Papa Geo’s
Budget Proposal
for
2007-2012






BUSN-278
[Term]
Professor[name]
DeVry University



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	Table of Contents 

Section	Title	Subsection	Title	Page Number
1.0	Executive Summary			
2.0	Sales Forecast			
		2.1	Sales Forecast	
		2.2	Methods and Assumptions	
3.0	Capital Expenditure Budget			
4.0	Investment Analysis			
		4.1	Cash Flows	
		4.2	NPV Analysis	
		4.3	Rate of Return Calculations	
		4.4	Payback Period Calculations	
5.0	Pro Forma Financial Statements
			
		5.1	Pro Forma Income Statement	
		5.2	Pro Forma Balance Sheet	
		5.3	Pro Forma Cash Budget	
6.0	Works Cited			
7.0	Appendices			
		7.1	Appendix 1: [description]	
		7.2	Appendix 2:
[description] 	

(Please put page numbers in the last column of the table of contents above, because they apply to your finished assignment. Do this after your project is complete. Also, remove this text and all text that is in italics in this template when finished your project.)

(Also, please submit your Excel spreadsheet that shows your supporting calculations.)
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The first paragraph of this executive summary should give a brief description of the business to which this budget applies. Very briefly describe the products and services of this company, the geography or demographics of the customers it serves, and why people purchase the main product of this business. Much or all of this will be found in the business profile provided to you. Please use your own words, and please do not simply copy and paste the explanation in the course materials. Make assumptions if necessary.

Also, provide a second paragraph that describes how the budget supports the company’s strategy.

Finally, provide a third paragraph where you summarize the key points from your budget, including the planning horizon; the amount of up-front investment; the NPV, payback, and IRR of the project; and key figures from your income statement, cash budget, and balance sheet. 

Remember, this is not a thesis or introduction of what you will talk about—it contains the major, specific content of each section. The second and third paragraph should be written after you have completed all other sections of this template.

As you complete sections of this template, please remove all italicized text in all sections of this template and replace it with your own or you will lose points!

?	Business Profile: Papa Geo’s—Restaurant
?	
?	Vision
?	
?	The vision of the entrepreneur is to create a single-location, sit-down Italian restaurant called Papa Geo’s. The goal is to generate an income of $40,000 per year, starting sometime in the second year of operation, as wells as profit that is at least 2% of sales.
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?	Strategy
?	
?	a) Market Focus and Analysis
?	The restaurant targets middle- to lower middle-class families with children, as well as adults and seniors, located in Orlando, Florida. The area within 15 minutes of the store has 10,000 families, mostly from lower to middle-class neighborhoods. Average family size is four people per household. There is no direct competition; however, there are fast food restaurants like McDonald’s, Taco Bell, and Wendy’s in the geographical target market. The lower to middle-class population is growing at about 6% per year over the next 5 years in this area. 
?	 
?	b) Product
?	The product is Italian food served buffet style, in an all-you-can-eat format, with a salad bar, pizza, several different types of pasta with three or four types of sauces, soup, desserts, and a self-serve soda bar. The restaurant is also to have a 500 square foot gaming area that has game machines that children would be interested in using.
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?	c) Basis of Competition
?	Customers come to this restaurant because of the good Italian food at a low price—you can get a meal for $7, including drinks. Customers also eat at Papa Geo’s due to the cleanliness of the facility, the speed of getting seated and served, and the game machines that keep the children busy while adults enjoy their meal.
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?	Start-Up Requirements*
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?	Given Costs
•	The cost of registering a limited liability company in Florida—filing fees listed at the bottom of the application located at http://form.sunbiz.org/pdf/cr2e047.pdf
•	Renovation of the facility expected to cost $15,000
•	Business insurance, estimated at $1,000 per year
•	Health and other benefits at 20% of the salaries of the manager and assistant manager

