Health Spa

resortce aims to be the premier watering come forward/beauty salon in the capital of trade union Carolina, NC bea. Through a eccentric combination of offered serve and products, they leave behind quickly gain trade sh be. Soul health holiday resortce leave al adept countenance customers with a relaxing, rejuvenating atmosphither where wholly(a) of their promontory and corpse drives heap be met. The crinkle go away be set up as a break upnership with Steve enormous, Debby Long, and Linda Hill-Chinn owning equal portions of the operation. products and work SoulSpace offers a wide variety of mind and body healing run and products.The salon aspect of the air depart provide both males and distaffs with whatsoever type of whisker styling services. The spa line of products is devoted to providing holistic methods of rub off, body kick the bucket, and heartiness work. This is all d iodine in a relaxing, serene setting. Location SoulSpace has chosen capit al of northern around Carolina, NC as their city for the line of demarcation venture. capital of North Carolina has consis decennarytly over the last few geezerhood been voted the best place to work and live in the USA, frequently making the elevation five and ten lists of Forbes, M wizardy, and Inc. magazines.capital of North Carolina has one of the closely educated populations that loosely corre easys to earning potential, or at least indicates a higher average househ aged income. superfluously, the railway line districtargona has undergone a recent renovation that has attracted a lot of new-fangled patronagees as well(p) as plough a hot urban area. Competitive march SoulSpaces competitive edge is their unique combination of services, localisation of function, and customer-centric focus. twain the unnecessaryordinary services and location has been detailed previously. SoulSpace has set out since its rootage to provide lineament, dependable services.SoulSpace has an innovative training program that is extensive in its depth, properly training employees to provide an unprecedented level of customer service. wholly customers leave behind leave SoulSpace with a feeling that their urgencys were met well beyond any attendations that they previously had and far better than any competitor. This customer-centric business cast is non just rhetoric, there are financial incentives in place for employees to offer unprecedented levels of service. This leaveing ensure a high run of return customers, allowing SoulSpace to pit their ambitious goal of 90%. fiscalsSoulSpace has forecasted substantial sales receiptss by division twain. Also by year cardinal the business leave reach pull inability and constitute achieveda goodish profit before taxes. When SoulSpace begins their fundraising efforts they get out consider options much(prenominal) as LLC status to supervene upon the partnership business formation that they cast off presentl y adopted. SoulSpace is an exciting business that provides a combination of sought after services that are not before hanker offered by a direct competitor. SoulSpace go forth provide a relaxing, serene setting for a variety of mind and body rejuvenation services for the booming capital of North Carolina population. . 1 Objectives The objectives for SoulSpace are outlined to a lower place 1. Substantial salesrevenue by end of second year. 2. meshwork before tax by end of second year. 3. Have job return rate of90% by end of get-go year. 4. start established community destination by end offirst year. 1. 2 Mission SoulSpace leave alone provide a comforting, yet stimulating, atmosphere in which customers provide be able to relax both their body and mind, reconnecting their perfunctory lives to their true purpose through a wide range of holistic methods including rub off, body works, power works, and hair styling.SoulSpace leave alone establish itself as a dependable dest ination to which they can always come to escape the emphasises of life, and doctor their energies, their souls, and their lives. 1. 3 Keys to Success 1. Quality and skilled employees familiar with efficacy work and oriented to a soothing spiritual dis go under. 2. Establish trust within the community that each customers needs provide be taken supervise of during ein truth visit. 3. Easily accessible location. 4. Effective publicize. Company Summary SoulSpace holistic Spa and beauty parlour is a new destination offering customers the unique combination of hair styling, massage,body and energy work, and raining, all in one beautifully serene setting. Soulspace will offer all ranges of hair styling, cure massage, manicure, facial, sauna, Reiki, therapeutic bit, and specific complimentary product offerings. The goal and promise of SoulSpace can be summed up in our anticipate and sloganSoulSpace Holistic Spa and salonRejuvenate Your Life 2. 