Accounting for Decision Making: Business Plan for a Fast Food Retail Business

This assessment contains a business plan for a fast food retail business, including a marketing plan, operational structure, financial projections, and time frame for implementation.

Running head: ACCOUNTING FOR DECISION MAKING
Accounting for Decision Making
Name of the Student:
Name of the University:
Author’s Note:

1
ACCOUNTING FOR DECISION MAKING
Table of Contents
Executive Summary.........................................................................................................................2
Background......................................................................................................................................2
Marketing Plan.................................................................................................................................3
Operations........................................................................................................................................4
Financial Projections.......................................................................................................................5
Time Frame for Implementation......................................................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11
Appendix........................................................................................................................................12

2
ACCOUNTING FOR DECISION MAKING
Executive Summary
The main purpose of this assessment is to formulate a business plan which will be dealing
with a retail business and the business will be providing fast food items such as Hamburgers and
fries. The name of the shop as per the owners will be Friend’s and Fries. The assessment will be
containing a brief description of the background of fast food industries and the recent market
developments for the same. The assessment will be including an operational structure of the
business as to what will the business structure and the level of management of the business will
also be discussed in operation. The assessment will be including a marketing plan which will
portray the different strategies which are adopted by the business for promoting the products and
overall business. The assessment will also include a financial plan which will be showing
financial forecasts and budgeting of financial information for a one-year period.
Background
The plan of the owners is to open a retail business in fast food line of business and the
business will be providing fast food items such as Burgers, Fries, Wraps and a variety of
beverages. The Australian fast food market is known to be very much competitive as a lot of
such food chains are established. The owners are hoping to take advantage of the suitable market
conditions which is present in the Australian retail market (McKeever, 2016). The owners have
also selected a potential location which will allow the shop to attract the kids and teenagers as
well offices workers who are looking for a snack or beverage.
The owners plan to have a variety of burgers which will provide the potential customers
of the business with appropriate choices for purchasing a product. The strategy of the business is
to follow cost reduction strategy so that the business is able to offer burgers at a reduced price

3
ACCOUNTING FOR DECISION MAKING
(Burns & Dewhurst, 2016). This will thus provide an edge to the business over the other
competitors in the industry. As per the plan of the owners, the shop will be established by the
business following partnership form of business and the owners will be equal partners of the
business. The owners of the business will be responsible for overall management of the shop and
also for taking important decisions which are regarding the business.
Marketing Plan
The marketing plan of the shop will be playing a vital role in promoting and overall
development of the business. The main products which will be offered by the business are
hamburgers, fries, wraps and noodles and also wide range beverages which includes tea, coffee,
cold drinks. The owners plan to make the hamburgers as the main attraction for the customers for
which the owners plan to recruit the best chefs who can bring about a different flavor and taste in
the different varieties of burgers which will be offered by the business (Scarborough, 2016).
The target market for the business will be the high school kids and college teens who are
mostly attracted by such kinds of foods. The selected location for the business will allow the
shop to provide a cool place to hang out for such college teens. The level of competitiveness in
the market is intense, however the owners feel that with the cost reduction strategy the business
will be able to survive and even compete with potentials competitors of the business (Holliman
& Rowley, 2014). The industry consists of big businesses such as Subway, McDonald’s and
even other retail fast food businesses which is the main reason surviving in such a market is
tough.
The owners will be using both televisions and printed media for advertising the food
products which are offered by the shop (Lovelock & Patterson, 2015). The shop will also be

