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 Analysis
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Fixed Costs Create or edit this table

Fixed Costs

Cost Rent or Lease Professional Services Payroll $0 $1,000 $10,000

Interest Payments Utilities & Telephone Non-discretionary marketing expenses Other Total Fixed Costs $18,000

$2,000 $5,000 $0 $0

Break-even Analysis Create or edit this table

Break-even Analysis

Monthly Units Break-even Monthly Revenue Break-even

145 $19,929

Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost $18,000 $137.14 $13.28

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. Create or edit this chart

Sales Forecast Create or edit this table

Sales Forecast FY 2006 Unit Sales Corporate Single Corporate Double Corporate Deluxe Corporate Suite Total Unit Sales 1,925 3,665 2,695 268 8,553 2,118 4,032 2,965 294 9,409 2,118 4,032 2,965 294 9,408 FY 2007 FY 2008

Unit Prices Corporate Single Corporate Double Corporate Deluxe Corporate Suite

FY 2006 $95.00 $125.00 $175.00 $225.00

FY 2007 $95.00 $125.00 $175.00 $225.00

FY 2008 $99.00 $135.00 $195.00 $240.00

Sales Corporate Single Corporate Double $182,875 $458,125 $201,210 $504,000 $209,633 $544,253

Corporate Deluxe Corporate Suite Total Sales

$471,625 $60,300 $1,172,925

$518,875 $66,150 $1,290,235

$578,175 $70,560 $1,402,620

Direct Unit Costs Corporate Single Corporate Double Corporate Deluxe Corporate Suite

FY 2006 $7.86 $13.92 $17.50 $0.84

FY 2007 $11.00 $13.50 $18.50 $0.00

FY 2008 $11.00 $13.50 $18.50 $0.00

Direct Cost of Sales Corporate Single Corporate Double Corporate Deluxe Corporate Suite Subtotal Direct Cost of Sales $113,558 $15,138 $51,033 $47,163 $225 $132,583 $23,298 $54,432 $54,853 $0 $132,570 $23,293 $54,425 $54,853 $0

Expense Forecast
Marketing expenses are projected to be approximately 8.5% of overall annual revenue. The breakdown of expenditures is as follows: Create or edit this chart

Marketing Expense Budget Create or edit this table

Marketing Expense Budget FY 2006 Print Advertising Internet Advertising Public Relations Other $10,600 $21,000 $6,000 $21,000 -----------Total Sales and Marketing Expenses Percent of Sales 5.00% $58,600 4.99% FY 2007 $11,600 $23,100 $6,600 $23,100 -----------$64,400 5.06% FY 2008 $12,826 $25,410 $7,260 $25,410 -----------$70,906

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 the hotel. 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. Create or edit this chart

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. Create or edit this chart

Contribution Margin

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Contribution Margin FY 2006 Sales Direct Cost of Sales Other Costs of Sales $1,172,925 $113,558 $0 -----------Total Cost of Sales $113,558 FY 2007 $1,290,235 $132,583 $0 -----------$132,583 FY 2008 $1,402,620 $132,570 $0 -----------$132,570

Gross Margin Gross Margin %

$1,059,368 90.32%

$1,157,653 89.72%

$1,270,050 90.55%

Marketing Expense Budget Print Advertising Internet Advertising Public Relations Other

FY 2006 $10,600 $21,000 $6,000 $21,000 ------------

FY 2007 $11,600 $23,100 $6,600 $23,100 -----------$64,400 4.99%

FY 2008 $12,826 $25,410 $7,260 $25,410 -----------$70,906 5.06%

Total Sales and Marketing Expenses Percent of Sales

$58,600 5.00%

Contribution Margin Contribution Margin / Sales 85.32%

$1,000,768 84.73%

$1,093,253 85.49%

$1,199,144