Papa Geo - Financial Budgetary - Assignment Example

The sales of the company may also increase by 6% annually considering the population growth. The restaurant is intended to sell diverse products, which include buffets, pizza, soup, sauces, and desserts. In addition, the restaurant will have a self-service soda bar.

Competition
Although there are other companies such as McDonalds serving the area, the prices of their products are not affordable to most people in Florida. Moreover, these companies do not have physical locations in the area but rely on suppliers. This means that Papa Geo has the potential of competing effectively in the market and possibly gaining a competitive advantage (Jeffries & McGrath, 2008). The fact that the products of the company are rare in the market consequently high demand makes the company more competitive. This will ensure that the company records high sales volume. Moreover, the company will register high sales volume because they produce variety, which gives consumers the ability and freedom of choice. Finally, the company strategy is effective because it attracts children too, which will boost sales since it will be assumed to be a family restaurant (Jeffries & McGrath, 2008).

Financial Budgetary and the contributory aspect towards achieving the company’s strategy
The offers given by financial lending institutions will be enough in setting up the business and the repayment period is reasonable, which will grant the owner the opportunity to repay comfortably. Therefore, the business can be set up but it requires effective analysis and forecasting due to uncertainties in the business environment. Proper financial budgetary planning is fundamental to achieving the company’s strategy.


Sale forecast forms the most critical part of this budget proposal because it is through proper and accurate forecasts in sales that the entrepreneur would be able to determine the amount to repay either on a monthly or annual basis.
The above sales forecasts are made with the assumption that one unit in the company goes at $7, and each individual in the 15-minute area purchases one unit per day. Secondly, it is assumed that since the population increases by 6% annually for the next five years, sales volume also increases at the same margin.

2.2 Methods and Assumptions

This budgetary proposal assumes that the owner is granted a loan for the preliminary startup, which is repayable within 10 or more years. The repayment is done at the current rates, which range from 9.5% to 12%. Moreover, the owner is to use personal investments in operating the business until it starts generating adequate cash flow. This sales forecast is based on the assumption that the inventories are expected to be estimated at 10% for the subsequent month’s sales. This study reveals that the standard meal costs at least $4 in terms of labor and material. Similarly, a representative family spends $4 on selling machine tokens. Notably, the managers enjoy some privileges, which are not extended to other workers. This cuts the cost of operation consequently favorable for the sale forecast made.

The above sales forecasts are made with the assumption that one unit in the company goes at $7, and each individual in the 15-minute area purchases one unit per day. Secondly, it is assumed that since the population increasesbyt 6% annually for the next five years, sales volume also increases at the same margin.

2.2 Methods and Assumptions

This budgetary proposal assumes that the owner is granted a loan for the preliminary startup, which is repayable within 10 or more years. The repayment is done at the current rates, which range from 9.5% to 12%. Moreover, the owner is to use personal investments in operating the business until it starts generating adequate cash flow. This sales forecast is based on the assumption that the inventories are expected to be estimated at 10% for the subsequent month’s sales. This study reveals that the standard meal costs at least $4 in terms of labor and material. Similarly, a representative family spends $4 on selling machine tokens. It is notable that the managers enjoy some privileges, which are not extended to other workers. This cuts the cost of operation consequently favorable for the sale forecast made. Read More