FIGURE 9.3 Sample pro forma for a registered dietitian nutritionist advanced practice training program EXPENSES
Explanation
Clinician salary and 27% benefits fringe rate
Clinician salary and 27% benefits fringe rate
Administrative assistant salary and 27% benefits fringe rate
Liability insurance Computer
Office supplies Printing
Preceptor continuing education Program marketing
Parking and meals
REVENUE Tuition
Initial program development and annual updates
Program management: 2 hours per participant per day
Program development and ongoing management
$20.00 per participant per year
Allocated laptop for program participants Copier paper, binders, flash drives
Year 1 $2,440 $3,050 $687 $100 Newsletter advertising, flyers, brochures
All participants receive 1 parking voucher and a $6.00 meal coupon per day
Total Expenses: $2,000 per student per year Total Revenue: Net Profit: Breakeven Analysis
One tool commonly used by managers when evaluating new business opportunities is a breakeven analysis. Situations where a breakeven analysis may be useful include:
› deciding whether or not to start a new service; › reducing services in order to reduce costs or net losses; and
› determining appropriate pricing strategies (eg, price changes, check averages, billable rates, cost reductions, and so on) to sustain a business model.
A breakeven analysis is an algebraic equation used to calculate the level of revenue (or volume of units sold or labor hours billed) required to achieve a net income of $0. The equation is as follows:
Revenue – Fixed Costs – Variable Costs = Net Income This can be solved algebraically. Revenue is unknown and can be expressed as x.
Variable Costs can be expressed as a percentage of revenue (for example, if food cost or cost of goods sold is expected to be 40% of sales, it would be expressed as 0.40x). Breakeven Net Income is zero. Breakeven analysis is expressed graphically in Figure 9.4, followed by a step-by-step example in the following Stories From the Field box.
CHAPTER 9: Budgeting and Managing Finances 183
$1,000 $200 $250 $900 $500
$550 $9,677 Year 2 $251 $6,283 $153
$200 $0
$250 $500
$1,500 $500
$1,100 $10,737 Year 3 $259 $9,699 $229
$300 $0
$300 $600
$1,500 $500
$1,650 $15,037
$10,000 $20,000 $30,000 $10,000 $20,000 $30,000
$323 $9,263 $14,963
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