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Venture Budgeting and Forecasting Paper

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University of Phoenix Material

 

Venture Budgeting and Forecasting Paper

 

Resources: Kudler Opening Budget

Write a 700- to 900-word paper in APA format in which you do the following:

 

·         Illustrate how your venture would perform by estimating the revenue and expense to calculate operating profit or loss. Include estimates of your venture’s main sources of revenue and the expenses expected in the main cost categories such as the cost of goods, sales and marketing, labor, rent, maintenance, and any other significant expenses.

 

·         Illustrate your venture’s startup costs by estimating a preopening budget—also termed development budget—that includes startup costs such as building and construction, Web site development, preopening marketing, equipment, merchandise, preopening operations, research and development, working capital, and any other significant preopening expenses.An example of a preopening budget may be found in the materials listed on the course page for the University of Phoenix student Web site for Week Two named Kudler Opening Budget.

 

·         Develop financial planning goals by illustrating how your venture would be initially funded by using cash on hand, debt, venture capital, or a combination of these. Use a mortgage calculator found on the Internet and calculate your loan payments. Include these expenses in your Operating Budget. Use the information below to help in your calculations:

 

Building and Construction Estimation*

Remodeling Fees

$200 per Square Foot

New Building Construction Fees

$450 per Square Foot

*Multiply square footage of small business by fee for estimation.

 

Interest Information

10 Year bank Note (Debt)

7.5% Interest

5 Year Venture Capital Loan

15% Interest

 

Examples of Profit Split for Venture Capital Partnerships*

Example 1

Venture Capital Investment 1

$300,000

Cost to Develop Business 1

$1,000,000

Venture Capital Profits 1

30% of Business Profits

Example 2

Venture Capital Investment 2

$500,000

Cost to Develop Business 2

$2,000,000

Venture Capital Profits 2

25% of Business Profits

*Profit split is commensurate with the ratio of investment.

 

Post your assignment as a Microsoft® Word attachment.

 

 University of Phoenix Material

 

 

Venture Budgeting and Forecasting Paper

 

Resources: Kudler Opening Budget

Write a 700- to 900-word paper in APA format in which you do the following:

 

·         Illustrate how your venture would perform by estimating the revenue and expense to calculate operating profit or loss. Include estimates of your venture’s main sources of revenue and the expenses expected in the main cost categories such as the cost of goods, sales and marketing, labor, rent, maintenance, and any other significant expenses.

 

·         Illustrate your venture’s startup costs by estimating a preopening budget—also termed development budget—that includes startup costs such as building and construction, Web site development, preopening marketing, equipment, merchandise, preopening operations, research and development, working capital, and any other significant preopening expenses.An example of a preopening budget may be found in the materials listed on the course page for the University of Phoenix student Web site for Week Two named Kudler Opening Budget.

 

·         Develop financial planning goals by illustrating how your venture would be initially funded by using cash on hand, debt, venture capital, or a combination of these. Use a mortgage calculator found on the Internet and calculate your loan payments. Include these expenses in your Operating Budget. Use the information below to help in your calculations:

 

Building and Construction Estimation*

Remodeling Fees

$200 per Square Foot

New Building Construction Fees

$450 per Square Foot

*Multiply square footage of small business by fee for estimation.

 

Interest Information

10 Year bank Note (Debt)

7.5% Interest

5 Year Venture Capital Loan

15% Interest

 

Examples of Profit Split for Venture Capital Partnerships*

Example 1

Venture Capital Investment 1

$300,000

Cost to Develop Business 1

$1,000,000

Venture Capital Profits 1

30% of Business Profits

Example 2

Venture Capital Investment 2

$500,000

Cost to Develop Business 2

$2,000,000

Venture Capital Profits 2

25% of Business Profits

*Profit split is commensurate with the ratio of investment.

 

Post your assignment as a Microsoft® Word attachment.

 University of Phoenix Material

 

 

Venture Budgeting and Forecasting Paper

 

Resources: Kudler Opening Budget

Write a 700- to 900-word paper in APA format in which you do the following:

 

·         Illustrate how your venture would perform by estimating the revenue and expense to calculate operating profit or loss. Include estimates of your venture’s main sources of revenue and the expenses expected in the main cost categories such as the cost of goods, sales and marketing, labor, rent, maintenance, and any other significant expenses.

 

·         Illustrate your venture’s startup costs by estimating a preopening budget—also termed development budget—that includes startup costs such as building and construction, Web site development, preopening marketing, equipment, merchandise, preopening operations, research and development, working capital, and any other significant preopening expenses.An example of a preopening budget may be found in the materials listed on the course page for the University of Phoenix student Web site for Week Two named Kudler Opening Budget.

 

·         Develop financial planning goals by illustrating how your venture would be initially funded by using cash on hand, debt, venture capital, or a combination of these. Use a mortgage calculator found on the Internet and calculate your loan payments. Include these expenses in your Operating Budget. Use the information below to help in your calculations:

 

Building and Construction Estimation*

Remodeling Fees

$200 per Square Foot

New Building Construction Fees

$450 per Square Foot

*Multiply square footage of small business by fee for estimation.

 

Interest Information

10 Year bank Note (Debt)

7.5% Interest

5 Year Venture Capital Loan

15% Interest

 

Examples of Profit Split for Venture Capital Partnerships*

Example 1

Venture Capital Investment 1

$300,000

Cost to Develop Business 1

$1,000,000

Venture Capital Profits 1

30% of Business Profits

Example 2

Venture Capital Investment 2

$500,000

Cost to Develop Business 2

$2,000,000

Venture Capital Profits 2

25% of Business Profits

*Profit split is commensurate with the ratio of investment.

 

Post your assignment as a Microsoft® Word attachment.

 

University of Phoenix Faculty Material      
       
 Kudler Opening Budget Startup Costs 
       
         
 Construction           
 Site preparation                  100,000    
 Building               1,000,000    
 Trade Fixtures                  400,000        
 20% CONTINGENCY                  300,000    
     SUBTOTAL:    1,800,000
       
 Operating Capital       
 Marketing/PR                    50,000    
 Launch Event                    25,000    
 Equipment                    50,000    
 Inventory                  750,000    
 Operating Supplies                    10,000    
 Legal fees                    25,000    
 Permits                    10,000    
 Insurance                    25,000    
 Preopening Salaries and Travel                  125,000    
 10% Contingency                  107,000    
     SUBTOTAL:    1,177,000
       
 Occupancy Cost       
 R E Taxes                    12,000    
 Utilities                    10,000    
     SUBTOTAL:        22,000
       
 TOTAL   2,999,000    
       
       
       
 Capitalization Plan       
       
 Cash from Principle Owners                  300,000    
 Cash from Venture Capital Partners                  600,000  Preferred return of 80% of net profit until principle is paid, then 10% of net profits   
 Bank Loan               2,100,000  7.5% APR on a 15-year term   
               3,000,000    

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