Market Day: Financial Viability Basics
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Market Day: Financial Viability Basics
Understanding costs and profits for your food stall business Year 10 Business Studies 60 minutes
What is Financial Viability?
Can your business make money after covering all costs? The difference between income and expenses Essential for any successful business Helps you make smart pricing decisions
Understanding Variable Costs
Costs that change with how much you produce Ingredients for your recipes Packaging materials Example: More cupcakes = more flour, eggs, sugar
Calculate Your Variable Costs
List all ingredients for ONE item from your recipe Find the cost per unit (per gram, per egg, etc.) Calculate total variable cost per item Don't forget packaging costs!
Breakeven and Profit Calculations
Breakeven: When income equals costs Profit = Selling Price - Variable Cost per unit Example: Sell muffin for $3.00, costs $1.20 to make Profit per muffin = $1.80
Pricing Challenge Discussion
What happens if ingredient costs suddenly increase? How do you balance competitive pricing with profit? What if customers think your price is too high?
Scaling Your Business (Extension)
Profit = (Price × Quantity) - (Variable Cost × Quantity) - Fixed Costs How many items do you need to sell to break even? What's your profit if you sell 50 items? 100 items? Use algebra to solve for different scenarios
Summary and Next Steps
Financial viability = Can you make profit after costs? Calculate variable costs accurately for pricing Consider market factors when setting prices Apply these concepts to your Market Day business plan