Chelsea and Loveth are two friends who are both passionate cyclists. Although neither of them has experience in retail business, they have often discussed the idea of opening a small motorbike shop in Staines, UK. They believe that their enthusiasm about motorbike will lead to them having great success. Chelsea has recently received an inheritance of 35,000 and has agreed with her friend that she will invest the money in starting up their business, Bespoke motorbike. They have found a suitable shop premises in Staines and they are beginning to put together their financial plans. Neither Chelsea nor Loveth has owned their own business before. So, for them this is an exciting idea and they believe they can make it a success. They intend to target youths as their target market segments. The entrepreneurs have not yet considered all the potential costs of their new business idea, but have managed to gather some data. Below is information that Loveth has collected as part of the planning for the new business. The entrepreneurs are not sure whether they should apply for a bank loan and both of them will take 1,000 per month from the business.

Required:

Please check if the below math is the right answer-

	January	February	March	April	May	June	January - June
Sales	4000	10000	15000	15000	14000	25000
Variable cost (30% of sales)	1200	3000	4500	4500	4200	7500
Opening balance	0	-6500	-7700	-5700	-5200	-5700	0
Add: cash inflows
Initial investment of Loveth	35000						35000
sales	4000	10000	15000	15000	14000	25000	83000
Total cash inflows	39000	10000	15000	15000	14000	25000	118000
Less: cash outflows
Initial business startup cost	30000						30000
Variable cost to be paid		1200	3000	4500	4500	4200	17400
Insurance,rent,tax etc	3000	3000	3000	3000	3000	3000	18000
Staff wages	1500	2000	2000	2000	2000	2000	11500
Launch marketing	6000						6000
Overhead costs	5000	5000	5000	5000	5000	5000	30000
Total cash outflows	45500	11200	13000	14500	14500	14200	112900
Closing balance	-6500	-7700	-5700	-5200	-5700	5100	5100

They have already negotiated with suppliers in Japan (Kawasaki) and will get one month's credit on their supplies. They have already negotiated with suppliers in Japan (Kawasaki) and will get one month's credit on their supplies