TEMP 2

CONFIDENTIAL

Sample Company

BUSINESS PLAN

Prepared March 2016

Contact Information

Vanessa McBee
[email protected]

Sample Company i

Table of Contents

Executive Summary.................................................................................1

Company Description..........................................................................................................................................1
Ownership & Management.................................................................................................................................1
Company Goals and Objectives ........................................................................................................................1
Competitive Advantages .....................................................................................................................................1
Marketing & Promotions.....................................................................................................................................2
Financial Projection .............................................................................................................................................2

General Company Description.............................................................3

About us...................................................................................................................................................................3
Mission.....................................................................................................................................................................3
Company Goals & Objectives.............................................................................................................................3
Industry Growth....................................................................................................................................................4
Legal Structure.......................................................................................................................................................4

Products & Services .................................................................................5

Products & Services ..............................................................................................................................................5
Difference................................................................................................................................................................5
Inventory .................................................................................................................................................................5
Pricing......................................................................................................................................................................6
Expansion ...............................................................................................................................................................6

Marketing Plan..........................................................................................7

Overview..................................................................................................................................................................7
Product Features and Benefits ..........................................................................................................................8
Customers ...............................................................................................................................................................9
Demographic Profiles........................................................................................................................................10
Competition .........................................................................................................................................................10
Strengths and Weaknesses ...............................................................................................................................12
Niche ......................................................................................................................................................................13
Strategy ..................................................................................................................................................................13
Promotional Strategy .........................................................................................................................................13
Rational ..................................................................................................................................................................14
Promotional Budget ...........................................................................................................................................14

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Sample Company ii

Pricing ....................................................................................................................................................................15
Location .................................................................................................................................................................15
Distribution Channels .......................................................................................................................................15

Operational Plan.....................................................................................16

Production ............................................................................................................................................................16
Location .................................................................................................................................................................16
Legal Environment .............................................................................................................................................16
Trademarks , Copyright, or Patent .................................................................................................................18
Personnel...............................................................................................................................................................18
Inventory ...............................................................................................................................................................19
Suppliers ................................................................................................................................................................19
Credit Policies ......................................................................................................................................................19

Management and Organization.........................................................21

General Duties......................................................................................................................................................21

Bibilography ............................................................................................23

Bibliography.........................................................................................................................................................23

Financial Plan .........................................................................................24

Forecast .................................................................................................................................................................24
Statements ............................................................................................................................................................25
Financing ..............................................................................................................................................................27

Appendix ..................................................................................................28

Profit and Loss Statement ................................................................................................................................28
Balance Sheet.......................................................................................................................................................30
Cash Flow Statement .........................................................................................................................................33

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the understanding that you will not share its contents or ideas with third parties without the express written consent of the plan author.

Sample Company 1

Executive Summary

Company Description

Company is a fantastic new boutique hybrid intertwining a styling boutique featuring photography
services and a salon with pampering services. This business structure serves to provide an all-inclusive
luxury beauty and fashion experience in one location. The clothing that will be used for styling represents
an expression of organic, original, design styles that may never have been developed or discovered. It is
the ability to bring new expressions of fashion styling to a mass market, by tried and tested methods. It is
a taste of lavish luxury. It is the evolution of beauty.

The Company experience revolves around luxury, indulgence, and pampering. Our patrons come to
experience and exhibit. Excellence in quality, customer service, and client management will create our
community imprint. Our commitment to character and integrity will stretch far beyond the traditional
experiences of styling and beauty services. Our focus on "customer catering" which gives every man and
woman the pseudo-celebrity experience.

Ownership & Management

Owner is the Owner and founder of the Company boutique. Owner has been testing the concept through
the co-ownership of the Company. She has been nurturing her fetish for creating a luxury house of
pampering since a young lady. This is that dream come true. The complete resume is available in the
appendices.

Company Goals and Objectives

• Create an epic grand opening based on celebrity support.
• Secure design samples for in-house photoshoot styling.
• Secure hair professionals and nail technicians to lease individual booths.
• Secure photographers for the photography styling function of the boutique
• Secure a $50,000 loan for location renovation, marketing, and other business operation expenses

Competitive Advantages

Company will have competitive advantage in the product/service mix, due to the exclusive selection and
service combination. The service providers are all certified experts in their fields and the stylists are
skilled in fashion styling techniques and photography staging, for the benefit of specific customer advice.
The company will have fashion designers to contribute their sample inventory to the boutique, providing
them an opportunity for photography exposure, credits, and consumer interest though the photography

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Sample Company 2

services and cross promotional opportunities. The company will also brand and sell private label hair care
and makeup items from the salon and online.

