As expected, salary and rental would form a significant portion of the operating expenditure. Utilities, transportation, equipment repair and general maintenance also form part of the costs. Furthermore other forms of commitment including tax, legal fee etc. is lumped into miscellaneous expenses. All budgeted expenses are tabulated in TABLE 2. For simplicity in analyzing the business profitability, the expenses is calculated based on the budgeted value rather than the actual costs. TABLE 2: ABC Original Expenses (monthly estimations) Cost Item Shop Rental Descriptions RM4000 per month for 3 years and will increase by 10% in 2021. 3% of total revenue & Utilities Transportation Repair Maintenance IT Services Staff Salary & RM500 per month per month for 3 years and will increase by 10% in 2021 RM500 per month per month for 3 years and will increase by 10% in 2021 RM100 per day for 22 per month for 3 person in 2018 and increase by 5% every year onward RM200 per day for 22 per month for 3 person in 2018 and increase by 5% every year onward RM 1000 Owner Salary Miscellaneous (tax, legal etc) It is noticed that improvement in efficiency has reduced the direct costs in the current ventures, thus increase profitability of her business. Nevertheless direct cost is also affected by fluctuation of the price of raw material and transportation. She needs to consider the bottom line to remain healthy in the presence of this variability. Moving forward, Anna plans to continue her current business at the current location, if the revenues continue as projected. For this she needs to know how good is her current business (effective rate of return) and if she were to sell her business, how much will the business is worth (if her MARR is 20%). Furthermore she is eyeing for a new location to start her second shop and Business Expansion Plan Anna plans to expand her business to a new site. She plans to put up an initial investment of RM200,000 to buy the required equipment and initial renovations. As she has a good track record, she expect to secure a business loan from the same SME bank to be recovered within 3 years with interest rate of 8% pa. As before she expect sales to grow at steady rate with revenues coming from the cafe. As customer confidence is already secured, sales is expected to double and margin to remain steady at 66%. The projected annual revenues for both business divisions are shown in TABLE 3, where all values are based on projection. 3 As expected, salary and rental would form a significant portion of the operating expenditure. Utilities, transportation, equipment repair and general maintenance also form part of the costs. Furthermore other forms of commitment including tax, legal fee etc. is lumped into miscellaneous expenses. All budgeted expenses are tabulated in TABLE 2. For simplicity in analyzing the business profitability, the expenses is calculated based on the budgeted value rather than the actual costs. TABLE 2: ABC Original Expenses (monthly estimations) Cost Item Shop Rental Descriptions RM4000 per month for 3 years and will increase by 10% in 2021. 3% of total revenue & Utilities Transportation Repair Maintenance IT Services Staff Salary & RM500 per month per month for 3 years and will increase by 10% in 2021 RM500 per month per month for 3 years and will increase by 10% in 2021 RM100 per day for 22 per month for 3 person in 2018 and increase by 5% every year onward RM200 per day for 22 per month for 3 person in 2018 and increase by 5% every year onward RM 1000 Owner Salary Miscellaneous (tax, legal etc) It is noticed that improvement in efficiency has reduced the direct costs in the current ventures, thus increase profitability of her business. Nevertheless direct cost is also affected by fluctuation of the price of raw material and transportation. She needs to consider the bottom line to remain healthy in the presence of this variability. Moving forward, Anna plans to continue her current business at the current location, if the revenues continue as projected. For this she needs to know how good is her current business (effective rate of return) and if she were to sell her business, how much will the business is worth (if her MARR is 20%). Furthermore she is eyeing for a new location to start her second shop and Business Expansion Plan Anna plans to expand her business to a new site. She plans to put up an initial investment of RM200,000 to buy the required equipment and initial renovations. As she has a good track record, she expect to secure a business loan from the same SME bank to be recovered within 3 years with interest rate of 8% pa. As before she expect sales to grow at steady rate with revenues coming from the cafe. As customer confidence is already secured, sales is expected to double and margin to remain steady at 66%. The projected annual revenues for both business divisions are shown in TABLE 3, where all values are based on projection. 3