Disadvantages: The projected sales and profit calculated above can differ based on various external and internal factors. If the influence results in decreased sales and piled up losses, this would pose a great disadvantage to the business owner. The factors that can contribute to this scenario can be poor customer service, health department notices, poor economy and very poorly managed inventory, as this business deals with perishable inventory.
SWOT Analysis: The outcome of a SWOT analysis can be a redirection of company resources. The intent is not necessarily to eliminate all weaknesses, or to pursue all opportunities. Instead, management may conclude that attention must be focused on just one or two items, while …show more content…
The concept of break-even applies to nearly all organization, activities and events. A key concern when launching a project is whether it will break even, that is, whether sales will at least cover total costs. The break-even point can be expressed in either units or dollars of sales.
Let us calculate the break-even units based on below cost and sales data for a year and unit cost of Variable cost and total fixed cost (one time setup cost + fixed cost).
Total Fixed Cost $ Total Variable Cost $
197,400 2.53
Sale Price Per Unit $ Anticipated Unit Sales
8.5 40,800
Breakeven Analysis Graph
Detailed Data Table
Units Sold Sales Revenues Variable Costs Fixed Costs Operating Profit
0 $0 $0 $197,400 $-197,400
8266 70,264 20,914 197,400 -148,050
16532 140,528 41,828 197,400 -98,700
24798 210,791 62,741 197,400 -49,350
33065 281,055 83,655 197,400 -0
41331 351,319 104,569 197,400 49,350
49597 421,583 125,483 197,400 98,700
57864 491,847 146,397 197,400 148,050
66130 562,111 167,311 197,400 197,400
74396 632,374 188,224 197,400 246,750
Based on the above cost and sales data, Health Juice Bar will have to sell 33,065 units in order to cover your fixed costs. If we sell the anticipated 40,800 units then the profit would be …show more content…
If the juice bar is able to keep up quality service, control cost and manage its inventory very well, there is all the possibility that the juice bar will break-even within six months of starting business. This is due to various external and internal factors contributing to the increase in sales. There is increased awareness among working class population to be healthy and eat and drink healthy.
If this trend continues Health Juice Bar has all the potential to outperform the budgeted sales and profit and place it self in expansion mode very soon. This can be achieved only by delivering quality products and service to customer at the same time keeping the cost in control, having said that Health Juice Bar should also keep track of the threats or risks that may arise in future in terms of competition, increase in inventory cost, higher wages, expansion cost. It is very easy for a company doing well to lose focus and start to descend, this can happened very quick and fast if managers do not plan, budget and strategize its existing operations and future
SWOT Analysis: The outcome of a SWOT analysis can be a redirection of company resources. The intent is not necessarily to eliminate all weaknesses, or to pursue all opportunities. Instead, management may conclude that attention must be focused on just one or two items, while …show more content…
The concept of break-even applies to nearly all organization, activities and events. A key concern when launching a project is whether it will break even, that is, whether sales will at least cover total costs. The break-even point can be expressed in either units or dollars of sales.
Let us calculate the break-even units based on below cost and sales data for a year and unit cost of Variable cost and total fixed cost (one time setup cost + fixed cost).
Total Fixed Cost $ Total Variable Cost $
197,400 2.53
Sale Price Per Unit $ Anticipated Unit Sales
8.5 40,800
Breakeven Analysis Graph
Detailed Data Table
Units Sold Sales Revenues Variable Costs Fixed Costs Operating Profit
0 $0 $0 $197,400 $-197,400
8266 70,264 20,914 197,400 -148,050
16532 140,528 41,828 197,400 -98,700
24798 210,791 62,741 197,400 -49,350
33065 281,055 83,655 197,400 -0
41331 351,319 104,569 197,400 49,350
49597 421,583 125,483 197,400 98,700
57864 491,847 146,397 197,400 148,050
66130 562,111 167,311 197,400 197,400
74396 632,374 188,224 197,400 246,750
Based on the above cost and sales data, Health Juice Bar will have to sell 33,065 units in order to cover your fixed costs. If we sell the anticipated 40,800 units then the profit would be …show more content…
If the juice bar is able to keep up quality service, control cost and manage its inventory very well, there is all the possibility that the juice bar will break-even within six months of starting business. This is due to various external and internal factors contributing to the increase in sales. There is increased awareness among working class population to be healthy and eat and drink healthy.
If this trend continues Health Juice Bar has all the potential to outperform the budgeted sales and profit and place it self in expansion mode very soon. This can be achieved only by delivering quality products and service to customer at the same time keeping the cost in control, having said that Health Juice Bar should also keep track of the threats or risks that may arise in future in terms of competition, increase in inventory cost, higher wages, expansion cost. It is very easy for a company doing well to lose focus and start to descend, this can happened very quick and fast if managers do not plan, budget and strategize its existing operations and future