The Catering For Kids will finance growth through cash flow, grants and school district revenues. We recognize that this means we will have to grow more slowly than we might like but that no borrowing is necessary.
The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:
The following benchmark chart indicates our key financial indicators for the first three years. We foresee slow but steady growth in demand for our services and consequent increase in operating expenses. During year one, Catering For Kids will serve its internal market only, as we ramp up to serving the external market in year two.
Our break-even analysis is based on the ongoing costs we incur to keep Catering For Kids running. Fixed costs including the overhead for use of the commercial kitchen, utilities/contract services, payroll, and marketing costs. The payroll cost includes the salary for one permanent part-time staff person who will manage the operation of the catering business as well as instruct the student workers for the entrepreneurship portion of the curriculum. Marketing expenses will be kept to a minimum, primarily employing word-of-mouth and other inexpensive means. Our assumptions on the average unit revenue are based on the average price we will charge for our corporate boxed lunch, however this is not the only product that will be offered by Catering For Kids. The result of this analysis offers general insight regarding the number of boxed lunches we must sell in order to maintain uninterrupted operation of the catering business each month.
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