I am doing a mock business plan to open up a restaurant. I need help achieving the financial statements aspect of it. I have the start up cost completed as well as the fixed monthly assets. I need:
-projected sales for 5 years
-projected income statement for 5 years
-projected balance sheet for 5 years
-projected statement of cash flows
-ROI
The menu prices can be adjusted
DeVry University
College of Business and Management
Pomona, California
DeVry University College of Business and Management
BUSN-463 Senior Project
Written Report Grading Criteria
Team #: ___________
1 to 10 points scoring, 10 is the best.
Writing Criteria Pts
Executive Summary (6.6%) 8
Organization (16.6 %) 9
Content (33.3%) 8
Writing Conventions (20%) 7
Visual Impact (10%) 7
Conclusion and Support Documentation (13.3%) 7
• Total (100% possible)
Comments:
Total points: 135 points
THE BACKYARD RESTAURANT
By
Jeannette Angulo, Joel Luis, Craig Mohan and Walter Washington
thebackyard.com@gmail.com
Submitted in Partial Fulfillment of the Course Requirements for
Senior Project I
BUSN-462 65158
Professor Edward Yee
04/15/14?
Executive Summary
The Backyard restaurant will be a unique barbecue restaurant that will provide excellent food and a great atmosphere for families and different from our competition; It will be our intent to blend an American style picnic with an authentic American barbecue. Our restaurant will be located in San Dimas, California where there are other dining facilities, but nothing like the dining experience our customers will receive at The Backyard restaurant.
Our business partners have constructed a business plan that will reveal that we are prepared to obtain financing for the initial launch of this concept. We are asking investors to contribute $150,000 for the initial launch, in addition to the $25,000 each of the 4 partners has contributed for a total of $250,000 initial startup expense and startup cost for the first year; the projected return of investment is addressed more closely in the financial projections section of our report, but we are looking at a profit of $68,604 in the first year and $104,870 in the second year. A detailed projection is addressed more closely in the financial section.
The financing in addition to the capital contributions from the owners will allow The Backyard restaurant barbecue to successfully open and maintain operations through year one. The initial capital investment will allow The Backyard restaurant to provide its customers an excellent dining atmosphere that will induce families and friends to dine and socialize.
The Backyard restaurant’s team has developed a business and financial model, focusing on realistic projections.
1. Our Industry Analysis provided is based on industry facts. We have analyzed the competitive landscape and determined who our key competitors are for the local market and analyzed our cost against local San Dimas markets; we looked at all the figures to make sound business estimates.
2. In constructing our Market Analysis, we analyzed our market findings and started to build around our local customers. Our team determined that our business will service an unmet consumer desire, which is to have authentic American style barbecue combined with an American style picnic.
3. During our Operational Plan we will provide our day to day operation and display the location of our facility, and the plan to acquire equipment to start. The plan will detail The Backyard restaurant’s management team and organizational structure.
4. The Financial plan will include start-up cost to ensure the business is not under financed, the plan will display food margin cost, employee cost and provide our estimated first year projections, highlighting sales, cost and projected profits.
Table of Contents
Executive Summary 2
Mission Statement 6
Objectives 6
Keys to Success 7
Industrial Analysis 8
SWOT Analysis 9
Strengths 9
Weaknesses 9
Opportunities 10
Threats 10
Operations Plan 12
Facilities 12
Location Error! Bookmark not defined.
Area Analysis 16
Market and Sales 17
The Target Market 19
Market Location & Customers 19
Competition Error! Bookmark not defined.
Competitor Profile 21
Competitive Strategy 22
Marketing penetration & sales strategy 22
Financial Analysis 25
Use of Funds 25
Food Margins 27
Sales Forecast 29
References 35
Appendix 37
Mission Statement
• The Backyard restaurant is a motivated team of hospitality-minded individuals, dedicated to providing our guests with an excellent dining experience . The team members have a fundamental passion for food, a tireless work ethic and a commitment to outstanding quality of our products. The Backyard restaurant strives for operational efficiencies that assure us a fair profit, enabling us to be a charitable and a socially responsible partner in the local community.
Objectives
• Product Development- Create our own market niche and brand name.
• Control Cost- By managing food and labor cost
• Manage Customer Service- Capturing statistical data to improve customer satisfaction.
• Dining Experience-Create atmosphere of exceptional food that’s warm and friendly.
