Managing Budget and Business Plan Australia Project 2022

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Managing Budget and Business Plan
8/16/2019
(Student Name)

Managing Budget and Business Plan 1
Table of Contents
Introduction......................................................................................................................................2
Purpose of Budget............................................................................................................................2
Project Details..................................................................................................................................2
Timeline.......................................................................................................................................2
Cost..............................................................................................................................................3
Project Budget.................................................................................................................................3
Budgeted Income Statement........................................................................................................3
Budgeted Balance sheet...............................................................................................................5
Budget Assumption and Consideration...........................................................................................6
Monitoring of Project Expenses......................................................................................................6
Budget Evaluation Process..............................................................................................................7
Contingency Plan.............................................................................................................................7
Strategy for Financial and Budgetary Controls...............................................................................8
Recommendations and Conclusion..................................................................................................8
References......................................................................................................................................10

Managing Budget and Business Plan 2
Introduction
Beans Coffee is one of the owned small companies that distribute its coffee beans to other coffee
shop across Australia. The company is planning to expand its business through retailing as well
as whole selling businesses. Therefore, in the following part there will be detailed analysis of the
budget that is required for expanding the business.
Purpose of Budget
The main purpose of the budget is to forecast the income that will be occur in the future as well
as the expected expenditure that will be required for expanding the business. Moreover, its will
be used for decision making related to the finance, from which source the fund will be raised and
the amount that is required to be raised from the market. Furthermore, it is also used to monitor
the performance of the business in an effective and efficient manner (Junita et al., 2018).
Project Details
Project Team Key Task
Marketing Team It will manage whole marketing and promotional related activities
Research Team Such team will analyze the market and analyze the demand of product
Finance Team The team will manage the funding related activities
HR team It will manage hiring related activities to enhance the sales activities
Sales Manager It will manage whole sales related activities

Managing Budget and Business Plan 3
Timeline
Activities July August September October
Novembe
r
Social Media Marketing
Email Campaigns
Market Research
Email Campaigns
Mobi Communications
Affiliate Advertising
Exhibitions
Sponsorship
Sales Promotion
Banner Advertising
Agency strategic
Review

Managing Budget and Business Plan 4
Cost
Operating Expenses 2020
Additional Staff 55000
Business Visit 35,000
Image Rebranding 20000
Company Website 25000
POS Software 50000
Staff Training 15000
Expansion Expenses 50000
Sports Sponsorship 30000
Total Operating Cost 280000
Fixed Cost
Additional Floor Space 148750
Capital Investment 54000

Managing Budget and Business Plan 5
Total Fixed Cost 202750
Total Cost 482750
Project Budget
Budgeted Income Statement
Period ended 31st march
2018
Period ended 31st march
2020
Sales Revenue
$
185,000,000.00
$
185,000,000.00
Cost of sales
$
184,200,000.00
$
184,200,000.00
Gross profit
$
800,000.00
$
800,000.00
Sundry Income
$
87,500.00
$
87,500.00
Freight Outward
$
(11,750.00)
$
(11,750.00)

Managing Budget and Business Plan 6
Rent Received
$
92,100.00
$
92,100.00
Gain/loss on sale of party
equipment
$
25,000.00
$
25,000.00
Gain on Investment
$
30,000.00
$
30,000.00
Inventory Write-down Exp
$
(15,000.00)
$
(15,000.00)
Director fees
$
(20,000.00)
$
(20,000.00)
Audi Fees
$
(52,000.00)
$
(52,000.00)
Freight Inward
$
(5,750.00)
$
(5,750.00)
Insurance
$
(20,000.00)
$
(20,000.00)
Import Duties
$
(2,000.00)
$
(2,000.00)
Depreciation $ $

Managing Budget and Business Plan 7
(120,000.00) (120,000.00)
Bad and doubtful debt
expense
$
(5,000.00)
$
(5,000.00)
Business Visit
$
(35,000.00)
Image Rebranding
$
(20,000.00)
Company Website New
$
(25,000.00)
Staff Training
$
(15,000.00)
Expansion of Catering
Business
$
(50,000.00)
Sports Sponsorship
$
(30,000.00)
New POS Software System
$
(50,000.00)
Other administrative
expenses
$
(100,000.00)
$
(100,000.00)

