Real-Life Math
You've just started an outfitter business. Now comes the fun
of planning a budget.
You have been assigned an area 237 miles from
the nearest airport. Luckily, this area already has two small cabins that
sleep four people each. There is a shared outhouse, with a wood burning stove
and running water in each cabin. The tenure, or rights to guide on the land,
will cost you $100,000.
You will be offering two-week trips at a cost
of $350 per day, all-inclusive. You have budgeted a cost of $25 per day for
meals and coffee for each customer. You will cook the food yourself. You will
also provide the necessary licenses and permits for each person, which cost
$220 per trip.
You must provide the guns and ammunition, if the hunters
wish to use them. You figure the actual cost for this and the replacement
costs per season will average $150 per trip per person, plus an initial $2,500.
Transportation
will cost you $0.33 per mile for gas and wear on your van. The cost of the
van, including insurance, will set you back $30,000. You will be picking up
and dropping off your customers from the airport.
It does tend to get
fairly cold at night, so you will invest $2,000 in bedding, quilts and basic
toiletries. The replacement costs for these will be approximately $25 per
person per trip.
You'll want to carry at least $1 million worth
of liability insurance per year, which costs about $500. You have also budgeted
advertising and phone book listings at a cost of $1,700 per year.
You
will need an annual membership to your region's Guide Outfitter Association
that will cost $50 per year. And your own hunting licenses and lodge tenures
will be approximately $2,000 for the year.
Assuming that you fill 7
out of the 8 vacancies per trip and run 6 trips this year, prepare
a projected budget for your first year of operation.