• Profitability-Use profitability ratios, income statement trends to assess financial health.
• Longevity –Understand the market and listen to customers to ensure long term.
Keys to Success
• Having a solid plan.
• Create a unique and innovative fast casual dining atmosphere.
• Ensure product quality, making great food and giving great service.
• Achieve a profitable investment return after the 2nd year.
Industry Analysis
Barbecue Restaurant Industry
According to the Hearth, Patio & Barbecue Association (HPBA), the barbecue restaurant industry has increased its demand by 18 percent from 2003 to 2008. In the state of California, restaurant sales for 2014 are expected to increase up to $69.7 billion. The increase in sales and the growing restaurant industry will also influence the increase of 10 percent job demand. The total sales of restaurant industry contribute four percent of the US GDP (HBPA, 2010).
Barbecue Industry Customers
According to the HPBA (2010), eighty percent of Americans prefer to eat barbecue at any given time of the year, the changing of Americans healthy lifestyle and diet also leads to the increasing demand of barbecue restaurants. In San Dimas, California in which The Backyard restaurant barbecue will open its business, there is an approximate population of 750,000 in the surrounding twenty miles radius. This population has twenty percent of retired adults that prefer to dine-out. There is also the presence of the international airport in two miles distance from the restaurant. The location is surrounded by many industrial businesses that helps boost the economy and consumer growth. The different shopping malls that are within five miles can bring a lot of potential customers.
SWOT
Strengths
The Backyard barbecue restaurant will dominate the barbecue market in San Dimas and its neighboring cities in California , we are the only company to have an innovative range of barbecue in our menu, so we will have the ability to gain a portion of the food and drink market, in addition to our location being positioned to allow strong penetration to the population around the nearby cities from Ontario. With high visibility, lowered space rent, and convenient access The Backyard restaurant has every unique and effective marketing strategy which influences customers to come and dine with us.
The menus are designed to attract different ranges of people from young to old. The prices of foods and drinks are reasonable and affordable and it’s one of the reasons that it is enjoyed by people with different economic and social status. The quick and easy process of ordering and overall customer service provided keeps our customer coming back. The excellent image of The Backyard restaurant projects good taste, quality products, good atmosphere, hygienic environment and qualified staff. The experience managers will bring valuable experience in the positions about restaurant establishment. Managers are also familiar with the local suppliers and including the whole market of suppliers at the location. The location of the business can accommodate the disabled and offers spacious parking.
Weaknesses
Loyal customers might feel that barbecue is declining and they might feel the decline of satisfaction. Low customer satisfaction will lead to lower customer satisfaction and the reduction of restaurant credibility in the local market. Barbecue restaurant will face problems with diverse population, different lifestyle, cultures and this will struggle for the appeal of opening another store. Menus are more focus on western taste . Increase in maintenance and other bills will cause products price to rise. The Backyard restaurant Barbecue capacity is eighty five customers and it opens for operation from 12 noon to 8pm. The opening of the patio space will depends on the weather condition. The Backyard restaurant is new in the business while the competitors are in the business since, they already establish loyal customers. The company will need to make a big promotion to attract customers from the well-established restaurants.
Opportunities
The Backyard restaurant barbecue is the only restaurant that is designed to serve foods in the way it does, there will be opportunity to explore new markets and introduce new products that can target the diverse population which will lead to the increase market share. Abundance of resources will lead to the decrease of our prices; The Backyard restaurant will be bringing foods that focus on upscale products to the average consumer base to meet the demand of customers changing diet and food preference. The location of the company is surrounded by many business and office establishments that increase the demands for food. The increase of food and drink service industry in California posted a strong growth, much of this increase is a pattern of demand coming from the aging population who prefer to dine-out and spend time in restaurants.
Threats
The customer’s food preference will be influenced by the rising competition that will be attracting customers by offering customers lower prices and temporary promotions and there will be a new threat when competitors will bring in a new menu on their products. The rising cost of the primary ingredients of our products when there is unforeseen recall on such products. In situations like the food supplier will encounter risk that will delay the delivery of ingredients that the company need for daily operations .
Operations Plan
The three partners listed on the second tier of the graph below report on a direct individual basis to the CEO however they also communicate strategically amongst themselves to ensure the organization remains fruitful and properly managed, each member of the group has finite as well as general duties associated with their titles for instance the CEO also functions as the operations manager and handles purchasing decisions. The CFO does the accounting for the group along with managing human resources; our President is also our business manager and is control of inventory while the Vice President is in charge of marketing and development. All four partners would be responsible for hiring, managing and disciplining employees as needed.