Managing Budget and Business Plan 8
Employment Cost
$
(3,500.00)
Sales staff wages
$
(250,000.00)
$
(250,000.00)
Add: Additional Hiring
$
(55,000.00)
Donations
$
(10,000.00)
$
(10,000.00)
Advisory Fees
$
(35,000.00)
$
(35,000.00)
Loss on Discounted
Business
$
(35,000.00)
$
(35,000.00)
Earnings before interest
and tax
$
353,100.00
$
69,600.00
Interest Paid mortgage
$
(112,240.00)
$
(112,240.00)
Interest paid - overdraft
$
(5,290.00)
$
(5,290.00)

Managing Budget and Business Plan 9
Dividends paid on ordinary
shares
$
(50,000.00)
$
(50,000.00)
Dividends paid on
preference shares
$
(18,400.00)
$
(18,400.00)
Profit or loss before Tax
$
167,170.00
$
(116,330.00)
Less: GST @10% -11633
Profit or loss after Tax
$
(104,697.00)
Budgeted Balance sheet
Beans Coffee Shop
Fiscal year ends in June. USD in
millions except per share data.
2018 2019
Assets
Current assets

Managing Budget and Business Plan 10
Cash
Cash and cash equivalents
$
3,500.00
$
3,500.00
Total cash
$
3,500.00
$
3,500.00
Receivables
$
35,000.00
$
35,000.00
Inventories
$
358,800.00
$
358,800.00
Prepaid expenses
$
3,500.00
$
3,500.00
Shares in New Zealand Company
$
60,000.00
$
60,000.00
Allowance for Doubtful Debt
$
1,700.00
$
1,700.00
Total current assets
$
462,500.00
$
462,500.00
Non-current assets

Managing Budget and Business Plan 11
Property, plant and equipment
Land
$
1,900,000.00
$
1,900,000.00
Additional Floor Space
$
148,750.00
Warehouse
$
953,000.00
$
953,000.00
Accumulated Depreciation (Ware
House)
$
(350,000.00)
$
(350,000.00)
Party equipment for hire
$
640,000.00
$
640,000.00
Purchase new Coffee Machine
$
54,000.00
Accumulated depreciation – Party
equipment
$
(40,000.00)
$
(40,000.00)
Investment
$
360,000.00
$
360,000.00
Net property, plant and equipment
$
3,463,000.00
$
3,665,750.00

Managing Budget and Business Plan 12
Total non-current assets
$
3,463,000.00
$
3,665,750.00
Total assets
$
3,925,500.00
$
4,128,250.00
Liabilities and stockholders' equity
Liabilities
Current liabilities
Bank Overdraft
$
15,000.00
$
15,000.00
Creditors
$
202,750.00
Accounts payable
$
350,000.00
$
350,000.00
Tax Payable
$
100,000.00
$
100,000.00
Insurance Payable
$
6,000.00
$
6,000.00
Interest Payable $ $

Managing Budget and Business Plan 13
65,000.00 65,000.00
Total current liabilities
$
536,000.00
$
738,750.00
Non-current liabilities
Loan secured by mortgage
$
100,000.00
$
100,000.00
Total non-current liabilities
$
100,000.00
$
100,000.00
Total liabilities
$
636,000.00
$
838,750.00
Net Assets
$
3,289,500.00
$
3,289,500.00
Ordinary share capital
$
2,000,000.00
$
2,000,000.00
Retained earnings
$
548,595.00
$
548,595.00
8% Redeemable preference share capital
$
320,905.00
$
320,905.00
Asset revaluation reserve $ $

