Appendix E: Yearly Financial Projections

Appendix E: Yearly Financial Projections

(Please refer to Excel files for all details relating to the financial projections)

Appendix F: Assumptions

Derivation of Sales

• 
  The average selling price of a gelato product is $3.75
  
• 
  Sales target of 20 customers/hr on average
  
• 
  $75 Sales revenue/hr
  

Operating Hours for May = weekends only

Operating Hours for June/July/August = Wed-Sun;

Operating Hours for September = weekends only

Total Operating hours for 2009 = 844 Hours

Total estimated customers for 2009 = 844hrs x 20/hr = 16,880

Therefore, 844hrs x $75 = $63,300 Sales revenue for 2009

Derivation of Expenses

Truck

• 
  Ice Cream Truck rental = $650/month x 5 months = $ 3,250
  
• 
  Truck Maintenance = $200/month x 5 months = $1,000
  
• 
  Power for cold plates = $50/month x 5 months = $250
  
• 
  Insurance on truck = $200/month x 5 months = $1,000
  
• 
  Business License = $100 for 5 months
  
• 
  Fuel costs = 33litres/day x 112 days of operations in 2009 x $.95cents/litre = $ 3,511
  

Derivation on Inventory Costs

Cups – $0.25 x 8,440 customers (50% of sales) = $2,110

Spoons – $0.05 x 16,880 customers = $844

Cones – $0.20 x 8,440 customers (50% of sales) = $1,688

Napkins – $0.15 x 16,880 customers = $2,532

Gelato – Jerry’s Wholesale price is $88 for 11.4L. Based on about ½ cup serving size, there should be about 88 servings per 11.4 L container. .4L will be a buffer for waste and taste samples for prospective customers. Therefore, the gelato costs should be about $16,880.

** In order to be conservative in the estimated Inventory costs noted above, all cost figures in the attached financial statements have been increased by 5%**

Derivation of Marketing Expenses

Facebook: $500 for sidebar ads, based on a pay-per-click rate of $0.28, which will generate 1786 click throughs to the Gelato Mobile Facebook Page. Facebook Page and Events are no cost.

Promotions: $300 (free gelato giveaways, discounts)

Scenario Analysis

Worst

• 
  The average selling price of a gelato product is $3.75
  
• 
  Sales target of 15 customers/hr on average
  
• 
  $56.25 Sales revenue/hr
  

Therefore, 844hrs x $56.25 = $47,475 Sales revenue for 2009

Best

• 
  The average selling price of a gelato product is $3.75
  
• 
  Sales target of 25 customers/hr on average
  
• 
  $93.75 Sales revenue/hr
  

Therefore, 844hrs x $93.75 = $79,125 Sales revenue for 2009

Appendix G: 2006 Industry Canada Small Business Profile for Mobile Food Services in Saskatchewan²⁶

