The Professional Personal Chef 1 Chapter 6 Finances

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Chapter 6Chapter 6

FinancesFinances

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3 Different Costs3 Different Costs

• One time costOne time cost– Deposit or licenseDeposit or license

• Fixed costFixed cost– A cost that does not change as sales A cost that does not change as sales

changechange

• Variable costVariable cost– A cost that changes as sales changeA cost that changes as sales change

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Start UP CostStart UP Cost

• License / FeesLicense / Fees

• Insurance Insurance

• Professional serviceProfessional service

• Phone / Web set up Phone / Web set up

• Office equipment Office equipment

• Printing costPrinting cost

• CookwareCookware

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Fixed CostFixed Cost

• Vehicle paymentVehicle payment

• RentRent

• Web-hosting feeWeb-hosting fee

• Association feesAssociation fees

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Variable CostVariable Cost

• Cost of foodCost of food

• Cost of fuel used in transportation Cost of fuel used in transportation

• Uniforms / LinensUniforms / Linens

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Finding Capital Finding Capital

• How much do you need ?How much do you need ?– In what time frame ?In what time frame ?

• What resources do you have ? What resources do you have ? – Savings / family / friends ? Savings / family / friends ?

• How much are you willing to pay ?How much are you willing to pay ?– InterestInterest

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Finding Capital Finding Capital

• Your credit history Your credit history – Credit report Credit report

• How will repay the loan ?How will repay the loan ?

• How much of your own money will be How much of your own money will be at risk ?at risk ?

• Personal references Personal references

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Cash Management Cash Management

Cash from Sales

Your Personal Chef Business

Cash thatPays the Bills

Cash Flow through your business

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Cash FlowCash Flow

• Positive Positive – More monies coming in than going outMore monies coming in than going out

• It’s a GREAT thing!It’s a GREAT thing!

• Negative Negative – More monies going out than coming in More monies going out than coming in

• Must be short livedMust be short lived

• Breakeven pointBreakeven point– Where positive and negative cash flow balanceWhere positive and negative cash flow balance

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Planning On ProfitPlanning On Profit

Sessions per month

Income per session

Total gross receipts

Variable + Fixed Cost

Net Profit

X

=

-

=

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YieldYield

• As purchased (AP)As purchased (AP)

• Edible portion (EP)Edible portion (EP)

• EP / AP = Yield EP / AP = Yield

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Yield CostYield Cost

• Example Example – Whole fish AP 6 lbs @ $4.00 per pound Whole fish AP 6 lbs @ $4.00 per pound – After cutting After cutting

•3 lbs EP3 lbs EP

– 6 lbs AP / 3 lbs EP = .50 (%)6 lbs AP / 3 lbs EP = .50 (%)– $4.00 / .50 = $8.00 per pound EP$4.00 / .50 = $8.00 per pound EP

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Setting Up Your BooksSetting Up Your Books

• Use a system that you are Use a system that you are comfortable with comfortable with

• Do your “bookkeeping” every week, Do your “bookkeeping” every week, same day same time same day same time

• Keep an accounting journal Keep an accounting journal – Save ALL receipts Save ALL receipts