Organizational Graph
Day to Day
One main building with an actual physical fenced backyard that has grass, picnic benches and maybe even a tree-swing or two that gives the customer the relaxed environment of a typical home cook-out all year long without the hassle of preparation or cleanup. The truly unique concept is that we cook it the way you would cook it, with charcoal on a grill designed to cook with charcoal; many of the larger chains use wood because it is cheaper but unfortunately it releases methane and tar into the food which is removed by the conversion of wood to charcoal and charcoal also has better flavor all around.
Two large barrel cookers that will be housed in the main building with two industrial grade swamp coolers (air washers) located just above the grills in the ceiling, this provides the filtration we need to use a smoke barbecue while eliminating 98% of smoke and still allowing the smell of barbecue to permeate the air thus drawing in customers; these items are purchased because they are low maintenance and have a low probability of breakdown so warranty service is unlikely but the units can be replaced rapidly if necessary. One of the barrel cookers will be used for slower cooked meats like chicken and ribs through controlled use of heat, fuel and oxygen; the other will be used for flashed cooked food like burgers and links.
Equipment that has a higher tendency for maintenance issues such as refrigerators, beverage dispensers, cooling units for sides and warmers for hot sides would be leased so they could be replaced or repaired immediately with no added expense to the owners. Additionally the property would be leased so if any major structural problems occur it would be obligatory of the property owners to make any repairs however the landscaping and grounds would be maintained by the business owners.
Our day will begin with the opening manager who happens to be one of our owners firing up the grills two hours before we open for business at 11 am which also gives them time to bring the previous night’s prepped food out of the cooler and to serving temperature such as chili, potato salad, Cole slaw, etc. and gives them time to get the slower cooked meats started i.e. chicken and ribs. On the whole most of the preparation for setup in the morning has been done the night before by the closing manager and employees; we will have two to three employees depending on need which varies by peak and off peak hours.
One employee will come in at ten o clock to assist the manager with preparing the facility for opening, counting out the registers and making sure the beverage service area is ready and stocked. When we open there will be 3 employees at the facility from 11 to 2 which is our first rush, by noon the second manager should be arriving with replenishments supplies for the day and will also relieve the opening manager so they can take a lunch break; one employee will run the register, one will run the dine in window and the third will be in charge of the take out window and general cleaning and restocking.
During our off peak hours we will be offering a box special at the take out window such as half a chicken, half rack of ribs and two sides with drinks for $15 dollars so the stock keeps rotating out the cooked meat for freshness; since there is no pre-ordering required an employee would need to be at or near the window during all off peak hours so it has been strategically place near the front counter where the cashier will be at all times but the second employee would be assisting them as well as covering orders at the dine in windows.
The managers primary responsibilities would be attending the grill however since the dine in window is located directly near the grill area they would also bring the food to the window where the customer is waiting if the second employee is seeing to other matters, throughout the day food supplies are monitored and if need be one of the managers can make a supply run to one of local distributors which is located nearby a couple of miles from the business location; banking runs would be performed in the same manner also on a local scale.
The second rush will start at 5 pm and run till 8 pm when the business will again be up to three employees and little changes from the AM rush except at this point we have two managers available to field any complaints and visit patrons as they dine and get real time input which should have value beyond measure over simple survey cards. Our human resources manager will be onsite Monday through Thursday but is available through digital measures at any time as needed also conducts the bookkeeping facets of our business, although part of the managerial staff she will not be expected to perform the operational management of the other three partners.
There are condiment stations throughout the grass yard, covered and window areas that are restocked regularly, there are High Intensity Distributor lights mounted to the back corners of the building to provide light for patrons who select to dine after dark along with two fully accommodating restrooms (including baby changing stations) adjacent to the building; ample parking and ease of access for disabled patrons with designated parking and ramps for accessibility.
Items that need not be fresh grilled such as the sides and chili will be prepared the night before by the chef who has closing duties, the owners will rotate responsibility using a typical nurse’s schedule of two 12 hour shifts which affords a “2 day on- 2 day off” lifestyle. Life issues will invariably arise and the owners are committed to stepping in and absorbing any cost of the extended absence of any fellow owner.
