The premier element in our financial plan is initiating, maintaining, and improving the factors that create, stabilize, and increase our cash flow:
The key underlying assumptions of our financial plan shown in the following general assumption table are:
Our most important Key Financial Indicator is when each barber averages seven clients per day and each specialist averages three clients per day.
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.
There are two important assumptions with our Projected Profit and Loss statement:
Our business is a luxury, retail-oriented business with clients who will pay primarily with credit cards.
Our Projected Balance Sheet shows we will not have any difficulty meeting our debt obligations as long as our revenue projections are met.
The following table contains important business ratios for the barber shop industry, as determined by the Standard Industry Classification (SIC) code, 7241.