group think

Recommendations. 

The recommendation is to open Ooty restaurant and begin the startup operations as soon as possible and to open the restaurant by December 31st 2015.

It is also recommended that we follow the following budget and timeline.

Budget

Assumptions

Current Interest rates expected to remain constant throughout the five years at 10%.

Long term interest rates also expected to remain constant at 15%.

Fixed tax rate of 30%.

Total operational expenses to be approximated at $50,000.

Cost of sales to increase by $10,000 annually due to reinvestments in terms of profits ploughed back.

 

Assumption                                                       2016       2017       2018       2019       2020

Current interest rates %                                               10           10           10           10           10

Long term interest rates %                          15           15           15           15           15

Tax rate %                                                           30           30           30           30           30

Expenses $(000s)                                             50           50           50           50           50

 Recommendations

Projected Profit and Loss

Ooty Indian Restaurant

Projected Profit and Loss

From Commencement of Restaurant Operations (December 1, 2015) to End of Fifth Fiscal Year (November 30, 2010).

                                                2016                       2017                       2018                       2019                       20120

Sales ($)                               291,552 297,708 330,236 361,067 390,000

Cost of sales ($)                                50,000                   60,000                   70,000                   80,000                   90,000

Gross margin ($)               214,552 237,708 260,236 281,067 300,000

Expenses ($)                      50,000                   50,000                   50,000                   50,000                   50,000

Net profit ($)                     164,552 187,708 210,236 231,067 250000

Timeline Recommendations

Legend of dates

October 1, 2015:

  • Renovations commence for Ooty Indian restaurant. The restaurant renovations will be completed by November 30, 2015 to give way and adequate preparations for the grand opening ceremony to be held on December 1, 2015. During the month of October, Alla will purchase all the necessary equipment, furniture and other capital assets needed to operate the Ooty Indian Restaurant from funds provided by the restaurant investor Mr. D. Trump.
  • During October and November the restaurants grand opening will be advertised on social media and through conventional advertising methods such as journals, newspapers and business shows.

December 1, 2015:

  • Ooty Indian Restaurant grand opening. The restaurants food services will be continually advertised on the above mentioned advertising platforms.

November 30, 2016:

  • First fiscal year end of Ooty Indian Restaurant. The operating profit for this first year of operation is expected to be $164,552.

November 30, 2017:

  • Second fiscal year end of Ooty Indian Restaurant. The operating profit for this first year of operation is expected to be $187,708.

November 30, 2018:

  • Third fiscal year end of Ooty Indian Restaurant. The operating profit for this first year of operation is expected to be $210,236.

November 30, 2019:

  • Fourth fiscal year end of Ooty Indian Restaurant. The operating profit for this first year of operation is expected to be $231,067.

November 30, 2020:

  • Fifth fiscal year end of Ooty Indian Restaurant. The operating profit for this first year of operation is expected to be 250,000.