Hair Removal Business Plan

Laser Dreams

Financial Plan

The following is the financial plan for Laser Dreams.

7.1 Break-even Analysis

The monthly break-even point is approximately $13,300.

Hair removal business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$13,329

Assumptions:
Average Percent Variable Cost	0%
Estimated Monthly Fixed Cost	$13,329

7.2 Projected Cash Flow

The following table and chart highlights the projected cash flow for three years.

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$135,300	$190,000	$245,000
Subtotal Cash from Operations	$135,300	$190,000	$245,000

Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$0	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$0	$0	$0
Subtotal Cash Received	$135,300	$190,000	$245,000

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$93,600	$105,000	$118,000
Bill Payments	$62,348	$72,440	$87,565
Subtotal Spent on Operations	$155,948	$177,440	$205,565

Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$0	$0
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$5,160	$5,160	$5,160
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$161,108	$182,600	$210,725

Net Cash Flow	($25,808)	$7,400	$34,275
Cash Balance	$16,092	$23,492	$57,767

7.3 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$135,300	$190,000	$245,000
Direct Cost of Sales	$0	$0	$0
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$0	$0	$0

Gross Margin	$135,300	$190,000	$245,000
Gross Margin %	100.00%	100.00%	100.00%


Expenses
Payroll	$93,600	$105,000	$118,000
Sales and Marketing and Other Expenses	$6,000	$8,000	$10,000
Depreciation	$8,568	$8,568	$8,568
Leased Equipment	$0	$0	$0
Utilities	$3,300	$3,300	$3,300
Insurance	$2,400	$2,400	$2,400
Rent	$36,000	$36,000	$36,000
Payroll Taxes	$10,080	$13,050	$15,750
Other	$0	$0	$0

Total Operating Expenses	$159,948	$176,318	$194,018

Profit Before Interest and Taxes	($24,648)	$13,682	$50,982
EBITDA	($16,080)	$22,250	$59,550
Interest Expense	$9,721	$9,226	$8,710
Taxes Incurred	$0	$1,337	$12,682

Net Profit	($34,369)	$3,119	$29,590
Net Profit/Sales	-25.40%	1.64%	12.08%

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$16,092	$23,492	$57,767
Other Current Assets	$20,000	$20,000	$20,000
Total Current Assets	$36,092	$43,492	$77,767

Long-term Assets
Long-term Assets	$30,000	$30,000	$30,000
Accumulated Depreciation	$8,568	$17,136	$25,704
Total Long-term Assets	$21,432	$12,864	$4,296
Total Assets	$57,524	$56,356	$82,063

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$5,153	$6,026	$7,302
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$5,153	$6,026	$7,302

Long-term Liabilities	$94,840	$89,680	$84,520
Total Liabilities	$99,993	$95,706	$91,822

Paid-in Capital	$60,000	$60,000	$60,000
Retained Earnings	($68,100)	($102,469)	($99,349)
Earnings	($34,369)	$3,119	$29,590
Total Capital	($42,469)	($39,349)	($9,759)
Total Liabilities and Capital	$57,524	$56,356	$82,063

Net Worth	($42,468)	($39,349)	($9,759)

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7231, Beauty Shops, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	40.43%	28.95%	7.50%

Percent of Total Assets
Other Current Assets	34.77%	35.49%	24.37%	36.10%
Total Current Assets	62.74%	77.17%	94.77%	52.40%
Long-term Assets	37.26%	22.83%	5.23%	47.60%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	8.96%	10.69%	8.90%	31.90%
Long-term Liabilities	164.87%	159.13%	102.99%	26.80%
Total Liabilities	173.83%	169.82%	111.89%	58.70%
Net Worth	-73.83%	-69.82%	-11.89%	41.30%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	100.00%	100.00%	100.00%	0.00%
Selling, General & Administrative Expenses	105.89%	91.73%	84.21%	73.40%
Advertising Expenses	4.43%	4.21%	4.08%	2.50%
Profit Before Interest and Taxes	-18.22%	7.20%	20.81%	3.20%

Main Ratios
Current	7.00	7.22	10.65	1.79
Quick	7.00	7.22	10.65	1.34
Total Debt to Total Assets	173.83%	169.82%	111.89%	58.70%
Pre-tax Return on Net Worth	80.93%	-11.32%	-433.16%	5.20%
Pre-tax Return on Assets	-59.75%	7.91%	51.51%	12.50%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	-25.40%	1.64%	12.08%	n.a
Return on Equity	0.00%	0.00%	0.00%	n.a

Activity Ratios
Accounts Payable Turnover	13.10	12.17	12.17	n.a
Payment Days	27	28	27	n.a
Total Asset Turnover	2.35	3.37	2.99	n.a

Debt Ratios
Debt to Net Worth	0.00	0.00	0.00	n.a
Current Liab. to Liab.	0.05	0.06	0.08	n.a

Liquidity Ratios
Net Working Capital	$30,940	$37,467	$70,465	n.a
Interest Coverage	-2.54	1.48	5.85	n.a

Additional Ratios
Assets to Sales	0.43	0.30	0.33	n.a
Current Debt/Total Assets	9%	11%	9%	n.a
Acid Test	7.00	7.22	10.65	n.a
Sales/Net Worth	0.00	0.00	0.00	n.a
Dividend Payout	0.00	0.00	0.00	n.a