Business Plan Competition December 6-7, Prison Entrepreneurship Program P.O. Box Houston, TX (832)

Transcription

1 Business Plan Competition December 6-7, 2018 Prison Entrepreneurship Program P.O. Box Houston, TX (832)

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3 K s Superior Spalon Your One Stop Beauty Shop Business Plan December 2018 Owner & Founder

4 TABLE OF CONTENTS EXECUTIVE SUMMARY...1 PERSONAL FIT...2 OPPORTUNITY...2 SOLUTION...3 CUSTOMERS...3 DIFFERENTIATORS...5 EXTRAS...6 MARKETING...6 FINANCIAL PROJECTIONS... ATTACHED

5 EXECUTIVE SUMMARY Opportunity Purpose Solution To bring superior quality to one location. Hard working Americans grow frustrated with depleted funds and wasted time in the pursuit of body maintenance. Offer affordable prices in three personal care services. Customers Differentiators Extras Women within a seven mile radius between the ages of Installing effective communication skills among employees and our expertise in all domains of personal care to one convenient location. Incentives to repeat customers as well as surveys for employees and clients. Marketing Start-up Costs Financials & Extras Billboards and word of mouth as well as social media. Owner Inv. - (Cash) $ 11,000 Owner Investment (Equipment) $ - Vehicle/equipment Loan $ 40,000 Unsecured Debt/Loan $ 20,000 Equity Investment $ - Total start up costs: $ 71,000 Plan Purpose: Start Up Sales: $ 1,299, % COGS 652,800 50% Gross profit 647,000 50% Overhead 98,600 8% Pretax income 548,300 42% Tax expense 137,000 11% Owner withdrawals 93,500 7% Net income $ 317,700 24% Personal Fit I am skilled with customer interaction and I have two years in the retail industry. I am familiar with operational duties and inventory management.

6 PERSONAL FIT Kevin is the owner and operator of K s Superior Spalon. Kevin will be responsible for overall management, advice and customer satisfaction. Kevin brings over two years experience in the retail industry as well as material handling qualifications. Kevin has knowledge with customer interaction, time productivity and operational duties. Kevin has completed Cognitive Intervention and received his G.E.D. in 2011 from the El Paso Community College. Kevin will also be graduating the Prison Entrepreneurship Program in December He is currently enrolled in Toastmasters International. Kevin has acquired computer skills in Microsoft Word, Excel and PowerPoint while attending PEP. OPPORTUNITY Explanation: Valuable time is lost by hard working Americans in the pursuit of body maintenance driving around town to accomplish an easy task. Can I solve the problem given my skills and personality? I m very skilled in the art of communication, I will soon have the piercing required for these tasks. Is the customer looking for a more holistic solution than his or her immediate complaint? Our facilities will be able to tailor our services to meet the demand in the personal care industry. Do I need to do all of the work myself or can I hire others to help me and still maintain quality? I will hire the employees that fit the criteria to fulfill quality measure. Is there growth potential to expand my business, or is this a dying market? Due to population increase so does the demand for a better grooming standard. How soon can I get my business up and running? About two and a half years to acquire funding plus the appropriate location to provide conferment. Is this something that will take a lot of cash to get started or is it more of a question of hustle? In this industry I will need an abundance of cash as well as productivity. Is this something I would be proud to share with my family and parole officer? I will proudly advertise my business in every aspect of life. Is the opportunity (Activity and Start Date) consistent with potential parole restrictions? Work hours will not interfere with parole. Would my business start as a part-time venture or need to be full time? This will be a full time venture. K s Superior Spalon 2

7 SOLUTION Explanation: All-inclusive personal care service best suited for the modern American. Built for best quality and known convenience. Is what I am offering filling the customer s real need? What we offer is a simplification of a daily frustration and time efficiency. What are the benefits (not features) that I am providing? Customers will have an abundance of assistance when it comes to overall grooming as well as safety concerns and wellness. Why can I do this better than another business (competitor)? What I offer is an elite team of employees and a total package of personal care services in the heart of the city. How will I deliver this better idea to my customers? By focusing on customer relationships earning their trust and loyalty to produce a maximum benefit for both parties. Is my delivery (retail store, home service, etc.) consistent with how I will produce the service (one-day delivery, hand-made products, etc.)? Our quality will remain excellent and we will arrange our services to best suit each customer/individual. Is my solution consistent with my passion for selling? We share a passion for our customers and their wellbeing. Is the price of my solution equal to or less than the customer s pain? Our prices fluctuate to match our customers with their level of service. Is the approximate cost of my solution lower than the price? Individual prices change to best suit the convenience of the customers. Do I need a fixed location (Storefront) or is this a mobile business? We will have a storefront in a busy part of the city. Do I offer a guaranty or return policy? We will have a guarantee of safety and satisfaction. CUSTOMERS Explanation: My target customers have a job or go to school and have kids. Demographics: Will my service have different appeal to men versus women? This will interest women more because these services are in demand by women more than men. What is my ideal customer s age (children, young adult, middle aged, mature)? K s Superior Spalon 3