Location
Figure1: Location and proximity of business to Downtown San Dimas, California
For the main building sized at 809 square feet on a lot sized 125,000 square feet we are looking at $2,086 per month or $25,032 annually with a gross leasable area of 100,000 square feet which is needed to provide ample parking and we will be requiring additional space to construct our actual “Backyard”, we currently project a maximum capacity of 120 people airing on the side of caution that should a large party or two of 15 to 25 arrive during regular business hours we would still be well within the regular safety parameters to wit we are permitted.
Our theme is simply that of which you would expect when you and your family were invited to a friend’s backyard barbecue party, typically during holidays where you had the day off during the week and no real plans of your own; the environment is relaxed and familiar. This is part of the success of Starbucks in that no matter which Starbucks you go to anywhere in the country they have the exact same setup which makes the customer feel at home in a familial environment, the difference is we are not building a gigantic franchise but instead capturing the essence of a typical 4th of July barbecue at home… but away from home and any day of the week instead of just holidays.
It has been our personal dining experience that when the quality of the food being served exceeds the level of service that most people are willing to overlook the service aspects but if the food being served doesn’t meet expectations you will lose customers even if the service has improved so our dynamic is to ensure the quality of the food always remains exceptional, fortunately this aspect is controlled by just the owners so we can always have oversight in regards to the ingredients we use and have quality control over the end product so if a server doesn’t show up and service takes a dip in speed we can guarantee the customer still gets the best possible meal we can provide.
As far as employing workers outside of the 4 main owners we plan to hire 6 part time workers from some of the local college campuses and high schools for a starting rate of $8.25 per hour with regular increases, the reason we don’t start higher is that we have discovered through our research that “fast casual” dining tends to have a higher rate of turnover; there would be perks as well as free meals for employees while they are working their families would enjoy a 20% discount on all visits and that’s something nobody else does.
Employee responsibilities would include ringing orders, bussing tables, restocking of supplies and general cleaning of both the kitchen and public areas; the responsibility of the managers would be making supply runs when needed, operating the grill, supervising the employees and customer interaction but this doesn’t place a manager above doing menial tasks when it’s required such as tidying up the public areas.
Hours of operation will be seven days a week 11 am to 9 pm and all holidays which typically fall on Mondays, banquets could be booked after hours since we will be open all 365 days of the year; we do offer take out or call ahead service (delivery service not yet available). We are associated with Houston’s restaurant in Pasadena in that we buy their exclusively made BBQ sauce for rib marinade, for local reputation we are counting on the 10% discount that is associated with checking in on the yelp application that can be downloaded for free to all smartphones. Even if a review isn’t written it still shows the popularity of the business because the same customer keeps checking in regularly.
Area Analysis
Our facility located in San Dimas is located within walking distance from old town San Dimas which is a central point for the city where the library, city hall and chamber of commerce are all located, while it is home to many businesses there are only a handful of restaurants located in this part of San Dimas which offer Italian, Mexican and Japanese cuisine so they offer no direct competition to what we are offering. San Dimas is however quite a bit larger than just its central downtown area and indeed it is known for its many different dining experiences all in city with a natural and relaxing park like atmosphere of many shady pine trees and well groomed landscapes.
Because of its reputation among diners as a destination for a myriad of different types of food offerings the city actually draws people from surrounding areas for a leisurely day of shopping and dining which presents a great opportunity for a small business trying to promote a new type of dining environment, while the restaurant culture offers a diverse variety I can say unequivocally that no one restaurant in the area offers exclusively what we do; that is the competition may offer one or two of the same items that we have on our menu but not anywhere close to offering our full menu and while you c an get barbecue at a couple of restaurants it isn’t cooked on an open grill with charcoal such as ours is.
Restaurants in the area typically thrive and it would be a rare sighting indeed to see a business closing due to lack of traffic which is primarily working middle class small families with children that have some disposable income to spend on the weekends and days off but consider dining out to be necessity rather than a luxury so they are more than willing to spend some money if the experience was pleasurable.
Market and Sales
The description of our restaurant is an authentic American barbecue called The Backyard restaurant, the name is a result from your typical holiday barbecue experience, wherever customers find great music, the smell of hamburgers cooking on the grill and families gather around the table. Our major goal is to deliver that equivalent experience without waiting for the next holiday in order to obtain a similar bond.
