Herr Haar

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Hair Replacement and Salon Business Plan

Company Summary

Herr Haar will provide a wide range of hair care services, products, wigs, and hairpieces. We will only offer top quality hair and skin services and beauty products. Herr Haar is moving to a new location on a main road at ground level, which is ideal for this kind of business. What will set Herr Haar apart from any competition is our commitment to continued education, providing the latest hair care and replacement techniques, along with other related services, at a convenient location.

2.1 Company Ownership

Herr Haar is an S-Corporation, established in 2003 by Jane Whigg, who owns the majority of the business. Joan Whigg, her daughter, holds less than 15% of the business.

  • Jane has been a cosmetologist for 27 years, with years of experience in hair extensions and other hair care needs, and has been trained in the latest hair replacement systems.

  • Joan has been working successfully with a modest clientele for three years, after receiving training in the latest hair replacement systems, such as Great Lengths and Le Metric. Joan will continue to take several more classes that will help her specialize in specific hair loss syndromes and corrective color techniques.

2.2 Company History

Herr Haar was started in May, 2003. Although this may seem a fairly short existence, Herr Haar has done fairly well in the past six months, as the following table and chart show, garnering hair services revenue of roughly $7,800 per month. Herr Haar has done well in spite of a declining economy and a location with poor visibility and small square footage. 

We do not do sales on credit, and have a good asset base of almost $6,000, in the form of inventory and equipment, which will move with us to the new building. We currently have $4,365 in liabilities, in the form of $3,500 of Accounts Payable (for recent inventory shipments and utilities) and a no-interest loan for $1,350 from another family member. Accounts Payable are paid on 30 day terms, on time. The outstanding loan will be repaid gradually over the course of the next two years, according to our agreement with the lender (see the Cash Flow table for details).

The future shows much promise, and the new location will afford Herr Haar greater access to the public.

Past Performance
2001 2002 2003
Sales $0 $0 $46,896
Gross Margin $0 $0 $8,000
Gross Margin % 0.00% 0.00% 17.06%
Operating Expenses $0 $0 $10,112
Inventory Turnover 0.00 0.00 30.91
Balance Sheet
2001 2002 2003
Current Assets
Cash $0 $0 $1,031
Inventory $0 $0 $1,519
Other Current Assets $0 $0 $1,675
Total Current Assets $0 $0 $4,225
Long-term Assets
Long-term Assets $0 $0 $1,800
Accumulated Depreciation $0 $0 $126
Total Long-term Assets $0 $0 $1,674
Total Assets $0 $0 $5,899
Current Liabilities
Accounts Payable $0 $0 $3,500
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $1,135
Total Current Liabilities $0 $0 $4,635
Long-term Liabilities $0 $0 $0
Total Liabilities $0 $0 $4,635
Paid-in Capital $0 $0 $0
Retained Earnings $0 $0 ($2,049)
Earnings $0 $0 $3,313
Total Capital $0 $0 $1,264
Total Capital and Liabilities $0 $0 $5,899
Other Inputs
Payment Days 0 0 0