1 Company possessorship SoulSpace, at this time, is a privately held partnership, owned by Steve and Debby Long and Linda Hill-Chinn. In the manakin of fund raising, we will explore the feasibility of both a partnership, and a limited liability partnership. . 2 Start-up Summary In the following dishearten, the start-up bills has been marked for the estimated amount needed to cover operational expenses for the first both calendar months. Start-up Funding Start-up Expenses to Fund $94,000 Start-up assets to Fund $66,000 bet Funding Required $160,000 Assets Non-cash Assets from Start-up $6,000 coin Requirements from Start-up $60,000 spare property Raised $0 interchange Balance on Starting Date $60,000 organic Assets $66,000 Liabilities and bully Liabilities on-going acceptation $0 semipermanent Liabilities $0Accounts Payable (Outstanding Bills) $0 some other Current Liabilities (interest-free) $0 totality Liabilities $0 Capital plotted Investment Investor 1 $66,000 Investor 2 $47,000 Investor 3 $47,000 Additional Investment Requirement $0 conglomeration Planned Investment $160,000 Loss at Start-up (Start-up Expenses) ($94,000) count Capital $66,000 make out Capital and Liabilities $66,000 hit Funding $160,000 Start-up Requirements Start-up Expenses Legal $4,000 Stationery etc. $2,000 Brochures $3,000 locution/ radiation pattern $30,000 insurance $3,000 Rent $20,000 Research and Development $0 Expensed Equipment $15,000 Other $17,000 add up Start-up Expenses $94,000 Start-up Assets Cash Required $60,000 Start-up armory $6,000 Other Current Assets $0 long Assets $0 Total Assets $66,000 Total Requirements $160,000 2. 3 Company Locations and Facilities Target sites for SoulSpace hold business district Raleigh in the Warehouse District and Art Districts, watt Raleigh near Entertainment Sports Arena, and arural area off route 40/440 between Raleigh and Cary.SoulSpace will need at least 4,000 square feet (sq. ft. )of space. Initial estimates put leasing between $12/sq. ft. to $28/sq. ft. (inclusive of tax and accommodations). Contact has been made with Mary Hobbson of Grub & Ellis satisfying Estate for 4,200 sq. ft. at 510 Glenwood Avenue downtown Raleigh. This site is within the bearing priority area in part of the Warehouse District in what is straight off referred to as Glenwood South. The lease is $28/sq. ft. , making estimated payments at $9,800/month, the most expensive of all target sites.We also have met with Peter step of York Properties when shown the space operable at 200 west Street in Raleighs Warehouse district. This space is in priority target range, and will be two blocks from the Raleigh Commuter Rail Hub due to open in the next five to eight years. The location is spacious at 10,000 sq. ft. , with first floor (5,000 sq. ft. ) leasing at $12. 50/sq. ft. and the basement floor (5,000 sq. ft. ) leasing at $8/sq. ft. , which averages out to $10. 25/sq. ft. for the wide-cut 10,000 sq. ft. locatio n.This makes this space cheaper than the other locations, and has twice the space. We have also met with David Stowe of Anthony Allenton Real Estate when shown space at the Royal bakehouse on Hillsborough Street across from Meredith College. This location is within priority target, and has 6,000 sq. ft. at $20. 60/sq. ft. This site is extremely attractive for it offers many accommodations such as plumbing, electrical, and hvac, that will save us tremendously on construction costs, thusly counterbalancing the expense of rent, which is precisely $ccc, over our high-ended estimated budget.Also, this space is primely located on Hillsborough, 1/4 mile from the Beltine, and two miles from Highway 40. It is also the site of a early Commuter Rail Station. They have also built a large parking decking which will be free to all patrons. Products and Services SoulSpace will provide customers with personal beautifying and relaxational services and complimenting products, as well as training i n specific forms of energy work, accessible materials on a wide range of wellness-related topics, and the option to purchase artwork displayed in SoulSpace.Ex contriveations and/or consultations will be provided on all services and products if needed. 3. 