The nearest threat to our business is located in San Dimas, a well-known restaurant called Lucille’s Smokehouse Bar-B-Que. They claim they are the best BBQ in the whole South. The strategy of why they are so successful has to do with the variety of seasonal style of how they cook their meals. The offer a several choices such as the Carolina-style, Texas-style, Memphis-style, or any style in between, chances are you’re going to be partial to Lucille’s style. Most of their cooking method relies on the smoke-ring of pink around the edges and spices with juices, and so succulent it practically falls off the bone.
Although Lucille’s is one of our toughest competitors, the price for the meals is high for most families. An average plate of ribs cost around 28 dollars with sides and a drink. For a family of 4 an estimate bill comes up to $100-$130 dollars including tip. The food is phenomenon but if we can provide a similar experience at a fraction of the cost the success rate of our business will attract their customers. Our average meals for individuals will be under 15 dollars and a family of 4 can eat for under 100 dollars and get a greater experience they will never forget.
The best way to magnetize customer to our location is by exposer. Having the proper public relations will maximize the customers to visit our restaurant. Today world, a simply send out a catchy media advisory and expect to get press coverage for your news won’t guarantee success. For that reason The Backyard restaurant will be more modern and have customers involve mobile tools such as social app like Facebook, Twitter, Instagram, Yelp and more. However, that is not all, as we all know the Internet is widely spread and can be access thru smartphones, tablets, laptops or desktops. Our restaurant will have its own website where you can order online and by the time you arrive at our location it will be ready.
The Target Market
Market Location & Customers
Located in the heart of the San Gabriel Valley - 25 miles east of Los Angeles along the foothills of the San Gabriel Mountains, San Dimas is a blend of community amenities, wonderful parks and open space, great recreational and community facilities. Our greatest asset is our small town feel and the volunteerism of our residents as they contribute to our great quality of life. Welcome to our community.
Competition
There are over 10 barbecue restaurants throughout the entire San Dimas area. Several of them are small business restaurants that do not have advertisement strategies to capture potential customers outside the San Dimas perimeter. The two main competitors to your restaurant are Lucille’s Smokehouse Bar-B-Que, and Famous Dave’s. These two unique restaurants have a prestige reputation for barbecue dishes. For years, they work hard to establish a strong impression around California for their authentic and exclusive taste in barbecue meals. Although they both started from a family oriented business, the success strategy is similar. Quality food is the greatest factor for ensuring customers to return again for the similar experience.
However, both restaurants are located in Rancho Cucamonga a twenty-minute drive from your location. A ten-mile distance radius separates our competitor with our business. This gives an advantage to your restaurant to penetration the market and impacts the customers around that area of competition.
Although our restaurant is new to the city and may not have a well-known name like our competitors; we will offer a similar food quality at a fraction of their price. Our greatest benefit will be the environment experience, which will make us unique compare to any other barbecue location. With that mentality and mindset your restaurant will make sure every meal they eat at our site will be unforgettable, like the first time they did.
Competitor Profile
Lucille’s Smokehouse Bar-B-Que overview is a restaurant with a Southern Bar-B-Que cooking style, which consists of low and slow methods to ensure every dish is cook right and has a unique taste that makes it irresistible. Lucille Buchanan and Craig Hoffman the owners of the restaurant work hard to create the recipe for success. According to claims of their website every meat is cook at a constant temperature of 225°, for hours on end. They offer several style of cooking like the Carolina-style, Texas-style, Memphis-style, or any style in between at the customer’s wishes. Their best seller secrete consist of the Lucille’s style—perfectly cooked Bar-B-Que with a smoke-ring of pink around the edges, encrusted by a “bark” of spices and juices, and so succulent it practically falls off the bone.
Famous Dave’s overview is very similar to Lucille’s business story. They have the identical low and slow cooking method for their dishes to come out mouthwatering every time. One unique method why their food is so great is that every rib spends the rest of the morning smoking over hickory logs. Once a customer orders a rack of ribs they are marinated on the grill to caramelize the sauces. This technique ensures a smoky flavor on the inside, chargrilled sweetness on the outside. The owner Dave Anderson states in his website, “I’ve spent over 25 years trying to figure out what tastes good. I’ve taken whole mouthfuls of different herbs, spices, fruits, and vegetables just to understand the complex flavor nuances and how they interact with each other.” That how Mr. Dave becomes famous for his ribs recipe and customers love his restaurant for his delicious food he provides.
