new business module

90
BUSINESS SKILLS
year, starting entrepreneurs should estimate their income and
calculate their costs on a monthly basis, as suggested in the
hand-outs. They can thus monitor the development of their
businesses at shorter intervals and react as soon as the businesses
deviate from the plan.
2.3 Calculating Costs – the case study continued
The case study of Berthe’s small business is continued to
provide an example for how total costs can be calculated.
Berthe’s tearoom – case study, part 2 (see Hand-out 34)
After having estimated her monthly and annual income, Berthe set out to determine her
business’s total monthly and annual costs. She knew that she had to consider her direct, indirect
and depreciations costs.
She had to calculate the costs related to:
• the tea;
• the juices;
• the five newspapers that she would buy every day (6 days per week) for her customers;
• the cleaning lady that would clean the tearoom once a week;
• electricity;
• the operating licence.
Berthe consulted her suppliers to obtain the prices of the material and equipment she would
need and she asked one specialist to tell her how long her equipment would last. This is the
information she received:
• Tea:
Purchase price = $4 for every 40 cups
• Juice:
Purchase price = $5 for each bottle
• Rent
$4,000 per month
• Refrigerator: Purchase price = $10,000
• Life-time:
5 years
• Newspapers:
$4 each
• Cleaning:
$50 per week
• Electricity:
$200 per month
• Licence:
$500 per year
• Refrigerator maintenance: $750 twice a year