8 My ideal customer is in the mid-twenties with kids and works. Does my customer need to be married, single or does it matter? These services are family friendly either choice is likely to have the same impact. Do language or ethnicity differences improve or limit my ability to sell to my ideal customer? There are no language barriers or ethnicity barriers. What aspect of my ideal customer am I appealing to (outdoors person, health conscious, nerd, their personal image, environmental concerns, recreation, etc.)? This type of service will appeal to the person s health, wellness, personal image and convenience. Income: Does my customer need a certain income (rich, middle class, poor)? My target customer has a middle to upper income level. Does my customer need to own specific assets (car, house, boat)? Owning assets is not required. Location: Where will I sell to my customers (their home, their workplace, on the street, online, my store, an event like trades day)? These services will be sold at my place of business. Do I go to my customer (home service) or does my customer come to me? My customers will come to me so I can provide my service. What neighborhood will my ideal customer live/work in (River Oaks/Highland park, a suburb, or small rural community)? My ideal customers lives in the western part of the city. How close are my customers geographically located (live close to each other or spread all over the city)? Time is money. My customers will live nearby with a commute not to exceed 30 minutes. How easily can I find this customer (one at a time or they will provide referrals)? My customers will come easily through referrals one at a time. Other: Can I reach these individuals as a group or do I need to find and sell to them individually? My customers will be found individually and groups. They will be sold to some in the same way. Once I sell to a customer, what is the likelihood that they will buy from me again? The chances of repeat business are extremely high because of our superior quality of work. K s Superior Spalon 4

9 DIFFERENTIATORS My Competitors West End Hair Company Direct or Indirect Indirect Promotion Price Their Advantages TV, and newspaper advertisements. $30 Well known, good reputation. Their Disadvantages Too pricey My Differentiators Cost affordable, convenient, nails and massage therapy with hair care. Ana s Hair Salon Indirect TV, and Radio $15 Affordable with good reputation. Wait time Fast services, good quality nails and massage therapy. 360 The Colour Bar Salon Indirect Billboards, and Radio $25 Fast and affordable. Small market Convenient, fast, nails and massage therapy along with hair care services Mastercuts Indirect Radio $50 Good reputation. No connection with customers. Healthy connection with customers nails, hair care and massage therapy. K s Superior Spalon 5

10 EXTRAS External Extras: Do you have a connection with a supplier in your industry? Yes, my business partner is in direct relationship with our supplier for this industry. Do you have access to a favorable location for your business? Yes. I have a business associate that has a space reserved for this company. Are you going to be the first company of your type in your chosen area operations? Yes. Other salons do not offer these exact services in this area. Internal Extras: Do you have a new or cutting edge concept? I will offer the convenience of all types of personal care services in this area. Will you be able to offer specialized or flexible scheduling that your competitors cannot match initially? We will be open seven days a week and extend our hours on weekends to match customer s demands. Are you an especially charming or personable person? Yes, I am comfortable around people and easy to get along with. MARKETING Message: What are three things your company name (with no other information provided) says about your company? My company name says my quality is great, I have a spa, and that it is a nail salon. What is your tagline? Your one stop beauty shop! How does your name and tagline make you different than your competitors? My name and tagline says that I offer all my services in one convenient location. Can your message be effectively conveyed through multiple types of media? My message can be effectively conveyed through multiple types of media. Is your message effective across different demographics? Yes. People from all over the city will know that K s Superior Spalon is a superior nail salon. Is your pricing consistent with the market for similar offerings? Yes. Our prices will vary for our services and the quality will match. Is your pricing consistent with the degree of personalization? Yes. Our prices are tailored to the services. The quality will remain consistent along with the effort we put toward our customer s satisfaction. Media: What are three types of media you will use to reach your customers? I will advertise my business through billboards, radio broadcasts, and social media. K s Superior Spalon 6

11 How many potential typical customers (not just total people) can you reach each month using the types listed above? I look forward to reaching a minimum of 100 people per month using these marketing methods. Once you ve reached your typical customer, how many will actually buy from you? At least 80 customers will actually buy from me per month. For each of the three, what do you think the estimated cost will be? Billboards will cost me $300. The radio commercials will be around $350. Social media will be free. For each cost estimate, is this a one-time expense up front or a recurring monthly charge? Billboards will be a one-time fee. The radio commercials will be a monthly fee and social media is free. How will you collect customer reviews? I will have online surveys as well as paper ones. I will demand only the best customer satisfaction ratings. K s Superior Spalon 7

