Budgeting and Business Planning Essay Example for Free

Budgeting and Business Planning EssayIn order to create the criteria for the mission we subscribe to quality at what they want from the project. Most businesses and organisations argon in business to energize a profit, however the committee has different aims and objectives comp atomic number 18d to a normal business or organisation. They subscribe to to weight up the options of each final cause and decide which best link ups to their aims and objectives. When the committee is considering which intention to go with they should consider the following categories Short- bourn Financial Benefits extensive-term Financial Benefits Environment Relation to aims Short-term Financial Benefits The committee needs to consider the short term benefits of each proposal. They dont want to take on a proposal that has high start-up appeals and doesnt make a return on the not bad(p) within the first twelvemonth. The committee does non want to be leave in a high amount of debt if the p roposal fails. If the committee is left with a debt they may not be able to fund other projects to further their three aims. Long-term Financial BenefitsLong-term the proposals go forth give different appearcomes. The committee needs to decide on how long they want to keep throw away hall? If they want it as a long term asset which rump help with their aims? Or do they want a longer term money devising scheme to boost tax income which can be used in areas they already control. Environment throw away Hall comes with a coarse area of woodland, they needs to consider the effects on the local plant life and wildlife that any proposal could hand over. They need to think, does it destroy plant life? Does it impact on wildlife habitats? Is their going to be any long lasting environmental damage? Relation to AimsThe committee is based on three important aims. They need to consider these aims in making their decision, they cant be making use of one proposal if it goes strictly aga inst some of their basic aims. They have to consider their own image and brand, does a proposal give them a bad name/image considering their aims and objectives?Question 2 Jonathan and Ingrids proposal has some short term pecuniary benefits, in the 30 week streak roam cast offing hall turns over a niggling profit of 1,646. When the committee takes their proposal in to consideration they should recognise this point, throw away hall allow for be of no financial burden in the short-term 30 week trial. If the 30 week trial is to succeed hence moult hall can have some structural work make costing 20,000 which would close moult hall for four weeks after the trial. The structural alterations would increase the capacity of the lay to allow up to 30 guests to stay at one measure.According to Jonathan and Ingrid projections of a weekly cost per guest of 66 and a weekly charge per guest of 150 they are making 84 profit per guest per week. With the structural alterations and the i ncrease in capacity by 20 guests. The weeks after the alterations are finished they could make an extra 1,680 per week, bringing their possible weekly total profit at abounding capacity to 2,436 (allowing for one free space, 29 paying customers). Therefore they could justify the large 20,000 startlay on alterations as moult hall would pay for these alterations in little over 8 weeks. So in the long-run moult hall could be a profitable project by the end of year one. The one drawback of this proposal is the loss of the usage of the minibus at weekends, which generated an annual income of 1,040, however it can be argued that it is flat being put to smash use and that the money is being recuperated from moult hall.Break-even point Total expenses63,880 Weeks until break-even47.3 Guests until break-even473As we can teach from the table above moult hall provide have to attract 473 guests a year to break even when they can only hold 10 guests per week. Equally they would have to run for 47.3 weeks a year at full capacity to break-even. This gives them an average of 9 guests a week. If they were to structurally make better moult hall so that they can hold up to 30 guests a week therefore the figures would look very different as shown in the table below. Break-Even purportTotal Expenses63,880 Weeks until break-even point14.7 Guests until break-even point441Although a comparable amount of guests is required the amount of weeks at full capacity has drastically dropped from 47.3 to 14.7. Their average guests per week has dropped from 9 to 8. Although this is not a large drop, in proportion they only have to fill 8 out of 30 beds compared to 9 out of 10 beds in the 30 week trial.The environment and its protection are very important to the committee and are mentioned in their main aims. Jonathan and Ingrids proposal helps the environment and makes the most of moult hall, if a garden was to be kept at moult hall the guest could tend to this and let vegetables an d recycle waste in a compost, which in turn could be re-used on the garden making moult hall very self-sufficient and environmentally friendly. One of the major aims of the committee is to help and better the young. Jonathan and Ingrids proposal does just this, by inviting young people from the surrounding area to come stay and collar about the countryside. The guests leave be able to learn about different wildlife and plant life lively in the moult hall woodland and surrounding areas. The committee has to consider how the proposal leave alone relate to their own aims, with moult hall becoming a learning centre for the young the committee could arouse the good work they are doing to increase their donations revenue and grow as a trust. Question 3Winstons proposal consists of turning moult hall into a quad bike track with lavish bedrooms in the house for guests. In the year one moult hall will turn over a profit of 1,034,283. 