Budgeting and Business Planning Essay

In order to create the criteria for the citizens delegacy we subscribe to to look at what they postulate from the project. more or less businesses and organisations ar in business to puddle a profit, however the citizens delegation has contrasting aims and objectives compa blood-red to a normal business or organisation. They need to tilt up the options of each design and decide which best relates to their aims and objectives. When the committee is containing which proposal to go with they should consider the following categories Short- marches m onetary Benefits unyielding-run financial Benefits Environment Relation to aims Short-term Financial Benefits The committee need to consider the short term benefits of each proposal. They dont want to birth on a proposal that has eminent start-up bes and doesnt act upon a return on the capital within the first division. The committee does non want to be left in a high heart of debt if the proposal fails. If the committ ee is left with a debt they may not be able to fund opposite projects to further their cardinal aims. Long-term Financial BenefitsLong-term the proposals leave give different forbiddencomes. The committee needs to decide on how long they want to keep shed sign of the zodiac? If they want it as a long term asset which loafer help with their aims? Or do they want a longer term money making scheme to boost revenue which dismiss be utilise in areas they already control. EnvironmentMoult Hall comes with a huge area of woodland, they needs to consider the hearts on the local anesthetic base life and wildlife that any proposal could contain. They need to think, does it destroy self-coloured caboodle life? Does it squeeze on wildlife habitats? Is their going to be any long lasting environmental damage? Relation to AimsThe committee is based on three of import aims. They need to consider these aims in making their decision, they appriset be making use of one proposal if it goes purely against some of their basic aims. They have a bun in the oven to consider their own image and brand, does a proposal give them a bad name/image considering their aims and objectives? unbelief 2 Jonathan and Ingrids proposal has some short term pecuniary benefits, in the 30 week trial run molting residence turns over a small profit of 1,646. When the committee takes their proposal in to consideration they should recognise this point, spill abidance leave alone be of no financial burden in the short-term 30 week trial. If the 30 week trial is to succeed then shake off anteroom hobo have some structural change state done costing 20,000 which would pixilated moult planetary house for four weeks after the trial. The structural alterations would increase the message of the site to allow up to 30 guests to stay at one time.According to Jonathan and Ingrid projections of a weekly cost per guest of 66 and a weekly charge per guest of 150 they are making 84 profi t per guest per week. With the structural alterations and the increase in efficiency by 20 guests. The weeks after the alterations are finished they could make an extra 1,680 per week, convey their possible weekly total profit at full talent to 2,436 (allowing for one free space, 29 paying customers). Therefore they could justify the huge 20,000 outlay on alterations as moult manse would pay for these alterations in little over 8 weeks. So in the long-run moult residence pressure group could be a profitable project by the wipeout of year one. The one drawback of this proposal is the loss of the usage of the minibus at weekends, which generated an annual income of 1,040, however it mountain be argued that it is now being put to ameliorate use and that the money is being recuperated from moult hall.Break-even point Total expenses63,880 Weeks until break-even47.3 Guests until break-even473As we toilette go to from the table above moult hall allow have to bring in 473 gu ests a year to break even when they corporation only aim 10 guests per week. Equally they would have to run for 47.3 weeks a year at full capacity to break-even. This gives them an average of 9 guests a week. If they were to structurally improve moult hall so that they john hold up to 30 guests a week then the figures would look truly different as shown in the table below. Break-Even PointTotal Expenses63,880 Weeks until break-even point14.7 Guests until break-even point441Although a equal amount of guests is required the amount of weeks at full capacity has drastically dropped from 47.3 to 14.7. Their average guests per week has dropped from 9 to 8. Although this is not a wide drop, in comparison they only have to fill 8 out of 30 beds compared to 9 out of 10 beds in the 30 week trial.The environment and its protection are very important to the committee and are mentioned in their main aims. Jonathan and Ingrids proposal helps the environment and makes the most of moult hall, if a garden was to be kept at moult hall the guest could tend to this and grow vegetables and recycle waste in a compost, which in turn could be re-used on the garden making moult hall very self-sufficient and environmentally friendly. iodin of the major aims of the committee is to help and educate the unsalted. Jonathan and Ingrids proposal does just this, by inviting young people from the ring area to come stay and learn astir(predicate) the countryside. The guests will be able to learn about different wildlife and plant life living in the moult hall woodland and surrounding areas. The committee has to consider how the proposal will relate to their own aims, with moult hall becoming a learning centre for the young the committee could promote the good work they are doing to increase their donations revenue and grow as a trust. Question 3Winstons proposal consists of turn moult hall into a quad bike track with overgenerous bedrooms in the house for guests. In the year one mo ult hall will turn over a profit of 1,034,283. 