PROFITABILITY ESTIMATES FOR B72 RURAL MODEL

Based on basic set-up cost Year 1 Year 2 Year 3
REVENUE 1 396 800 1 536 480 1 690 128
Bread (700 Loaves per day @ R5.50 ave) 1 108 800 1 219 680 1 341 648
Other Products (Confectionary @ R1 000 per day) 288 000 316 800 348 480
COST OF SALES 763 200 839 520 923 472
Bread 604 800 665 280 731 808
Other Products 158 400 174 240 191 664
GROSS PROFIT 633 600 696 960 766 656
Bread 504 000 554 400 609 840
Other Products 129 600 142 560 156 816
OVERHEAD 583 339 626 296 673 549
Total Salaries 179 400 197 340 217 074
Manager 39 000 42 900 47 190
Staff 140 400 154 440 169 884
Premises 36 000 39 600 43 560
Accounting fees 3 000 3 300 3 630
Bank Charges 12 571 13 828 15 211
Cleaning 4 800 5 280 5 808
Directors Remuneration 60 000 66 000 72 600
Electricity 108 000 118 800 130 680
Insurance Short  Term 8 400 9 240 10 164
Loan Repayment - R640k @ 11.5% over 86 months 123 768 123 768 123 768
Royalty - Fresh (Fixed) 30 000 30 000 30 000
Subscription - Internet 2 400 2 640 2 904
Stationary 6 000 6 600 7 260
Telephones 1 800 1 980 2 178
Uniforms 7 200 7 920 8 712
PROFIT BEFORE TAX 50 261 70 664 93 107
GROSS PROFIT RATIOS
Overall 45.4% 45.4% 45.4%
Bread 45.5% 45.5% 45.5%
INTEREST RATE ON RETURN 6.28% 8.83% 11.63%

ASSUMPTIONS:

  1. Average of 24 Trading Days per month.
  2. Bread Sales are estimated at 700 loaves per day. 
  3. Confectionary and other sales are estimated at R1,000 per day.
  4. Overhead costs are estimated at averages of a typical bakery of this size.
  5. Year on Year increases are estimated at 10% on revenue and expenses.
  6. All amounts on the Profitability Estimates excludes VAT.
  7. The Profitability Estimates assumes ONLY retail sales and DOES NOT include any wholesale.
  8. Loan Repayments start with the repayment of R640k over 86 months at prime + 3%.
  9. Royalties are fixed at R2,500 per month.