New Day Care Project Cost Estimation Business Plan Example

Published: 2021-06-21 23:41:44
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Category: Management, Finance, Taxes

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- Budget estimationIn this budget, the new day care general manager is responsible for the execution of the opening plan and total budget. The total estimated budget for opening a new day care center is close to $50.000. In this estimation, major cost drivers in the opening phase are legal and real estate advisory fees. These costs are relatively high in comparison to other task costs because these services need to be obtained externally and be specialized in nature. However expensive is it important to obtain high quality legal and real estate advice because it is essential to meet the relevant legal requirements to prevent fines or closure in the future. Also, erroneous real estate decision can be particularly costly to advert. Table 1 below provides an overview of the task costs (“Commercial Lease - Commercial Real Estate Lease - Commercial Lease Factors,” n.d.)
Figure 1 – Task cost overview
Figure 2 – Budget chart
Figure 3 - Risk matrix
- Budget OptimizationIt is difficult to reduce the main cost drivers of legal and real estate advisory fees because they are outside the control of new day care general manager and are essential tasks to be performed. Project duration can be improved, however. In the current timeline administrative and customer management tasks are performed after legal, financial and real estate tasks are done. These increases the total duration significantly (Hendrickson, Martinelli, & Rehak, 1987). If it is possible to undertake administrative and customer management tasks parallel with legal, financial and real estate tasks total duration can be reduced with about 40 days. This increases risk a bit because extra costs are incurred before legal, financial and real estate prerequisites are met. But total project performance is increased because of shorter duration (Davis & Patterson, 1975).
- Bibliography
Commercial Lease - Commercial Real Estate Lease - Commercial Lease Factors. (n.d.). About.com US Business Law / Taxes. Retrieved April 7, 2014, from http://biztaxlaw.about.com/od/findingabusinesslocation/f/top10leasetips.htm
Davis, E. W., & Patterson, J. H. (1975). A Comparison of Heuristic and Optimum Solutions in Resource-Constrained Project Scheduling. Management Science, 21(8), 944–955.
Hendrickson, C., Martinelli, D., & Rehak, D. (1987). Hierarchical Rule‐Based Activity Duration Estimation. Journal of Construction Engineering and Management, 113(2), 288–301. doi:10.1061/(ASCE)0733-9364(1987)113:2(288)

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