“Live life one cupcake at a time” /
By: Katelyn & Haleigh Stanley Williams High AOF Teacher: Rhonda Farmer /
- What are the core business functions of your organizations? How is your organization structured?
We are going to the president/CEO of our business, Cupcake Avenue. The sales and marketing president of our company is Katelyn. She will promote and advertise our products, as well as being in charge of sales. The president of accounting and operations is Haleigh. Paying our bills on time and keeping track of our profits is important. We need to manage our money in order to keep our company in business. Operations include ordering supplies and ingredients. Also, making sure that the equipment is working properly is important. We will hire employees after three months after we open. After three months, we will ensure that we have enough income to provide pay for the employees. The staff will be in charge delivering the products to our customers and working the cash register.
- What risks does your business venture face? What measure will you take to counter those risks?
Our business, Cupcake Avenue, has many risks once we open our doors. Our bakery may have financial risks, such as not meeting our breakeven point or possible being sued. There are many factors that could result in us being sued. These factors include health and safety or if a customer is injured in our store. If one of our products is unsafe for consumption, we could face being sued. Product liability is needed if any of our products causes harm. To prevent this, our bakery should always display the ingredients our products contain. Another risk our business could face is a customer or employee gets injured in the store. If a customer is injured, we need to have general liability to protect our business finances if we are sued. Employee compensation is also very important to have if an employee is hurt on the job. Other risks that could happen are environmental risks. Weather and natural disasters make up the environmental risks. This would cover any property damage. Our business can also have operational risks as well. Operational covers any inventory shortages, poor quality ingredients or any problems that disrupts our ability to operate our business correctly.
- What are your most important milestones for your business to reach?
The first important milestone to reach in our business is to open our business. In order to open our business, we must acquire a loan from the bank to pay for the supplies and equipment that we need. After we open, we need to make realistic goals to have a successful business. Our second goal is to have a good profit. To have a good profit, we will need customers. We will attract customers by having low and affordable prices. Also, by sending people coupons and delivering free cupcakes to businesses and offices. The third goal is increasing our profits each year. To do so, we must attract more customers than we had before and sell more products each month. Selling more products each month will increase our profits each year. Selling more products means that we have to buy more ingredients each month to make more of our products. The fourth goal is to employ others to help with the cash register and delivering.
- Preparing our cash flow statement
To start our business, we first organized our expenses. Each month, we would need to pay our monthly expenses. These expenses include rent, utilities, insurance, internet/phone, gas for the company car, owner’s draw and payroll. Rent each month, will cost us $1,160 and utilities will cost $1700. Insurance every few months will cost our bakery $300 so we can have exceptional coverage. The internet/phone bill will cost $90 and the gas for the company car will vary each month but it will be about $70. For our owner’s draw, we decided to pay ourselves $3,500 each and this adds up to $7,000 total. We also decided to hire two employees and they will each get paid $3,000 and that will add up to a total of $6,000. In total, our monthly expenses adds up to $9,520. The amount of our beginning cash is $150,000. This is a loan that we have borrowed from the bank and will use to open Cupcake Avenue. Our total cash in is $197,561. This was found by subtracting the total cash in by the total cash out. Our ending cash is $347,561. We found this number by adding the beginning cash amount and the cash flow.