SoulSpace
Financial Plan
The premier element in our financial plan is initiating, maintaining, and improving the factors that create, stabilize, and increase our cash flow:
- We must create visibility so as to create customer flow.
- We must maintain a dependable, happy employee force so as to minimize turnover.
- 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:
- We assume access to equity capital and financing to support our financial plan.
- We assume our financial progress based on realistic sales to minimum sales against highest expenses.
- We assume there will not be an economic crash that would greatly hinder our target market’s access to their personal luxury funds.
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 2.50% | 0.00% | 2.50% |
Other | 0 | 0 | 0 |
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.

Break-even Analysis | |
Monthly Revenue Break-even | $73,567 |
Assumptions: | |
Average Percent Variable Cost | 60% |
Estimated Monthly Fixed Cost | $29,525 |
7.4 Projected Profit and Loss
There are two important assumptions with our Projected Profit and Loss statement:
- We expect to have to pay out from the Draw Fund occasionally.
- Our revenue is based on minimum estimated averages against highest expense expectations.




Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $900,000 | $1,750,000 | $2,000,000 |
Direct Cost of Sales | $538,800 | $1,050,000 | $1,200,000 |
Other | $0 | $0 | $0 |
Total Cost of Sales | $538,800 | $1,050,000 | $1,200,000 |
Gross Margin | $361,200 | $700,000 | $800,000 |
Gross Margin % | 40.13% | 40.00% | 40.00% |
Expenses | |||
Payroll | $155,910 | $171,176 | $171,176 |
Sales and Marketing and Other Expenses | $34,000 | $39,000 | $41,000 |
Depreciation | $0 | $0 | $0 |
Rent | $120,000 | $120,000 | $120,000 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $9,000 | $9,000 | $9,000 |
Insurance | $12,000 | $12,000 | $12,000 |
Payroll Taxes | $23,387 | $25,676 | $25,676 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $354,297 | $376,852 | $378,852 |
Profit Before Interest and Taxes | $6,904 | $323,148 | $421,148 |
EBITDA | $6,904 | $323,148 | $421,148 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | ($2,907) | $0 | $10,529 |
Net Profit | $9,810 | $323,148 | $410,619 |
Net Profit/Sales | 1.09% | 18.47% | 20.53% |
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.

Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $900,000 | $1,750,000 | $2,000,000 |
Subtotal Cash from Operations | $900,000 | $1,750,000 | $2,000,000 |
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 | $900,000 | $1,750,000 | $2,000,000 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $155,910 | $171,176 | $171,176 |
Bill Payments | $719,414 | $1,263,200 | $1,423,005 |
Subtotal Spent on Operations | $875,324 | $1,434,376 | $1,594,181 |
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 | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $875,324 | $1,434,376 | $1,594,181 |
Net Cash Flow | $24,676 | $315,624 | $405,819 |
Cash Balance | $84,676 | $400,299 | $806,118 |
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.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $84,676 | $400,299 | $806,118 |
Inventory | $54,450 | $106,111 | $121,269 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $139,126 | $506,410 | $927,387 |
Long-term Assets | |||
Long-term Assets | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 |
Total Assets | $139,126 | $506,410 | $927,387 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $63,316 | $107,452 | $117,811 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $63,316 | $107,452 | $117,811 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $63,316 | $107,452 | $117,811 |
Paid-in Capital | $160,000 | $160,000 | $160,000 |
Retained Earnings | ($94,000) | ($84,190) | $238,958 |
Earnings | $9,810 | $323,148 | $410,619 |
Total Capital | $75,810 | $398,958 | $809,577 |
Total Liabilities and Capital | $139,126 | $506,410 | $927,387 |
Net Worth | $75,810 | $398,958 | $809,577 |
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.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 94.44% | 14.29% | 15.90% |
Percent of Total Assets | ||||
Inventory | 39.14% | 20.95% | 13.08% | 3.60% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 31.10% |
Total Current Assets | 100.00% | 100.00% | 100.00% | 39.00% |
Long-term Assets | 0.00% | 0.00% | 0.00% | 61.00% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 45.51% | 21.22% | 12.70% | 34.80% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 27.60% |
Total Liabilities | 45.51% | 21.22% | 12.70% | 62.40% |
Net Worth | 54.49% | 78.78% | 87.30% | 37.60% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 40.13% | 40.00% | 40.00% | 0.00% |
Selling, General & Administrative Expenses | 39.37% | 21.53% | 18.94% | 73.20% |
Advertising Expenses | 1.11% | 0.86% | 0.85% | 2.40% |
Profit Before Interest and Taxes | 0.77% | 18.47% | 21.06% | 2.70% |
Main Ratios | ||||
Current | 2.20 | 4.71 | 7.87 | 1.10 |
Quick | 1.34 | 3.73 | 6.84 | 0.73 |
Total Debt to Total Assets | 45.51% | 21.22% | 12.70% | 62.40% |
Pre-tax Return on Net Worth | 9.11% | 81.00% | 52.02% | 3.00% |
Pre-tax Return on Assets | 4.96% | 63.81% | 45.41% | 7.90% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 1.09% | 18.47% | 20.53% | n.a |
Return on Equity | 12.94% | 81.00% | 50.72% | n.a |
Activity Ratios | ||||
Inventory Turnover | 10.91 | 13.08 | 10.56 | n.a |
Accounts Payable Turnover | 12.36 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 24 | 29 | n.a |
Total Asset Turnover | 6.47 | 3.46 | 2.16 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.84 | 0.27 | 0.15 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $75,810 | $398,958 | $809,577 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.15 | 0.29 | 0.46 | n.a |
Current Debt/Total Assets | 46% | 21% | 13% | n.a |
Acid Test | 1.34 | 3.73 | 6.84 | n.a |
Sales/Net Worth | 11.87 | 4.39 | 2.47 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |