Final Class reflection #6-7

Sales Mbaga Kayondo

1/20/15

                        Store front and Financial reflection

During the final stretch of the Storefront project, we had many discrepancies in our profit and loss statement and even with Mr. Gladstone’s later corrections, there were still underlining errors.

First issue: We had not accounted for the recalculated costs such as insurance, and cost of utilities in the profit and loss statement.

*This simply meant that we had to update the profit and loss statement with revisions from parts four and five.

Second issue: Construction cost, which is fifty thousand dollars, was not accounted for in our operating costs, which greatly over valued our projected annual profit for the first and second year.

This major issue was made minor through Dan’s effort to correct the mistakes as soon as we found them. He did the initial corrections (43%) and I finalized the rest (57%).

With the presentation coming up and the profit and loss statement nearly complete, I had a moment of brilliance, when I was able to split the construction payment over two years, which allowed for an easier first year, in terms of income generated.

The process that interested me the most was the creation of a six-year financial projection. (Should have been three to four years but I was having fun!) My mathematical expertise allowed me to project our increased profit, cost, and income for years one through six by assuming a ten percent increase in our customer base for the second year. Then a five percent increase (third year), five percent increase (fourth year), five percent (fifth year), two percent (sixth year) in the subsequent years. After the presentation, the panel made it clear that our biggest issue is how we are going to steal customers from our competitors in the surrounding area.