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Financials

Control & Implementation: Financial Management

Income Statement

Beantown Bakery

For Year Ending December 31, 2011

Sales

 $473,000

Less Cost of goods sold

 $75,330

Gross profit

 $397,670

Less Operating Expenses
     Interest Expense

 $12,000

     Depreciation

 $50,000

     Rent and Utilities

 $32,756

     Advertising

 $31,225

Total Operating Expenses

 $125,981

Net Income

 $271,689

 

 

Start-up Expenses

Start-up Expenses
Legal $4,000
Premise Renovation $8,000
Equipment $22,796
Other $0
Total Start-up Expenses $34,796
Start-up Assets
Cash Required $60,000
Other Current Assets $0
Long-term Assets $0
Total Assets $60,000
Total Requirements $94,796

 

 

Profit and Loss for First Three Years

Year 1

Year 2

Year 3

Sales

$473,000

$521,995

$607, 825

Direct Cost of Sales

$75,330

$84,560

$100,980

Other

$0

$0

$0

Total Cost of Sales

$75,330

$84,560

$100,980

Expenses
Sales and Marketing

$31,225

$37,120

$41,460

Depreciation

$50,000

$59,000

$69,350

Utilities

$1,700

$1,790

$1,840

Rent

$31,056

$31,065

$31,065

Total Operating Expenses

$113,981

$128,975

$143,715

Profit Before Interests and Taxes

$283,689

$308,370

$363,130

Interest Expense

$12,000

$11,050

$10,000

Net Profit

$271,689

$297,320

$353,130

 

Summary

The advantage that Beantown Bakery has over its competitors is our delivery service to the customers, with the convenience of placing an order online. To help better the community, Beantown Bakery uses recyclable materials for its cups and take-home packaging. The costs of organic ingredients and “green” products are high, but the desired customer base will make up for these costs. Extra profits can be made when customers use their re-usable mugs because it saves the company from having to purchase cups. Beantown Bakery will benefit most from encouraging the use of “green” products. Beantown Bakery will be located in the heart of the financial district on Summer Street.

We expect our sales volume on a monthly basis to be around $39,416. The number will fluctuate in the months of July and August, due to increased tourism, and in November and December, due to the demand for hot goods. The Return on Investment will be 33%. We are beginning with a total of $100,000 and expect our profit to grow as the business matures. Our market share will be minimal, at first, since we are just starting out and we are competing against established companies such as Starbucks, Panera, Finagle a Bagel, etc. As our company grows, we expect both our return on investment and our market share to increase. If we decide to expand, we will account for a larger market share than the initial one.

In the first year, Beantown Bakery’s sales will be at its lowest because the company is just starting out, and is establishing a customer base. In the second year, the sales will increase by approximately $100,000 because the business is beginning to establish a regular customer base. In the third year, the company’s sales will have again increased by about another $100,000 because Beantown Bakery will have established a regular customer base, and also will have implemented a new marketing plan to further meet the needs of its consumers. 

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