How To Write a Beauty Salon Business Plan
If you’re starting a new salon or expanding your existing business, a well-crafted business plan is crucial for success. Whether you own a hair salon, barber shop, or other type of beauty salon, following the step-by-step guide below will help you develop a comprehensive business plan that will help you achieve your business goals.
Step 1: Company Overview
The second section of your business plan, a well-written company description will:
- Provide a brief history of your salon and its mission statement.
- Explain the inspiration behind starting the business.
- Mention any important milestones achieved before the official launch.
- Detail the specific services and products you will offer.
Step 2: Industry Analysis
Conduct market research for the beauty industry to:
- Summarize the current state of the industry and its growth potential.
- Discuss any relevant trends that could impact your salon business (e.g., increased demand for eco-friendly products).
Step 3: Customer Analysis
Understanding your ideal customer is crucial for tailoring your beauty salon’s offerings to meet their specific needs and preferences. In this section:
- Describe the characteristics of your ideal customers.
- Break down your target market into specific segments.
Step 4: Competitive Analysis
Conduct a thorough analysis of competing salons and other local businesses with similar services to understand the landscape your business will operate in and:
- Identify your main competitors and analyze their strengths and weaknesses.
- Explain what makes your salon stand out from the competition.
Step 5: Marketing Plan
Your marketing plan will:
- Define your brand identity and core values.
- Outline the salon marketing strategies you will use to attract new clients and retain existing clients.
- Detail your pricing model and how it compares to competitor salons.
Step 6: Operations Plan
The operations plan is designed to:
- Describe the day-to-day business operations and the roles of your staff.
- List key milestones and timelines for achieving them.
Step 7: Management Team
This section provides an in-depth look at the team you have assembled to:
- Provide detailed bios of the team members.
- Outline your salon staffing needs and recruitment strategy.
Step 8: Financial Plan
This section offers a comprehensive overview of the financial plan to:
- Identify the main sources of revenue and key expenses.
- Explain how much funding you need and how you will use it.
- Present your financial projections and the assumptions behind them.
Step 9: Executive Summary
Although written last, the Executive Summary is the opening of the business plan and should provide a concise overview of your entire business plan.
- Provide a concise overview of your salon business, including its name, location, and the services offered.
- Highlight the mission statement and core values that guide your salon’s operations.
- Summarize the target market and customer demographics you aim to serve.
- Outline the competitive advantages your salon has over other beauty salons in the area.
- Provide a brief introduction to the management team and their experience in the beauty industry.
- State the financial objectives, including revenue targets and profitability goals.
- Mention any unique selling propositions or standout features of your salon services.
- If you are seeking funding, include a summary of the funding requirements and how the funds will be utilized to grow the salon business.
By following this guide and the sample below, you can create a successful salon business plan that will establish a strong foundation for growth.
Sample Hair Salon Business Plan
The sample hair salon business plan below will help you write a solid plan for your salon business.
I. Executive Summary
Business Overview
[Salon Name], located at [insert location here] is a brand-new, upscale salon focusing on providing high-quality, full-service hair care to the surrounding community. Our product and service lines fit nicely with the prevailing tastes and preferences of the local area – middle-class suburbanites want quality hair care, but don’t want to pay luxury prices for it.
Products and Services
[Salon Name] will provide relationship-oriented hair-cutting services for all ages and genders. Our stylists will focus on building long-term rapport with their clients and strive to deliver personalized beauty results for each individual.
All manner of special treatments will be available including perms, extensions, coloring, and styling for special occasions (weddings, proms, etc.)
In addition to providing these services, [Salon Name] will also generate retail sales of an exclusive line of hair care products. Customers will find products at [Salon Name] that they won’t find in grocery stores or big box stores.
Customer Focus
[Salon Name] will primarily serve the residents within a 5-mile radius of our location. The demographics of these customers are as follows:
- 27,827 residents
- Average income of $74,700
- 58.9% married
- 49.6% in Management/Professional occupations
- Median age: 38 years
In addition to this prime adult demographic for an upscale salon, there are two large high schools and four middle schools in the area. Students, particularly girls, from these schools will be sure to patronize [Salon Name] for special occasions.
