In first place we have calculated the estimated costs during our first 5 years of operations.
To begin with, we made an estimation of the salaries of the general manager, the chef and the two deliverymen. For all the cases, the estimation for all the other years was according to the last inflation rate in Colombia, which was of 6,77% during 2015.
Here, we can find the salary of the general manager. To reduce costs, in this case, the service given by this is by a contract for services provision and payment will be given by the minimum weight per hour in Colombia, which, according to the law 789 of 2002 is COP$2875.
According to this information, the annual payment during the first year would be of COP$5.520.000, which represents the 55% of the initial budget of COP$ 10.000.000 but legally, this is the lowest amount of money we can pay to the person in this position.
Then, we estimated salaries of deliverymen, once more, to reduce costs, the service given by the deliverymen is by a contract for services provision and payment will be given by trip and tips given by customers. The amount payed by trip will be of COP$1200 for 7 trips done by day, for a total daily payment of COP$8.400 and a monthly one of COP$ 168.000. we have to take into account that these payments do not include tips given by the customers.
On the other hand, the service given by the chef, like the general manager’s one, is by a contract for services provision and payment will be given by the minimum weight per hour in Colombia, which, according to the law 789 of 2002 is $2875. All this with the goal of reduce costs once more, and adapt it to our very limited budget.
Finally, the total estimation of money invested in salaries is $14.482.000 during the year 1, $15.495.740 during year 2, $ 16.580.441,80 during year 3, $ 17.741.072,73 during year 4 and $ 18.982.947 during year 5. But, don’t worry, we know it overcomes the original budget of $10.000.000, but later we will show you how we estimate we are going to retrieve our investment and get earns.
Secondly, we made an estimation of leasing costs of the apartment we will work from. As we did before, we estimated costs for next five years according to the last annual inflation report in Colombia.
The cheapest price we found was of $450.000 monthly, then we will show you the estimations:
Here, total lease costs during year 1 were of $ $5.400.000, $5.778.000 during year 2, $6.182.460 during year 3, $6.615.232 during year 4 and $7.078.298 during year 5.
In third place, we estimated the average public services costs for a socio economic level 4 in Bogotá, Colombia.
As a result, total estimated average cost of public services during year 1 was of $2.438.420 which grows according to inflation rate.
Later, we estimated cost of food for year one which was of $3.360.000,00 during 1st year, $3.696.000 during 2nd year, $4.065.600 during 3rd year, $4.472.160 during 4th year and $4.919.376 during 5th year. Taking into account that it depends on the amount of sales by year.
Likewise, during the first year we expect to invest $250.000 in bicycles, $600.000 in improving stuff and $700.000 in advertisements. These values can grow depending of our success through the time.
Then, we have calculated the estimated sales during our first 5 years of operations, and estimated earns which will make the organization profitable.
In the above chart we estimated our sales during the first year of operations where we sell two products: Sandwiches and Salads. For both we estimated that December will be the month when we will sell more units because is holiday seasons in Bogotá and have passed 12 months where the company has got more recognizing and experience in the market.
Total estimated money collected by selling is $48.320.000 during first year. We estimate to grow 10% during 3 first years and then grow 5% during 2 later ones.
In the last chart, we can see that the organization becomes profitable, with total benefits of $58.320.000 in the first year, taking into account the initial investment of $10.000.000, and a gross profit of $31.089.579,58. Likewise, we estimated it increase up to $67.683.092 five years later.
Also, taking into account all the costs and estimations brought to present value, the net benefit during the first five years is $159.917.814,22