Health Spa Business Plan

Financial Plan

The premier element in our financial plan is initiating, maintaining, and improving the factors that create, stabilize, and increase our cash flow:

1. We must create visibility so as to create customer flow.
2. We must maintain a dependable, happy employee force so as to minimize turnover.
3. Create a brisk turnaround on our retail and art products, always maintaining viable stock levels.

7.1 Important Assumptions

The key underlying assumptions of our financial plan shown in the following general assumptions table are:

1. We assume access to equity capital and financing to support our financial plan.
2. We assume our financial progress based on realistic sales to minimum sales against highest expenses.
3. We assume there will not be an economic crash that would greatly hinder our target market's access to their personal luxury funds.

7.2 Key Financial Indicators

Our most important Key Financial Indicator is when each stylist averages seven customers per day and each therapist averages three customers per day.

7.3 Break-even Analysis

For our Break-even Analysis we assume estimated monthly operational costs which include payroll, rent, utilities, and other running costs (not including employee draw fund considerations). Payroll alone is only estimated to about 1/2 of those costs.

The analysis shows what we need to generate in revenues per month to break even. This total is 13% less than estimated monthly store gross. This estimation does not include revenue from any other store sources, and is based on a salon customer average of $36 and spa customer average of $60.

Our average per customer revenue is estimated at $39. Considering our minimal assumptions show a monthly total customer average of 1,922, we therefore believe our break-even figures can be readily maintained.

7.4 Projected Profit and Loss

There are two important assumptions with our Projected Profit and Loss statement:

1. We expect to have to pay out from the Draw Fund occasionally.
2. Our revenue is based on minimum estimated averages against highest expense expectations.

7.5 Projected Cash Flow

Considering our business is a luxury, retail-oriented business with customers who will pay primarily with credit cards, our cash flow is not dependant on the issuance of invoices and the vagaries of Accounts Payable. We will need a minimum of financing to cover the cash flows of the first year of operations. After that, the cash flow becomes continual.

7.6 Projected Balance Sheet

Our Projected Balance Sheet shows we will not have any difficulty meeting our debt obligations as long as our revenue projections are met.

7.7 Business Ratios

The follow table contains important business ratios for the physical fitness facilities industry, as determined by the Standard Industry Classification (SIC) code, 7991.