Management Team
[Salon Name] is led by [Salon Owner] who has been in the hair care business for 20 years. While [Salon Owner] has never run a salon himself, he has been cutting hair since age 15 and spent most of his adult life working as a stylist at several major salons. As such [Salon Owner] has an in-depth knowledge of the salon business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing efforts, etc.).
Success Factors
[Salon Name] is uniquely qualified to succeed due to the following reasons:
- The salon will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
- The team has a track record of success in the salon business.
- The upscale salon business is a proven business and has succeeded in communities throughout the United States.
- Local competitors leave a large gap in the haircut market—there are low-cost providers ($10-$20), and an ultra-luxury salon ($120+), but nothing in between.
Financial Highlights
[Salon Name] is currently seeking $260,000 to launch. Specifically, these funds will be used as follows:
- Salon design/build: $140,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Salon Name] reaches break-even
Topline projections over the next five years are as follows:
| Financial Summary | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | $315,115 | $466,067 | $524,563 | $590,400 | $664,500 |
| Total Expenses | $345,594 | $385,172 | $419,434 | $475,894 | $507,480 |
| EBITDA | ($30,479) | $80,895 | $105,129 | $114,506 | $157,020 |
| Depreciation | $20,840 | $20,840 | $20,840 | $20,840 | $20,840 |
| EBIT | ($51,319) | $60,055 | $84,289 | $93,666 | $136,180 |
| Interest | $16,822 | $14,719 | $12,617 | $10,514 | $8,411 |
| Pre-Tax Income | ($68,141) | $45,336 | $71,673 | $83,153 | $127,769 |
| Income Tax Expense | $0 | $0 | $17,104 | $29,103 | $44,719 |
| Net Income | ($68,141) | $45,336 | $54,569 | $54,049 | $83,050 |
| Net Profit Margin | - | 10% | 10% | 9% | 12% |
| Average customers/day | 26 | 29 | 32 | 36 | 41 |
II. Company Overview
Who is [Salon Name]?
[Salon Name], located at [salon location] is a new, upscale salon focusing on providing professional haircut styles and services in an enjoyable environment. It will showcase a well-designed interior as well as a full-featured waiting area equipped with television screens and at-request refreshments. [Salon Name] also sells a variety of premium hairstyling and hair care products which will be on display in the waiting room.
[Salon Name] was founded by [Salon Owner]. While [Salon Owner] has been in the hairstyling business for some time, it was in [month, year] that he decided to launch [Salon Name]. Specifically, during this time, [Salon Owner] took a trip to Fort Lauderdale, FL. During his trip, [Salon Owner] frequented a salon that enjoyed tremendous success. After discussing the business at length with the owner, [Salon Owner] clearly understood that a similar business would enjoy significant success in his hometown.
Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and his hometown were so similar that he knew the business would work. After surveying the local population, [Salon Owner] went ahead and founded [Salon Name].
[Salon Name]’s History
Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential retail location, [Salon Owner] incorporated [Salon Name] as an S-Corporation on [date of incorporation].
The business is currently being run out of [Salon Owner] home office, but once the lease on [Salon Name]’s retail location is finalized, all operations will be run from there.
Since incorporation, the salon has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Created the salon’s name, logo, and website located at [website]
- Hired an interior designer for the decor and furniture layout
- Determined salon equipment and fixture requirements
- Begun recruiting key employees with previous hairstyling experience
[Salon Name]’s Products & Services
Below are [Salon Name]’s initial service offerings and retail products sold.
Hairstylists will be asked to perform the following services for both men and women:
- Hair washes
- Hair cuts
- Special event hairstyling (such as for a wedding, prom, etc.)
- Hair coloring
- Hair extensions
Each appointment will include an initial hair assessment and suggestion phase where the stylist will discuss the customer’s hair and preferred hairstyle. There will then be a pre-cut hair wash with our exclusive line of hair products, a haircut or coloring as appropriate, and finally a post-cut styling to our customer’s preferences.
[Salon Name] will feature premium hair products from these well-established brands. It will continue to update its offering in order to provide the newest hair products to its customers.
Some of its featured brands will include:
- GOLDWELL
- Schwarzkopf
- Sexy hair concepts
- Paul Mitchell Systems
Furthermore, the waiting area will have television screens and popular publications to make the wait for service more pleasurable. Toys and board games will also be on hand for children, as well as at-request refreshments which we will provide for free during the waiting period.