1 Product and Service Description 1. Men and Women Hair StylingMens($30 average)and womens($40 average)color ($75), perm ($80), and combos ($80-$120). Selected hair care products (shampoos, conditioners, cleansers, brushes, mirrors) will be exchange as well. 2. Body WorksMassage ($60), other massage/body works ($65 average), facials ($60 average), manicures ($45), pedicures ($50-$65), waxing ($20 average), aromatherapy ($40), and combos ($60-$200 depending).Specific complementing products will be sold as well. 3. Energy WorksReiki (1/2 arcminute $35, 1 hour $60), energy revitalization (1 hour $60), and therapeutic touch (1 hour $60). Customers will embroilpeople wishing to strengthen their inwrought body, mind, and spirit throu gh the cleaning and revitalizing of their energetic system (i. e. , aura, man energy field). The Reiki offered will be traditional Usui Shiki Ryoho, the predominant form of Reiki honest worldwide, which originated in Japan from its rediscoverer Dr. Mikao Usui. Reiki is a hands-on stepping method of balancing the energy field.Energy revitalization and therapeutic touch are energy field cleaning and revitalizing techniques working with the outer levels of the energy field along with Reiki. 4. graphics Most of the artwork in SoulSpace will beby local artists, for sale to the customers. SoulSpace will earn a 15% commission on each piece sold. This adds an extra element of community integration to SoulSpace with an added fury of the art world from beginning artists, and that the art be spiritual and/or modern in form. 3. 2 Competitive Comparison in that location are many salons in the greater Raleigh area just now no direct competitors.There are many places offering massage, but there are only ten day spas, of which only four are a spa/salon. There is one place offering energy work, in Clayton (30 minutes southeast from downtown Raleigh). All energy work practitioners are private, of which there are only ten working full-time, with most of them concentrating on other alternative modalities, and an estimated ten (twenty at the very most) part-time energy practitioners. Not including Chapel Hill and Durham, the above service an estimated population of at least 800,000, with that figure growing by an estimated 6,000 persons periodic. . 3 gross revenue literary productions Services brochure, logo/slogan with advertizement to be included, and a intend website. 3. 4 Fulfillment SoulSpace services grapple themselves as a natural way to rejuvenate ones life. 3. 5 Technology SoulSpace will sell complementing products of the highest quality that have not been created through the testing of animals, and are of the latest scientific knowing for effecting the desir ed results for body beautification and energetic balancing nourishment. 3. 6 incoming Products and Services SoulSpace will add healing touch when Steve Long earns his certification.SoulSpace will alwaysre master(prenominal) involved with the best spa relaxational techniques offered, and will utilise them if deemed appropriate and feasible for SoulSpace clientele. commercialise outline Summary There are no exact competitors, and few related competitors in the greater Raleigh area. There are no related competitors in the downtown Raleigh area. The space at 510 Glenwood was recommended to us by the managing realtors because they had targeted that space for a spa type tenant. By character of the service SoulSpace will provide, success will be readily achieved. 4. 1 Market SegmentationOur target merchandise will be divided by salon customers and spa customers. Salon customers will be from every age and gender however, since the salon and spa will be in direct association with each other, we expect that the spa market segment will greatly affect the salon market segment. Thusly, our target market segment will be male and female professionals and retirees, from the age of 25, with someone and household incomes greater than $25,000. Market Analysis family 1 stratum 2 category 3 class 4 category 5 Potential Customers Growth CAGR +$25K 5 mi. Radius Raleigh 2% 50,500 51,510 52,540 53,591 54,663 2. 0% +$25K 5 mi. Radius West Raleigh 2% 53,000 54,060 55,141 56,244 57,369 2. 00% Total 2. 00% 103,500 105,570 107,681 109,835 112,032 2. 00% 4. 2 Target Market Segment scheme The members of these market segments have luxury money on hand, and lead professional lives change with stress at a consistent level. All persons usually need hair styling regardless of income level, and make the effort to find the money available to style their look. 4. 2. 1 Market Needs People love to botch up themselves, especially people who have achieved a modicum level of profes sional success.Raleigh has sustaina bastion for the successful, having consistently been pissd as one of the best cities in America to live and to do business in since the mid(prenominal)(prenominal) 1990s. This has created a community of wealth, mobility, and growth. Raleigh has successfully implemented a refurbishing plan of old downtown, which now makes Glenwood South, the Warehouse District, and Hillsborough Street one of the most popular destinations in the whole city. 4. 2. 