Profitability Analysis of a New Business

This assignment presents a detailed financial analysis of a hypothetical new business venture. It includes a breakdown of projected expenses across various categories such as motor vehicle costs, repairs & maintenance, stationery & printing, insurance, and wages. The analysis also showcases the calculated net profit, income tax, and after-tax profit (PAT) for different periods. Furthermore, it explores potential funding sources like banking loans, overdrafts, and venture capital to support the business's growth and profitability.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Name of the Student:
Name of the University:
Authors Note:

ENTREPRENEURSHIP
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Table of Contents
4. Technical Feasibility:.............................................................................................................2
1. Depicting the option for developing the technology:.............................................................2
2. Depicting the options for producing the product services:....................................................2
3. Depicting the option for sales and promotion:.......................................................................2
4. Depicting availability of the resources that are need for development:.................................2
5. Depicting the laws and regulations related to the organisation:............................................2
6. Depicting any discovery in moral or ethical issues that are problematic:..............................3
7. Depicting the change in emerging technological:..................................................................3
5. Financial stability:..................................................................................................................3
1. Depicting the projected revenues from the sale of your product and services:.....................3
2. Depicting the start-up cost and equipment /capital cost:.......................................................3
3. Preparing profit and loss statement for first 3 years:.............................................................6
4. Depicting the possible source of financing:...........................................................................7
Reference and Bibliography:......................................................................................................8

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4. Technical Feasibility:
1. Depicting the option for developing the technology:
There are relevant options such as off the shelf, and online booking for adequately
designing the relevant options for supporting sales activities.
2. Depicting the options for producing the product services:
The use of combination of the relative in-house and contract could eventually help in
fulfilling the overall producing services for the Ethio catering service Pty ltd.
3. Depicting the option for sales and promotion:
Sales and distribution mainly needs to be evaluated, which could directly help in
generating higher revenue. The relevant sales mainly needs to be conducted with the help of
in-house and online marketing, while the distribution needs to be conducted with the help of
adequate sales representatives.
4. Depicting availability of the resources that are need for development:
Resources like raw material, supplier of the raw materials, facilities where production
will be conducted and relevant equipments that need to be used in production. The adequate
premises need to be maintained by the organisation for producing the foods by using
adequate equipments of foods production.
5. Depicting the laws and regulations related to the organisation:
The use of Food Production (Safety) Act 2000 and Food Production (Safety)
Regulation 2014 could eventually help in defining the overall regulation that needs to be

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maintained by the company. In addition, the use of standard as ISO 9000 could eventually
help in improving quality of the food.
6. Depicting any discovery in moral or ethical issues that are problematic:
Therefore, are no moral or ethical issues that could be faced by the organisation in
conducting the relevant operations, as adequate ISO are used by the new business. Hence,
there is no unethical measure that is currently being conducted by the new business.
7. Depicting the change in emerging technological:
The current technological change are been conducted in the hotel industry where
adequate increment in technology has mainly allowed the restaurant to connect with the
customer adequately. The use of social media exposure could eventually help in generating
the required profitability for the new business (Drucker 2014).
5. Financial stability:
1. Depicting the projected revenues from the sale of your product and services:
The relevant sale that needs to be conducted on monthly basis is $ 40,500, which
directly increases to $ 486,000 for the first year, while from second year 15% increment in
sales could be witnessed. Therefore, the overall sales of the company will mainly increased
over time, which could in turn help in generating the relevant profitability of the new Ethio
catering service Pty ltd.
2. Depicting the start-up cost and equipment /capital cost:
Start-up Cost Amount Amount

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Registrations
Business name $ 450
Licences $ 2,450
Permits $ 850
Domain names $ 99
Trademarks/designs/patents $ 500
Vehicle registration $ 350 $ 4,699
Membership fees $ 1,200
Accountant fees $ 1,100
Solicitor fees $ 800
Rental lease cost (Rent advance/deposit) $ 1,800
Utility connections & bonds (Electricity, gas, water) $ 2,600
Phone connection $ 400
Internet connection $ 250
Computer software $ 150
Training $ 750
Wages $ 4,500
Stock/raw materials $ 1,400
Insurance
Building & contents $ 250
Vehicle $ 200
Public liability $ 150
Professional indemnity $ 50
Product liability $ 350

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Workers compensation $ 480
Business assets $ 550
Business revenue $ 600 $ 2,630
Printing $ 199
Stationery & office supplies $ 299
Marketing & advertising $ 650
Total start-up costs $23,427
EQUIPMENT/CAPITAL COSTS Cost
Start-up capital $ 100,000
Plant & equipment
Vehicles 12500
Computer equipment 4500
Computer software 5000
Phones 1500
Fax machine 1250
Security system 6500
Office equipment
Furniture 4800
Shop fit out 2400
Total equipment/capital costs $138,450
3. Preparing profit and loss statement for first 3 years:
Profit & Loss for [Business name] as at [Financial Year]

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PROFIT & LOSS Month 1 Month n Year 1 Year 2 Year 3
Sales $
42,500
$
42,500
$
510,000
$
586,500
$
674,475
less cost of goods sold $
23,000
$
23,000
$
276,000
$
317,400
$
365,010
Gross profit/net sales $
19,500
$
19,500
$
234,000
$
269,100
$
309,465
Expenses
Accountant fees $
1,100
$
1,100
$
13,200
$
15,180
$
17,457
Advertising & marketing $
650
$
650
$
7,800
$
8,970
$
10,316
Bank fees & charges $
100
$
100
$
1,200
$
1,380
$
1,587
Bank interest $
250
$
250
$
3,000
$
3,450
$
3,968
Utilities (electricity, gas,
water)
$
2,600
$
2,600
$
31,200
$
35,880
$
41,262
Telephone $
400
$
400
$
4,800
$
5,520
$
6,348
Rent & rates $
1,800
$
1,800
$
21,600
$
24,840
$
28,566
Motor vehicle expenses $
150
$
150
$
1,800
$
2,070
$
2,381

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Repairs & maintenance $
180
$
180
$
2,160
$
2,484
$
2,857
Stationery & printing $
498
$
498
$
5,976
$
6,872
$
7,903
Insurance $
219
$
219
$
2,630
$
3,025
$
3,478
Wages (including PAYG) $
4,500
$
4,500
$
54,000
$
62,100
$
71,415
Total expenses $
12,447
$
12,447
$
149,366
$
171,771
$
197,537
NET PROFIT (Net Income) $
7,053
$
7,053
$
84,634
$
97,329
$
111,928
Income tax $
1,939.53
$
1,939.53
$
23,274.35
$
26,765.50
$
30,780.33
PAT $
5,113.30
$
5,113.30
$
61,359.65
$
70,563.60
$
81,148.14
4. Depicting the possible source of financing:
Relevant use of banking loan, overdraft, and venture capital could be used by the new
business for adequately improving relevant profitability. Seeing the overall profitability
depicted in the profitability table relevant loan could be provided to the company from
adequate funding source.