Managing Budget and Business Plan 14
420,000.00 420,000.00
Total stockholders' equity
$
3,289,500.00
$
3,289,500.00
Budget Assumption and Consideration
There are certain assumptions while preparing the budget as they are explained din the below
points:
 The rate of GST is 10% that is constant in all the years.
 The company has taken additional space for the business to expand its business.
 It is assumed that the remaining expenses are general in nature that will be occurring at
constant basis.
 The budget is prepared on yearly basis and the projected budget is prepared according to
the analysis of current year expenditure.
 It is assumed that the company has sufficient fund to invest in the business (Claggett,
2018).
Monitoring of Project Expenses
The project expenses will be monitor through the following methods:
 Forecasting: it is one of the methods that will be used by the café to monitor the project
expense. Through earned value management provide formula to forecast the future
performance of the project which is based on the current actual performance
 Variance Analysis: the café will adopt such method to monitor the project expense. It is
the analysis of the comparison of the expected project performance to the actual
performance after which if any deviation occur them the corrective actions are
determined.

Managing Budget and Business Plan 15
 Performance Review: the café will analyze the cost as well as schedule which is the main
parameters to assess (Boyle, 2017).
Budget Evaluation Process
The process of budget valuation is explained in below points:
Creating Budget:
The café is required to consider all the income and expense that can be occur in the near future.
Therefore, first of all it will create budget according to the level of expansion of business.
Using a budget:
The budget will provide guidelines for how to spend money as well as target for enhancing the
earnings. It refers to the budget as the plan operations.
Evaluating budget
It is exceedingly rare for the activities of business to precisely correlate with the activities related
to finance that is laid out in a budget in an effective manner. The budget will be checked each
and every month that is required for the company to analyze the efficiency of the budget
(Kasdin, 2017).
Contingency Plan
Risk Event Response Contingency Plan Who is Responsible
Projection of revenue
exceeding
Enhance the
marketing budget
The manager needs to
be hired prior to the
incident happened
Human Resource
Executive
Projection of require to redouble Capital infusion Finance Executive

Managing Budget and Business Plan 16
Revenues Miss marketing efforts requires
Server down Lose of the order of
consumers
Provide on-call
services
Human Resource
Executive
Change in the taste
and preference of the
consumers
Impact on the sales
and revenue of Food
Friend
Interact will the
consumers
Marketing Executive
Strategy for Financial and Budgetary Controls
There are certain strategies that are provided for the café are explained in the below points:
 Setting appropriate standards: the café should set its standards according to analyzing the
market. Therefore, wit will help in clearing the objective of the café in the mind of its
staff in an effective manner.
 Ensuring top management support: the budget making as well as administration must
receive the whole hearted of top management. If the top management supports the budget
making, require department as well as divide to make with defending their budgets.
 Participation by user in budget preparation: beside the support of top management, the
concerned mangers at lower levels must participate in its preparation. Real participation
in budget preparation is necessary to ensure the success (Otley, 2016).
Recommendations and Conclusion
It is recommended to the beans café that it should adopt effective budgeted strategy according to
the analysis of the competitive market. The company is required to analyze the market before
entering in the new market. Moreover it is required for the company to adopt effective budget
strategy as well as control over such strategies to compete its competitor in an effective and
efficient manner.

Managing Budget and Business Plan 17
Therefore, from the above analysis it can be concluded that the company is required to prepare
proper budget to expand the business in the existing market. Beans café can face loss in the
future at limited time period however; it will provide great return after getting settled down in the
market.

Managing Budget and Business Plan 18
References
Boyle, G. (2017) Design project management. London: Routledge.
Claggett, E.T. (2018) Capital Budgeting: Methods, Aspects, and Issues. Journal of Modern
Accounting and Auditing, 14(2), pp.90-101.
Junita, A., Abubakar, E., Muda, I. and Abdullah, S. (2018) Influence of budget participation and
leadership style against rebudgeting on work unit of apparatus. Journal of Business and Retail
Management Research, 13(2).
Kasdin, S. (2017) An evaluation framework for budget reforms: A guide for assessing public
budget systems and selecting budget process reforms. International Journal of Public
Administration, 40(2), pp.150-163.
Otley, D. (2016) The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, pp.45-62.