2 Market Trends With the refurbishment of Raleighs Warehouse District, including Glenwood South, and its revenant training of downtown Raleigh, this area will nly become more popular. 4. 2. 3 Market Growth WhenForbes, Inc. ,andMoney, Inc. listed Raleigh as the best place to live and do business, and subsequently listed Raleigh in the top five and top ten in the following years, a population boom ensued in the late 1990s. The North Carolina census released in October 2000 reportsthat an average of 6,000 persons per day were relocating to the greater Raleigh area. According to this census, the trigon has one of the highest concentrations of Ph. D. s per square mile in the world. The average income per household is $40,000-$60,000and climbing.According to theRaleigh parvenus & Observerreports of Raleigh City Counsel meetings concerning growth, the continuing refurbishment of downtown Raleigh is a top priority, along with a complete overhaul of the mass passageway system. wise buses and taxis are funded and are to be implemented during the next two years. A Commuter Rail System run by the Triangle Transit Authority is supposed to be finalized May 1, 2001, and completed by 2007-2008, with rail stations throughout downtown, ravel up Hillsborough Street loss to RDU Airport then connecting to Chapel Hill and Durham later phases include branch rails to North Raleigh.The refurbishment plan bear upons, and downtown is now populated with more destinations than ever, with the plan gr owing even more businesses. The future looks very promising for a thriving downtown with a continual presence of customers. 4. 3 Service Business Analysis We are part of the retail health and beauty industry which has four major types 1. Salons Stores with only hair styling services and products. 2. Day Spas Stores specializing in body health maintenance through a variety of services and products. 3.Day Spa & Salon Stores combining the services of the two aforementioned. 4. Health & Beauty Products Stores merchandising only merchandise products covering the wide range of products available but not inclusive of those sold by salons and spas. 4. 3. 1 Main Competitors The main competitors are Salon 21 with a location in downtown Raleigh, Von Kekel with locations in East Cary and North Raleigh, Soigne with a location in mid North Raleigh, Emerald City with a location in Northwest Raleigh, go out with a location in far North Raleigh, Millennium 2000 with a location n North Raleig h, Devine with a location in mid North Raleigh, and Warren Scott with a location in far North Raleigh. Also, by nature of their popularity we must also include these spas as main competition strip Sense with locations in downtown Cary and far North Raleigh, and Iatria in far North Raleigh. Strengths of the above are services offered location proximity to major housing developments, and name recognition. The weaknesses of these competitors are superior public escape of promotion, concentration generally in North Raleigh.With our target location being downtown Raleigh, we will be servicing East, South, West, and Old Raleigh, as well as downtown commuters. There are no salon-spas in West Raleigh, the closest being Von Kekel in East Cary, and the spa only Skin Sense also in Cary. The only downtown competitor, Salon 21, is very small, not very well known, and concentrates most of their business on the salon end. Our market advantage is wide open, and will give us the fortune to ser vice a large population base that is not currently being well served.When you include our service of energy works, we become the furbish up provider of all triple services of hair works, body works, and energy worksnot only in downtown Raleigh, but for the entire greater Raleigh area. 4. 3. 2 Business Participants Industry participants are those whose services include salon and spa offerings. Salon services concern hair styling, while spa services concern body relaxing and rejuvenating offerings such as massage, and nailand face works. 4. 3. 3 Competition and Buying PatternsCustomers favour spa and salon services ground on proximity to their daily travels from home and work, reputation for quality, and good pricing. With our combined services, we expect to compete mainly against other combination spa-salons. Strategy and Implementation Summary 1. Emphasize quality, originality, and dependableness of service. We will divers(prenominal)iate ourselves from our competitors by off ering a staff of practitioners who are not only certified in their professions, but will be trained in understanding the dynamics of individual energy systems so as to maximize the connection to their client and more easily meet the needs of he client. 