Checklist for Starting a Fast Food Business: Essential Ingredients for Success
If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Fast Food business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
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A Step by Step
Guide to Starting a Small Business
This is a
practical manual in a PDF format, that will walk you step by step through all the
essential phases of starting your Fast Food business. The book is packed with
guides, worksheets and checklists. These strategies are
absolutely crucial to your business' success yet are simple and
easy to apply.
Copy the following link to your browser and save the file to your PC:
https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf
How to Perform a
Break-Even Analysis in a Retail Store
Break-even analysis is not a panacea.
It doesn't tell you if your costs are out of line. It tells you
only what sales volume you need to cover fixed costs.
It is, however, an excellent starting
point for finding out where you are and, more importantly, where
you can go. It's a good first step to planning.
This Guide presented as a
conversation between a business counselor (C) and the
owner-manager of a retail store (M), discusses a simplified
method of calculating the break-even point for a retail
operation. While this method is not appropriate for
manufacturers, it does provides a financial planning take-off
point.
M: I'm
ready to expand. I've just had a great forth quarter. I've got a
chance to move to a larger store in a good location. I really
think I'm on my way. Still, though, I don't want to take any
unnecessary chances and lose what I've built up these first
three years. What do you think I should do?
C: Let me
answer your question with a question: What's your break-even
point now and what will it be if you assume the
added expansion cost?
M: I'm not
exactly sure, but after that last quarter, I've got money in
the bank and I'm paying all my bills on time.
What Bank Balances May Not Reveal
C: I'm glad to
hear you're in good shape, but you can't make an intelligent
expansion decision based on your bank balance at a given moment.
M: You ought to
know, but why not
C: Take your
balance now, for example. It's a lot better than it was at the
end of the first quarter , isn't it?
M: Sure, but the
first quarter's usually slow. It's a fact of retail life.
C: And the fourth
quarter is usually good, right?
M: Yes, that a
fact, too. But mine was outstanding - it was the best I've
ever had.
C: I'm sure it
was, but it can distort the picture. If you’re relying on your
bank balance for a feel for your break-even point, you may just
be guessing. Many things influence your bank balance that may
not necessarily have a direct bearing on the break-even point
for your store. Seasonal fluctuation is just one of them.
M: There are
more?
C: Sure, capital
expenditures, extraordinary repairs, unusual outlay...
M: Okay, I get
the point. My bank balance is meaningless. I shouldn't
expand.
C: We don't know
that yet. After we find out what sales volume you'll need to
break even, then you'll tell me if you ought to expand or not.
M: Some
counselor. First you tell me I don't know what I'm doing and
then you expect me to advise me on expansion.
Break-even Analysis Is Not a
Substitute for Judgment
C: You're wrong
on the first half of that; I know you know retailing. But, yes,
you'll decide on the basis of your business knowledge and
judgment whether or not expansion now makes sense.
M: I must do
something right. I'm still in business.
C: Exactly.
You've made it through some of the toughest business years, the
first ones. And you're showing a fair profit. I think you've got
a real flair for merchandising.
M: Please, you'll
make me blush. What about this break-even thing?
What Break-Even Means
C: Break-even is
simply the point where costs equal what you're taking in - no
profit, no loss - over a relevant sales range. To calculate this
point
you must work with only two factors, fixed expenses
(like insurance or rent) and variable costs (like cost of goods
or sales commissions).
M: I sure wish my
costs were fixed. Everything goes up for me. My insurance, for
example, looks like it's going up 25 percent over last year.
Fixed and Variable Costs
C: Well, actually
"fixed costs" is something of a misnomer. Sure, rents, property
taxes, insurance, even the salary you pay yourself may fluctuate
- but on a yearly basis and not in relation to sales. For the
purpose of break-even analysis every cost that doesn't vary in
relation to sales is called "fixed". Your rent, for instance,
stays the same for a year whether you sell 250,000 or 2.50 worth
of goods, though we know some rents are tied to volume and vary.
The same is usually true of utilities, depreciation and similar
expense items.
M: I see the
point. Variable costs, then, are basically my cost of sales?
I have to buy more if I sell more. If I paid commissions, I'd be
paying more for more sales, and that sort of thing.
C: That's right.
There can be other variable costs, but we're simplifying. In
addition, you'll probably find costs that seem to be part
variable, part fixed.
M: You mean
they're "semi-variable" or "semi-fixed?"
C: Yes, they're
costs that remain fixed up to a certain sales volume and then
jump as that volume is exceeded. For example, office costs, or
delivery expenses may fit in this category.
M: How do I treat
them?
C: Use your good
business judgment and split them between fixed and variable
costs in what you consider a reasonable proportion. The
important thing is to hold in mind for simple break-even
analysis is to keep it simple. Over simplicity is, of course, a
drawback of this method. But simple break-even analysis really
helps you to see your way into a planning problem and to
establish its perimeters.
M: I like the
idea of simplicity, but I don't think break-even sounds
simple so far.
C: I think you'll
see how easy it is if we work through an example. Here, take
a look at this hypothetical income or profit and loss statement
for the B-E Retail Store.
M: B-E doesn't
seem to have broken even.
