new business module

94
BUSINESS SKILLS
Berthe’s tearoom – case study, part 3, answers (see Hand-out 37)
Berthe’s profit:
Month
1 2 3 4 5 6 7 8 9 10 11 12
Total
Income 11,880 11,880 11,880 11,880 11,880 11,880 23,760 23,760 11,880 11,880 0 11,880 154,440
Direct costs 5,864 5,864 5,864 5,864 5,864 5,864 11,728 11,728 5,864 5,864 0 5,864 76,232
Indirect costs 5,444 5,444 5,444 5,444 5,444 5,444 5,444 5,444 5,444 5,444 0 5,444 59,884
Depreciation 182 182 182 182 182 182 182 182 182 182 0 182 2002
Profit 390 390 390 390 390 390 6406 6406 390 390 0 390 16,322
Note that the totals vary slightly because the numbers in the table were rounded up.
If Berthe’s estimate proves to be accurate, she would generate a profit of $430 in a normal month
and a profit of $6,406 in the peak months of July and August.
Her annual profit would amount to $16,682.
Berthe could increase her profit by, for example:
• raising her prices slightly (she set them rather low to be on the safe side);
• cleaning the tearoom herself and saving the cleaning lady’s salary or only hiring the
cleaning lady in July and August, when she is busiest;
• checking whether she can reduce the amount of peanuts she gives her clients for free;
• trying to negotiate rebates for large orders of soft drinks and beer with her supplier.
As a starting entrepreneur, Berthe may rethink her decision to
employ a cleaning lady. If she has the time, this would be the
easiest way to increase her income and reduce her costs and risk.