2. We will provide a unique atmosphere. From the name to the ambience of our salon, SoulSpace will distinguish itself as a completely genuine and soothing setting where customers can enjoy being pampered and escape the stress of their everyday lives. 3. pull in a community relationship-oriented business. We will focus on strengthening the trust of our customer base, and providing not only services, but teaching that will aid everyone in the emanationion of obtaining a balanced and healthy lifestyle. We will also work with local artists to provide their work to instigate our customers. 5. Value Proposition Our value proposition is that we will bring a unique mode of relaxation and fulfillment to our community. When people are rela xed, comfortable, and apt, they have the ability to work harder, concentrate better, feel physically, emotionally, and mentally balanced, and give that gladness back into their homes, workplaces, and community. Simply put, our value proposition is that we help our community become a better place to live and work. 5. 2 Competitive Edge Our competitive edge isa combination of our unique services, outstanding location, and our fundamental interaction with customers.By providing our customers a holistic and integrative spa and salon, we build relationships of trust and satisfaction. Our customers will come to depend on our unique services and fulfilling environment. 5. 3 market Strategy Our marketing strategy is the key to our success 1. Emphasizeour name and unique services through advertising. 2. Focus on the convenience of our location. 3. Build community relationships through unique and quality service, friendly and caring atmosphere, and establishing irresponsible dependability of our services. 5. 3. 1 Promotion StrategyOur promotional strategy will be two-foldfirst phase promotion will kettle of fish with advertising before, during, and six months following our opening the second phase advertising will deal with alllong-term advertising. 1. FIRST PHASE PROMOTIONS A. advertisement We will enforce local newspaper, local social and health magazines, local radio, local television, mail-outs to all households within the immediate five mile radius, andmail-outs to all local business within a five-mile radius. B. Internet We will have a broad website. C. AlliancesWe will place our brochures within the offices of our medical referral clients. 2. SECOND PHASE PROMOTIONS A. publicize We will continue to place ads in the local socialand health magazines year around. Mail-outs will be done again within a five-mile radius one year later after opening, then again only every three to five years. Radio and television ads will be done only when we have sale promotio ns during the most disagreeable times of the year for the Christmas season, and graduation television ads are not authorized, we will evaluate their effectiveness before further executing.B. Internet We will continue to have a comprehensive website. After thefirst six months, and certainly after the first year, we will evaluate the viability of having target clients advertise on our site, and conversely, we will evaluate viability of advertising on our target clients websites (if applicable). C. Alliances This type of advertising will be implemented once we have grown beyond our break-even point. We will also form advertising alliances with any business with whom we pct common business goals.We will also implement mutual perks with our business and restaurant neighbors which will aid in local visibility. Advertising promotions with certain restaurants will also be considered. 5. 3. 2 Marketing Programs possessor Steve Long will be responsible for marketing SoulSpace through the advertising channels. The general director will be responsible for helpering with the implementation of alliance advertising partnerships. Our advertising budget is $10,000 for the first year. Advertising will begin one week prior to opening. 5. 3. 3 Positioning StatementWe will automatically position ourselves as one of the top spa-salons in the greater Raleigh area. Considering that none of the other competitors will offer the range of services we will, or that their staffs will be trained like ours, and that there are not any spa-salons of our type in our target locations, we will be able to provide services to a portion of Raleigh populace not currently being tapped. 5. 3. 4 Pricing Strategy Our pricing strategy will be similar to that of our competitors. We will not charge over, nor substantially under, bar prices for our services.We will be paying our employees a higher straight persona of their total individual customer sales than our competitors. This will allow us to h ire the best employees, and have a built-in motivational grammatical constituent that will keep them working hard and happily. 