Salon Design
[Salon Name] will develop a 2,500-square-foot salon whose key elements will include the following:
- Stylist Booths
- Reception Desk
- Self-service coffee area
- Sinks to wash hair
- A waiting area with TV screens
- Restrooms
The retail location has 10 dedicated parking spots which should suffice even in peak business hours.
[Salon Name] plans to be open 6 days a week, from 10 AM to 6 PM. As demand dictates, we may extend or reduce our hours.
III. Industry Analysis
[Salon Name] competes against small, individually owned hair salons and barber shops, and major regional or national chains. There are over 450,000 registered salons in the United States, a figure that reflects the hair-cutting needs of 300 million people.
The salon industry is a fragmented one, as the 50 largest companies only hold 15% of the market, which is estimated to grow to more than $35 billion in three years. This bodes well for [Salon Name]; since there are no truly dominant competitors, barriers to entry are not as high as in many other industries, and a start-up can expect to have success in this growing market. There is plenty of room in the industry, particularly for well-placed local salons that cater to specific geographic and demographic customer niches. Smaller hair salons can easily develop a loyal clientele that enables them to compete and succeed against industry giants; in this industry, size does not necessarily mean an advantage, which bodes well for [Salon Name].
The largest competitor in the salon industry is Regis Corporation, which is affiliated with more than 8,000 locations across the continent. Their business model uses a combination of franchising and corporate ownership, along with several different brand names at different market positions. Regis tends to maintain central control of its higher-end locations and franchise its discount hair salons.
Industry Trends
The industry in which [Salon Name] will compete is experiencing a number of different trends.
Market-level trends:
- Slow but steady growth. This market is expected to grow consistently at around 2% annually.
- Success drivers. Customer satisfaction is what ultimately makes one salon triumph while another fails. The experience a salon’s client has determines whether or not they return and whether or not they refer others to the same salon.
- Seasonal change. The salon industry tends to thrive in the spring and fall, but slow down during the winter and summer. [Salon Name] will launch haircutting operations during [Fall/spring], when the industry is experiencing higher sales. Catching a seasonal upswing in the first quarter of business should help provide a buffer of cash for [Salon Name].
Firm-level trends:
- Price sensitivity at the bottom. The low-cost segment of the market, which primarily serves men and children, often competes on the basis of price. This reflects the different preferences of these particular consumers, who are often more interested in an affordable haircut than in seeing the same haircut regularly.
- Size at the bottom. Larger salon chains tend to gravitate toward the bottom of the market. Brand loyalty is not strong here. Many companies in this segment use a franchise model.
- Economies of scale. Larger salons are finding opportunities to succeed, by making effective use of support personnel. Receptionists, hair washers, and assistants at larger establishments can take care of many of the menial tasks that skilled hair stylists have to handle in small salons. This permits skilled stylists to spend a higher proportion of their time actually cutting hair and generating revenues.
- Premium independent salons. Independent salons also compete in the premium segment of the market. These firms develop loyal customer bases and select their location based on population demographics.
- Specialty salons. Presently, a niche is being carved out for salons that cater to very specific customer segments, most notably adult males from higher income brackets. High-end, men-only hair clubs draw this crowd with upscale amenities such as cigars, pool tables, and drink bars.
Customer-level trends:
- Intense customer loyalty. Many salons develop repeat customers who become a regular client base and represent a significant portion of their revenues. Salons whose employees can develop strong relationships with customers can expect to see more long-term success.
- Changing gender patterns. Traditionally, women bring in the lion’s share of revenues for salons, using beauty and spa services more often and spending more at each appointment. In recent years, however, the male consumer’s attitude has begun to shift. Men now make up approximately 25% of salon clientele.
- Gender preferences. Women are the most lucrative customers for salons, visiting more often and purchasing more special treatments such as coloring.
- Ideal demographics. The baby boom generation generates a very large portion of salon revenues. This large segment of the market has reached the peak of its earning power, and they are beginning to need special treatments such as coloring.
IV. Customer Analysis
Demographic Profile of Target Market
[Salon Name] will serve the residents of [salon location] and the immediately surrounding areas as well as those who work in [salon location].