Marketing & Promotions

The major target market is the greater New York City area, which is consistently referred to as one of the
fashion capitals of the world. Within this area, the sociographic segment being targeted is the
"Company", from which the name was derived.

Company is a perfect fashion spa experience. It is where all the elements necessary for your “celebrity”
effect come together. The boutique features independent design styles with exclusive pieces of fashion
art, costumes, and photography art, for clients to capture their essence in the perfect photography
setting. The company will be known for combining hair, makeup, nails, and fashion to bring out the
natural wonder within.

The expert advice of our onsite professionals, will provide personalized experience, a beauty treatment
plan, and self-maintenance advice. The client management strategy even allows the provision of
individualized client promotions, samples, and gifts.

The company will maintain a dominating social media presence, by associating advertising with the NYC
fashion industry, urban fashion mediums, and consistent and frequent activity. There will be brand
ambassadors placed in popular social event wearing the designer for exposure and photo opportunities.
The company will conduct strategic product placement with popular fashionistas and socialites, for
exposures with their followers.

Financial Projection

Company will be in profit by opening day, by securing the booth rentals prior to opening. The opening of
the boutique is projected to be opening after 60 days of the lease occupancy, in order to provide time for
renovations and to secure booth rentals.

In order to secure the loan repayment, the owner will personally guarantee the loan. A personal financial
statement will be included with this plan for the submission of financial assistance with start-up capital.

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Sample Company 3

General Company Description

About us

We indulge our vacations, pouring glasses of libations and trimmings of fun to make us feel celebrated
even if for a moment in time. Personal enhancements have always been a living and breathing billboard
of who we are, or at least how we would like to be perceived by the world. The best of both worlds is
represented by personal styling that displays, in real time, the ever-changing trends and styles. A
platform of what we desire to share with the world as our eternal legacy………to Indulge Yourself.

Company is a fantastic new boutique hybrid, intertwining a fashion styling service featuring custom
design samples and costume pieces and a salon with pampering services. This business structure serves
to provide an all-inclusive luxury beauty and photography experience in one location. In this visual
world, this concept represents an expression of organic, original, self-expressions that may never have
been developed or discovered. It is the ability to bring new expressions of fashion styling services to a
mass market, by tried and tested methods. It is a taste of lavish luxury. It is the evolution of beauty.

Mission

The Company experience revolves around luxury, indulgence, and pampering. Our patrons will not just
come to get serviced, they come to experience. Excellence in quality, customer service, and client
management will create our community imprint. Our commitment to character and integrity will stretch
far beyond the traditional experiences of fashion and beauty. Our focus on "customer catering" which
gives every man and woman the pseudo-celebrity experience.

Company Goals & Objectives

Our overall goal is to become the new social trend of visual self-expression and creativity.

• Renovate retail location to accommodate the service line.

• Organize and execute a fabulous grand opening, with celebrity impact and product sponsorship.

• Secure 100 independent designer samples for in-house photoshoot styling in brick and mortar
location.

• Secure five hair professionals and two nail technicians to lease individual booths.

• Secure relationships with photographers for the photography styling function of the boutique.

• Organize and execute an event schedule for increased exposure and target marketing.

• Secure a $50,000 loan for location renovation, marketing, and other business operation
expenses.

• Secure Inventory for product line from companies.

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Sample Company 4

Industry Growth

The personal services industry is growing rapidly and expected to continue expanding for years to come.
According to IBISWorld, the industry has experienced profit growth from 1.9% in 2009 to 5.7% in 2014,
and is expected to grow over the next five years at an average rate of 3.2% to $58.7 billion by 2019 (2). The
predictability based on a few socio-economic factors, such as the lower unemployment rates and more
disposable income, increasing the frequency and amount spent on these services (2). Another market
trend effecting the increase in opportunity is the influence of social media and the power of a favorable
photograph. The design line and online boutique will benefit highly from this growth because of the
global recognition of the styling and photography trends of New York.