Top of Form

Report Criteria: 2006 Canada All Businesses % of Total Revenue 722330

Bottom of Form

Top of Form

STATISTICS CANADA

2006  SMALL BUSINESS PROFILES - Canada

NAICS Number:     722330   -   Mobile Food Services 

Bottom of Form

Average of all Businesses	Whole Industry (Reliability)	Lower Half (50%)		Upper Half (50%)		Bottom Quartile (25%)		Lower Middle (25%)		Upper Middle (25%)		Top Quartile (25%)			Percent of Businesses Reporting
Number of Businesses	1230
Revenue Range:
Low Value ($ 000)			30		30		82		30		50		82	126
High Value ($ 000)			5000		82		5000		50		82		126	5000
			(percent of total revenue)
Total revenue			100.0		100.0		100.0		100.0		100.0		100.0	100.0		100.0
Cost of sales (direct expenses)			49.8		41.3		52.0		40.1		42.1		46.4	53.8		92.1
Wages and benefits			2.9		1.8		3.2		1.0		2.3		2.0	3.6		11.8
Purchases, materials and sub-contracts			46.9		39.2		48.9		38.5		39.7		44.6	50.3		90.9
Opening Inventory			2.8		1.4		3.2		1.8		1.2		1.3	3.8		39.2
Closing inventory			2.8		1.1		3.2		1.2		1.0		1.5	3.8		38.1
Operating expenses (indirect expenses)			40.2		46.6		38.6		49.7		44.8		39.8	38.1		99.9
Labour and commissions			10.9		7.7		11.7		7.1		8.1		7.7	13.1		47.7
Amortization and depletion			3.5		5.1		3.0		5.3		5.0		4.0	2.7		74.6
Repairs and maintenance			2.3		2.8		2.1		3.3		2.5		2.0	2.2		66.7
Utilities and telephone/telecommunication			3.0		3.6		2.8		3.9		3.5		3.3	2.7		83.5
Rent			3.4		4.0		3.3		4.4		3.7		3.2	3.3		45.1
Interest and bank charges			2.3		3.0		2.1		3.8		2.5		2.2	2.0		65.8
Professional and business fees			1.3		1.2		1.3		1.3		1.1		1.4	1.3		77.9
Advertising and promotion			0.5		0.5		0.5		0.5		0.5		0.6	0.4		50.9
Delivery, shipping and warehouse expenses			0.2		0.2		0.1		0.3		0.2		0.2	0.1		13.5
Insurance			1.3		1.7		1.2		1.9		1.5		1.5	1.1		71.6
Other expenses			11.7		16.9		10.3		17.9		16.3		13.8	9.1		98.8
Total expenses			90.0		88.0		90.5		89.7		86.9		86.3	92.0		100.0
Net profit/loss			10.0		12.0		9.5		10.3		13.1		13.7	8.0		100.0
FINANCIAL RATIOS
Interest coverage ratio			5.4		5.0		5.5		3.7		6.2		7.1	4.9
Gross margin (%)			50.2		58.7		48.0		59.9		57.9		53.6	46.2
PROFITABLE vs NON-PROFITABLE BUSINESSES			(thousands of dollars)
Profitable
Percent of businesses (%)			79.2
Total revenue			128.2		52.7		194.7		39.3		65.2		102.4	287.3
Total expenses			108.9		40.5		169.2		29.3		51.1		83.2	255.4
Net profit			19.2		12.1		25.5		9.9		14.2		19.2	31.9
Non-Profitable
Total revenue			120.7		51.4		234.2		40.1		65.1		99.7	366.6
Total expenses			133.2		61.9		249.8		51.0		75.1		113.6	384.0
Net loss			-12.4		-10.5		-15.6		-10.9		-10.0		-13.9	-17.4

1^ http://answers.yahoo.com/questions/index?qid=20070924111911AA4eM55

2^ Ibid

3^ Ibid

4^ http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c

5^ Equals 2006 Saskatoon population of 202340 (http://www12.statcan.ca/english/census06/data/trends/ Table_1.cfm?T=CSD&PRCODE=47&GeoCode=11066&GEOLVL=CSD) divided by 2006 SK population of 985386 (http://www.stats.gov.sk.ca/pop/POP%20AGE%20GENDER%202006.pdf) multiplied by 1230

6^ http://www.nudgelondon.com/blog/2008/07/define-social-media/

7^ http://en.wikipedia.org/wiki/Social_media

8^ Ibid

9^ Ibid

10^ http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/

11^ Ibid

12^ Ibid

13^ http://www.yoursearchadvisor.com/glossary.php

14^ As stipulated by SGI, www.sgi.ca

15^ http://www.jerrys.ca/artisanicecreams/icecreams.shtml

16^ http://blogs.townonline.com/wellesley/wp-content/uploads/2009/01/gelato4.jpg

17^ http://tinyurl.com/cuooxc

18^ Ibid

19^ http://www.city.saskatoon.sk.ca/org/quick_facts/index.asp

20^ cnet News Article: (Facebook Connect officially open): http://news.cnet.com/facebook-connect-officiallyopen/

21^ http://www.upi.com/Top_News/2009/04/06/So-called-social-media-soaring-in-Canada/UPI-84441239050428/

22^ Forbes.com Article: (Yes, CEO’s should Facebook and Twitter): http://tinyurl.com/cb2swt

23^ Ibid

24^ http://weblogs.hitwise.com/heather-dougherty/2009/01/twitter_catches_up_to_digg.html

25^ As per the April 4^th, 2009 phone call

26^ http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000ZslYz__NEm3c5AHPr8C13rF:1247mpv0c

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