Food Truck Financial plan. Business & Marketing Coursework

Food Truck Financial Plan
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Food Truck Financial Plan
The Food Truck Business model is based on the principle of planning for the worst, but at the same time ensure management efficiency to realize the business goals. The sales volume and the seat turn during the first year are projected to be below average while the hamburger/hotdog cost will be expected to be above average. Adequate capital will facilitate the business in coping up with the ramp-up period. Funding of the business is required to avoid under-capitalization of the venture that will lead to the failure of reaching the set goals.
Sources of Funding
The amount contributed to the business by the owner is $15,000. In addition to the owner investment fund, the business will access $2,500 in grant monies and long-term loans of $1,500 from banks. The funds for renovations, supplies, working capital, legal fees, kitchen equipment, and furniture will be obtained from investment capital. The owner investment fund will incorporate the liquidated savings for the owner which will be held in bonds and stocks. The critical requirement for the grant fund will be a grant proposal or application to the Small Business Association (SBA). The bank loan will require a solid business plan, collateral, and positive track record.
Although personal savings are associated with numerous advantages when used as start-up capital for the business, they are still linked to several risks. In the case of Fast Truck enterprise, the use of private savings to fund the business will put a strain on the personal life of the owner. The owner will have lack enough money to cover his expenses in other areas. Moreover, in the event the business will fail, the owner will risk losing his savings and turn to selling personal possessions to sustain his life. One of the risks associated with grant fund consumption of considerable time, which affects the business schedule. Application of the grant will require an inordinate amount of paperwork and documentation. The owner will be required to research for information on the demographics of the market and the service rendered. The application process is time-consuming because many hours are required to plan, research, and organize essential information. The process can be frustrating to the owner, especially when the grant is not approved after a long period of waiting. The eligibility for the grant tend to be strict and the owner might lose out.
In case the owner decides to use the bank loans as the primary source for funding the business, several risks should expected. The small-business-loans are mostly charged high interest rates making businesses to strain. If Fast Truck will depend on the bank loans for funding the business, the owner will experience difficulties in expanding the business since the primary focus will channelled towards servicing the loan as well as cover the high interests. Additionally, the loan limits for businesses are often low and cannot meet the needs of the business sufficiently. In the event the business secures the loan against the business assets or personal possessions, the owner risks losing the property to banks in case repayment becomes a problem. Moreover, the business could exper...