Legal Structure

Company will be the governing body for Company boutique. The Limited Liability Company will be
solely owned and operated by Owner, as the sole Managing Member.

Upon bank financing, there will be a board of directors formed as advisers in each of the major business
functions. The corporation will bear the date of organization of June, 2016 and be held responsible under
the laws of the state of New York.

The Business will be conducted under NACIS code: 812112

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Sample Company 5

Products & Services

Products & Services

Company the full service salon boutique experience. We have hand selected our products and services, in
order to create the perfect environment.

SERVICES

• Hair Salon Services - Men & Women
• Make up services
• Photography
• Nail services
• Fashion Styling and On-Site Clothing Rental

PRODUCTS

• Custom branded hair products
• Custom branded make up products
• Custom branded spa products
• Human Hair Extensions

Difference

Although, each service featured here can be found in separate locations, it is the product mix that makes
us unique. Our supporters are excited about their opportunity to have their hair done, make up, nails
tailored, fashion styling, photo shoot, and be treated like a king or queen. Perfect for special occasions, as
it is in and of itself, a special occasion. By offering an array of beauty and styling services, all in the same
location, we are the "one-stop shop" for glamour.

Inventory

The custom branded products will be purchased from certified wholesaler private label product
developers, who we will work with on product customization. We are building relationships and
negotiating for greater price point advantage. The human hair extensions will be purchased from quality
wholesalers and resold at a premium and combined with extension application services.

The services will be outsourced to licensed professionals, who will be contracted to the company. They
will carry any licenses, bonds, permits, and/or insurances, typical for the industry.

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Sample Company 6

Pricing

The premium pricing strategy will be used for the boutique, along with markdowns and discounts. We
will be retailing for a 60% markup of cost of goods sold and wholesaling for 30% markup of cost of goods
sold.

Expansion

Our expansion goals are:

• Multiple locations within the greater New York City area and five major national markets.
• Stimulating and enhancing the trend for style photography sessions though PR and social media
• Developing and branding a cosmetic line and have products placed in locations around the

country.
• Securing ten major contracts for consistent business with plays, modeling agencies, beauty

pageants, event planners, etc.
• Creating pop up make up and style booth locations at salons and events for off-site promotions

of services.

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Sample Company 7

Marketing Plan

Overview

Facts about the industry:

• The salon/spa industry is a major function in the US economy, with an estimated 1.1 million total
establishments and sales in excess of $44 billion annually (3).

• There are no significant claims to the market share, as the 50 biggest companies only generate
15% of the industry’s revenue (2).

• According to IBISWorld, the industry has experienced profit growth from 1.9% in 2009 to 5.7% in
2014 (2).

• The industry is expected to grow over the next five years at an average rate of 3.2% to $58.7 billion
by 2019 (2).

• The industry’s employment opportunities are rapidly expanding at an annual rate of 3.8% and
currently employs over 1.7 million people (2).

• Consumers, age 35 to 64 spend 8% to 14% more than average on personal care services. Married
couples with adult children spend 25% more than average on personal care services, while those
with children at home spend 31% to 37% more than the industry average (2).

Barriers for Entry

Barriers for entry:

o High capital costs – To mitigate, there will be a loan secured via the SBA at a low interest rate.

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Sample Company 8

o High competition rate – To mitigate, strategic service promotions with social media icons and
consistent photography demonstrations.

o High production costs – To mitigate, secured private label manufacturing reducing initial inventory
costs while maintaining premium quality.

o High marketing costs – To mitigate, there will be a “guerilla marketing” style marketing strategy,
where we use free and low cost resources strategically for budget maximization.

o Consumer acceptance and brand recognition – The design line has been conducting brand
promotion and product testing for the last 12 months. Our social media and industry relationships have
been established through this process.

o Shipping costs – To mitigate, there will be a logistics company contracted to advise us on the
shipping, customs clearances, tariffs, etc. in order to insure the most cost effect process is being used.

Industry Changes

Product Features and Benefits

PRODUCTS

• Human Hair Extensions – The Company has invested time and energy into securing a premium
wholesale producer of human hair extensions, which will be packaged in custom branded
packaging and marketed through the brick and mortar location, as well as online.

