Small Business/MS Office Small Business Project

Keeping Track of Expenses Imagine you are running a small Ice Cream Shoppe. Imagine you are running a small Ice Cream Shoppe. The following pages will describe the operation of the business. The following pages will describe the operation of the business.

The building You found a building with reasonable floor space and location for $2500/month. You found a building with reasonable floor space and location for $2500/month. It costs $1875/month for electricity (remember, you have to keep those refrigerators running!) It costs $1875/month for electricity (remember, you have to keep those refrigerators running!) You pay $75/month for your simple business phone line to the building. You pay $75/month for your simple business phone line to the building.

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

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

Advertising You took out a ½ page ad in the Yellow book, which includes an address and web-site link that forwards to your phone. It costs $750/month. You took out a ½ page ad in the Yellow book, which includes an address and web-site link that forwards to your phone. It costs $750/month. You run fliers out to mailboxes once every three months at a cost of $500 each time. You run fliers out to mailboxes once every three months at a cost of $500 each time.

Personnel You have the following people on your staff: You have the following people on your staff: Day Manager: $29,000/year Day Manager: $29,000/year Night Manager: $24,800/year Night Manager: $24,800/year One helper behind the counter at all times at $5.75/hour. Your store is open 12 hours/day. One helper behind the counter at all times at $5.75/hour. Your store is open 12 hours/day.

Your Assignment Calculate the daily cost of running your business. Calculate the daily cost of running your business.

Part 2: Paying off Expenses Here, we will calculate how much money we need to pay off our expenses. Here, we will calculate how much money we need to pay off our expenses. This gives us a look at how much work we need to do just to keep from losing money. This gives us a look at how much work we need to do just to keep from losing money.

Project Assignment 10/21/04 Calculate the number of scoops of ice cream you must sell per day to cover your daily overhead costs. Assume that ice cream costs between $1.00 to $2.00 per gallon. Assume that ice cream costs between $1.00 to $2.00 per gallon. Assume that you get 40 to 50 scoops per gallon. Assume that you get 40 to 50 scoops per gallon. Show your results in a table on a separate page. Show your results in a table on a separate page.

Project Assignment 10/21/04 Example: # scoops/day to break even Example: # scoops/day to break even $1.00$1.25$1.50$1.75$