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8/13/2019 Sample Legal Document

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Financials

Our annual marketing budget is $100,000. Sales are anticipated to achieve revenue of

$1,172,925. Our marketing expenses will equate to approximately 8.5% of the overall

revenue.

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Break-even AnalysisCreate or edit

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Fixed Costs

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Fixed Costs

Cost

Rent or Lease $0

Professional Services $1,000

Payroll $10,000
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Interest Payments $2,000

Utilities & Telephone $5,000

Non-discretionary marketing expenses $0

Other $0

Total Fixed Costs $18,000

Break-even Analysis


Break-even Analysis

Monthly Units Break-even 145

Monthly Revenue Break-even $19,929

Assumptions:

Average Per-Unit Revenue $137.14

Average Per-Unit Variable Cost $13.28

Estimated Monthly Fixed Cost $18,000

Sales Forecast

Room revenue for this year is based on an average growth rate of 10%. This is based

on the number of pre-contracted corporate rooms, and an anticipated return to

business levels projected.

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Sales Forecast


Sales Forecast

FY 2006 FY 2007 FY 2008

Unit Sales

Corporate Single 1,925 2,118 2,118

Corporate Double 3,665 4,032 4,032

Corporate Deluxe 2,695 2,965 2,965

Corporate Suite 268 294 294

Total Unit Sales 8,553 9,409 9,408

Unit Prices FY 2006 FY 2007 FY 2008

Corporate Single $95.00 $95.00 $99.00

Corporate Double $125.00 $125.00 $135.00

Corporate Deluxe $175.00 $175.00 $195.00

Corporate Suite $225.00 $225.00 $240.00

Sales

Corporate Single $182,875 $201,210 $209,633

Corporate Double $458,125 $504,000 $544,253
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Corporate Deluxe $471,625 $518,875 $578,175

Corporate Suite $60,300 $66,150 $70,560

Total Sales $1,172,925 $1,290,235 $1,402,620

Direct Unit Costs FY 2006 FY 2007 FY 2008

Corporate Single $7.86 $11.00 $11.00

Corporate Double $13.92 $13.50 $13.50

Corporate Deluxe $17.50 $18.50 $18.50

Corporate Suite $0.84 $0.00 $0.00

Direct Cost of Sales

Corporate Single $15,138 $23,298 $23,293

Corporate Double $51,033 $54,432 $54,425

Corporate Deluxe $47,163 $54,853 $54,853

Corporate Suite $225 $0 $0

Subtotal Direct Cost of Sales $113,558 $132,583 $132,570

Expense Forecast

Marketing expenses are projected to be approximately 8.5% of overall annual

revenue. The breakdown of expenditures is as follows:

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Marketing Expense Budget


Marketing Expense Budget

FY 2006 FY 2007 FY 2008

Print Advertising $10,600 $11,600 $12,826

Internet Advertising $21,000 $23,100 $25,410

Public Relations $6,000 $6,600 $7,260

Other $21,000 $23,100 $25,410

------------ ------------ ------------

Total Sales and Marketing Expenses $58,600 $64,400 $70,906

Percent of Sales 5.00% 4.99% 5.06%

Linking Expenses to Strategy and Tactics

Our marketing expense is structured to reflect the corporate strategy differentiation.

Quarterly travel trade publications and interim monthly press ads communicate our

message to key corporate clients in one of our most significant target markets.

Monthly Internet advertising expenses include banner ads, and strategic links with car

hire, airline and destination management companies' websites to drive business to thehotel. Direct mail activity builds our targeted customer database, not only in terms of

improving the quality of the data we currently hold, but on increasing the size of the

database with prospective customer information. Public relations expenses cover PR

events, participation at local functions and sponsorship funds. Overall, the percentage

of total revenue required to support the marketing expense is considered a moderate

amount.

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Contribution Margin

Contribution margins should increase due to:

Differentiation/focus strategy increases ability to specialize. Maintenance of expenses within specified levels. Increased efficiency in capacity utilization. Economies of scale due to increased purchasing efficiencies.

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Contribution Margin
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Contribution Margin

FY 2006 FY 2007 FY 2008

Sales $1,172,925 $1,290,235 $1,402,620

Direct Cost of Sales $113,558 $132,583 $132,570

Other Costs of Sales $0 $0 $0

------------ ------------ ------------

Total Cost of Sales $113,558 $132,583 $132,570

Gross Margin $1,059,368 $1,157,653 $1,270,050

Gross Margin % 90.32% 89.72% 90.55%

Marketing Expense Budget FY 2006 FY 2007 FY 2008

Print Advertising $10,600 $11,600 $12,826

Internet Advertising $21,000 $23,100 $25,410

Public Relations $6,000 $6,600 $7,260

Other $21,000 $23,100 $25,410

------------ ------------ ------------

Total Sales and Marketing Expenses $58,600 $64,400 $70,906

Percent of Sales 5.00% 4.99% 5.06%

Contribution Margin $1,000,768 $1,093,253 $1,199,144

Contribution Margin / Sales 85.32% 84.73% 85.49%
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