4
ACCOUNTING FOR DECISION MAKING
distributing free menus cards as a scheme for advertising and promoting the food products which
are offered by the business.
Operations
The operations of the retail business will be handled by the shop managers who will be
appointed by the owners of the business. The operational structure of the business will comprise
of top level management who are the owners or partners in the business. There are four partners
who will be sharing profits on an equal basis (Ward, 2016). The middle level management will
comprise of shop managers, who will be looking after the quality of services which is provided
by the business and the lower level management will be constituting of chefs, delivery boys,
counter service personnel. The shop will be requiring a number of personnel for managing all the
activities of the business (Lacity & Willcocks, 2013). The owners need to adhere to the
regulations which are established for restaurants such as licensing requirement, registration of
premises, testing of quality of food. The business will be requiring furniture, computers and
equipment such as coffee machines, ovens, systematic chimney sets. The owners want to
promote sustainability practices so that the business processes can be improved.
The retail process of the business will consist of both dine in order and will also offer
delivery services to customer within the range of locality. The delivery services can be opted by
calling in the number of the shop and ordering for the foods products which are offered by the
business (Blackburn, Hart & Wainwright, 2013). The business will be purchasing goods from
local retailers for vegetables, meat, bread and the business plans to buy such products in bulk so
that the management can get raw materials for the business.

5
ACCOUNTING FOR DECISION MAKING
Financial Projections
The financial Plan of the business will be analyzing key financial aspects which the
owners needs to consider while establishing a business. The primary requirement which the
business needs to consider is the sources of funds from which the business will be acquiring
assets and also maintaining a certain level of working capital for day to day business
management (Korn & Levitz, 2013). As per the plan of the management, the initial requirement
of the business for funds will be met by the contributions made by each partner which is of the
amount of $ 20,000. The initial contribution which is made by the partners will be used for
securing the location of the shop and also taking care of the preliminary expense which is related
to setting up of the business. These types of expenses include registration expenses, legal costs
and other similar expenses which the business needs to incur for setting up of the business.
The estimated revenue which the business anticipates is shown to be $ 5,00,000 during
the year 2019. An analysis of month by month sales in given in the appendix section of the
assessment. The sale revenue of the business is expected to rise by 10% from the month of
January and the sales which is anticipated for the month of January is shown to be $ 30,000. The
sales of the business will stabilize from the month of April and more or less constant sales
revenue is anticipated by the owners of the business. Following the month of April, sales is
anticipated to grow at the rate of 5% for each month and in this phase, the owners anticipate the
overall competition in the market will be at its peak and therefore only survival will be on the
agenda of the business at that time. The growth in overall sales which is anticipated by the
management is based on the market conditions and other factors which affects sales revenue of
business is considered to be constant. The total sales revenue which the owners anticipate for the
year 2019 is shown to be $ 5,00,000. As per the cost of sales Budget which is formulated by the

6
ACCOUNTING FOR DECISION MAKING
owners show that the cost of sales is anticipated to be $ 18,000 for the month of January and the
cost of sales is also anticipated to increase as the overall sales of the business increases which is
clearly shown for the month of April, May and June. The owners of the shop have also
forecasted that a situation might come when the sales revenue of the business is growing at a
lower rate but the cost of sales is still growing at usual or higher rate. This situation reflects the
survival strategies which the business formulates during the intense competition in the market.
(4) PROFIT AND LOSS FORECAST
Preop
Year 2019
Revenue 500,000.00$
Cost of sales 450,000.00$
Gross profit 50,000.00$
Gross Margin 10%
Expenses/overheads
Salaries of Staff 5,000.00$
Depreciation of Furniture 10,000.00$
Supervisor's Salary 6,000.00$
Rent of the Premises 15,000.00$
Electricity 3,000.00$
Interest on loans 2,000.00$
Marketing and Sales cost 4,000.00$
Total expenses/overheads 45,000.00$
Profit before tax 5,000.00$
Tax @ 20% 1,000.00$
Profit after tax 4,000.00$
Transfer to reserves 4,000.00$

7
ACCOUNTING FOR DECISION MAKING
The above statement shows the expected profit and loss statement of the shop which the
owners are planning to establish. The management of Friends and Fries anticipates that the total
sales which can be generated by the business during the year of 2019 will be $ 5,00,000 while
the cost of sales of the business is anticipated to be $ 4,50,000. The gross profit at initial stages
of the business is anticipated to be low due to the high costs which the business will likely incur
(Nielsen & Roslender, 2015). The overall profit after tax which is anticipated by the business is
shown to be $ 4,000 during the year.
The budgeted Balance sheet of the business shows the value of the assets which the
business requires for starting of the business such as computers, equipment and furniture. The
management in order to further stabilize and develop the business, will be taking a loan of $
6,00,000 which is shown in the budgeted balance sheet of the business.
Start Up Cost Summary