Competitive Strategy
Our goal is to provide a family oriented experience you get when you have a holiday barbecue where you find great music, delightful food, and families gather around to share timeless conversation, which makes it extraordinary memories. Our strategic plan will not only target large families, instead it can be for everyone. Whether it’s a small family, big family, or an office worker that wants a carry-out meal, every customer will have quality food with excellent customer service at a reasonable price. The advantages of your restaurant is that take-out will be available online or call-in from customers and by the time they arrive to the restaurant no-line will be necessary since they have a 20 minutes head start of anybody else
Marketing penetration & sales strategy
Social media will assist our business by promoting advertisements to capture customer’s attention. Todays’ world everyone uses application for everything and we plan to take advantage of that innovation in an effective way. The reason by we will invest in social media advertisement to spread the word around customers. Applications like Yelp helps get feedback of our services and insight of our events or menu items. Facebook will is an excellent way to promote our new menu items or show case our favorite dishes for customers to see. Offering discounts to customers will give reasons for their visit to our restaurants. By being connected in direct dialogue with current customers or even potential customers give a reputation that is spread around the virtual community. No more flyers in people car to promote sales, we live in a world where social media has impacted the market and we plan to take advantage of it in every way possible.
Yelp
Yelp is a service engine to help people find awesome local business that will fit their needs. Yelp is a free site to write reviews of local business whether it’s a dentist or a food store. Every business owner can set up an account and post photos for potential customers to see their product or services. The way Yelp makes money is by selling advertisement call Yelp Ads, which vary depending on the amount of publicity you set up. Yelp was founded in 2004 to help people find great local businesses like dentists, hair stylists and mechanics. What is awesome about this site is that it can be accesses by web, iPhones, androids, BlackBerrys or any other smartphone device.
Facebook
Facebook is one of the most utilized social media around the world. Facebook for business helps promote according to the selective target why are trying to reach. Whether you’re a business is large and small, creating a pages (now also known as “public profiles”) has several advantages to assist our restaurant. The profile page will allow your business to publish videos, photos, posts, links to YouTube, links to webpages and more. It will enable fans to interact with our business and receive feedback of how we are doing. The way we will use Facebook for our marketing is by purchasing advertisement every day. We care more of exposure rather then click to our business; therefore the technique we will use from them is the click per mile. Cost per mile (CPM), also called cost ‰ and cost per thousand (CPT) (in Latin mille means thousand), is a commonly used measurement in advertising.
Instagram
Instagram is alternative for business exposer in numerous ways such as employee interaction. Instagram has the ability to connect and share their videos or photos to other social media such as Twitter, Facebook, and etc. Instagram allows you t o hashtags your post to categorize your material in certain areas for user to view them according to the hashtag. Instagram will be helpful to tap into varies customers in search of our specialty of food. By trending pictures and 12-second videos, it will give customers and insight of our products and what is expected of our business. The best part of this, instagram is free no need for subscription.
Website
Last but not least, in our marketing strategy is creating a webpage for our business. Most of the main restaurants in a franchise chain have a webpage since it’s important to develop a presence for our restaurant within your online local community as it is to develop a presence amongst your real local community. Providing a webpage will engage customers and potential customers to see and have a feeling of what we do, what you will be expecting and what do we consist off. Having a user-friendly webpage with professional image of your restaurant on the web gives us great exposer that can generate profit in a long run. One key thing about website is gives an atmosphere of our restaurant is vitally important in attracting the clients I want, to your restaurant. By showing our customer what to expect when they get there, you're selling them the experience that your restaurant offers; by allowing our customers to make reservations online, and closing a sale without doing a thing.
Financial Analysis
Start-up Funding
• Total capital required to open The Backyard restaurant $250K
• Seeking $150K from investors to open The backyard restaurant by July 2014.
• Owner’s will invest $25K for a total investment of $100K
Use of Funds
Start Up Costs:
Leasehold Improvements $35,700
Employee Training $30,000
Furniture and Decorations $26,000
Lease Down Payment $15,300
Advertisement $15,000
Menu Development $5,000
Website Development $3,000
Cash on Hand $120,000
Total: $250,000
Monthly Costs:
Monthly Fixed Costs:
Employees (6 part time employees) $5,100
Payment to the Four Partners $12,000
Food (minimum of $500 a day) $9,000
Rent: $2,100
Utilities $1,800
Advertisement $1,000
Website Maintenance $500
Insurance $500
Depreciation: Furniture $450
Depreciation: Leased Improvements $300
Charcoal $300
Total: $33,050
Monthly Variable Costs:
Foods assumed 15% of revenue
Additional Labor 20% of revenue
Break Even Analysis:
The Backyard BBQ is a family oriented restaurant therefore our break even analysis is family based. A family of four will spend an average of $60 per visit. Considering that our monthly costs are $33,050, we will break even after serving 550 a month. This comes out to us breaking even after feeding 19 families per day.