5. 4 gross sales Strategy 1. Our umbrella sales strategy is to sell SoulSpace to public consumers as a uniquely desirable destination that will enhance their lives. 2. We will sell SoulSpace through each employees skill, courtesy, and warmth, creating a trusting impression on all customers, thusly establishing loyalty and return.We will ensure each visit to SoulSpace is a relaxing and memorable experience, so thatcustomers can always depend on our brand of service when they arrive. 5. 4. 1 gross sales Forecast The important elements of the gross sales Forecast are shown in the chart and table below. Initial sales forecasts indicate vigorous first yearsales,almost doubling by theend of second year, then leveling out somewhat by theend of third year. These figures are ground only on revenue from minimum average estimates from salon stylings and spa massag es only, with sales cost wistful of the 60% commission earnings to each stylist/therapist.Sales Forecast family 1 socio-economic class 2 division 3 Sales Salon Styles Only receipts $717,500 $1,400,000 $1,600,000 Spa Massage Only Revenue $182,500 $350,000 $400,000 Total Sales $900,000 $1,750,000 $2,000,000 instantly Cost of Sales category 1 Year 2 Year 3 Salon Styles Only Revenue $429,300 $840,000 $960,000 Spa Massage Only Revenue $109,500 $210,000 $240,000 Subtotal Direct Cost of Sales $538,800 $1,050,000 $1,200,000 5. 4. 2 Sales Programs 1. Our comprehensive brochure will explainthe holistic nature of our services, and how this benefits the customer. 2.Our website will be comprehensively informative of our services and their benefits. 5. 5 strategical Alliances We will form alliances with our referral practitioners, local restaurants, offices, and businesses who will be strategically unspoilt for generating new customers we will also form alliances withlocal certif ied massage schools and hair styling schools. 5. 6 Milestones The following table lists important stemma milestones, with dates, implementation duty, and budgets for each. The milestone schedule emphasizes the timeliness for implementation per the sales and marketing targets listed in detail in the previous topics.Milestones Milestone Start Date force out Date Budget Manager Department Business Plan 1/15/2001 2/1/2001 $0 Steve proprietor Financial living 2/1/2001 2/5/2001 $200,000 Steve owner Design asseverator Retainer 2/5/2001 5/1/2001 $5,000 Steve Owner Construction Contractor Retainer 2/5/2001 5/1/2001 $20,000 Steve Owner Lease Agreement 1/17/2001 2/12/2001 $20,000 Steve Owner Logo Design 2/12/2001 3/1/2001 $1,000 Steve Owner Business Cards (Initial) 2/19/2001 3/1/2001 $300 Steve Owner Brochures 3/1/2001 5/1/2001 $3,000 Steve Owner grand Opening 5/1/2001 6/1/2001 $0 Steve Owner Seven Customers Per Stylist/Therapist 8/1/2001 9/1/2001 $0 Steve Owner Totals $249,300 Management Summary The management philosophy of SoulSpace is ground on respect for each of our fellow employees, respect for every customer, and individual responsibility. SoulSpaces success is dependent on the warmth and uniqueness of its atmosphere which is generated by a fun-loving and caring employee. The management team will consist of the owner, general manager, and assistant manager (if deemed unavoidable).We will hire only those whom demonstratethe qualities necessary for working in a nurturing environment, and the willingness to move forward in piece of work of energetic principals if not already so trained. We will be hiring the crowning(prenominal) people persons. 6. 1 Organizational Structure Our initial team consists of 14 employees, inclusive of a general manager and an assistant manager,both of whom will be active stylists/therapists. Employees will be in from the two store divisions of spa and salon. On the salon side there will be 10 stylists and one or two rec eptionists.There will be dwell for expansion to 12-15 stylists and three receptionists. The spa side will consist of three massage therapists, one energy therapist, one nail specialist, and one receptionist. There will be room for expansion to five to sevensome massage therapists, andtwo to three energy therapists. 6. 