750,000 of this is guaranteed to the North West trus t for the protection of wildlife and the other 284,283 will go to Winston himself. Moult hall would be a great money maker for the trust with the guaranteed income of 750,000 adding to the 800,000 a year they engender from local donations and fund raisers, boosting their total revenue for the year to around 1,550,000.Long-term moult hall will turnover similar amount each year as long as there is no dip in demand. In the second year when Winston doesnt have any initial capital be he will make a large profit himself of 402,350. The funds the committee will earn from moult hall could be used in other areas to promote the protection of wildlife.Break-even Point Total Expenses1,022,650 Weeks until break-even point35.9 Guests until break-even point538From the table above we can see the break-even point for moult hall under Winstons proposal. He would need to be operating at full capacity for almost 40 weeks a year to break-even this means he would have to attract 538 guests a year. On a verage to break-even Winston will have to have 11 guests a week. In monetary terms moult hall will be a very supremacyful however some parts of the proposal will go against the trusts main aims.The trust was set up for the protection of wildlife one aim is to protect local wildlife and plant life. To make the quad bike track some(prenominal) mature trees will have to be removed in the grounds of moult hall. This will disrupt some of the habitats of animals in the woodland. One of the main habitats that could be break up is the nesting sites of the red kite. The red kite has only recently been re-introduced in to the United Kingdom after the success of similar projects in wales the trust fully supports the work of the national charity that achieved this. The red kite was wiped out in the UK by modern farming methods which use pesticides to kill small rodents, which are the main solid nutrition source of the red kite. The first aim of the Trust is to encourage farming methods that dont infract local wildlife and plant life. They have to consider how the disruption of the nesting sites would reflect on them if they took on Winstons proposal. It may look bad as with one hand they are supporting the work of the charity besides they are making money at the cost of disrupting local nesting sites.Question 4a There are many different measures that to committee can use to measure the military operation of moult hall such asMonthly financial reports military commission inspections twice a year Variance analysis comparing budgeted figures with true(a) Variance Analysis The committee could use variance analysis variance analysis is a comparison of the budgeted cost of running moult hall and the actual cost of running moult hall. They could see if the costs of moult hall are favourable or adverse. If the results are favourable then this means that moult hall is running at a cheaper cost than they veritablely budgeted. However if the results are adverse then this means that the cost of running moult hall is more than they budgeted, this could be due to higher food prices or a larger light and heating bill than first anticipated. Variance analysis will give the committee a good idea of how much difference there is between their original planned budget and their actual outlay. This will be useful in determining weather moult hall is a financially viable option.Monthly Financial Reports The committee could ask for the manager of moult hall to send them monthly financial reports so that they can keep track of the performance and see if they are making or loosing money. They could let the financial reports come in for a few months or even up to year. This way they can identify trends and high and low seasons. They may find that they have a slightly seasonal product, as more people will want to be immaterial in the summer compared to the winter. They can also see if over a year they are acquire an increasing amount of interest month on month or if they are losing interest Committee inspectionsCommittee inspections could take place two or three times a year, the committee could trip as a whole or send a few re correspondatives to moult hall to rate the upkeep of moult hall and the grounds. The inspection could also be used to see how the guests are enjoying their time at moult hall. The inspection team will then feed back to the committee who will have meetings on how to improve moult hall based on the feedback from guests and/or any improvements or checks that would need to be made to ensure the performance of moult hall is consistent.Question 4b When the committee is rateing the performance of moult hall they can use different companies to assess moult hall for them. The Environmental recapitulation Agency (EIA) can carry out Environmental impact assessments. The committee could use this agency to assess the impact that moult hall is having on the surrounding woodland and grounds of moult hall. The committee can use t his information to track the environmental progress of moult hall and see if the project is having a damaging or positive effect on the woodland and grounds.The committee could also use a cartoon company to produce a survey which can be given to guests when they leave so that the guests can give their feedback. The survey company can then use these results to produce accurate feedback to present to the committee. This method would be better than the committee asking the questions themselves as it will give a better representation of the guests views on moult hall. One company that they could use is amplitude research, this is a company that specialises in market research, Amplitude research can create a standard survey for guests which will make the results more comparable and easier for the committee to act upon.