Question: Determining Sales and Costs
As one of the four functions of management (see Henri Fayol), the control function involves projecting the costs of a business through budgeting and preparation of financial statements. Eventually the financial statements must be analyzed to reveal what is going on in a business.
• How will you determine your monthly sales? Be specific when determining your sales based on price, number of customers, customer return rate, new customer rate, and number of items or services sold to each customer each month. Defend your assumptions.
• Pick your top five expenses. How have you determined your expenses? Be specific, and back up your assumptions with research. For example, if you will be renting, what are the going rates for rentals? How much will electricity and other utilities cost? What salaries will you pay and what perks will you give employees? What is your salary or intended draw from the company?