Restaurant pro forma

PAPA GEO’S RESTAURANT14

Papa Geo’s Restaurant

Budget Proposal

for

[2020-2024]

Table of Contents

Section

Title

Subsection

Title

Page Number

1.0
Executive Summary
4

2.0
Sales Forecast
4

2.1
Sales Forecast
2.2
Methods and Assumptions
3.0
Capital Expenditure Budget
4

4.0
Investment Analysis
5

4.1
Cash Flows
5

4.2
NPV Analysis
5

4.3
Rate of Return Calculations
6

4.4
Payback Period Calculations
6

5.0
Pro Forma Financial Statements
7

5.1
Pro Forma Income Statement
7

5.2
Pro Forma Balance Sheet
7

5.3
Pro Forma Cash Budget
8

6.0
Works Cited
8

7.0
Appendices
8

7.1
Appendix 1: [description]
7.2
Appendix 2: [description]
1.0 Executive Summary

Papa Geo’s Restaurant needs to be competitive and unveil marketing crusades to protect their returns in the business. However, it is guided by typical objectives in the marketing plan. The first objective of the restaurant is ensuring customer satisfaction and loyalty. The target market entails about 10,000 families which is a totality of lower to middle class clients with zero direct competition. However, the customers’ satisfaction is determined the customer’s loyalty to the restaurant especially due to the services that they receive. The restaurant wins the customers through the good Italian food of low price. Stunning cleanliness of the restaurant is welcoming and eye catching which applies to both the foods served and the environment. Generation of the restraint traffic will impact the Restaurant towards success. The restaurant will cultivate a customer base such as having demanding lunchtimes and dinner services through intensive marketing. It will achieve this through weekly and monthly promotions as the marketing strategies.

The restaurant needs to attain their financial goals. The objective is to meet the financial income goal of $40000 annually. At the starting of the second year the company expects to attain a minimum of 2% profits of the sales. The main objective of the restaurant is profitability. It is attainable with the managerial ability to achieve the weekly goals especially through cost reduction with profitability growth concurrently.The restaurant needs to develop a restaurant brand. As the restaurant grows successfully, it will improve it’s place in the local market and toughen the brand. The quality of the food served has a great influence on the restaurant branding. The company purposes to cook using healthy products and use the brand to win new customers (Myers, 2019).

2.0 Sales Forecast

The sales forecast table illustrates the restaurants ability to offer services to the clients through listing the total services sold and the net sales in every year.

2.1 Sales Forecast
Year 1

Year 2

Year 3

Year 4

Year 5

Sales

$1,074,150

$2,157,700

$2,390,100

$2,625,920

$2,880,040

The sales are expected to rise each year as the restaurant continues to gain a higher customer base each year through marketing.

2.2 Methods and Assumptions
The sales forecast figures were obtained from the customer surveys which are based on the Italian fast food industry. Using the historical analysis of other restaurants with similar services and the customer base similar to that of this restaurant, we were able to structure the sales for each year in the next five years.

3.0 Capital Expenditure Budget

year 1

year 2

year 3

year 4

year 5

$204,360

$393,000

$411,800

$440,500

$460,700

(payroll)

$50,000

$53,000

$53,000

$52,000

$50,000

(marketing)

$25,000

$30,000

$34,000

$37,000

$41,000

(utilities)

$12,000

$38,000

$43,000

$44,000

$45,000

(repairs/maintainance)

$2,400

$10,000

$11,000

$13,000

$15,200

(dishes/ cleaning supplies)

$15,000

$18,000

$22,000

$24,000

$31,000

(employee healthcare)

$17,000

$50,000

$50,000

$50,000

$5,000

(rent)

$325,760

$606,000

$624,800

$660,500

$647,900

This data was gathered from numerous consumer surveys of the fast food industry. Using the data, we were able to develop the most crucial costs for every restaurant and then estimate the increment of capital expenditure as the restaurant’s sales grow.

4.0 Investment Analysis

The discount rate used in the calculations is 5 % since it is the most dominant rate that most restaurants similar to this one use (Van den Berghe.et.al, 2019). The net present value of the firm is calculated as $2,695,521

which illustrates that the company’s investment is very productive. In addition, the rate of return in all years indicates that the company’s profitability is approximately twice the amount of investment that was made.

4.1 Cash flows
year 1

year 2

year 3

year 4

year 5

$1,074,150

$2,157,700

$2,390,100

$2,625,920

$2,880,040

(cash sales)

$69,045

$134,673

$148,117

$162,899

$179,146

(taxes)

$10,300

$12,000

$13,000

$14,000

$15,000

(sales of current assets)

($204,360)

($393,200)

($411,860)

($431,453)

($451,717)

(cash spending)

($570,420)

($1,380,599)

($1,493,514)

($1,619,145)

($1,758,632)

(bill payment)

$378,715

$530,574

$645,843

$752,221

$863,837

(net cash flow)

$495,311

$1,112,740

$1,537,093

$2,508,380

$2,647,942

(cash balance)