C: Correct. Let's
find out what kind of sales volume B-E needed to break-even in
that year. For simplicity (there's that word again) Let's
consider cost of sales (which is 70 percent of sales) as the
total variable costs and the expense items of 19,200 as the
fixed costs. We calculate the break-even point by using an
algebraic formula.
M: A simple one,
I hope.
C: Of course.
It's just S = F + V, where:
S = Sales at the break-even point,
F = Fixed expenses, and
V = Variable costs and expenses as a
percent of sales.
M: All right, we
know B-E's variable and fixed costs. How do we get sales?
C: Let's
plug in the figures:
S= 19,200 + .70S
10S = 192,000 + 7S
O-M: Excuse me,
10S?
C: I multiplied
the whole equation by 10 to get rid of the decimal fraction,
because I think it's easier to work with whole numbers.
Anyway, we get:
10S - 7S = 192,00
3S =192,000
S = 64,000
M: B-E needed
64,000 total sales to break even? Anything less, they'd
have a loss; anything more they'd make a profit?
C: You've got it.
Let's check it, though, just to confirm it:
M: Okay, so B-E
has broken even. I think they'd like to make a profit. I
know I do.
Evaluate your financial plan periodically
with real operations figures. With effective records you can
accomplish this. Then,
where discrepancies appear you can
take corrective action before it is too late. The right choices
for the right corrective action
will depend upon your
knowledge of management techniques in purchasing, pricing,
selling, selecting and training personnel, and
handling other
management issues.
You're thinking you can employ a
bookkeeper or a Accountant to deal with the record keeping for
you. Yes, you can. But remember
two very important details:
1. Supply the accountant with accurate input. If you buy
something And don't record the amount in your business
checkbook, the
accountant can't enter it. Should you sell
something for cash and don't record it, then the accountant
won't understand about it.
The records the accountant
prepares will be no greater than the info that you provide.
2. Utilize the records to make decisions. If you went to a
physician And he told you you were ill and needed certain
medication to
get well, you'd follow his guidance. If you pay
an accountant and he tells you your sales are down this year,
don't hide your head
in the sand and pretend that the issue
will go away. It won't.
Business Management Roll in
Personnel Selection. If your business Will be big enough to
require outside help, an important
responsibility will be the
choice and training of one or more employees. You may start out
with relatives or business partners
that will assist you. But
if the business develops - as you expect it will - the time will
come when you must select and train
employees.
Careful selection of personnel is vital. To Pick the right
Employees determine beforehand what you want each one to
perform.
Then look for applicants to fill these specific
needs. In a small Business you will need flexible employees who
can shift from
task to task as needed. Include this in the
description of those tasks you would like to fill. At the same
time, look ahead and
plan your hiring to assure an
organization of people capable of performing every essential
function. In a retail store, a
salesperson may likewise do
stock-keeping or bookkeeping at the outset, but as the business
grows you will need sales people,
stock-keepers and
bookkeepers.
When the project descriptions are composed,
line up applicants from whom To make a selection. Don't be
swayed by customers who
might suggest relatives. In the event
the applicant does not succeed, you may drop a customer as well
as an employee. Some sources
of potential new employees are:
1. Tips by friends, business acquaintances. 2. Employment
agencies. 3. Placement bureaus of high schools, business
schools, and
colleges. 4. Trade and industrial institutions.
5. Help-wanted ads in local papers.
Your next job is to
display want ad answers or program Forms delivered by employment
agencies. Some applicants will be removed
sight unseen. For
each of those others, the application form or letter will act as
a foundation for the interview that ought to be
conducted in
private. Put the applicant at ease by describing your business
in general and the job particularly. Once you've
completed
this, invite the applicant to talk. Picking the right individual
is extremely important. Ask your questions carefully to
find
out everything about the applicant that's pertinent to this job.
References are a must, and should be assessed prior to
making a final decision. Check through a personal visit or a
phone call
directly to the applicant's immediate former
supervisor, whenever possible. Verify that the information given
you is accurate.
Consider, with judgment, any negative
comments you hear and what isn't said.
Checking
references can bring to light significant information Which may
help save you money and future inconvenience.
Personnel
Training. A well-selected employee is only a potential Asset to
your organization. Whether he or she becomes a real
advantage
is dependent on your own training. Remember:
To allow
sufficient time for instruction. Not to expect too much from The
trainee in too short a time. To let the employee learn
by
doing under real working conditions, with close supervision. To
follow along with your training.
Check the worker's
performance after he or she was in work For a time. Re-explain
important points and short cuts; bring the
employee up to
date on new developments and invite questions. Training is a
continuous process which becomes constructive
supervision.
Personnel Supervision. Supervision is the third crucial
of employees control. Fantastic oversight will lessen the
expense of
operating your company by cutting back on the
amount of employee errors. If mistakes are corrected early,
employees will find more
satisfaction from their jobs and
perform much better.
Motivating Employees. Small
businesses sometimes face particular Issues in motivating
employees. In a large company, a Fantastic
employee can see
An chance to progress into management. In a small business, you
are the management. 1 thing you Might Wish to
Think about
would be to give good employees a Small share of their profits,
either via part-ownership or even a profit-sharing
plan.
Someone who has a"share of this action" will be more Worried
about helping to make a success of the business.
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