The area we serve is populated mostly by the middle class; as a result, they have the means to pay for higher quality service, and are looking for a hair and beauty services somewhere between the deep discounters and the top-end luxury brands.
The precise demographics of the town in which our retail location resides are as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The salon will primarily target the following three customer segments:
- Soccer/stay-at-home moms: The town has a large population of stay-at-home moms who are active in the school and community. These moms seek beauty services regularly. Winning the loyalty of a mother often includes winning the business of her children and husband as well. These women are well-connected to each other and as such are a prime source of referral business. [Salon Name] expects to regularly acquire new customers from referrals.
- Professionals: [Salon Name] is located along a well-traveled commute route. By offering a convenient location and exceptional service to the customer, [Salon Name] will draw in working men and women who need to look professional for work.
- Students: There are multiple high schools and middle schools located in the surrounding area. These students still live on their parents’ income and can therefore afford to pay for higher-quality services than discounters provide. In particular, [Salon Name] can expect to generate significant seasonal business based on the beauty needs of the local youth culture.
V. Competitive Analysis
Direct & Indirect Competitors
The following retailers are located within a 5-mile radius of [Salon Name], thus providing either direct or indirect competition for customers:
Joe’s Beauty Salon
Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.
Besides offering haircuts, Joe’s also offers nail salon services such as manicures and pedicures. Over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.
For example, they only offer 2 types of regular hair gels and 4 types of shampoos. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. [Salon Name], on the other hand, offers numerous options for exclusive products that are not yet available in [Town’s Name].
LUX CUTS
LUX CUTS has been in business for 5 years and offers an extremely high-end hair service, with introductory prices of $120 per haircut.
However, LUX CUTS will primarily be targeting a different customer segment from [Salon Name], focusing on households with an income in the top 10% of the city.
Furthermore, [Salon Name] offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:
- Hairstyle suggestions & hair care consultation
- Hair extensions & coloring
- Premium hair products from industry leaders
Freddie’s Fast Hair Salon
Freddie’s Fast Hair Salon is located four suites down the road from [Salon Name]. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.
Freddy’s business offers inexpensive haircuts and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.
[Salon Name] has several advantages over Freddy’s Fast Hair Salon including:
- An entertainment-focused waiting room, with TVs and board games to make the wait for service more pleasurable. Especially great for parents who bring their children.
- A focus on service quality rather than speed alone to ensure repeat visits. [Salon Name] will spend on average 20 more minutes with its clients than Freddy’s.
While we expect that Freddy’s Fast Hair Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent [Salon Name] based on the high-quality service it provides.
Competitive Pricing
| Joe's | LUX | Freddy's | |
|---|---|---|---|
| Women's Cut | $30-$40 | $40-$50 | $60-$70 |
| Women's Color | $60-$70 | $70-$80 | $80-$90 |
| Men's Cut | $20-$25 | $30-$35 | $40-$45 |
| Highlights | $65-$75 | $80-$90 | $85-$90 |
Competitive Advantage
[Salon Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Salon Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and passersby shopping in the city. We also offer adequate parking making it easy for customers to patronize us.
- Great service at an affordable price: The complete array of hair services offered by [Salon Name] nearly equals the most premium-positioned competitor, LUX CUTS. However, [Salon Name] will offer these services at a much more affordable price.
- Management: Our team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Salon Owner] knows all the local leaders, newspapers, and other influences. As such, it will be relatively easy for [Salon Name] to build brand awareness and an initial customer base.
VI. Marketing Plan
[Salon name] seeks to position itself as a respectable, upper-middle-market competitor in the salon market. Customers can expect to receive professional hair care from familiar stylists for a price somewhere between discount chains and luxury establishments.
The [Salon Name] Brand
The [Salon Name] brand will focus on the salon’s unique value proposition:
- Convenient location
- Familiar, regular hairstylist
- Significant personal attention
- Moderate price point
- Comfortable, customer-focused environment
Promotions Strategy
[Salon Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. The [Salon Name]’s promotions strategy to reach these individuals includes:
Local Publications
[Salon Name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.
Major Publications
We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of XYZ, and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost-effectiveness. These ads will include discount coupons so that responses to the ads can be tracked.
Community Events/Organizations
[Salon Name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events. Since mothers are often heavily involved in such things, we will not only reach the lucrative audience of adult women but also potentially their families by extension.
