Small Business/MS Small Business/MS OfficeOffice

Small Business ProjectSmall Business Project

Keeping Track of ExpensesKeeping Track of Expenses

Imagine you are running a small Imagine you are running a small Ice Cream Shoppe.Ice Cream Shoppe.

The following pages will The following pages will describe the operation of the describe the operation of the business.business.

The buildingThe building

You found a building with reasonable You found a building with reasonable floor space and location for floor space and location for $2500/month.$2500/month.

It costs $1875/month for electricity It costs $1875/month for electricity (remember, you have to keep those (remember, you have to keep those refrigerators running!)refrigerators running!)

You pay $75/month for your simple You pay $75/month for your simple business phone line to the building.business phone line to the building.

The building (cont)The building (cont)

You pay $200/month in the You pay $200/month in the winter months (Nov, Dec, Jan, winter months (Nov, Dec, Jan, Feb, Mar) to heat the place. Feb, Mar) to heat the place. During the other months, the During the other months, the excess heat from the excess heat from the refrigerators keeps the place refrigerators keeps the place warm.warm.

InsuranceInsurance

You pay $15,000/year for You pay $15,000/year for insurance for your business.insurance for your business.

AdvertisingAdvertising

You took out a ½ page ad in the You took out a ½ page ad in the Yellow book, which includes an Yellow book, which includes an e-mail address and web-site link e-mail address and web-site link that forwards to your phone. It that forwards to your phone. It costs $750/month.costs $750/month.

You run fliers out to mailboxes You run fliers out to mailboxes once every three months at a once every three months at a cost of $500 each time.cost of $500 each time.

PersonnelPersonnel

You have the following people You have the following people on your staff:on your staff: Day Manager: $29,000/yearDay Manager: $29,000/year Night Manager: $24,800/yearNight Manager: $24,800/year One helper behind the counter at One helper behind the counter at

all times at $5.75/hour. Your store all times at $5.75/hour. Your store is open 12 hours/day.is open 12 hours/day.

Your AssignmentYour Assignment

Calculate the Calculate the dailydaily cost of cost of running your business.running your business.

Part 2: Paying off ExpensesPart 2: Paying off Expenses

Here, we will calculate how Here, we will calculate how much money we need to pay off much money we need to pay off our expenses.our expenses.

This gives us a look at how This gives us a look at how much work we need to do just to much work we need to do just to keep from losing money.keep from losing money.

Project Assignment 10/21/04Project Assignment 10/21/04

Calculate the number of scoops of ice Calculate the number of scoops of ice cream you must sell per day to cover cream you must sell per day to cover your daily overhead costs.your daily overhead costs. Assume that ice cream costs between Assume that ice cream costs between

$1.00 to $2.00 per gallon.$1.00 to $2.00 per gallon. Assume that you get 40 to 50 scoops Assume that you get 40 to 50 scoops

per gallon.per gallon. Show your results in a table on a Show your results in a table on a

separate page.separate page.

Project Assignment 10/21/04Project Assignment 10/21/04

Example: # scoops/day to break evenExample: # scoops/day to break even

$1.00$1.00 $1.25$1.25 $1.50$1.50 $1.75$1.75 $2.00$2.00

4040

4242

4444

4646

4848

5050