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    Case Study - Caribbean Internet Café

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    The document contains a break even analysis for a start-up business in year 1 and year 2. It shows that in year 1, the break even point is 20011 units or $4,962,816 in sales. This requires attracting 69 customers per day. In year 2, the break even point is 18,991 units or $4,709,649 in sales requiring attracting 66 customers per day. It also includes sensitivity analysis with optimistic, realistic, and pessimistic scenarios based on the target customer segment.

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    Case Study - Caribbean Internet Café

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    58 views7 pages
    The document contains a break even analysis for a start-up business in year 1 and year 2. It shows that in year 1, the break even point is 20011 units or $4,962,816 in sales. This requires attracting 69 customers per day. In year 2, the break even point is 18,991 units or $4,709,649 in sales requiring attracting 66 customers per day. It also includes sensitivity analysis with optimistic, realistic, and pessimistic scenarios based on the target customer segment.

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    The document contains a break even analysis for a start-up business in year 1 and year 2. It shows that in year 1, the break even point is 20011 units or $4,962,816 in sales. This requires attracting 69 customers per day. In year 2, the break even point is 18,991 units or $4,709,649 in sales requiring attracting 66 customers per day. It also includes sensitivity analysis with optimistic, realistic, and pessimistic scenarios based on the target customer segment.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    58 views7 pages

    Case Study - Caribbean Internet Café

    Uploaded by

    A
    The document contains a break even analysis for a start-up business in year 1 and year 2. It shows that in year 1, the break even point is 20011 units or $4,962,816 in sales. This requires attracting 69 customers per day. In year 2, the break even point is 18,991 units or $4,709,649 in sales requiring attracting 66 customers per day. It also includes sensitivity analysis with optimistic, realistic, and pessimistic scenarios based on the target customer segment.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 7

    Start-up costs

    Contribution Margin per costumer (or per unit $144.00 Equipment costs
    Additional advertising
    Up-front costs
    Cost for the first customer (FC + Vcu) $204,321 Utility deposit

    Depreciation Annual
    Hardware & software $ 135,917
    China, cutlery, etc. $ 33,333
    Other $ 114,781
    Total $ 284,031
    Total

    Break even analysis (Year 1) Table to Make Chart

    Fixed Costs (One-time FC + Total FC) $2,881,635


    Variable Costs (per unit) $104
    Sales Price (per unit) $248

    Unit increments (for x-axis display) 5000

    Breakeven (units) 20011


    Breakeven ($) $4,962,816

    Customers to attract per day to break even : 69 CVP


    $10,000,000
    $9,000,000
    The BE analysis for year 2 is on the next sheet $8,000,000
    $7,000,000
    $6,000,000
    $5,000,000
    $4,000,000
    $3,000,000
    $2,000,000
    $1,000,000
    $0
    0 5000 10
    Start-up costs Fixed Costs Monthly Annual Variable Costs per Custome
    $1,426,000 Part-time wages $28,800 $345,600 Drinks
    $20,000 Manager salary $40,000 $480,000 Food
    $120,000 Rent $30,000 $360,000 Internet
    $7,000 Telephone bills and Utilities $15,000 $180,000
    Link Internet $10,000 $120,000
    Advertising, marketing $10,000 $120,000
    Miscellaneous adm. and expenses $50,000 $600,000
    Depreciation $284,031
    Insurance $10,000 $120,000
    Interest payment on the loan $10,417 $125,004

    $1,573,000 Total FC $204,217 $2,734,635 Total VC per unit

    Unit Fixed Costs Variable Costs Total Costs Sales


    0 $2,881,635 $0 $2,881,635 $0
    5000 $2,881,635 $520,000 $3,401,635 $1,240,000
    10000 $2,881,635 $1,040,000 $3,921,635 $2,480,000
    15000 $2,881,635 $1,560,000 $4,441,635 $3,720,000
    20000 $2,881,635 $2,080,000 $4,961,635 $4,960,000
    25000 $2,881,635 $2,600,000 $5,481,635 $6,200,000
    30000 $2,881,635 $3,120,000 $6,001,635 $7,440,000
    35000 $2,881,635 $3,640,000 $6,521,635 $8,680,000

    CVP Analysis Year 1


    0,000
    0,000
    0,000
    0,000
    0,000
    0,000
    0,000
    0,000
    0,000
    0,000
    $0
    0 5000 10000 15000 20000 25000 30000 35000

    Total Costs Sales


    iable Costs per Customer Sales per customer
    $50 Beverages $140
    $30 Food $60
    $24 Internet $48

    $104 Average revenue per customer $248


    Break even analysis (Year 2)

    Fixed Costs $2,734,635


    Variable Costs (per unit) $104
    Sales Price (per unit) $248

    Unit increments (for x-axis display) 5000

    Breakeven (units) 18991


    Breakeven ($) $4,709,649

    Customers to attract per day to break even 66


    Table to Make Chart Unit Fixed Costs Variable Costs Total Costs Sales
    0 $2,734,635 $0 $2,734,635 $0
    5000 $2,734,635 $520,000 $3,254,635 $1,240,000
    10000 $2,734,635 $1,040,000 $3,774,635 $2,480,000
    15000 $2,734,635 $1,560,000 $4,294,635 $3,720,000
    20000 $2,734,635 $2,080,000 $4,814,635 $4,960,000
    25000 $2,734,635 $2,600,000 $5,334,635 $6,200,000
    30000 $2,734,635 $3,120,000 $5,854,635 $7,440,000
    35000 $2,734,635 $3,640,000 $6,374,635 $8,680,000

    CVP Analysis Year 2


    $10,000,000
    $9,000,000
    $8,000,000
    $7,000,000
    $6,000,000
    $5,000,000
    $4,000,000
    $3,000,000
    $2,000,000
    $1,000,000
    $0
    1 2 3 4 5 6 7 8

    Total Costs Sales


    Senstivity Analysis

    Estimated Target Segment of Customer 20000

    Scenario Optimistic

    Percentage of segment 50%

    Number of customers 10000

    Number of visits per year per customer 5

    Total number of visits 50000

    Total revenues $12,400,000

    Net Profit or Loss (before taxes) $4,318,365

    Net Profit (before taxes) = Total revenues – total variable costs – total fixed costs = SP
    Realistic Pessimistic

    40% 30%

    8000 6000

    3 2

    24000 12000

    $5,952,000 $2,976,000

    $574,365 -$1,153,635

    le costs – total fixed costs = SP * Q - Vcu * Q - FC

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