Papa Geo’s Restaurant essay

The forecast for my budget are as follows:

Item	Year1	Year 2	Year 3	Year 4	Year5
Meals	1379700	1462482	1550323	1643223	1741871
Vending machine	197100	208780	221920	235060	251120
Total sales	1576800	1671262	1772243	1878283	1992991

As shown in my budget forecasts, I estimated that during the first year there would be $1.5m in total sales. In the following year, there will be an increase in total sales because of intense advertisements, good customer service, as well as availability of cheap food. In the first year the business would be run by personal funds and it would be expected that it would pick up on its second year of operation.

Assumptions made during budget preparation.

After studying other businesses in the area, rough estimates were made that were used to prepare the budget. These businesses were studied because it is expected that the business run in the same way that these businesses are run.

The budget estimates relate with current market prices and any changes to the prices will be adjusted to +/- 3% of the total estimated costs. The budget also estimates that there will be a steady flow of customers. The budget planner is optimistic that the business will go ahead as planned.

All figures in the spreadsheet are in US dollars. The budget has been modified to deal with changes in the business environment such as competition, changes in the food market etc.

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