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Budgeting. By setting up a budget it will allow me to see the where I am spending my money and allows me to control spending in certain areas.

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Introduction

Budget: A budget is a financial plan that helps businesses to see how much money is going to be spent of things such as expenses and fixed costs. By setting up a budget it will allow me to see the where I am spending my money and allows me to control spending in certain areas for examples if I am spending too much on equipment's, the budget will highlight it an I can therefore buy a cheaper one or not buy it at all. There are two types of budget, the trading budget and the capital budget. The trading budgets is a budget plan that shows that amount which is going to be spent on the day to day running costs for example raw materials and bills. The capital budget shows the amount of money which is to be spent on large equipment's such as the fixed costs for example equipment and rent. My capital budget includes the equipment that will be used when making and serving the products for example the oven and drinks dispenser. I will only buy these equipment's once as it is very expensive and I wouldn't be able to afford it if I keep buying it again. ...read more.

Middle

By ordering at the beginning of the month, the ingredients will be fresh as it will be bought recently from the suppliers. However, this could cause problems because if I get more sales than anticipated, than I would be required to order more stock which could cause problems for example if there is a delay in delivery then I won't be able to offer the products to customers which will ultimately result to dissatisfied customers. A situation I could carry out to overcome this situation is to order stock whenever needed. By doing this, I will always have the sufficient amount of stock needed as well as having enough storage space to store them. Apart of the raw materials, I have decided to buy the non edible products such as tissues, packaging and serviettes on a 3-4 month basis. I have chosen to do this because one, they don't take up much storage space and two, because they don't get ruined over time. By doing this, it saves me time having to order it every month and it also saves me money having to pay for shipping if I were to order them every month. ...read more.

Conclusion

Another disadvantage is that it doesn't take into consideration any external factors for example, there could be a change in price for example my suppliers may increase the price of the pizza packaging and as a result of this, it will lead to me creating another budget which will ultimately waste time. By creating the budget, it has helped me to meet my aims and objectives for the reason that it will control my spending and by controlling spending, therefore it will help me to meet my objectives of cutting down costs and will therefore, lead my business to a greater profit. As well as this, it will help me to stay within my budget and as a result, will lead to greater profit as well. Apart from my profit aim, my budget will help me to increase sales because it will motivate my staff to work harder as they are given a task to do with a set amount of budget. Lastly, if I notice I am overspending, I will look for cheaper suppliers for example if I can't find cheaper equipments from a different website/store then I will purchase it from there and therefore will allow me to fulfil my objectives of finding suppliers and as a result will increase me profit. ?? ?? ?? ?? ...read more.

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