Identifying All of the Costs Involved, Case Study Example

Anticipated Budget

Creating a budget can be very tedious but is essential to  keep a business afloat for the longevity of the business to track spending and to possibly uncover hidden cash flow problems that may arise in the future. Budgeting can help to eliminate or minimize financial risks associated with new businesses. Creating a budgeted worksheet is the most effective means to organize and keep track of expenses in a proper fashion.

Direct Costs

Deliverables to clean the entire restaurant for initial inspection: $500

Computer Costs, Kitchen Costs and Dining Room Costs including Initial Food Costs: $20,000

Administrative Costs: $300

Daily Sign in Sheet for Managers and Employees: $10

Consulting Firms for assistance: $1,000

Overhead Costs

Utilities: $1,000

Employee Salaries: $6,000

Maintenance: $1,000

Time-Phase Budget for Project

Initial Set-Up Time is estimated at six months

The cumulative cost of the project including one month salary for managers and employees: $24,410

Budget Costs can be made in the areas of these if needed: Consultants and Maintenance. Consultants are used to focus and organize the budget and get the business off to a good start or re-organize a pre-existing business but when a business is lacking funds consulting costs can be trimmed.

Major and Minor Inherited Risk to the Project: Business may be slow because of poor or inadequate marketing. There is always a risk with the area of choice for location and competitors for newly established businesses. This phase of development should be planned well in advance before actually implementing the financing phase of the business or making new investments to an already existing business.

Contingency Plan for any Risks: Plan is to market by word of mouth, market through banners and internet sites and serve daily specials to attract new customers.

References

Budgeting for the Small Business (2010) Retrieved January 2010) from, http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_fm8.pdf

Vohwinkle, J.Budgeting 101 Retrieved January 25, 2010 from, http://financialplan.about.com/od/budgetingyourmoney/tp/budgeting-101.htm