• Custom branded make up products - The Company has also secured a premium private label
cosmetics producer, which will also package the items in custom branded packaging and
marketed through the brick and mortar location, as well as online.

• Custom branded spa products - The premium private label cosmetics producer will also produce
custom branded spa products and package the items in custom branded packaging, which will be
marketed through the brick and mortar location, as well as online.

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Sample Company 9

• Custom branded hair products – The premium private label cosmetics producer will produce
custom branded hair products and package the items in custom branded packaging as well,
which will be marketed through the brick and mortar location, as well as online.

SERVICES

• Hair Salon Services - Men & Women – Full services provided at a traditional hair salon and barber
shop, as determined by the contractor. The contracted hair professionals have a dedicated client
base which will create a repeat customer base and word-of-mouth promotions.

• Make up services - Full services provided by a traditional makeup artist, as determined by the
contractor. The contracted make up professionals have a dedicated client base which will create a
repeat customer base and word-of-mouth promotions.

• Photography – A professional photographer will be at the facilities a minimum of once a week,
providing Photoshop services and electronic backdrop. In this social media based society,
pictures are used to demonstrate affluence and quality. The client will have the opportunity to
have a professionally edited photograph, and the company will have constant and consistent
marketing material being produced.

• Styling service – As a premiere and niche service, Company will have clothing from local and
high end designers, as well as photography props to use, in order to enhance the photography
service or for patrons to take their own photographs for social media.

We pride ourselves in client management. Upon arrival, we have our clients complete a client profile,
with purchase information, demographic information, and lifestyle trends. We contact our clients by
email, text, or messenger, as specified within one week of purchase with gratitude and a follow up
promotion. We will maintain a return policy of 14 days after purchase or arrival, ass applicable.

Customers

The major target market is the greater New York City area, which is consistently referred to as one of the
fashion capitals of the world. Within this area, the sociographic segment being targeted is from which
the name was derived.

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Sample Company 10

This segment is a proud ownership based group which relates their perception of life from a materialistic
stand point. They are culturally noted for their “conspicuous consumption”, and a “wealthy, consumerist
lifestyle” (1).

The boutique, embraces all of the greatest features of the culture, itself, and presents them to the client on
a silver platter. The experience feeds the thirst for luxury and exclusivity. Our pricing, environment,
marketing strategy, and customer service will reflect the cultural nuances of our target market.

Demographic Profiles

Demographic Profile:

Individual Clients

• Age: 25 – 45
• Gender: Men/Women/Unisex
• Location: Greater New York City
• Income level: $30,000.00 and above (individual annual income)
• Social class and occupations: Company – entrepreneurs, fashion connoisseurs, materialists,

executives, traditional middle class societal values
• Education – Secondary and Post-Secondary, or Equivalent work experience

Business Clients:

• Industry: Popular or Niche Independently Owned Boutiques; Department stores; Franchised
Cosmetic Retailers.

• Location: In major cities Nationwide (years1-2), Internationally (years 3-5)
• Market Size: In ten independently owned stores or one brand with ten locations (year 1), adding

15% or more increase in the product placement location.

Competition

The companies that have been determined, for the purposes of this plan, are indirect competitors,
competing with Company only in specific services or only in specific markets. There are several
businesses that a client can go to in order to have each service performed, but not under one brick-and-
mortar group. By observation, other companies in the greater NYC area that perform both makeup and
hair services, focus their market on wedding services. Otherwise, each service is generally performed in
separate locations. The competitive information related to Company is based on our company strategy
and forecasting.

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Sample Company 11

Competitor A:

Company
Address
Phone
Website

Competitor B:

Company
Address
Phone
Website

Competitor C:

Company
Address
Phone
Website

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Sample Company 12

Strengths and Weaknesses

Company will have competitive advantage in the product/service mix, due to the exclusive product
selection and service combination. The service providers are all certified experts in their fields and the
salesperson will be skilled in styling techniques, for the benefit of specific customer advice. The styling
inventory will be consigned from independent designers and purchased at liquidation pricing.

The company will be able to provide a competitive position in price for comparable quality, because of
cost management and the revenue streams. The company will design the boutique for optimization of
visual effect and product display, and to maintain an appearance and image consistent with industry
standards. We will stay on the verge of any technological advancements consistent with the current
industry standards and integrate them into our sales processes.