?	Costs you should estimate through research, experience, or other methods
•	Soda fountain bar $1,050.00
•	Two pizza ovens $33,664.00
•	Salad and pizza/dessert bar $2,500.00
•	Approximately 100 square foot commercial refrigerator $6,660.00
•	Two cash registers $712.00
•	Six video game machines $8,200.00
•	Management office with desk and lower priced laptop computer $1,500.00
•	Staff lunchroom equipment such as microwave, sink, cupboards, and refrigerator $500.00
•	20 four-seat tables with chairs $ 1,000.00
•	Busing cart for transporting dirty dishes from the dining area to the dishwashing area $100.00
•	140 sets of dishes, including cutlery and drinking cups $1,700.00
•	Commercial dishwasher $3,558.00
•	Miscellaneous cooking and food handling equipment like trays, lifters, spoons, pots, and so on $3,000
•	The cost of an average of seven employees on the payroll 2,660.00 @ $9.50 an hour. 
•	All operating costs, such as advertising, rent for a 3,500 square foot facility with male and female washrooms (already installed), utilities, maintenance, and annual depreciation $ 
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?	*If you have questions about start-up requirements, or think that other start-up costs necessary for the business are missing, then make an assumption and state it in the relevant section of the report.
?	
?	Given Financial Assumptions*
•	The owner will be granted a loan for the initial start-up, repayable over 10 years at current interest rates for small business loans.
•	The owner will use personal funds to operate the business until it generates enough cash flow to fund itself.
•	Essentially, all sales are made by credit card. All credit card sales are paid to the restaurant daily by the credit card company.
•	A total of 2.5% of sales are paid to the credit card company in fees.
•	Food suppliers give 30 days of trade credit.
•	Inventories are expected to be approximately 10% of the following month’s sales.
•	The average meal costs $4 in materials and labor.
•	The average family spends $4 on vending machine tokens.
•	Equipment is depreciated on a straight-line basis over 5 years.
•	Managers have health benefits, and other workers do not. The company will operate from 10:00 a.m. to 9:00 p.m., 7 days a week.
•	The entrepreneur will manage the store and draw a salary.
•	Every shift has one person on the cash register, one keeping the food bars stocked with food, two cooking the food, one on busing and table cleaning, a manager, and an assistant manager. 


 

Briefly introduce the sales forecast section.

2.1 Sales Forecast

Here you should include a simple table showing the years and the total sales for each year, along with a brief explanation of why sales are expected to rise, fall, change, or stay the same in certain years. Provide a brief explanation of the sales forecast, indicating why you expect sales to rise or fall during the planning horizon. Your explanation should be consistent with the trends and changes in sales found in your table.
	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	$290,840.00	$294,683.00	$279,736.00	$241,400.00	$227,880.00

2.2 Methods and Assumptions

Here you should describe how you arrived at your sales forecast in section 2.1. You should also provide any detailed calculations that led you to the sales forecast values. You should also summarize any research or figures that led you to make this sales forecast.
So I took the amount of people that can in every month and multiplied it by seven dollars per a customer. After that I added in the sales for people that use the video games, after that I added food sales by game sales to get the yearly total.

 

Here you should provide a screenshot of your capital expenditure budget, also listing the sources of data and assumptions that led to each line item in table format. Briefly describe the total investment and, if necessary, why major items are necessary to achieve the company’s strategy.
Building-Item					             Cost

Renovations						15,000.00
							15,000.00
Kitchen Equipment					
 
Pizza Oven (2)					33,640.00
Soda Fountain					1,050.00
Salad/Pizza/Dessert Bar				2,500.00
Refrigerator						6,660.00
Dishwasher						3,558.00
Total							47,408.00

Other Set up Expenses 

Lin & Building Permits				2,000.00

Computer systems/ Office Desks/ Registers	
Lunchroom & Equipment 				500.00
Video Vending Machines	(6)			8,200.00
Four Seater Tables w/chairs (20)			1,000.00
Cash Registers					772.00
Set of dishes (140) & cutlery/tableware		3,000.00
Advertising and rent (2 months)			10,000.00
Security Deposit (2 months)				8,000.00
Initial stock of food and beverages			25,000.00
Total							58,472.00

Total Cost 						120,880.00







Briefly describe the NVP, IRR, accounting rate of return, and payback period for this analysis. Indicate the discount rate you used, and how you arrived at it.

4.1 Cash flows
Provide an Excel spreadsheet screenshot that shows how you arrive at the net cash flows for each period in your planning horizon and describe its highlights.

4.2 NPV Analysis
Provide a screenshot of your Excel NPV analysis here, and describe its highlights.

4.3 Rate of Return
Provide a screenshot of your IRR and accounting rate of return calculations here, and explain the highlights.

4.4 Payback Period
Provide a screenshot of your Excel calculation of the payback period for this venture.

 

Briefly introduce this section here.
5.1 Pro Forma Income Statement
Describe key figures and assumptions from the income statement, such as important profit or sales figures and their causes. Also, provide a screenshot of your pro forma income statement.

5.2 Pro Forma Balance Sheets
Provide a screenshot of your balance sheets, and describe key figures they contain.

5.3 Pro Forma Cash Budget
Provide a screenshot of the cash budget and describe the impact of the budget on cash balances.

 

List any sources you cited in the body of your report. 

 

NOTE: Start this section at the top of a new page.
This section of the budget proposal is where you’ll attach all of the supporting materials that you’ve referenced in the preparation of your plan, and that is too detailed or extensive to be included in the body of the report. Use this page to separate the appendices from the text in the body of your report. Make certain that you update the table of contents to include the title of each exhibit in the appendix and its page number.
7.1 Appendix 1: [put a description here]
7.2 Appendix 1: [put a description here]
7.3 Appendix 1: [put a description here]