Family of 4 average food and drinks= $60
BE= Fixed Costs/ Average Check
BE= $33,050/ $60
BE= 550 families
Sales Forecast
Projected Profit
Cash Flow Statement
2015 2016 2017
Operations
Net Profit $81,164 $101,731 $125,399
Depreciation and Amortization $3,140 $3,140 $3,140
Net Cash Flow from Operations $84,304 $104,871 $128,539
Investing & Financing
Assets Purchased or Sold -$15,700 $0 $0
Investments Received $250,000 $0 $0
Net Cash Flow from Investing &
Financing $234,300 $0 $0
Cash at Beginning of Period $0 $318,604 $423,475
Net Change in Cash $318,604 $104,871 $128,539
Cash at End of Period $318,604 $423,475 $552,014
Balance Sheet
As of Period's End 2015 2016 2017
Cash $318,604 $423,475 $552,014
Accounts Receivable $0 $0 $0
Inventory $0 $0 $0
Total Current Assets $318,604 $423,475 $552,014
Long-Term Assets $15,700 $15,700 $15,700
Accumulated Depreciation -$3,140 -$6,280 -$9,420
Total Long-Term Assets $12,560 $9,420 $6,280
Total Assets $331,164 $432,895 $558,294
Total Current Liabilities $0 $0 $0
Paid-In Capital $250,000 $250,000 $250,000
Retained Earnings $0 $81,164 $182,895
Earnings $81,164 $101,731 $125,399
Total Owner's Equity $331,164 $351,731 $375,399
Total Liabilities & Equity $331,164 $432,895 $558,294
Income Statement
The Backyard restaurant
2015 2016 2017
Revenue $318,793 $350,673 $403,271
Direct Cost $154,129 $169,542 $194,972
Gross Margin $164,664 $181,131 $208,299
Gross Margin % 52% 52% 52%
Operating Expenses
Employees $45,760 $45,760 $45,760
Location Lease $15,300 $15,300 $15,300
Leased Equipment $6,000 $6,000 $6,000
Charcoal & Storage $3,800 $3,800 $3,800
Liquor License $3,500 $0 $3,500
Advertisement $4,200 $3,600 $3,600
Utilities $1,800 $1,800 $1,800
Total Operating Expenses $80,360 $76,260 $79,760
Operating Income $84,304 $104,871 $128,539
Depreciation and Amortization $3,140 $3,140 $3,140
Total Expenses $237,629 $248,942 $277,872
Net Profit $81,164 $101,731 $125,399
Net Profit / Sales 25% 29% 31 %
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References
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Appendix
Air Quality Management Permit (909) 396-2000
Alcohol Beverage Permit (909) 782-4400 and (909) 395-2036
California Trademark and Service Mark Registration (916) 653-4984
Employment Development Department Registration (916) 653-0707
Employment Eligibility Verification (800) 870-3676 and (800) 357-2099
Federal Trademark and Patent Registration (800) 786-9199 and (703) 308-9000
Fictitious Name or Doing Business as (DBA) (909) 387-8306
Figure #1: http://www.loopnet.com/Listing/17664313/1175-Walnut-Avenue-Ontario-CA/
Figure #2: Created by Craig Mohan using MS Office SmartArt
Figure #3: Created by Jeannette Angulo MS Office Chart
http://10minutescafe.com/benefits.htm
http://www.famousdaves.com/
http://www.famousdaves.com/
https://www.facebook.com/
https://www.instagram.com/
Legal Structure Registration (213) 897-3062 or (916) 657-3537
Ontario Zoning and Building Code Compliance (909) 395-2036 and (909) 395-2023
San Bernardino County Fire Department (909) 386-8401
San Bernardino County Health Permit (909) 387-6359
State of California Identification Number (800) 852-5711
State of California Seller’s Permit (951) 680-6400