Brand identity, reliability, stability, and company reputation will be a disadvantage to the company as a
startup, but will quickly become an advantage through our client management strategy. Being an
intimate boutique size provides limitations in the range of products which can be displayed. There will
also be limitations in the marketing budget, so a cost effective targeted marketing plan will be
implemented.

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Sample Company 13

Niche

Company is a perfect photography opportunity. It is where all the elements necessary for your “celebrity”
effect come together. The boutique features exclusive pieces of fashion art, props, and beauty services.
The company will be known for exquisite photography displays with exclusive wardrobe pieces,
breathtaking makeup and hairstyles, and high quality cosmetic items.

The expert advice of our onsite professionals, will provide personalized experience, a beauty treatment
plan, and self-maintenance advice. The client management strategy even allows the provision of
individualized client promotions, samples, and gifts.

The company’s niche is the onsite scene photography sessions and styling services, which will
accomplish two objectives in its favor. First, we will build a reputation for stellar photography sessions,
illustrating the hair and makeup services. Second, the company will consistently receive favorable
promotions from the client’s social media posts.

Strategy

The company will maintain a dominating social media presence, by promoting its photography shoots
through social media, onsite presentations, and consistent and frequent activity. There will be brand
ambassadors placed in popular social events, in full hair and makeup, for exposure and photo
opportunities. The company will conduct strategic service promotions with popular fashionistas and
socialites, for exposure with their followers.

This market strategy, along with the complete beauty experience and client management strategy, will
create an increase in brand awareness and reputation at a steady growth rate. The company will maintain
revenue goals, while allowing for consistency of results.

Promotional Strategy

Company will create awareness utilizing the following promotional strategy:

EVENTS

• Photography and Art Expos
• Catered Open Houses
• Themed Promotional Days
• Strategic Model Placement
• Pop up Opportunities

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Sample Company 14

ADVERTISING

• Television Commercial
• Radio Commercial
• Magazine Ads

INTERNET

• Website featuring e-Catalogs and Photography “Look Books”
• Ad words
• Social Media Promotions/Interactions/Competition
• Video Sharing Commercials

INDUSTRY

• Trade Show
• Off - Site Design Expos
• Pop up Stores

Rational

The rationale behind this particular media mix is founded in the cultural trends of the Company. The
potential clients being targeted will focus on the status symbol. The particular mix of marketing channels
and techniques are based on research and study of the emergence of status based products and services,
within the target market.
The boutique appearance including logo design, cards and letterhead, brochures, signage, and interior
design will all carry the energy of exclusivity, luxury, and intimacy for consistency in appearance and
consumer perception of quality.
The strategy will utilize free and low cost customizable applications, in order to cut third party design
costs. There will be a public relations firm contracted to create notoriety and the budget will increase
exponentially with effectiveness. We will strategically phase in the advertising mediums and closely
monitor for effectiveness and ROI.

Promotional Budget

The initial promotional budget for the first year will be $25,150.00. This will also be the minimum
promotional budget in any successive year. There will be an additional amount equal to 25% of the prior
year’s annual profit for reinvestment in advancing the promotional goals, essentially increasing revenue.

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Sample Company 15

Pricing

The culture of the target market predisposes the client to look for a discount or benefit on an item of
value, verses purchasing a low priced item. Therefore, we have the advantage of a higher resale value and
the sales incentives will provide the feeling of advantage for the client.

The number one advantage in fashion is that the brand prices the product. In other words, a relatively
high profit margin can be created by brand value. The premium pricing strategy will be used for the
boutique, along with markdowns and discounts. We will be retailing for a 60% markup of cost of goods
sold and wholesaling for 30% markup of cost of goods sold. Projections regarding these markups will be
reflected in the financial plan.

The services will be valuated using a price matching pricing strategy, with consideration for the
surrounding market competitors.

Location

The boutique will be located at TBA. The 1000 sq. ft. location was selected in order to give a private
intimate location with enough area to comfortably provide all the luxury services. The location already
has the foundation required, with nine booth stations currently in place. The design layout provides the
familiarity of a 5th avenue boutique. The parking and client access is customary for the NYC climate and
culture.

The internal environment is custom designed to create the effective atmosphere. This is the image and
experience the business reputation is built on. The environment will reflect the functionality and luxury
expected. The layout will be tested in a focus group for feedback prior to implementation.

