Johns small restaurant John started a small restaurant in the centre of town, worth 350,000 and plans to run it selling lunches and snacks. It has kitchen fixtures and fittings worth 150,000 and furniture etc valued at 8,000. She has savings of 10,000 which he will deposit into a business bank account in January and is in discussion with her bank to get a loan. They have asked him to prepare a business plan, including a cash budget for the coming six months. John expects the restaurant to draw customers straight away. Most customers will pay cash immediately, but John intends to offer to sell on credit terms to local professional offices (accountants, solicitors etc) for staff lunches, meetings etc He reckons that his sales for the coming six months will be: % credit sales January 12,000 0% February 13,000 5% March 14,000 5% April 15,000 10% May 15,000 10% June 16,000 10% The credit sales will be paid up in the month following sale. John will buy ingredients immediately before using them and the cost will be 50% of monthly sales. There will be negligible inventory on hand. (For example, in January, ingredients costs will be 12,000 * 50% =6,000) John will employ an assistant who will be paid 1,500 per month. He will need to buy a small delivery vehicle and has seen one advertised for 9,800. He will buy it in February. Some of the furniture needs replacement and he thinks he will budget 1,600 for that in January. Repairs, redecorating will be undertaken in January and February and be paid for in March. This will cost 4,000. Running costs, including electricity, other utility bills etc are budgeted to be 3,600 a month. Business rates are 4,000 for the six months from April and are payable in April