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Keep in mind that we are still in the Restaurant business in Texas


Keep in mind that we are still in the Restaurant business in Texas. You found an existing building and can grow faster than the Industry average. Porter's Generic Model of Competition has helped you pin point an entry wedge with unique customers. 


The purpose of this assignment is to test the money aspect of the business. This will determine if we have a business, a pipe dream, or a hobby. 


Start with chapter 12 and then page 162 of the textbook. (Please submit assignment as Lastname.Firstname.Financial.docx.) You will notice that much of this is covered in section eight of the business plan template. Your written report should be key boarded, utilize the American Psychological Association (APA) citation format, and be 2 pages in length (including exhibits, tables and appendices). Use 12 point Ariel font, 1/4 inch indentions,  and single line and character spacing. I am expecting a professional report that (a) demonstrates a command and understanding of the topic, (b) uses sound presentation logic and well thought through justifications, and (c) displays use of appropriate graphs, charts, and tables. Turn in your Word and Excel files to Canvas for submission to Late submissions will not be accepted. Please answer the following questions in paragraph form.



Financial Feasibility Analysis

Capital Requirements  How much cash and securities do we need to get started? We will bring 20% with us for a loan. 

Estimated Earnings  Can we beat the Industry averages in the IBIS report? What do the numbers look like? Do we lose money at first while developing the company? 

Return on Investment  Can we beat the Industry average? What is the normal return on an investment like this? How soon do we expect to make a return on investment? 

Remember that you can estimate your expenses using the IBIS industry report. Start with your room count, percent of occupancy, and estimated sales. Then estimate your expenses using the averages listed in the IBIS report.


Your Restaurant
"Just Like Mom's."
Estimated Budget
(Dollars, except were noted)
Year 2020
Sales Revenue
Sales Revenue $ 720,000.00
(Est. 200 Customers * 360 days * $10)
Catering (add 7.8%) Inc. $ 56,160.00
Total Sales Revenue $ 776,160.00
Cost of Sales
Wages (36.2% of Revenue) $ 260,640.00
Purchases (32.3% of Revenue) $ 232,560.00
Depreciation (2.2% of Revenue) $ 15,840.00
Marketing (1.8% of Revenue) $ 12,960.00
Rent/ Utilities (10.6% of Revenue) $ 76,320.00
Other Factors (13.1% of Revenue) $ 94,320.00
Total Operating Expenses $ 692,640.00
Operating Income $ 27,360.00
Subtract Expenses from Sales
Operating Margin 4%
* All of this information was obtained by reading the IBIS World report provided to you at the beginning of the term.
*Catering income based on the IBIS Hotel Industry report.
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