Distribution Channels

Brick and Mortar – The services and products will all be provided at the brick and mortar boutique
location. The services and events will be housed there as well.

Pop up shops/ Trade shows/Conventions – The photography services, custom branded products, and
service packages, will be sold at off-site locations within the demographic area of the brick and mortar
location, or any retail location where the products are available for purchase.

E-commerce – There will be an ecommerce website where the retail products and service packages will
be sold. This site will also provide booking and scheduling opportunities.

Wholesale – The custom branded product line will be consigned at ten carefully selected boutiques
nationwide within the first year of business operations. All other wholesale buyers will be sold the
product at an established wholesale price using the pricing strategy.

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Sample Company 16

Operational Plan

Production

The custom branded product line will be purchased from professional and certified wholesalers and
private label companies. We are building relationships and negotiating for greater price point advantage.
The products will all be purchased from wholesalers and resold at a premium.

There will be software based inventory control systems in place for the entire inventory and accounting
software utilized for the rent roll of the service professionals.

The services will be outsourced to licensed professionals, who will be contracted to the company. They
will carry any licenses, bonds, permits, and/or insurances, typical for the industry.

Due to the nature of the business, the company will consistently be conducting product research and
product development, changing the boutique layout and content once per season – spring, summer,
winter, and fall.

Location

Bourgeois will be located at TBA. The usable retail area will consist of 1000 square feet. The location is a
zoned for mixed use, already set up for both the salon and retail activities.

The retail location will be divided into two separate areas with a connecting walkway. The salon will
occupy the east side of the location, while the west side will host the boutique. The space is relatively
accessible to foot traffic, as it is known as prior location of a salon location. We will be open for business
from 12 PM – 1 AM.

The company will secure 24 month lease secured for $3,000.00 per month, triple net. The estimated total
monthly occupational expenses, considering the months with the highest utility costs and including
insurance, maintenance, and display requirements, will not exceed $4,000.00 per month.

Legal Environment

Licensing and Bonding

The company will be in full compliance with the New York State Division of Licensing’s regulatory
requirements. The business license will be displayed by the front entrance, in an ambiance friendly
frame. Each booth renter will be required to have their license, with photo, displayed by their rental space
as a contractual obligation. Each hair stylist will be required to have an active cosmetology license with
minimal infractions. The nail technician will be required to carry either a Nail Specialist or Cosmetology
license. The makeup artists will carry Esthetician licenses.

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Sample Company 17

Company will be considered by the state of New York as an Appearance Enhancement Business license
and carry the appropriate license for that status. The company will also ensure that all independent
contractors have Appearance Enhancement licenses and Renters licenses.

The company will be aware of any changes to the industries licensing requirements and come into
compliance immediately.

Permits

The location has the base structure for a beauty salon, but the company will be improving the location to
create the optimal environment. There are no foreseeable reasons for structural improvements, as most of
the projected changes will be cosmetic. We will have the plans drawn for the projected changes and have
them reviewed by the state for any possible licensing requirements.
The company will place a florescent backlight sign prominently outside the building, which will be in
complete compliance with the New York City Department of Buildings.

Special Regulations

The New York State Division of Licensing Services stipulates that the below guidelines are followed:

“The facility where any service is being offered should be clean, in good repair and free from dangerous
conditions or hazards.
• Sufficient space with good lighting should be provided to ensure the safety and health of the consumer.
• Hot and cold running water, toilet facilities, and covered containers for paper and waste should be
provided.
• State regulations require that a provider follow infection control procedures that protect the provider and
the client. Hand washing is required of all nail care clients and providers prior to a nail service being
performed.
• Tables and beds used for personal services should be sanitized/cleaned between each client.
• All implements that may abrade or clip superficial skin should be immersed in an EPA approved
disinfectant for at least 10 minutes and disinfected after each use.
• Porous manicuring and waxing implements such as emery boards, block buffers and waxing sticks and
other implements that cannot be disinfected should not be used for more than one person.
• Gloves should be worn by operators performing waxing or extractions.
• Disposable supplies such as cotton, sponge applicators and paper products should never be used for
more than one person.
• Disposable towels and paper table coverings should only be used as a single-use item.
• Other tools used to provide services should be cleaned, then disinfected after each client, using an EPA-
approved disinfectant. These tools include but are not limited to scissors, razors, clippers, combs, brushes,
capes and bowls.” (4)

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Sample Company 18

Zoning and Building Code Requirements

The location that the company will be occupying was formally used as a hair salon and retail location,
and there has been no change in the zoning or building zone requirements since that time. Therefore the
property meets every requirement necessary in this department to perform as an Appearance
Enhancement Business.

