Mazud’s Meal Delivery: Hire Sameer or Ask for Pay-Cut at Work?

Mazud’s Meal Delivery Business: Choice Between Hiring Sameer and Asking for Pay-Cut at Work
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Mazud’s Meal Delivery Business: Choice Between Hiring Sameer and Asking for Pay-Cut at Work
Mazud is a BC resident who works as a software engineer and has been a part-time entrepreneur for two years. His part-time work involves picking up meals from restaurants and delivering them to customers. His target customers for this service are older individuals living within 5 km of his residence. While helping to advertise Farny’s Wraps business, he discovered that an increasing number of customers are seeking food delivery services. His customers appreciated his attention to detail, commitment to delivery, and friendliness. However, the business has increased drastically recently since he began working with his friend Farnoosh, a new restaurant. As a result, balancing his side venture and his employment responsibilities is increasingly challenging. Having pondered on the issues, Mazud has two options: to hire Sameer (his current driver) to do the deliveries when he is at work or request his current employer to cut his working hours, resulting in a $30,000 annual salary from the current $60,000. Thus, the current paper seeks to determine which option is ideal for Mazud, particularly when it comes to the amount of money he will make annually.
Current Revenue Projections
Under the revenue projection, the paper summarizes Mazud’s business income regarding the future (5 years’ projections). These estimates are significant because they will provide a basis for making a decision.
Current Income from Business
In the first year, Maud’s records show that he delivered 12.5 meals per day within 1.5 hours. At this point, he could cover his job obligations and still deliver the means because 1.5 hours is relatively small considering that he was working from home. The average delivery fee was $2.33, and the average tip was $1.20. He also owned an old car that resulted in 30% of revenue being used for expenses. In other words, Mazud used to make $29.125 and $15 daily from delivery fees and tips, respectively, amounting to $44.125 per day. Thus, his daily net revenue (without expenses) was $31. Annually, this amount was $11,315. Thus, Mazud was making $71,315 per year in addition to his salary.
In the second year, Mazud increased his delivery fee and tip to $2.48 and adjusted tips to $1.18 while delivery was now 30 orders per day on average. Further, he had a new car that had reduced expenses from 30% to 25%. Thus, he was making $74.4 in the delivery fee and $35.5 in tips per day in the second year, totaling $110. Assuming he worked all days around the year, Mazud made $40,150 in gross income in the 2nd year, which (when expenses are incorporated) resulted in $34,128. Combined with his salary, he made $94,130 in the 2nd year while working 3 hours per day on deliveries.
5-Year Projections
After two years, while making an average of 30 deliveries per day, Mazud expects to adjust his delivery fee to $2.75 and tips to $1.25 on average. Based on this figure, Mazud will be making $82.5 and $37.5 in the delivery fee and tips, respectively, albeit with increased working hours (4 hours). This amounts to $120 daily. When expenses (25%) are considered, Mazud made $90 per day, amounting to $32,850, assuming that he made deliveries around the year. Mazud made $97,230 in his 3rd year of food delivery venture combined with his salary. However, Maud’s records indicate a 10% annual growth in order volume projection. Therefore, table 1 below summarizes revenue projected over five years using the third year as the base year.
Table SEQ Table \* ARABIC 1: 5 Year Projection Using 3rd Year into Business as Baseline
YEAR

AVER. ORDER VOLUME

AVER. DELIVERY FEE ($)