Hot Dog Stand Earnings Model

(Please use Excel for this exercise)

Using the information below, build an earnings model (revenues, expenses, income, etc.) with different cases (low/mid/high) for a sole proprietor operating a hot dog stand.

There are some basic assumptions below and you may make any other assumptions youd like about the owner/operators behavior, work patterns, etc. The more you can explain about your assumptions the better.

Please refrain from making the model overly complex.

Good to Know:

1) Hot dog consumption is on the rise

2) These numbers are (mostly) made up

Basic Assumptions:

Hot dog retail price (gross revenue): $4

Hot dog cost from supplier: $6 per 12 pack

Hot dog bun cost from supplier: $3 per 20 pack

Licensing and insurance cost: $60/month

Maintenance/repairs to hot dog cart: variable based on usage

Cost of a hot dog cart: $9,000

Useful life of hot dog cart: 7 years

The business was financed with a 2-year, $5,000 loan