750,000 of this is guaranteed to the North westmost trust for the protection of wildlife and the other 284,283 will go to Winston himself. Moult hall would be a great money maker for the trust with the guaranteed income of 750,000 adding to the 800,000 a year they receive from local donations and fund raisers, boosting their total revenue for the year to around 1,550,000.Long-term moult hall will turnover similar amount each year as long as on that point is no dip in demand. In the second year when Winston doesnt have any initial capital costs he will make a large profit himself of 402,350. The funds the committee will earn from moult hall could be used in other areas to promote the protection of wildlife.Break-even Point Total Expenses1,022,650 Weeks until break-even point35.9 Guests until break-even point538From the table above we can date the break-even point for moult hall under Winstons proposal. He would need to be operating at full capacity for nearly 40 weeks a year to break-even this means he would have to attract 538 guests a year. On average to break-even Winston will have to have 11 guests a week. In monetary terms moult hall will be a very successful however some move of the proposal will go against the trusts main aims.The trust was set up for the protection of wildlife one aim is to protect local wildlife and plant life. To make the quad bike track many mature trees will have to be removed in the grounds of moult hall. This will lop off some of the habitats of animals in the woodland. One of the main habitats that could be disrupted is the nesting sites of the red kite. The red kite has only recently been re-introduced in to the United domain after the success of similar projects in wales the trust fully supports the work of the national charity that achieved this. The red kite was wiped out in the UK by modern farming methods which use pesticides to kill small rodents, which are the main food source of the red kite. The first aim of the Trust is to boost farming methods that dont hurt local wildlife and plant life. They have to consider how the disruption of the nesting sites would reflect on them if they took on Winstons proposal. It may look bad as with one hand they are back up the work of the charity yet they are making money at the cost of disrupting local nesting sites.Question 4a There are many different measures that to committee can use to measure the doing of moult hall such asMonthly financial reports Committee inspections twice a year var. analysis comparing computeed figures with actual Variance abbreviation The committee could use variance analysis variance analysis is a comparison of the budgeted cost of running moult hall and the actual cost of running moult hall. They could see if the costs of moult hall are favourable or adverse. If the results are favourable then this means that moult hall is running at a cheaper cost than they originally budge ted. provided if the results are adverse then this means that the cost of running moult hall is more than they budgeted, this could be due to higher food prices or a larger light and heating bill than first anticipated. Variance analysis will give the committee a good persuasion of how much difference there is between their original planned budget and their actual outlay. This will be useful in determining suffer moult hall is a financially viable option.Monthly Financial Reports The committee could ask for the manager of moult hall to send them periodic financial reports so that they can keep track of the performance and see if they are making or loosing money. They could let the financial reports come in for a few months or even up to year. This way they can identify trends and high and low seasons. They may find that they have a slightly seasonal product, as more people will want to be outside in the summer compared to the winter. They can also see if over a year they are get ting an increasing amount of engross month on month or if they are losing interest Committee inspectionsCommittee inspections could take place two or three times a year, the committee could travel as a whole or send a few representatives to moult hall to treasure the upkeep of moult hall and the grounds. The inspection could also be used to see how the guests are enjoying their time at moult hall. The inspection group will then feed back to the committee who will have meetings on how to improve moult hall based on the feedback from guests and/or any improvements or checks that would need to be made to ensure the performance of moult hall is consistent.Question 4b When the committee is assessing the performance of moult hall they can use different companies to assess moult hall for them. The environmental Inspection Agency (EIA) can carry out Environmental impact assessments. The committee could use this agency to assess the impact that moult hall is having on the surrounding wood land and grounds of moult hall. The committee can use this information to track the environmental progress of moult hall and see if the project is having a damaging or positive effect on the woodland and grounds.The committee could also use a appraise company to produce a study which can be given to guests when they leave so that the guests can give their feedback. The survey company can then use these results to produce accurate feedback to present to the committee. This method would be better than the committee asking the questions themselves as it will give a better representation of the guests views on moult hall. One company that they could use is amplitude research, this is a company that specialises in foodstuff research, Amplitude research can create a standard survey for guests which will make the results more comparable and easier for the committee to act upon.