Write a 700- to 900-word paper in APA format in which you do the following:
•Illustrate how your venture would perform by estimating the revenue and expense to calculate operating profit or loss. Include estimates of your venture’s main sources of revenue and the expenses expected in the main cost categories such as the cost of goods, sales and marketing, labor, rent, maintenance, and any other significant expenses.
•Illustrate your venture’s startup costs by estimating a preopening budget—also termed development budget—that includes startup costs such as building and construction, Web site development, preopening marketing, equipment, merchandise, preopening operations, research and development, working capital, and any other significant preopening expenses. An example of a preopening budget may be found in the materials listed on the course page for the University of Phoenix student Web site for Week Two named Kudler Opening Budget.
•Develop financial planning goals by illustrating how your venture would be initially funded by using cash on hand, debt, venture capital, or a combination of these. Use a mortgage calculator found on the Internet and calculate your loan payments. Include these expenses in your Operating Budget. Use the information below to help in your calculations:
Building and Construction Estimation*
Remodeling Fees$200 per Square Foot
New Building Construction Fees$450 per Square Foot
*Multiply square footage of small business by fee for estimation.
10 Year bank Note (Debt)7.5% Interest
5 Year Venture Capital Loan15% Interest
Examples of Profit Split for Venture Capital Partnerships*
Venture Capital Investment 1$300,000
Cost to Develop Business 1$1,000,000
Venture Capital Profits 130% of Business Profits
Venture Capital Investment 2$500,000
Cost to Develop Business 2$2,000,000
Venture Capital Profits 225% of Business Profits
*Profit split is commensurate with the ratio of investment.