Men's Salon Business 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, cheerful employee force so as to minimize turnover.
3. Create a brisk turnaround on our retail products, always maintaining viable stock levels.

7.1 Important Assumptions

The key underlying assumptions of our financial plan shown in the following general assumption 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 finds.

7.2 Key Financial Indicators

Our most important Key Financial Indicator is when each barber averages seven clients per day and each specialist averages three clients per day.

7.3 Break-even Analysis

For our Break-even Analysis we assume monthly estimated operational costs which include payroll, rent, utilities and other running costs (not including employee draw fund considerations). Payroll alone is only estimated at $9,800 per month, including taxes.

The analysis shows that we need to generate monthly revenues, as shown below, to break even. This total is less than estimated monthly gross. This estimation does not include revenue from any other sources and is based on a barber shop client average of $35 and miscellaneous services average of $50. Our yearly average per client is estimated at $48. Considering our minimal assumptions show a monthly total client average of 1,063, 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. Our revenue is based on minimum estimated averages against highest expense expectations.
2. Our major expense of rent and utilities is fixed for the next five years.

7.5 Projected Cash Flow

Our business is a luxury, retail-oriented business with clients who will pay primarily with credit cards.

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 following table contains important business ratios for the barber shop industry, as determined by the Standard Industry Classification (SIC) code, 7241.