Insurance Coverage

Company will insure the proper coverage for the facility, employees, contractors, and equipment. The
types of insurances the company may need to carry are workers’ compensation, liability, disability
insurance, and any other insurance policies our legal advisers may deem necessary.

Trademarks , Copyright, or Patent

Company will hold a trademark for the name and branding of the boutique, Company.

The company will secure any releases and permissions legally necessary for the resale of any
trademarked items. Over the course of the life of the business, there will be constant attention on any
opportunities to patent or trademark any processes or intellectual property.

Personnel

Owner will run the administrative operations of the business herself until the business is profitable
enough to hire an onsite manager. The following duties will be fulfilled:

• Customer service
• Increase sales
• Cash management
• Inventory and supply management
• Event coordination and implementation
• Off-site promotional events
• Price posting, signage, and display set up
• Third party vendor monitoring

We will hire temporary staff as necessary for events, high impact sales seasons, or at any point deemed
necessary.

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Sample Company 19

Inventory

The boutique location will keep finished goods on hand for each retail product. The average value of the
stock on hand will be $10,000.00, which will define the initial inventory investment. We are looking to
turn over 40%-50% of the inventory stock on a monthly basis with 80% turnover in high impact
purchasing periods. During high impact periods, we will increase the inventory investment as we
determine necessary. The ordering lead time will be from 14 – 30 days, but there will be short turnaround
time suppliers available for emergency stocking or wholesale bulk purchasing.

Suppliers

The companies, who will supply Company with inventory, are:

Private Label Minerals Cosmetics
Miami, FL
plmcosmetics.com

Specializing in all natural mineral cosmetics, hair products, skin care and spa products. The company
assists independently owned cosmetic companies in developing their product line and have assisted
companies in getting products into Whole Foods and Target. Founded 2006.

Guangzhou Ted Hair Products Co., Ltd d/b/a Ted Hair
Guangzhou, China
tedhair.com

Ted Hair is a producer of all types of top quality human hair. They have assisted “110,689 hair business
owner or people new getting into hair line for the past 6 years.” The company has also helped over 30,000
hair salon owners and hair stylists with selling products to their clients. They coach independent
business owners on custom branded hair, from product line development to brand distribution. Founded
2009.

Our suppliers are well researched in reputation, consistency, and pricing. Our direct sales and
consignment methods make the inventory levels reasonably predictable. Our custom branded items will
be ordered in bulk and reordered when the inventory level is at 20%. If a situation arises where we are
unable to immediately fill an order, the company will implement a backorder policy with the client. Our
supply costs are reasonably steady, but any cost increase will be passed on to the customer.

Credit Policies

All retail purchases, on line and in person, as well as all services will be paid at the time of provision.

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Sample Company 20

The only credit extended will be on the behalf of the custom branded product line and be extended to ten
boutiques nationwide, for market testing and penetration. This credit will be extended in the form of
product placement on a consignment basis. The boutique will be extended a net 60 payment term and
inventory unsold or payment will be due at that time. The company will diligently review the credit and
payment history of the retail location and carry any bonds and/or insurances available to cover payment
default. Transparent inventory tracking systems will be in place for real-time inventory monitoring and
liability agreements will be utilized.

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Sample Company 21

Management and Organization

General Duties

Owner is the Owner and founder of Company boutique. She will run the administrative operations of the
business herself until is profitable enough to hire an onsite manager. The booth rental contractors will
provide access to the facilities during the hours the business will be open.

