CAPITAL EXPENDITURE OR STARTUP BUDGET.
Objective: To prepare budgets for both capital expenses and operation expenses.
A budget is both a prediction of activities to come and a control device used to compare against actual performance. It provides a basis for decision making about the priorities for an organization. Predicting income and expenses over some future period of time is a necessary early step in beginning a business. In order to get financing from institutions or private investors to help you it is important to have a realistic picture of what the business will cost to launch and when you can expect to have a positive financial position. Budgets are of several types: operating, cash, labor, capital, and renovation. For the purpose of this project we will focus on the capitol budget and the operating budget.
Using the budget forms provided below, each group will need to formulate a budget (or a list of expenses) that will be needed to open the facility and a second budget that covers the operation of the foodservice facility. In reality these budgets are an estimate of the expenses for setting up the facility and operating it for the first six months.
CAPITAL EXPENDITURE OR STARTUP BUDGET
While this is a group effort, much of the information for the Capital or Startup budget will come from the facility plan and design section, which includes all equipment and any leasehold improvements (any remodeling or new electrical or plumbing needed). Any deposits needed for rent, utilities, etc. are also included in this budget.
In addition, any funds spent on promotional materials and menu design before opening as well as signage would also be included in this budget. Consultant fees, (for design or menu, advertising, etc.) if any before opening, would also be included here. Budgets prepared by each group member for his or her specific area will provide the information that may be used to complete this budget.
OPERATING BUDGET FOR THE FIRST SIX MONTHS
DEVELOP A MONTHLY ESTIMATE OF OPERATING EXPENSES FOR THE FIRST SIX MONTHS OF OPERATIONS. BREAK IT OUT INTO A MONTH-BY-MONTH PROJECTION OF EXPENSES INCLUDING:
· Salaries and wages (this will be provided through Human Resources)
· Employee benefits (this will be provided through Human Resources )
· Direct operating expenses (this will be provided through product production and facilities)
· Marketing (this will be provided through marketing)
· Utility services (could be included in facility)
· Occupancy costs (this should already be part of the file from the info on site)
· Repairs and Maintenance (optional, but could be included in facility)
There may be other expenses not listed here. Use the list as well as the form attached as a Guide.
A 6-month budget means that there will be an entry on the budget form for each month from one to six. DO NOT GIVE THE SAME NUMBER FOR ALL SIX MONTHS FOR EACH BUDGET LINE ITEM. THINK ABOUT HOW ITEMS CAN FLUCTUATE FROM MONTH TO MONTH. IF A DELIVERY BUSINESS IT MAY BE BUSIER AT DIFFERENT TIMES OF THE YEAR. (For example, during the holidays it may be a bit less busy since clients may be celebrating with family and friends rather than using a meal delivery. On the other hand a smoothie business may be busier during hotter months than cooler ones.)
The excel spread sheet attached lists items that could be included on these budgets. Use it as a guide. These are also included on the content page listed as Project.
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