Commute Advertising
We will drive attention toward [Salon Name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals with disposable income of our opening.
Customer Loyalty Programs
[Salon Name] will create a winning customer loyalty program to keep its best clients coming back again and again. When not actively providing services to customers in the salon, our stylists and salon staff will make periodic, regular phone calls to customers. These phone calls will (a) ensure that customers are satisfied with their hair treatment, and (b) remind customers after a certain period of time has passed that they might want a new haircut. Long-term customers will have the opportunity to participate in the program, and referrals will be rewarded as well.
Direct Mail
[Salon Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Salon Name], offer discounts and/or provide other inducements for people to visit the salon.
Ongoing Customer Communications
[Salon Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the store, [Salon Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Salon Name] in the area.
Pricing Strategy
[Salon Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the salon. The anticipated price point for a standard hair treatment is $35, in exchange for which a customer can expect to receive personalized attention during and after their visit. The customer can expect to receive quality hair care from a familiar haircutter, for a more affordable price than what they pay at an ultra-premium salon.
VII. Operations Plan
Functional Roles
[Salon Name] will carry out its day-to-day operations primarily on an appointment basis. Walk-in clients will be served by the earliest available hairstylist, but priority will be given to clients who called ahead. In the meantime, waiting customers can divert themselves to the lounge, which features television and current popular magazines. The salon intends to employ [X] hairstylists and [A] assistants during peak hours and [Y] hairstylists and [B] assistants during off-peak hours. [Salon name] anticipates having [Z] customers every week.
To execute [Salon Name]’s business model, the salon needs to perform several functions. As a salon, the majority of employees will assist in upselling customers in addition to the primary functions as hair cutters and specialists (coloring, perms, etc.) [Salon Name] anticipates using the services of X employees, divided into the following roles.
Service Functions
- Hair cutting
- Hair coloring
- Hair washing
- Product sales
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing products
- Hiring and training staff
- Appointment making
- Customer service and cash register functions
Miscellaneous
- Maintenance personnel
Milestones
[Salon Name]’s long-term goal is to become the dominant provider of hair care and related services and products in the [city] area. We seek to the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Salon Name] expects to achieve the following milestones in the following [XYZ] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Salon Name] is led by [Salon Owner] who has been in the salon business for 20 years.
While [Salon Owner] has never run a salon himself, he has extensive experience cutting, treating, and styling hair at major salons for the past 20 years. He began his career in [19xx] when he received a certification from [Cosmetology School] and began work at [major chain], where he worked for X years.
[Salon Owner] graduated from the University of ABC where he majored in Communications.
[Other person’s name] will serve as the customer service manager. He/she has extensive experience in the beauty industry and excellent customer service skills.
Hiring Plan
[Salon Owner] will serve as the salon manager. To launch our salon, we need to hire the following personnel:
- Hair Stylists [Number]
As dictated by demand and operational maturity, [Salon Owner] will consider hiring the following personnel:
- Hair Treatment Specialist [Number]
- Receptionist [Number]
- Salon Manager
IX. Financial Plan
Revenue and Cost Drivers
[Salon Name]’s revenues will come primarily from the services rendered and secondarily from the sale of hair care products.
As with most services, labor expenses are the key cost drivers for hair salons. Hair stylists are paid through a combination of salaries and commissions, rewarding them for performance and making hair stylists an active part of business retention and development.
The major cost drivers for the salon’s operation will consist of:
- Commission paid to hair stylists on a per-service basis
- Salaries
- Lease
Moreover, ongoing marketing expenditures and cost of goods sold expenses are also notable cost drivers for [Salon Name].
Capital Requirements and Use of Funds
[Salon Name] is seeking total funding of $260,000 of debt capital to launch its store. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $140,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Salon Name] is cash-flow positive
Key Assumptions & Forecasts
The following table reflects the key revenue and cost assumptions made in the financial model.
| Number of customers per day | Per location |
|---|---|
| Year 1 | 26 |
| Year 2 | 29 |
| Year 3 | 32 |
| Year 4 | 36 |
| Year 5 | 41 |
| Haircut | $35 |
| Hair Style | $60 |
| Color | $40 |
| Product Sales | $20 |
| Annual Rent | $90,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
