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Italian Restaurant Business Plan - Financial Plan Page 1
8.1 Break even analysis
In the table and chart given below we have analyzed the break even costs for A Touch of Tuscany Inc. After allocating our costs into fixed and variable we find that $11.00 is the fixed and semi-variable cost for each check. We use the average check price of $31.42 in our first year to come up with a gross profit per check of $20.42. We use the average 3,862 checks per month figure which we obtain from our sales projection for the first year and from that we arrive at an average sales figure per month of $121,327.08.
The total fixed costs that we have come up with per month are $41,753.61 and that is sales figure that we have to meet in order to stay in the green. When we divide that by the gross profit per unit of $20.42 we come up with our break even checks of 2,045 every month. This is the amount of lunches and dinners we have to serve each month in order to be able to stay profitable. It is important to recognize that the only time we fall slightly below this target is during our slowest month – January using the slow market scenario. In every other month under every possible scenario we are profitable and in during the holiday season we do extremely well.
| BREAK EVEN COST ANALYSIS AND ASSUMPTIONS | ||
| Cost of average check: | $11.00 | |
| Estimated Sales price per check: | $31.42 | |
| Gross Profit per unit | $20.42 | |
| Avg. no. of checks per month | 3,862 | |
| Avg. Sales per month | $121,327.08 | |
| Fixed Cost per month | $41,753.61 | |
| No. of checks to break even per month | 2,045 | |
|
8.2 Projected income and expense statement 2009 to 2011
| A Touch of Tuscany Inc. | |||
| Proforma Income & Expense Statement | |||
| 2009 | 2010 | 2011 | |
| SALES | $1,455,925 | $1,528,721 | $1,605,157 |
| Cost of Goods Sold | $509,574 | $519,765 | $529,702 |
| Gross Profit | $946,351 | $1,008,956 | $1,075,455 |
| Gross Margin % | 65.00% | 66.00% | 67.00% |
| OPERATING EXPENSES | |||
| Accounting & Legal Fees | $7,280 | $7,498 | $7,723 |
| Advertising | $14,559 | $15,287 | $16,052 |
| Auto Expenses | $4,222 | $4,307 | $4,393 |
| Bad Debts | $14,559 | $14,705 | $14,852 |
| Bank charges | $4,077 | $4,117 | $4,159 |
| Credit card processing | $29,119 | $29,701 | $30,295 |
| Catering & Banquet Supplies | $3,640 | $3,713 | $3,787 |
| Cleaning / Janitorial Services | $4,368 | $4,499 | $4,634 |
| Depreciation | $34,700 | $34,700 | $34,700 |
| Charitable Donations | $5,000 | $5,000 | $5,000 |
| Employer Taxes | $33,240 | $34,902 | $36,647 |
| Entertainment | $4,368 | $4,455 | $4,544 |
| Extermination | $3,785 | $3,899 | $4,016 |
| Flowers & Decoration | $3,640 | $3,749 | $3,861 |
| Gifts | $10,919 | $10,919 | $10,919 |
| Gross Wages | $349,891 | $367,385 | $385,754 |
| Insurance | $14,559 | $14,996 | $15,446 |
| Kitchen Utensils | $3,640 | $3,749 | $3,861 |
| Linen & Laundry | $4,077 | $4,199 | $4,325 |
| Miscelleaneous Expenses | $3,931 | $4,010 | $4,090 |
| Musician / Music | $4,368 | $4,455 | $4,544 |
| Paper & Printing Services | $5,096 | $5,198 | $5,302 |
| Rent | $210,000 | $220,500 | $231,525 |
| Office Expenses | $3,640 | $3,822 | $4,013 |
| Office Supplies | $10,000 | $10,200 | $10,404 |
| Subscriptions, Licenses & Fees | $3,203 | $3,363 | $3,531 |
| Security & Computer maintenance | $2,184 | $2,228 | $2,272 |
| Tableware / Cutlery | $4,368 | $4,499 | $4,634 |
| Telephone | $2,912 | $2,941 | $2,970 |
| Training | $15,000 | $15,750 | $16,538 |
| Utilities | $4,500 | $4,725 | $4,961 |
| Web Design | $2,184 | $2,293 | $2,408 |
| TOTAL OPERATING EXPENSES | $821,026 | $855,762 | $892,159 |
| Profit before Interest & Taxes | $125,325 | $153,194 | $183,296 |
| Interest Expenses | $14,134 | $12,419 | $10,563 |
| Provisional Taxes | $43,864 | $53,618 | $64,154 |
| NET INCOME | $67,328 | $87,157 | $108,580 |
| % of Sales | 4.62% | 5.70% | 6.76% |
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