Nicole Brummer

1
Nicole Brummer
Slide 1

• Smoothie Doozie Company
• BISM 2100
• Summer 2004

2
Outline
Slide 2

• Introduction
• Assumptions
• Fixed Costs
• Figures from cash pro forma and possible budget
• Graph of revenues and Net Income
• Recommendation 1
• Recommendation 2
• Support of recommendation 1
• Support of recommendation 2
• Summary

3
Introduction
Slide 3

• The following presentation is designed to help
  illustrate the future budget and projected
  earnings for the Smoothie Doozie company.
  Included will be recommendations for possible
  changes to be made to the company in order to
  maximize total profits.

4
Assumptions
Slide 4

• Average smoothie price 3.00
• Average cost of goods sold for smoothies 1.00
• Average price of health food 2.00
• Average cost of goods sold for health food 1.00

5
Fixed Costs per Month
Slide 5

• Rent 1,600
• Phone Bill 50
• Electricity 120
• Insurance 80
• Advertising 1,200 after the 5th month 10
  increase

6
Figures from projected Budget
Slide 6

• Total Net Income for first year in business
  6,325.74
• Total Revenue for the first year in business
  205,369.13
• Total Expenses for the first year in business
  195, 077.25
• Total Taxes for the first year in business
  3,966.14

7
Graph
Slide 7
8
Recommendation 1
Slide 8

• My first recommendation is to raise the price of
  the smoothies by 50 cents.

9
Recommendation 2
Slide 9

• My second business recommendation to you is that
  you may not need two hourly employees and a
  manager working on Friday and Saturday.

10
Support of Recommendation 1

Slide 10

• At the original price of 3.00 per smoothie you
  would lose money until the fifth month in
  business.
• You would also only make a yearly net income
  (after taxes) of 6,325.74.
• Yet, when you raise the price of the smoothies
  you will earn 178.81(dollars after taxes) for
  the first month.
• A much more significant profit of 24,000.96
  would be earned for your first year in business.

11
Support of Recommendation 2
Slide 11

• With only 16 customers per hour, two people would
  only have to make 8 drinks an hour each.
• When you decrease you labor on Friday and
  Saturday by one hourly employee you will receive
  a profit of 51.80 on the third month and receive
  and annual net income after taxes of 11, 954.07.

12
Summary
Slide 12

• The Smoothie Doozie company will earn more
  profits and have less expenses if the owners
  decide to make the following changes
• Raise the price of each smoothie by 50 cents.
• Cut back to only one hourly employees on Friday
  and Saturday.