Papa Geo Budgeting Project

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Brain Enterprises
Budget Proposal
Papa Geo’s Restaurant

SUMB11 Sec B
Professor Marie Main
DeVry University

Table of Contents

Section| Title| Subsection| Title| Page Number|
1.0| Executive summary| | | 3|
2.0| Sales Forecast| | | 3|
| | 2.1| Sales Forecast| 3|
| | 2.2| Methods and Assumptions| 4|
3.0| Capital Expenditure Budget| | | 4|
4.0| Investment Analysis| | | 6|
| | 4.1| Cash flows| 7|
| | 4.2| NPV Analysis| 8|
| | 4.3| Rate of Return Calculations| 8|
| | 4.4| Payback Period Calculations| 9|
5.0| Pro Forma Financial Statements| | | 9|
| | 5.1| Pro Forma Income Statement| 9|
| | 5.2| Pro-Forma Cash flow Statement| 10|
| | 5.3| Pro-Forma Balance Sheets| 11|
6.0| Works Cited| | | 12|


* 1.0 Executive Summary

* Papa Geo’s Restaurant targets middle income families in Orlando Florida. The restaurant will be buffet style where for a low cost price people can eat from the serving bars that are built. The main food served in this restaurant is Italian food composed of pizza, pasta, soup, desserts, salad bar and a self-serve soda bar. There will be a gaming area which will create another source of revenue for the restaurant. Because the food is reasonable priced in the area where it is being built families will hopefully deter from the normal fast food restaurants. Although they are not in direct competition with the same line of food, they still hold a great weight in choices the customer might prefer that Papa Geo’s does not cater to. * The Capital Expenditure Budget presented is an estimated cost of what will be initially needed for the restaurant to run properly. It is separated by sections so that finding items that are necessary for specific tasks are easier to locate and update as the business progresses. The budget will allow for the minimum items necessary to be ordered but it is not by any means final as a change in menu or additional items necessary will be checked over weekly to make certain all necessities have been met. *

* 2.0 Sales Forecast

* The table below will show the expected sales forecast for the next five years where the population surrounding the restaurant is currently around 10,000 families and will be growing at an average rate of 6% per year. *

2.1 Sales Forecast
* The fiscal year for the company is from January to December, the restaurant will hope to open by October 1st, 2011. During those 3 months at the end of the fiscal year will be the “Grand Opening” for Papa Geo’s. With any new opening customers will first have to establish the place and then the popularity of the restaurant will spread and bring in more customers. We are first assuming that a quarter of the population (2,500 of 10,000) will first come in to dine at Papa Geo’s at least twice a month. At the beginning of 2012 we will start to see an increase in customers. By the end of the year we are hoping that from the original 10,000 families that 75% will end up eating at different rates but regularly at Papa Geo’s. * The first quarter will continue to come in at least twice a month and then the second quarter will come in at least once every 6 months and the third quarter will come in at least once every 4 months. We are estimating that at least 1,000 families will come in once every once throughout the year as a “special eat out dinner”. In the third year we are projecting that at least 80% of the population will be dinning at Papa Geo’s on an average of 11.5 times a year from then on. *

* When times are hard because the economy takes a down turn families will often cook at home so as not to waste money on outside food. However statistics show that once the economy improves the number of families that go out to eat will increase. *

* Year| *...
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