Tutorial:Starting your own business

Week 7

Day 34: Financial Write-Up

The balance sheet reflects the current assets and liabilities of Inside Slider Food Truck and Catering Company. The truck was the biggest asset costing $85,000. It came fully equipped and it was brand new. The owner invested $10,000 which went for the purpose of purchasing common stock in the S-corporation that was formed. The liability, the note payable, reflects the loan for the cost of the truck, uniforms, cooking utensils, fixtures and inventory. The loan was negotiated at 7% for 7 years.

A projected income statement was drawn up reflecting average costs for food truck operations. Payroll was one large expenditure. It includes salaries for 160 hours/month or 40 hour work week. The CEO is the truck manager and will receive $65,000 per year. The caterer/chef gets $38,400. The window person, receives $20,000 and the kitchen worker, $18,400. Based on research, these are competitive salaries. Cost of goods sold is based on 35%. Much research was done to deterrmine the cost and price of each menu item. Also the website, Biz-stats, was checked for similar operations for the indicated cost of goods sold. One thousand dollars was allocated for repairs since keeping all equipment is critical to our operation. Payroll taxes were calculated using current tax brackets. State payroll taxes were for California, where the truck is based. Interest on the loan was included. A Break-Even analysis was prepared using these expenses along with the cost of goods sold to determine the break even point. Revnue was determined by room occupancy of hotels within a half a mile of our daily truck locations. Projections were done on income for 6 months looking at a 2% increase each month in revenue while keeping expenses constant.

Start-up Budget

We have $10,000 in cash and we need to purchase some things before we begin operations. The propane tank needs to be filled, along with gasoline for the generator and truck, The insurance policy needs to be purchased, permits snd licenses need to be obtained. Point of sale equipment, phones and credit card reader need to be bought.

The total amounts to $4,450.00, leaving $5,550 cash