Paper Example on Food Truck: Growing 20% Profit in 3 Years

Introduction

Food truck business is a profitable venture especially in the town where there are offices and a large population in need of ready-made food. Over the last three years, we have been in business selling Paninis and other lunch items that re frequently purchased different people in the different working environment within the town. In the last three years of operation, the organizational profit has been growing by twenty percent, a situation that calls for the expansion of services. In other words, the amount of sales has been on the rise due to the increasing number of customers around the town. Even though the business still owns ten thousand US dollars on the existing truck, based on the market research there is still an opportunity for expansion to other areas within the city and still, make a profit. With the expansion, the business requires addition of two more new trucks. Following the agreement signed by the management, the business will be expanded through the addition of two more trucks to increase the supplies within the city. Currently, the supplies within the city do not reach the larger customer base that has developed an interest in the food products supplied by the company.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Financial Plan

Based on the profits that the company has been making from its previous operations, there is enough accumulation of capital that can enhance the expansion programs. Currently, the business has a capital of $600,000 that can be used in the expansion processes. Considering the fact that there is efficiency in operating with the food truck, the business would like to weigh the options between the two types of vehicles that can be used to deliver the services, the food trucks, and the food trailers. Although food trucks often prove to be efficient, the organization is considering the purchase of both the trucks and the trailers to ensure that there is a difference when it comes to service delivery. However, the new trucks and trailers come with additional equipment and labor, the organization is therefore concerned with incorporating the entire costs that come with the expansion processes. The table below shows the budget or the breakdown of the financial needs of the new products.

Equipment Cost ($)

• Food truck 200,000
• Equipment associated with Food truck 200,000
• Equipment associated with Food trailer 50,000
• Labor 70,000

Financing Methods

Given the position of the business and the profits that it has gained over the three-year period of operation, the business may consider several financing methods; savings, credit and purchase order funding (Haines, Madill & Riding, 2003). Depending on the position of the business and the profits it has accumulated, also given that it has some external debts that have not been cleared, the organization is considering savings as the main source of funds for expanding the business. In most cases, funding in the most efficient and easier way of finance a business (Schaper et al., 2010). In an ideal process of operation, the business has been involved in saving money, this, therefore, proves to be one of the best ways to use these savings. Savings is the best option of the expansion process considering the fact that the organization still have some debts.

Anticipated Profits

With the expansion of the business, the profits are expected to increase from the current twenty percent to forty percent annually; this would, therefore, mean that, through constant operation, the business will be able to recover this money in a period of two years.

References

Haines Jr, G. H., Madill, J. J., & Riding, A. L. (2003). Informal investment in Canada: financing small business growth. Journal of Small Business & Entrepreneurship, 16(3-4), 13-40.

Schaper, M., Volery, T., Weber, P., & Lewis, K. (2010). Entrepreneurship and small business. John Wiley & Sons.