Develop a conservative forecasted sales budget based on the survey results.
You live in a town that has 20,000 registered vehicles, of which 15,000 are taken by their owners to the dealerships for oil changes. Most owners take their vehicles into the dealership three times a year. You will need a truck, supplies, tools, and insurance to start this business and must gain funding from investors. Pro forma financial statements, a financial plan, and a business plan are required for all potential investors and creditors. Prepare a 10-15 slide PowerPoint presentation with the above information to present to potential investors and creditors.
Using PowerPoint (or similar), you have been asked to develop a feasibility study presentation to determine the feasibility of this idea of a new company. Your feasibility study presentation should include the following:
Develop a conservative forecasted sales budget based on the survey results. Make sure your price is less than what the dealership charges.
Identify fixed and variable costs for each oil change. Using these values, develop an operating budget to determine the contribution margin for an individual oil change, and the total amount for the forecasted sales budget.
Develop a proforma income statement, balance sheet, and statement of cash flows for the first year of business.
Based on these proforma financial statements, calculate all profitability, liquidity, and solvency ratios.
Based on a 40-hour work week, estimate how many oil changes one person can realistically perform. Given the projected sales forecast, develop a capital investment proposition for additional trucks with anticipated useful lives of 5 years. Use the discounted cash flow method at an interest rate of 6%.
Determine your sales goals and objectives. Based on the survey results, estimate how many products or services you expect to sell in the upcoming period.
Estimate the average selling price of your products or services based on the
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Multiply your estimated sales volume by the average selling price to calculate your total sales revenue.
Adjust your sales forecast based on any factors that could impact your sales, such as changes in the competitive landscape, economic conditions, or customer behavior.
Evaluate your sales forecast to ensure it is conservative and realistic. Consider adjusting your forecast downward if you have any concerns about achieving your sales goals.
Use your sales forecast to develop a budget for sales and marketing expenses, such as advertising, promotions, and sales commissions.
Remember that developing a sales forecast based on survey results is not an exact science, and there are many factors that can impact your sales. Be sure to regularly monitor your sales performance and adjust your forecast as needed to ensure you stay on track to meet your sales goals.