Investigating financial control for a new restaurant.

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BTEC First Diploma

Unit 3: Investigating financial control

Contents Page

Page 1: Introduction

Page 2-6:  Different Cost

Page 6-13: Net Profit

Page 13-16: Break Even

Page 16-20: Cash flow

Page 20-24: Recording transaction

Page 25: Evaluation

Page 26: Bibliography

Page 27: Appendix

Introduction

This unit looks at the financial aspects of running a business. I will start by looking at profit and then investigate the point at which income equals expenditure, known as the break even point. It is also important that businesses carefully watch their cash flow. I will have to calculate the cash flow for a selected business and explain how a business can improve their cash flow. Budgets are another way in which businesses control their financial situation and I will have to draw-up a budget for the selected business. Finally I will look at the ways in which a business record transactions and ways of preventing frauds.

  1. Restaurant Ideas

For this task I will be using the following scenario:

“Warren Palmer wants to open a new restaurant in the Barnet area and has approached our business class for some ideas and advice as to what type of restaurant would be successful in this local area.”

BRAINSTORM

These are my different ideas that I think the restaurant should be.

Gambian Restaurants: Serving Gambian traditional dishes

Takeaway service

Multicultural restaurant: serving dishes from different nationalities

BUSINESS NAME

This is the name that I choose for the restaurant.

Warren restaurant

POSSIBLE SUPPLIERS

These are the three suppliers that I have considered to supply Warren's restaurant with food

Earth Natural Foods

London Farmers' Markets

The Fresh Food Group

CHOSEN SUPPLIER

I have chosen Earth Natural Foods because it is the most cheapest and they sell the highest quality of food products.

Earth Natural Foods

THE MARKET

There are a total of 314564 people living in Barnet so because the restaurant is multi cultural, it could be a success because of the multi cultural people living in Barnet.  

Different types of Costs

My warrens restaurant goods product for fixed cost and variable cost

This is the table for my fixed cost and variable cost

Net Profit

I will use the information I gathered for Warren’s restaurant and show how to calculate net profit through a presentation.

Below are the slides used during my presentation and also the witness statement.

This is my introduction for the presentation for cost, revenue and profit.

This is my vision for warrens restaurant.

This slide shows the different cost figures. The formula for cost is Fixed cost + Variable cost = Total cost which is fixed cost 11566 + 4920 = 16486.

This slide shows the costs that are going to be involved in Warren’s restaurant.

        

This slide shows the importance of Warren knowing his cost.

This slide show how Warren can make Revenue with all sales. The formula for Total Revenue is unit price + unit sold.

This slide shows the importance of revenue and why Warren needs to know this.

This slide shows the profit for Warren’s restaurant, profit is calculated by total revenue – total cost = profit

From the presentation I have found out what my net profit is:

To calculate the net profit is

Total cost £25679

Total Revenue £45300

So to calculate warrens restaurant net profit it would be Total revenue

£45300 – Total cost £25679= which is a profit of £19621 for Warren’s restaurant.  

This slide tells why Mark needs to know his profit.

Break Even

For this task I will use the case study below to create a break even chart.

Mark owns and manages a French restaurant in Essex. The restaurant is very successful and Mark has recorded very high levels of profit over the past few years. From carrying out market research Mark is aware that he could expand his business and open another restaurant in High Barnet. Over the past few months a large number of Mark’s customer base has consisted of school teachers.  Mark is concerned that his new business might struggle in August when the schools are closed for summer holidays.    

Join now!

Mark has now carried out some research into his proposed new restaurant and he has produced the following information:

What is a Break Even

Total variable and fixed costs are compared with sales revenue in order to determine the quantity of sales level, sales cost or production at which the business makes neither a profit nor a loss, which is the break-even point.  

How to calculate break even points

The Break even point is the point at which total revenue and total cost (variable and fixed cost added together) meet or are equal. The break even analysis ...

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