2 Management team up Steven J. Long, co-owner, chairpersonFounded SoulSpace in 2001. He has a degree in psychology from NC State, aconcentration in industrial/organizational with emphasis on communication.He has been a Reiki Master Usui Shiki Ryoho since 1996 and operates part-time healing practice from home. He haseight years management experience, six in retail, two in electronic broker rep field for distribution. Mr. Long spentthree years in the modeling industry, one as model and two as the manager of an agency in Raleigh in 1991. Deborah L. Long, co-ownerDebby will not be directly involved in daily operations, but will assist Steve in general organizational p lanning and vision implementation. Debby currently is the number one co-location sales manager for SpectraSite, Inc. here she has worked for two years. She spent some(prenominal) years as an executive assistant at TDK of Americas Distribution Sales Center in Chicago, and at Cotton Incorporated. She is a level two Usui Shiki Ryoho. Linda Hill-Chinn, co-owner, CFOLinda is retired after having spent 15 years as of age(p) home(a) staffing specialist for the American Hospital Association in Chicago, as well as serving on their board of directors for several national projects. She also spent several years managing Planned Parenthood of Chicago.Linda holds a Masters of sociologyfrom Brown University. Jennifer McElravey, general manager For the past nine years, Jennifer has been one of the top stylist for Mitchells Hair Design of Raleigh and is currently a level five stylist, Salon Designer of the Year 94-97, and receivedextra training at Vidal Sassoon of London, Highest Salon Retail Sal es four different years. Jennifer is also a level two Usui Shiki Ryoho. 6. 3 Management Team Gaps We believe the experience of our team covers the needs to make the business plan for SoulSpace a very successful reality.The assistant manager is not named here because that position will be named from the pool of stylists/therapists that will be leased previous to our opening. 6. 4 force Plan The Personnel Plan below reflects our projected need at opening, and carries through the second year expansions. Personnel Plan Year 1 Year 2 Year 3 Steve Long, Owner, President $65,040 $65,040 $65,040 superior general Manager $60,000 $60,000 $60,000 %100 Commissioned Employees $150 $156 $156 Receptionist $15,360 $15,360 $15,360 Receptionist $15,360 $30,620 $30,620 Total People 17 18 18 Total Payroll $155,910 $171,176 $171,176Financial Plan The premier element in our financial plan is initiating, maintaining, and upward(a) 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,happy employee force so as to minimize turnover. 3. Create a speed up turnaround on our retail and art products, always maintaining viable parentage levels. 7. 1 Important Assumptions The key underlying assumptions of our financial plan shown in the following general assumptions table are 1. We convey access to honor 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 markets access to their personal luxury funds. General Assumptions Year 1 Year 2 Year 3 Plan month 1 2 3 Current involvement Rate 10. 00% 10. 00% 10. 00% long-run 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 av erages seven customers per day and each therapist averages three customers per day. . 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 approximately 1/2 of those costs. The analysis shows what we need to generate inrevenues per month to break even. This total is 13% less than estimated monthly store gross. This friendship 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 rig id Cost $29,525 7. 4 Projected Profit and Loss There are two important assumptions with our Projected Profit and Loss statement 1. Weexpect to have to pay out from the Draw Fund occasionally. 2. 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 $12,000Payroll Taxes $23,387 $25,676 $25,676 Other $0 $0 $0 Total run 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 real Cash from trading 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 authoritative 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-ter m Assets $0 $0 $0New 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 honorariums $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 grease ones palms Other Current Assets $0 $0 $0Purchase 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 amass 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) $238,958Earnings $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 charge $75,810 $398,958 $809,577 7. 7 Business Ratios The follow table contains important business ratios for thephysical fitness facilitiesindustry, 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 outlay 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 amp Administrative Expenses 39. 37% 21. 53% 18. 94% 73. 20% Advertising Expenses 1. 11% 0. 86% 0. 5% 2. 40% Profit Before Interest and Taxes 0. 77% 18. 47% 21. 06% 2. 70% Main Ratios Cu rrent 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 soften 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. 6 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 runniness 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 hear 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