Question:

Rachel wants to run a bakery shop with her friends. She has decided to rent a shop at a prime location. However her friends have some doubts and concerns. They are worried about the expenses and if business is going to be profitable or not. Rachel decided to clear their minds by preparing a plan. She wants to include the following items:

MANAGING OPERATIONS AND INFORMATION

IT Resources: What kind of IT resources will such business require?

What computer hardware and software will workers need? Will such business need a network and an Internet connection? What type of network?

Customer Services: How can the use information technology helps to keep track of customers and potential customers?

Cost of Doing Business

What are the costs of doing business? Equipment, supplies, salaries, rent, utilities, and insurance are just some of these expenses. What it might cost to do business for one year.

EXPENSESMONTHLYYEARLY

Rent

Salaries and Wages

Supplies:

Technological, Equipment, and Furniture

(computers, software, copy machine, desks, chairs, etc.), other

Advertising and Other Promotions

Utilities: Heat, Electricity, etc.

Insurance Telephone and

internet

Other (specify)

Expected Revenue

How much should the business charge for its product? How many estimated products can be sold in a year (or how many estimated number of customers such business can attract)?

Income Statement and Balance Sheet

12-Month Income Statement (Profit & Loss Statement)

Jan. Feb. Mar. Apr.May.Jun.Jul. Aug. Sept.Oct. Nov.Dec.

Revenue

Category 1

Category 2

Total Revenue

Cost of Goods Sold

Category 1

category 2

Total Cost of Goods Sold

Gross Profit

Expenses

Rent

Salary or wages

Supplies

Advertisement

Utilities expense

Telephone/ internet

Insurance expense

Interest from loan (if applies)

Others, if any

Others, if any

Total Expenses

Net profit

Balance Sheet

Assets

Current Assets

Cash in Bank

Cash Value of Inventory

Prepaid Expenses (insurance)

Total Current Assets

Fixed Assets

Machinery & Equipment

Furniture & Fixtures

Real Estate / Buildings

Total Fixed Assets

Total Assets

Liabilities & Net Worth

Current Liabilities

Accounts Payable

Taxes Payable

Notes Payable (due within 12 months)

Total Current Liabilities

Long-Term Liabilities

Bank Loans Payable (greater than 12 months)

Less: Short-Term Portion

Total Long-Term Liabilities

Total Liabilities

Owners' Equity (Net Worth)

Total Liabilities & Net Worth

Floor Plan: What does it look like when a customer walk through the door?

Raw Materials and Supplies: What types of raw materials and supplies are needed for such business? How goods can be produced? What equipment needed? Hours of operations?

Quality Assurance: Steps to ensure and maintain the quality of the product. Who can be responsible for maintaining the quality of the product or service?

Please help Rachel with her plan.