Retail Property Sub-leasing Business Plan

Galerie de Beaute is best described as a mall of beauty professionals. Galerie de Beaute will lease fully equipped units to state-licensed beauty professionals.

Owners of traditional salons face many challenges when starting a new business. Purchasing equipment and finding a location in a high traffic area with reasonable rent is often difficult. Although 40% of beauty professionals own their own business, 60% are employed in a privately-owned shop.

In a traditional salon environment employees are paid 50% commission. These employees are often charged for supplies and products utilized. These issues sometimes lead to high turnover in the industry. Because of these challenges, salon owners have resorted to booth rental in those states in which it is legal. Although booth rentals are attractive to many; there are some drawbacks. To be considered a booth renter and not an employee by the IRS and the state, a signed lease is required. If an audit is performed and there is no signed lease, this could involve significant liability, including back taxes, interest and penalty.

A long-term loan or an additional investment will be sought to supplement owner investment. This will help Galerie de Beaute make the required leasehold improvements to the selected site. Leasehold improvements include installation of equipment, electrical, plumbing and carpentry required to construct 24 suites.

First year profit is estimated at $17,000 growing to $37,500 in year three.

1.1 Mission

• Establish Ourstate’s first salon mall
• Provide high quality suites
• Maintain long-term financial stability
• Provide access to a spectrum of beauty and personal-care professionals
• Maintain the highest levels of professional ethics
• Foster a progressive environment, which attracts talented entrepreneurs
• Stay true to community commitment

1.2 Objectives

• Galerie de Beaute is an alternative for salon professionals who have the goal of salon ownership.
• Galerie de Beaute will provide hairstylists, nail technicians and massage therapists the opportunity to operate a mini-salon with minimal start-up capital expenditures.

1.3 Keys to Success

• Galerie de Beaute is located on the heavily travelled corridor of routes 13 and 40. Average daily traffic exceeds 20,000 vehicles.
• Galerie de Beaute is attractive to salon professionals because the professional pays a set monthly expense. The salon professional is no longer required to work as a commissioned employee.
• Galerie de Beaute gives salon professionals the opportunity to rent fully equipped units. Rent includes the locked unit, utilities, and insurance. Each salon professional will set his/her hours, set his/her pricing, schedule appointments and purchase supplies.
• Owners of traditional salons face many challenges when starting a new business. Purchasing equipment and finding a location in a high traffic area with reasonable rent is often difficult. Although 40% of beauty professionals own their own business, 60% are employed in a privately-owned shop.
• In a traditional salon environment employees are paid 50% commission. In addition these employees are often charged for supplies and products utilized. These issues lead to high turnover in the industry. Because of these challenges, salon owners have resorted to booth rental in those states in which it is legal.
• Although booth rentals are attractive to many; there are some drawbacks. To be considered a booth renter and not an employee by the IRS and the state, a signed lease is required. If an audit is performed and there is no signed lease, this could involve significant liability, including back taxes, interest and penalty.
• Salon malls have been established in several other states (i.e. Maryland, Virginia, Ohio and Nevada). Ourstate, and those immediately adjacent do not, as yet, have any salon malls.