Sales Projections Business Plans Examples

Introduction

The business for which these sales projections are made is a food truck business. The business idea is based on research findings that consumers are increasingly demanding food that is not only healthy, but also accessible, affordable and convenient. This is especially the case in the corporate world and in construction where the breaks for lunch are short and the restaurants are far away. Food trucks are a way of meeting this enduring need. This is because the food track is motorable, and as such can bring the food conveniently close to the consumer is pressed for time. Additionally, the food trucks eliminate many elements in a restaurant that contribute to the high prices charged for food.
For instance, a food truck operator does not need furniture, can use paper plates, and does not need a fixed location. These are several of the factors that necessitate a large startup capital for restaurants, hence the high charges on different items on the menu in order to recover the cost. By eliminating these factors by the use of a food truck, the operator can charge affordable prices for well prepared food items, thereby appealing to the frugal customer who is not only conscious about their health, but also their dime. The vision and mission of the business is to provide the people in the metro area in Houston with deliciously prepared meals at an affordable price in a convenient place and a timely manner.

Sales Description

The revenue streams of the business are from the sale of the food items. The food truck business is based on food items that are high in protein and drinks. These are the two lines of business from where revenue for the business is expected. The sale of the food items will primarily be done over the lunch hour. This is the period between noon and three in the afternoon. As highlighted above, the meals sold are high in protein content. This is important, especially given niche market that the business is targeting.
Construction workers and personnel in corporate organizations need high protein diets in order to meet their high energy requirements. In this respect, this line of business will offer chicken and beef sandwiches and burgers. The second line of business will deal with drinks. Many people like orange flavored beverages with their lunch. The business will stock up on a variety of orange flavored beverages. In order to increase diversity, the business will also stock up beers to meet the need of those who prefer a beer after their meal. However, the business will reserve a strict policy of one beer per meal.

Sales Capacity

The sales capacity of a business is determined by numerous factors. The number of personnel working in the business is one important factor that determines the sales capacity. For this business, there will be two other employees besides the operator. This implies that in total, the food truck will be manned by three people. Besides the number of people, the number of meals that can be sold in a given unit of time is an important indicator. This is a factor in the sales capacity. Finally, the sales capacity can also be determined by the sales volumes or its equivalent in monetary terms by other similar businesses in the same operational area (Weber, 2012). The following are estimates on the sales capacity of the business.
Considering the time a customer takes to place an order, the time the order is rung up on the cash register, payment is made and received and the order is given to the customer, it is estimated that two minutes are required to process the order for one customer.
1 customer = 2 minutes.
Considering that there are two operators to tend to individual customers simultaneously, then in a period of two minutes, two customers will be fed.
1customer = 2 minutes} for each operator.

Two operators will tend to two customers in the same two minutes,

This in ten minutes = (2 x 10)/2
= 10 customers in ten minutes

In a given hours, the two operators will tend to

(10 x 60) / 10
= 60

This means that sixty customers will be fed in a given hour.

The food truck will operate for three hours every day. This implies that the numbers of customers who will ideally be fed in a day are:
(60 x 3)/ 1
=240

This means that in a day, the business will feed 240 people.

Seeing that this is a startup business, the sales estimates for the business are based on annual sales estimates of other similar establishment. These give an impression on what the business might expect if all the factors remain as projected. The following tabulation shows annual sales estimates for various food truck businesses.
Source: Clover (2011).
This strategy utilizes economies of scale (Myrick, 2012). It is informed on the knowledge of the average that my prospective customers are willing to spend on food. Given the hard economic conditions, and the changing consumer behavior to frugality, many consumers are willing to spend between seven and ten dollars on a simple meal for lunch, the kind available on a food truck. The following calculations explore the effect of this on the sales.

Sales Estimates

It is important to determine how much to charge on one meal, a factor that will greatly influence the sales.
For instance,
Selling 100 meals a day at a price of 5.50 dollars will generate sales of 5.50 x 100 = 550 dollars
More sales can be generated by charging meals at double the price. However, given the changing consumer behavior towards frugality and the hard economic times, one might sell considerably less at this price.
Selling 20 meals a day at 12 dollars a meal will generate sales of 20 x 12 = 240 dollars
Higher prices charged for the meals will definitely increase the rate of profitability for the food tract business. This is because the increased profitability means the food truck business can easily cover the costs incurred in running the business. However, as the calculations have shown above, high charges on the meals might reduce the volume of sales as customers who are willing to pay the significantly higher charges are few.
Owing to this, the food truck business will charge its meals at 7.50 dollars.
Earlier on, I had projected that the business can feed an average of 240 people within the three hour period. From these figures, the following are the sales estimates:
240 meals sold every day at 7.50 dollars a meal will generate sales of 240 x 7.50 = 1800 dollars.
The food truck business will operate six days a week. Based on this, the sales estimates for the week are 1800 x 6 = 10800 dollars.
When this is projected over a period of 52 weeks, the amount of weeks in a year, the sales estimates are 52 x 10800 = 561600 dollars
It is the aim of the business to increase its annual sales by 5%. Based in this, the following graph shows the projected annual sales for the food truck business over a period of three years.

Conclusion

The food truck business operates on a different business model compared to a conventional restaurant. Unlike the conventional restaurant, a food truck business is likely to get a low sales volume by charging high prices on meals. This has been adequately illustrated using the calculations. In this regard, this business uses the economies of scales in order to keep the sales high in terms of volume, and by that, revenue.

References

Clover. (2011). Food truck 101. Retrieved from http://www.cloverfoodlab.com/wp- content/uploads/2011/06/Food-Truck-101.pdf
Myrick, R. (2012). Running a food truck for dummies. Hoboken, N.J., Wiley.
Weber, D. (2012). The food truck handbook: start, grow, and succeed in the mobile food business. Hoboken, N.J., Wiley.