Requirement #1

I will be starting a dog-walking business called Furiends. The business mission is to "Improve the lives of pets and pet parents by proving safe, affordable and trustworthy pet services." The business will service customers by providing high quality dog walking services. It will solve the problem that many pet owners face of making time to provide the proper amounts of exercise for their pets. Furiends can help free up time and give pet owners peace of mind knowing that their pet is well taken care of.

Requirement #2

The major costs of Furiends include the costs for labor, supplies as well as website and marketing costs. It is important to determine the cost of providing your service to individual customers in order to price services correctly so that they reflect expenses and include a profit.

Costs for Furiends website is $20. Cost for labor will be about $12 per walk. Costs for supplies such as extra leashes, waste pick up bags, and water dispensers combined are $55. Marketing using flyers and Facebook ads will be around $30. It appears that direct costs would be more than overhead costs.

1. Costs (Categories)

I. Variable

Advertisement

II. Fixed

Employee Wages

Website

Equipment/Supplies

Advertisement

Rent

2. Price per unit

I. Hour long walk session (per pet) - $40 (Based on average rates)

I based rated on the assumption that each owner will be needing services for one pet, so I will not include discounts for additional pets.

https://homeguide.com/costs/dog-walking-prices

40 x 300 (5 walks day x 30 days = 150 per month x 2 employees)= 12,000

40 x 450 (5 walks day x 30 days =150 per month x 3 employees) = 18,000

3. Costs

I. Variable

Equipment/Supplies - 150

Total Variable - 150

II. Fixed

Website/Software - $90

Rent - 1000

Advertisement - $100

Employee wages

$12 per hour x 5 walks per day = $60

30 days per month x $60 per day = 1,800 per month

1,800 per month x 2 employees = $3,600

Total Fixed = 4,790

Variable Expenses

Equipment

300.00

Total Variable Expenses

300.00

Fixed Costs

Website/ software

90.00

Rent

1,000.00

Advertisement

100.00

Employee Wages

3,600.00

Total Fixed Costs

4,790.00

4. Contribution Margin Ratio

12,000-300/12000= 97.5 = 98%

5. Break-even point in terms of total revenues necessary to breakeven.

4,790/.98= 4,887.76

Requirement #5

Master Budget

1. Service Revenue Budget

10 walks per day x 30 days= 300 walks a month

15 walks per day x 30 days = 450 walks a month

We do not plan to increase clients until half a year into providing services. This is because we will not be hiring another provider until 6 months in.

Labor Budget

Month

Expected Service Units

Labor hours per unit

Total labor hours needed

Direct Labor cost per hour

Cost of labor

January

300

1

300

12

3,600

February

300

1

300

12

3,600

March

300

1

300

12

3,600

April

300

1

300

12

3,600

May

300

1

300

12

3,600

June

300

1

300

12

3,600

July

450

1

450

12

5,400

August

450

1

450

12

5,400

September

450

1

450

12

5,400

October

450

1

450

12

5,400

November

450

1

450

12

5,400

December

450

1

450

12

5,400

Service Revenue Budget

Month

Expected Service Units

Price per hour

Expected Service Revenue

January

300

40

12,000

February

300

40

12,000

March

300

40

12,000

April

300

40

12,000

May

300

40

12,000

June

300

40

12,000

July

450

40

18,000

August

450

40

18,000

September

450

40

18,000

October

450

40

18,000

November

450

40

18,000

December

450

40

18,000

Services Overhead Budget

Cost of Labor

Rent Expense

Total Overhead Expenses

January

3,600

1,000

4,600

February

3,600

1,000

4,600

March

3,600

1,000

4,600

April

3,600

1,000

4,600

May

3,600

1,000

4,600

June

3,600

1,000

4,600

July

5,400

1,000

6,400

August

5,400

1,000

6,400

September

5,400

1,000

6,400

October

5,400

1,000

6,400

November

5,400

1,000

6,400

December

5,400

1,000

6,400

https://www.amazon.com/

https://www.vistaprint.com/lpt/flyers-one-resp-4tiles-sizes-1.aspx?mk=vista+print+flyers&ad=p&crtv=324884230790&device=c&psloc=9028661&pstid=aud-821449301488%3akwd-307856385753&psite=mkwid%7cQztPcJsv&pscid=236440339&psagid=17268306979&psint=&psfid=&psnet=g&pspos=&psp1=%2432.39&psp2=&psaceid=&gclid=CjwKCAjwnef6BRAgEiwAgv8mQdxPlsLzsoWZB7BjW1J5igLZZ0oSkR32GltswQBYZgD-hYPhR5GIGRoCd1wQAvD_BwE&couponAutoload=1&expiredCouponCode=INVITE25&GP=09%2f10%2f2020+21%3a17%3a15&GPS=5747727184&GNF=1

https://www.timetopet.com/blog/the-costs-to-start-a-pet-sitting-or-dog-walking-business

https://www.squarespace.com/pricing/?channel=pnb&subchannel=go&campaign=pnb-dr-go-us-en-website-bmm&subcampaign=(website-website-build_Pricing-and-Plan-Features_sl)&utm_source=google&utm_medium=pnb&utm_campaign=pnb-dr-go-us-en-website-bmm&utm_term=%2Bwebsites&gclid=CjwKCAjwnef6BRAgEiwAgv8mQbxC_peAdgStmI4N-QDpHqw4kKecxvVI3q9QMGkQ_rDvWxsMIRNvLRoCsg0QAvD_BwE

Selling and Administrative Expense Budget

Month

Rent

Advertising

Website/ Software

Total budgeted SG&A

January

1,000

100

90

1,190

February

1,000

100

90

1,190

March

1,000

100

90

1,190

April

1,000

100

90

1,190

May

1,000

100

90

1,190

June

1,000

100

90

1,190

July

1,000

100

90

1,190

August

1,000

100

90

1,190

September

1,000

100

90

1,190

October

1,000

100

90

1,190

November

1,000

100

90

1,190

December

1,000

100

90

1,190

Budgeted Income Statement

Budgeted Revenue

180,000

Less Expenses

Selling and Administrative

(14,280)

Overhead Expenses

(66,000)

Net Income

99,720