Ned Kelly Business Plan Essay Example | Topics and Well Written Essays - 1000 words

Ned Kelly Business Plan - Essay ExampleBudgeting in business is beneficial not only because it enables intercommunicate the yearly expenses to be incurred while following a certain plan, but it besides allows to determine how costs lead incur and how can they be controlled resulting in efficient operations (Dury, 2008 Albrecht et al., 2008). As for instance, without doing any budgeting of the business activities, an entrepreneur may only be able to visualize to a certain extent that what expenses imparting be incurred and how they will be financed and what revenues would be required to keep the business profitable. But, on the other hand, with budgeting the entrepreneur is in fact able to foresee that what expenses will be incurred and how much revenues will be required to cover those expenses and at the end make profits. This in turn allows not only setting up targets for revenue generation, but also allows ascertainment of cost controlling techniques (Jiambalvo, 2010 Horngren & Harrison, 2009). In this regard, cash budgeting is considered as one of the most beneficial and important procedure to forecast the results of a certain business approach or plan on monthly basis (Horngren & Harrison, 2009). ... Keeping in view these benefits, cash budget can also be prepared for hacker business and revenues and expenses can be forecasted, which can be then used to ascertain the required working capital to be raised. Apart from this, as it has been noted that the owner of the taxi business requires the amount of money required to be taken from bank to be ascertained precedent to starting the business. In this regard, it is pertinent to ascertain the cash inflows and outflows expected from a years operations and the net profit or loss which will be earned by the business. Having taken into consideration the information provided for the case, income statement and cash budget has been prepared and presented as follows for the business to be started by Ned Kelly. In come avouchment The income statement forecasted for Ned Kellys business has been presented as follows Forecasted Income Statement Amount Sales ? 417,312.00 Less Diesel (15 % of Total Sales Revenue) - ? 59,875.20 Maintenance Costs (? 120 per taxi per month) - ? 4,320.00 Annual Road Tax and Licence Fee (3 x ? 600) - ? 1,800.00 Drivers Salaries per Month (9 x ? 24,000 / 12) - ? 216,000.00 Drivers Social Security (10 % of gross(a) Annual Salary) - ? 21,600.00 Cost of Sales - ? 303,595.20 Gross Profit ? 113,716.80 Depreciation - ? 12,000.00 Office Staffs Salaries per Month (4 x ? 16,000 / 12) - ? 64,000.00 Office Staffs Social Security (10 % of Gross Annual Salary) - ? 6,400.00 Utility Costs - ? 6,000.00 Rent - ? 18,000.00 Local billet Tax Charges - ? 5,000.00 Drawings - ? 30,000.00 Advertisement - ? 6,000.00 Net Profit - ? 33,683.20 Sources (Albrecht et al., 2008 Dury, 2008 Horngren & Harrison, 2009 Jiambalvo, 2010) It can be observed