12 START-UP COST Owner's name Company name Industry K's Superior Spalon Personal Care Service Start-up Costs Year 1 Assumption 4 - Total Uses Paid or Non-Depreciable Costs contributed in Month 1 marketing, business cards, fliers 100 cell phone purchase car/truck down payment, if leased permits 2,000 supplies, office & misc. 400 advertising 8,000 inventory products 15,000 private insurance 1,000 software for online APP. 1,000 Cash needed for start-up expenses 27,500 Depreciable Costs Paid or contributed in Month 1 Equipment Financing (Additional to amount paid) Depreciable Assets company car, truck or van - company trailer - computer, printer, fax 10,000 10,000 beauty equipment chair,nail app. 30,000 30, building/office deposit 3,000 N/A N/A beginning cash balance 10,000 N/A N/A Cash needed for start-up assets 13,000 40,000 40, assumed life (months) 667 monthly depreciation Total start up cost 80,500 Assumption 5 - Total Sources Cash owner will contribute to the company 11,000 15% Value of owner's assets contributed to company 0% Vehicle loan and other equipment debt (see note 7 for financing) 40,000 56% Unsecured debt, if applicable (for example Kiva loan) 20,000 28% Outside equity investment, if applicable 0% Total start up cost, total sources 71, %

13 FINANCIALS

14 dba K's Superior Spalon Projected Income and Cash Flow Statements Year 1 Start-up Month Month Month Month Month Month Month Month Month Month Month First % of Total Assump-tions Month Year Revenue Revenue 2 Manicure/Pedicure 6-20,000 21,000 26,000 28,000 29,000 32,000 33,000 34,000 32,000 32,600 32, ,600 25% Hair Styling 6-30,875 32,500 34,125 39,000 42,250 40,625 45,500 46,475 46,800 47,125 48, ,025 35% Massage 6-33,250 40,375 40,375 47,500 50,825 52,250 49,875 55,100 57,000 52,250 47, ,300 40% Total revenue - 84,125 93, , , , , , , , , ,250 1,299, % Cost of Goods Sold 2 Manicure/Pedicure 6-8,875 9,319 11,538 12,425 12,869 14,200 14,644 15,088 14,200 14,466 14, ,823 11% Hair Styling 6-16,388 17,250 18,113 20,700 22,425 21,563 24,150 24,668 24,840 25,013 25, ,983 19% Massage 6-17,063 20,719 20,719 24,375 26,081 26,813 25,594 28,275 29,250 26,813 24, ,075 21% Total COGS - 42,325 47,288 50,369 57,500 61,375 62,575 64,388 68,030 68,290 66,291 64, ,880 50% Gross profit - 41,800 46,588 50,131 57,000 60,700 62,300 63,988 67,545 67,510 65,684 63, ,045 50% Expenses 2 Auto or truck lease - - 0% Depreciation ,333 1% Gasoline & fuels - - 0% Insurance - bonding ,500 0% Insurance - vehicle - - 0% Interest - equip & start up ,180 0% Marketing % Office - rent - 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 16,500 1% Office - insurance ,200 0% Office - telephone % Office - utilities - 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 16,500 1% Payroll - not owner and not in % COGS Payroll taxes (9%) 6 & % Permits 2, ,299 0% Supplies ,900 0% Tax service - 1,500 1,500 0% Telephone - cellular - - 0% Start-up expenses 25, ,000 2% advertising ,337 1% - - 0% - - 0% - - 0% - - 0% - - 0% - - 0% Total expenses 27,500 6,393 6,518 6,342 6,467 6,291 6,415 6,239 6,362 6,185 6,308 7,631 98,649 8% Taxable profit (loss) 1 (27,500) 35,407 40,070 43,789 50,533 54,409 55,885 57,749 61,183 61,325 59,376 56, ,396 42% Tax (expense) benefit 1 (11,994) (37,183) (43,704) (44,218) (137,099) -11% Owner's withdrawals 1 - (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (8,500) (93,500) -7% Net profit (loss) (27,500) 26,907 19,576 35,289 42,033 8,726 47,385 49,249 8,979 52,825 50,876 3, ,797 24% Depreciation ,333 Equipment purchases 3 (43,000) (43,000) Principle, equipment loan 7 40,000 (929) (938) (947) (957) (966) (976) (986) (996) (1,006) (1,016) (1,026) 29,259 Repay debt financing 7 20,000 (1,577) (1,593) (1,609) (1,625) (1,641) (1,657) (1,674) (1,691) (1,708) (1,725) (1,742) 1,759 Owner contribution 3 11, ,000 Equity investor Net cash flow ,068 17,712 33,400 40,118 6,786 45,418 47,256 6,959 50,778 48,802 1, ,149 Cash, period start ,568 43,280 76, , , , , , , ,798 - Cash, period end ,568 43,280 76, , , , , , , , , ,149 The accompanying assumptions are an integral part of this financial statement.