How to Start & Run a B&B BandBED2eBook-1 | Page 17

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The cost of fliers advertising your whelks (marketing costs – yet another
“overhead”)
The number of tubs of whelks you sell (sales units), and
The price per tub you sell them for (sales price).
So our much-derided whelk stall has become a little less simple as a business to
measure and manage, but the essentials are still simple: to manage the stall to achieve
maximum sustained net profit per week.
The purpose of Fred’s whelk stall budget is simply to put figures on all the above
essentials, and relate them all to his objective (ie net profit per week in this case), thus
giving Fred the essential tool to manage and judge the success of his business.
Anything else is, for our purposes, a superfluous complication.
So, just to finish our example, Fred’s weekly whelk stall budget might look like this:
Sales:
Sales units: 500 tubs of six cooked and seasoned whelks
Sales price: £1.75 per tub
_______
Total sales turnover:
£875
(£1.75 x 500)
Direct costs:
Wholesale costs of 3,000 whelks:
£300
Condiments, gas, packaging and other daily raw materials:
£30
_______
Total:
£330
Gross Profit: £875 - £330 = £545 (ie 62% of sales turnover)
Overheads:
Pitch rental per week in the market: £100
Advertising fliers: £15
Bank interest on the loan for the stall and equipment: £10
Wages for part-time assistant: £150
_______
Total:
£275
Net profit: £545 - £275 = £270 per week