developing an income statement

Project potential sales volumes, sales prices and expected revenues for your first year of business. Using your estimated costs, will there be a net profit?

Give some consideration to what potential sales might be and tie it in with the expenses listed above to determine whether a profit is viable or not. You may want to consider developing an income statement to show your income and expenses over the year.

Question 1 for Worksheet 4 Costs that will be involved in starting the Golden Leash include the building lease, renovations/additions required to get the building prepared and in working order (kennels, grooming stations, bath bays, cosmetic customization/signage), initial inventory (dog food, grooming supplies), van for pick-up and drop-off, and other miscellaneous expenses (toys, cleaning supplies, office supplies, billing system). Building Lease Our business will initially lease a building to lower the start-up costs. Since purchasing a building in evergreen would be very expensive, we can keep our costs more reasonable by leasing. In 2019/2020, Cushman & Wakefield developed a retail area in Evergreen with building spaces for lease. The net lease rate for these buildings was $32/square foot per year. Assuming our business would require approximately 6000 square feet, the yearly cost of our lease would be $192,000. If we pay for the first month at start-up, that will cost $16,000. Although our business is not necessarily the type of retail business that Cushman & Wakefield are looking for, their net lease rates give a good estimate for the costs to lease a building in our target area. Building Preparation Our building will require changes and must be adapted to fit our business's requirements. Firstly, kennels will need to be added to house dogs. The International Center for Trade and Sustainable Development (n.d.) claims that commercial dog kennels can range anywhere from $14,399 to $74,960. Our daycare will not need a large number of kennels as we do not anticipate housing many dogs overnight, so approximately $30,000 should suffice for our kennels. To get our grooming stations and bath bays ready, it will cost approximately $18,000 (Price, 2021). Cosmetically, we should set aside approximately $10,000 to ensure our building is unique and inviting to satisfy our luxury niche. In total, building preparations will cost about $58,000. Expense Monthly $ Annual $ Lease/Rent 16,000 192,000 Utilities 400 6000 30,000 360,000 Employee Wages(10 people) Vehicle maintenance/ gas 250 3000 150 1800 Grooming Supplies 350 4200 Dog foodutrition 100 1200 I Miscellaneous Dog supplies (toys, beds, leashes) 200 2400 Miscellaneous Office supplies (paper, pens, filing, computers, desks) Permits 300 3600 Advertising 200 2400 Total 47,950 575,400 Question 1 for Worksheet 4 Costs that will be involved in starting the Golden Leash include the building lease, renovations/additions required to get the building prepared and in working order (kennels, grooming stations, bath bays, cosmetic customization/signage), initial inventory (dog food, grooming supplies), van for pick-up and drop-off, and other miscellaneous expenses (toys, cleaning supplies, office supplies, billing system). Building Lease Our business will initially lease a building to lower the start-up costs. Since purchasing a building in evergreen would be very expensive, we can keep our costs more reasonable by leasing. In 2019/2020, Cushman & Wakefield developed a retail area in Evergreen with building spaces for lease. The net lease rate for these buildings was $32/square foot per year. Assuming our business would require approximately 6000 square feet, the yearly cost of our lease would be $192,000. If we pay for the first month at start-up, that will cost $16,000. Although our business is not necessarily the type of retail business that Cushman & Wakefield are looking for, their net lease rates give a good estimate for the costs to lease a building in our target area. Building Preparation Our building will require changes and must be adapted to fit our business's requirements. Firstly, kennels will need to be added to house dogs. The International Center for Trade and Sustainable Development (n.d.) claims that commercial dog kennels can range anywhere from $14,399 to $74,960. Our daycare will not need a large number of kennels as we do not anticipate housing many dogs overnight, so approximately $30,000 should suffice for our kennels. To get our grooming stations and bath bays ready, it will cost approximately $18,000 (Price, 2021). Cosmetically, we should set aside approximately $10,000 to ensure our building is unique and inviting to satisfy our luxury niche. In total, building preparations will cost about $58,000. Expense Monthly $ Annual $ Lease/Rent 16,000 192,000 Utilities 400 6000 30,000 360,000 Employee Wages(10 people) Vehicle maintenance/ gas 250 3000 150 1800 Grooming Supplies 350 4200 Dog foodutrition 100 1200 I Miscellaneous Dog supplies (toys, beds, leashes) 200 2400 Miscellaneous Office supplies (paper, pens, filing, computers, desks) Permits 300 3600 Advertising 200 2400 Total 47,950 575,400