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Question - It is the end of December and the actual cash amount is down 53% on the original projection. A large contributing factor is that income targets have not been met and the food and beverage budgets have been over spent by 20%. Betsy has asked you to come up with recommendations to solve the income problem, forecast for the remaining six months of the financial year and communicate the new targets and the importance of meeting budgets to the cook.
The good news is that you have heard through the grapevine that there are a number of events happening in the region in the last half of the year. These are weekday tourism events and there are a number of big construction projects where employees drive-in and drive-out for shifts Monday to Friday.
1. What sources of information might you need to set realistic projections for the rest of the year, including finding out more information about what is coming up in the region? Make a list of at least four people or places you could seek information from.
2. Identify at least three solutions for the income slump. The solutions should concentrate on increasing income and revenue rather than on reducing expenses.
3. Prepare a memo or email to Betsy and the Cook at the B&B outlining the answers to the above questions and including a discussion aimed at the cook about the importance of meeting budget restrictions, what the cook should do if they are having trouble meeting the budget or find it challenging keeping relationships with suppliers. Submit your memo to your assessor in the role of Betsy.
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