Profit 9: Projected profit and loss calculation during

 

Profit and loss calculation

Year 1

Year 2

Year 3

Revenue

540,000€

1,318,000€

1,872,000€

Variable costs

118,800€

289,960€

411,840€

Gross Margin

421,200€

1,028,040€

1,460,160€

Gross Margin %

78%

78%

78%

Fixed
costs

Labor (35%)

189,000€

461,300€

655,200€

Utilities

12,870€

14,060€

16,330€

Depreciation

10,800€

11,020€

11,570€

Rent

60,000€

60,000€

60,000€

Marketing &
advertisements

12,400€

12,400€

12,400€

Insurance

1,000€

1,000€

1,000€

Pension, holiday,
unemployment insurance of payrolls (27%)

51,030€

124,550€

176,900€

Total fixed costs

337,100€

684,330€

933,400€

Total operating expenses

455,900€

974,290€

1,345,240€

EBIT

84,100€

343,710€

526,760€

Bank return

12,500€

12,500€

12,500€

Interest Expense

3,000€

3,000€

3,000€

Income Tax (25%)

21,030€

85,930€

131,690€

Net Profit

47,570€

242,280€

379,570€

Net Profit/ Sales

8,8%

18,38%

20,28%

 

Table 9: Projected
profit and loss calculation during first three years

 

The figure 8 below represents the estimated
months profit and loss data at the Hookah Space lounge bar during the first
year. The most profitable month is going to be August with the highest profit
of 54,350€ due to season time, and the most passive month
will be February with only 350€ of profitability, because of no season time in
Calpe. In all the months the break-even point is positive, what predicts to not
have any loss month.

 

 

Figure 8: Projected
months profit and loss

 

1.1      
Required permits in Spain

 

Opening and management of a hospitality
business in Spain requires a huge number of nuances to be accomplished, and all
of them must be taken into account when buying and organizing this interesting business. First of
all, it must be in mind that the activity of hospitality business, and especially a lounge bar, in many countries is
carefully regulated by law. The start-up requires a whole list of licenses and its to get employees special
permits.

 

As in all the European countries, a lot of
sanitary requirements are imposed on the activities of lounge bar activities abroad. The enterprise must fully comply with the
established norms. Therefore, if an aspiring restaurateur decides to bring his
own chef abroad, he should be prepared for the fact that the process of
obtaining a work permit for him will be very difficult.

To get a
license for the lounge bar opening it is needed to get through the next steps. First of all, it is important
to get a municipal activity license for bar at a town council, cafeteria, or
restaurant. The social places like bars, are qualified activities (annoying,
with a special risk, etc.), therefore the departments of urbanism review these
activities with a special care. Before applying for the license, a technical
project must be drawn up certifying that the premises meet the necessary
requirements to perform the activity. In this license application must be
attached following documents as: technical report and approved project visa for
the activity, soundproofing measures, fire security plan, NIF or CIF of the
corresponding company and payment of the fees corresponding to the license. Talking
about NIF, it is the fiscal identification number used in Spain for natural
persons. Nevertheless, the CIF means cost, insurance and freight. Normally the
town councils allow to open the business once the application for a license was
presented, currently this can represent a fine in many municipalities. In the
process of getting the license the municipality will inform the neighborhood
that a bar will be installed and if they oppose it, it may defer the concession
of the start-up. Once the activity license is obtained, the execution process and
the corresponding preparation of the premises are started (Documentación Necesaria Para Abrir Un Bar 2017).

 

Besides the municipal activity license for bar,
it is crucial to get from a town council the building permission to perform the
conditioning of the premises. Having completed the works and after the
corresponding inspection the town council will issue the Opening License to be
able to exercise the activity in the premises. If needed, it is important to get
the permission to occupy
public roadway, if tables, chairs or awnings outside are planned to be used (Documentación
Necesaria Para Abrir Un Bar 2017).

 

In the Autonomous Community (CC.AA) it is
needed to register the company in the Register of the Touristic Companies and
Activities, which is in the department industry and commerce of the community.
Afterwards, to obtain the bar or restaurant identification plate and place it
outside the establishment on a visible place. This plate has a blue background
with the white letter R for restaurants, or the white letters R and B for the
restaurant bars, which is the case of the Hookah Space lounge bar due to
providing food and beverages at the future establishment. Getting the
authorization for the automated dispensing machine installation is one of the
main points It is usually carried out halfway with an operator that does all
the procedures before the CC.AA. All the personnel that works in the premises
must have the food service and liquor licenses, issued by CC.AA as well as the
Sanitary Authorization, which is processed in front of the corresponding body
of the Autonomous Community. Hazard analysis and critical control points plan
(HACCP) that includes the analysis of potential food risks and the establishment
of control measures. Besides that, it is essential to have price lists and
menus in view of the clients. Depending on the Autonomous Community, these
price lists or menus are stamped by the autonomic body, even if it is not
mandatory. To subscribe to a civil liability insurance according to the CC.AA will
be determined according to capacity, continent and content (Documentación
Necesaria Para Abrir Un Bar 2017).

 

Following the model 036, it is important
to get from the tax agency the declaration of registration for start of
activity: high value-added tax (VAT), location of the premises, type of
taxation, and so on (Documentación Necesaria Para Abrir Un Bar 2017).