8
ACCOUNTING FOR DECISION MAKING
Start-up Expenses
Fixed Costs Particulars Amount
License cost 5,000.00$
Rent of premises 15,000.00$
Electricty 3,000.00$
Salaries of Staff 5,000.00$
Marketing and sales cost 18,900.00$
Office equipment 3,500.00$
Total Fixed Costs 50,400.00$
Average Monthly Costs
Rent -$
Interest on loan 2,000.00$
Total Average Monthly Costs 2,000.00$
x Number of Months: 12.00$
Total Monthly Costs 24,000.00$
Total Startup Expenses 74,400.00$
Start-up Assets
Sources of funds
Owners Fund 490,000.00$
Total Owner Funding 490,000.00$
Loans
Bank Loan 600,000.00$
Other
Total Loans 600,000.00$
Total Start up Funds 1,090,000.00$
Assets
Furniture 400,000.00$
Equipments 300,000.00$
Computer and appliances 200,000.00$
Total Fixed Assets 900,000.00$
Total Start-up Assets 1,990,000.00$
Start Up Expenses
The above statement shows the various start up expenses which the business needs to
undertake for establishing the business of Friends and Fries. Initial funds for the business will be

9
ACCOUNTING FOR DECISION MAKING
acquired from the partner’s contribution and also from the personal loan which the business has
taken for financing different resources which are required by the owners. The interest on loan is
expected to be 10% annually and it would be preferred by the management if the repayment of
loan can be on an yearly installment. The start-up cost statement also shows the preliminary costs
which the business has to incur such expenses. The CVP analysis which is conducted
considering the contribution level is 50% and the total expenses of the business is considered to
be the fixed costs which the business incurs. The breakeven analysis which is shown in the
appendix below, the management anticipates that it needs to get at $ 45,000 to reach break even
point which is no profit, no loss situation.
Time Frame for Implementation
The management will be starting implementing the plans for the retail business in a three-
month period. In the mean-time, the management needs to get the business registered and also
get an appropriate license for opening and running of a fast food retail business. In addition to
this, the owners also need to finalize the location of the premises which is considered to be
possible location for establishing the shop. These processes will be taking a minimum of 6
months period. Then there is the recruiting process for chefs and other sales personnel of the
shop and also appoint efficient managers for the shop. This will again be taking a one-month
period to complete. The expected date for opening and starting the operations of the business is
set to be 1 January 2019 considering which the budget has been prepared. Therefore, there is a
six or eight months interval before the shop can become fully operational.

10
ACCOUNTING FOR DECISION MAKING
Conclusion
The conclusion which can be drawn from the analysis of business plan formulated by the
business is that the owners should implement the same as soon as possible so that the expected
date for starting the business is not delayed. The business plan formulated by the owners is a
sound one with an effective marketing plan and financial plan. The financial forecast are also
appropriate and the owners have a clear idea as to from where funds are to be procured in order
to finance the activities of the shop which is to be established.

11
ACCOUNTING FOR DECISION MAKING
Reference
Blackburn, R. A., Hart, M., & Wainwright, T. (2013). Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development, 20(1), 8-27.
Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship. Macmillan
International Higher Education.
Holliman, G., & Rowley, J. (2014). Business to business digital content marketing: marketers’
perceptions of best practice. Journal of research in interactive marketing, 8(4), 269-293.
Korn, M., & Levitz, J. (2013). Online courses look for a business model. The Wall Street
Journal, B8.
Lacity, M. C., & Willcocks, L. P. (2013). Outsourcing business processes for innovation. MIT
Sloan Management Review.
Lovelock, C., & Patterson, P. (2015). Services marketing. Pearson Australia.
McKeever, M. (2016). How to write a business plan. Nolo.
Nielsen, C., & Roslender, R. (2015). Enhancing financial reporting: The contribution of business
models. The British Accounting Review, 47(3), 262-274.
Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management.
Pearson.
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.

