Let’s Analyze and Adjust a Small Business Budget “Green Thumb” Landscaping Business Monthly Budget

Directions: First, calculate the Costs Total, Revenue, Profit, and monthly credit card payment. For numbers 1-7, explain how each event affects the budget monetarily. After you have adjusted your budget based on the following events, explain the affect it had on your Costs Total, Revenue, and Profit. Finally, would you make any adjustments? Why or why not?

How to Calculate Costs Total Costs total equals the sum of all five categories. We will use functions to perform this tasks like we did in lesson 3. 1) Watch me use the function then 2) copy the totals on your worksheet.

How to Calculate Costs Total Select the cost cell next to Costs Total Select sum under the function drop down menu Select the cost cell next to the Personnel Total Hold the Ctrl button and select the four remaining category totals Hit Enter

How to Calculate Revenue For this assignment we will calculate our revenue by multiplying our cost by 150%. Select the cost cell next to Revenue Select product under the function drop down menu Select the cost cell next to Costs Total for Number1 Enter 1.5 for Number2 Click Ok

How to Calculate Profit Profit = Revenue – Costs To do this task, use the SUM function. Adding a negative number is the same as subtracting. Note: There is no SUBTRACT function in Excel. Use the SUM function and convert any numbers that you want to subtract to their negative values.

How to Calculate Profit Select the cost cell next to Profit Select sum under the function drop down menu Select the cost cell next to Revenue Place a comma after the cell name (E13) and type –E11 (the cell name for the Costs Total) Hit Enter

How to Calculate Credit Card PYMT Equipment monthly min. pymt. on credit card is 5% of balance @ 14% interest. *Monthly budget allows for double payments. $1,435.00 x 5% = $71.75 $71.75 x 14% = $10.05 $71.75 + $10.05 = $81.80 $81.80 x 2 = $163.60

1). Your business is great 1) Your business is great! As result of your hard work, your Profit is consistently increasing by 2.5 percent every other month. What will your monthly profit be in 6 months (two increases)?

In 6 months (two increases) the profit will be $1,310. 98 $1,247 In 6 months (two increases) the profit will be $1,310.98 $1,247.80 X 2.5% = $31.20 $1,247.80 + 31.20 = $1,279.00 $1,279.00 X 2.5% = $31.98 $1,279.00 + 31.98 =$1,310.98

2. This month your Gas (Travel) expenses doubled. As a result of the gas expenses doubling this month, my overall travel expenses increased to $685.00, reducing my profit to $1,147.80.

3. Both of your Employees are due for a 10% raise this month. The 10% raise increased my personnel cost from $1,360.00 to $1,496.00. This caused a $136.00 decrease in profit.

4.There was a 30% increase this month for your Facility cost. The 30% increase in facility cost is $75.00. This also caused cost to increase and profit to decrease.

5. You were a victim of theft 5.You were a victim of theft. You have to replace three of your least expensive pieces of Equipment. The three least expensive pieces of equipment are a push broom ($25), rake (22.50), and garden hoe ($15.00). The total cost for replacement is $62.50, increasing the equipment total from $1,435.00 to $1,497.50. This also increased the minimum monthly credit card payment by $7.12 to $170.72.

6) Your Materials expenses were 12% cheaper this month. A 12% deduction in materials amounts to $16.44 which will decrease costs total and increase profit.

7) Recalculate your budget based on the previous events here then explain the affect they had on your Costs Total, Revenue, and Profit. Calculate your current revenue and profit based on your previous costs total adjusting for the recent expenses. Current Costs Total = $2,952.66 Revenue = $3,743.40 Profit = $790.74 Previous Costs Total = $2,495.60 Revenue = $3,743.40 Profit = $1,247.80

8) Would you make any adjustments? Why or why not? As a result of the profits decreasing significantly (-$357.06), I would not continue to make double credit card payments. The smaller profit margin increases risk if more unforeseen events arise. If next month is stable I will restart double payments. I will also look at ways to lower gas costs and look for a cheaper storage (Facility).