Sole Trader – Might go private (PLC) if business is successful. The reason I want to become a sole trader because I want to start a business by myself although with the advantages of being my own boss, getting all the profits and making all the decisions, there are disadvantages such as unlimited liability which is when I have to pay the debts by myself. The market will be mostly everyone but the business will be targeting teenagers, young adults and those who want to enjoy good, quality oriental food. The market is fairly small as there is only a few “rivals”.
My competition will be hard to put off as it consists of well known and accepted shops such as “McDonald’s” and “Nando’s Peri Peri Chicken”. The estimated costs above for setting up the business result in having an estimated i?? 18,000 left over from the total i?? 60,000 investment. This can then be used to buy more stock when required, advertising, hiring staff etc. The stock will be mainly supplied directly from a food wholesaler. The location of the restaurant will be in a retail store situated in the high street of Epsom in Surrey.
The restaurant will have machinery such as cash registers, smoke alarms, microwaves, stoves, gas cookers, knives, forks etc. Most of the equipment will not need to be the latest and most expensive devices as the restaurant involved will only be a small one. Payments will be received whenever an item is purchased from the restaurant. Payment options will include cash, cheque or credit or debit card. This has been estimated to be around i?? 3000 per month. Cash will also go out as the business will need to buy stock, pay staff, pay electricity rates for the restaurant and other payments. This is estimated to be around i??
1750. Therefore an estimated i?? 1250 profit (assuming the business has broken even) will be made monthly. With the money left over staff can be hired, cooking equipment for the restaurant can be bought, the business can be advertised, more stock can be bought, the company might go private(with the help of profit earned from the business – i?? 50,000 will be needed and money from friends and family). As the bank loan is of i?? 50,000, and the estimated cash income per month is i?? 3,000, it would take about 17 months to pay back the loan (assuming all income went towards paying the loan).