Accounting and Finance-Individual Business Report
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Financial Figures Prediction:
Estimated Turnover:
As the products to be sold are fairly expensive, and the volume expected to be sold rather large due to the market niche, and demand, I am going to estimate the turnover to be around £800,000 per annum. This figure is however, jus an estimate and is likely to change.
Here is a list of the expected costs:
Salaries and Wages
Warehouse staff: 15
Of which full time: 10
The remaining 5 being part time.
All of the warehouse staff are to be on an hourly rate of £5.50.
For the 10 full time staff, the expected cost will be:
9 hour days (9-5) x 7 day week = 63 hours. The 10 full time staff will each be contracted to work 40 hour weeks, while the part time staff working 23 hours a week.
40x£5.50= £220 per week for each full time member of staff
23x£5.50= £126.50 per week for each part-time member of staff
To arrive at final figures for full and part time staff:
£220x10 + £126.5x5 = £2832.5
To arrive at a yearly figure for all warehouse staff:
£2832.5 x 50 (weeks open each year) = £141625
Admin and other staff (on salaried pay):
There are to be:
1 x receptionist: £13,000
1 x IT technician: £20,000
2 x admin staff (sorting out orders, putting through to warehouse): £15,000 (x2)
1x operation manager: £35,000
Total being: £98,000
The total cost for salaries and wages, for all staff is therefore: £141625 + £98,000 = £239625
Rent and Rates
This will be dependant and the location, and size of the warehouse.
Heat and Light
As the operation is to be run 50 weeks of the year, it can be expected to be relatively high.
Telephone
Being an internet company, telephone bills will be rather small.
Postage and stationary
This will be a large cost as all items are to be posted out to the customer.
General Expenses
Maintenance
The main maintenance bill will be from the computer equipment, hard to estimate the actual cost.
Depreciation
Computer equipment will be the biggest depreciative item. As long as the company gets good use of out it, this cost will be cancelled out.
Recommendations:
I believe that the potential for this business proposition to be successful is very high. It produces maximum profit, with relatively few overheads in comparison to a retail outlet; it also conforms to the brief which has been set.