12
ACCOUNTING FOR DECISION MAKING
Appendix
Breakeven Analysis
Breakeven Sales Value =
average fixed cost/%
contribution
Average fixed cost
$
45,000.00
Contribution % 50%
Revenue Contribution
Fixed
Cost Profit
45000 22500 45000 -22500
90000 45000 45000 0
112500 56250 45000 11250
135000 67500 45000 22500
40000 50000 60000 70000 80000 90000 100000 110000 120000 130000 140000
-40000
-20000
0
20000
40000
60000
80000
-22500
0
11250
22500
45000 45000 45000 45000
22500
45000
56250
67500
Chart Title
Contribution Fixed Cost Profit
Balance Sheet
Assets 2019

13
ACCOUNTING FOR DECISION MAKING
Current Assets
Cash $ 200,000.00
Accounts receivable $ 80,000.00
Total current assets $ 280,000.00
Fixed (Long-Term) Assets
Furniture $ 400,000.00
Equipments $ 300,000.00
Computer and appliances $ 200,000.00
(Less accumulated depreciation) $ -300,000.00
Total fixed assets $ 600,000.00
Total Assets $ 880,000.00
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable $ 100,000.00
Accrued Rent $ 10,000.00
Bank Charges Payable $ 4,000.00
Income taxes payable $ 5,000.00
Accrued salaries and wages $ 20,000.00
General Expenses $ 30,000.00
Total current liabilities $ 169,000.00
Long-Term Liabilities
Long-term debt $ 600,000.00
Less: Loan Repayment
Total long-term liabilities $ 600,000.00
Owner's Equity
Owner's investment $ 80,000.00
Net Profits $ 4,000.00
Reserve and Surplus $ 27,000.00
Total owner's equity $ 111,000.00
Total Liabilities and Owner's Equity $ 880,000.00
Sales Budget for 2019
Particullar
s
Ja
nu
ar
y
Feb
urar
y
Mar
ch
Apri
l May
Jun
e July
Aug
ust
Sept
emb
er
Octo
ber
Nov
emb
er
Dec
emb
er Total
Sales 30 $ $ $ $ $ $ $ $ $ $ $ $

14
ACCOUNTING FOR DECISION MAKING
achieved
during the
year
00
0
33,0
00.0
0
36,
300
.00
36,3
00.0
0
38,1
15.0
0
40,0
20.7
5
42,0
21.7
9
44,1
22.8
8
46,3
29.0
2
48,6
45.4
7
51,0
77.7
5
53,6
31.6
3
499,
564.
28
Total
Sales
achieved
30
00
0
330
00
363
00
363
00
381
15
400
20.7
5
420
21.7
875
441
22.8
768
8
463
29.0
207
2
4864
5.47
175
510
77.7
453
4
536
31.6
326
1
4995
64.2
848
Cost of Sales Budget
Particullar
s
Ja
nu
ar
y
Feb
urar
y
Mar
ch
Apri
l May
Jun
e July
Aug
ust
Sept
emb
er
Octo
ber
Nov
emb
er
Dec
emb
er Total
Cost of
Sales
Budget
18
00
0
198
00
237
60
285
12
342
14.4
359
25.1
2
377
21.3
76
396
07.4
448
455
48.5
615
2
5238
0.84
575
549
99.8
880
4
604
99.8
768
4
4509
69.5
129
Total Cost
of Sales
Budget
18
00
0
198
00
237
60
285
12
342
14.4
359
25.1
2
377
21.3
76
396
07.4
448
455
48.5
615
2
5238
0.84
575
549
99.8
880
4
604
99.8
768
4
4509
69.5
129