General Duties

STORE MANAGEMENT

• Human resources
• Manage the store's daily operations
• Providing customer service
• Ensuring that shelves are fully stocked
• Directly overseeing lower-level employees
• Product selection and placement

ONLINE SALES MANAGEMENT

• Monitoring orders
• Tracking online advertising campaigns
• Inventory management
• Shipping and logistics management

FINANCIAL MANAGEMENT

• Track profit and loss information
• Pricing decisions
• Marketing budgets
• Daily financial record-keeping

PRODUCT DESIGN

• Design management
• Product placement and management

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Sample Company 22

• Manufacturing and distribution management and tracking
• Distribution contract negotiations and decision making

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Sample Company 23

Bibilography

Bibliography

1. Company. (n.d.). In Wikipedia. Retrieved December 14, 2015, from https://en.wikipedia.org/wiki/C
ompany

2. Beauty Salon 2014. (2014). Retrieved from http://www.sbdcnet.org/small-business-research-
reports/beauty-salon-2014

3. Economic Snapshot of the Salon Industry, (August 2013). Retrieved from
https://probeauty.org/docs/advocacy/2013_Economic_Snapshot_of_the_Salon_Industry.pdf

4. New York State Beauty Salons and Spas, (2016). Retrieved from
http://www.dos.ny.gov/licensing/guides/guidetosalons.html

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Sample Company 24

Financial Plan

Forecast

Key Assumptions

Important Financial Assumptions

The following important financial assumptions are to be considered when assessing the financial plan:

• The Owner will not draw a salary, only a distribution of proceeds once the business is profitable.
An assistant will be employed for 30 hours a week as a reinforcement.

• The booth rental fees will stay standard and the estimate is 48 out of 52 weeks per year. This
estimate will provide for situations such as delinquency, vacancy, or other unforeseeable
circumstances. The standard industry booth rent of $175.00 per week will be used in the
financials.

• The price of the custom branded spa and hair care products will vary by item, and the price will
reflect a 60% increase over COGS. For the sake of financial assumptions a general median price of
$20.00 will be used as an estimator. The rate of sales growth is projected to be 15% per month and
10% year.

• The price of the custom hair extensions will vary by item, and the price will reflect a 60% increase
over COGS. For the sake of financial assumptions a general median price of $100.00 will be used
as an estimation of price and $40 as an estimation of costs. The rate of sales growth is projected to
be 15% per month and 10% per year.

• The units for the booth rent are determined by the number of booths times the number of weeks
in a months. One booth for four weeks creates four units.

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Sample Company 25

• The financials will begin the first day the lease is executed. There will be a 60 day delay in
revenue for business set up and leasehold improvements.

• The detailed financial statements including the Income Statement, Balance Sheet, Cash Flow
statement, are to follow.

Statements

Projected Profit & Loss FY2017 FY2018 FY2019

Revenue
Direct Costs
Gross Margin
Gross Margin %
Operating Expenses

Salary
Employee Related Expenses
Total Operating Expenses
Operating Income
Interest Incurred
Depreciation and Amortization
Income Taxes
Total Expenses
Net Profit
Net Profit / Sales

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Sample Company 26

Projected Balance Sheet FY2017 FY2018 FY2019

Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-Term Assets
Accumulated Depreciation
Total Long-Term Assets
Total Assets
Accounts Payable
Income Taxes Payable
Sales Taxes Payable
Short-Term Debt
Prepaid Revenue
Total Current Liabilities
Long-Term Debt
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Owner's Equity
Total Liabilities & Equity

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Sample Company 27

Projected Cash Flow Statement FY2017 FY2018 FY2019

Net Cash Flow from Operations
Net Profit
Depreciation and Amortization
Change in Accounts Receivable
Change in Inventory
Change in Accounts Payable
Change in Income Tax Payable
Change in Sales Tax Payable
Change in Prepaid Revenue

Net Cash Flow from Operations
Investing & Financing

Assets Purchased or Sold
Investments Received
Change in Long-Term Debt
Change in Short-Term Debt
Dividends & Distributions
Net Cash Flow from Investing &
Financing
Cash at Beginning of Period
Net Change in Cash
Cash at End of Period

Financing

Use of Funds

Sources of Funds

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Sample Company 28

Appendix

Profit and Loss Statement

Profit and Loss Statement (With Monthly Detail)

FY2017 Jun '16 Jul '16 Aug '16 Sep '16 Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17

Revenue

Direct Costs

Gross Margin

Gross
Margin %

Operating
Expenses

Salary

Employee
Related
Expenses

Total
Operating
Expenses

Operating
Income

Interest Incurred

Depreciation
and
Amortization

Income Taxes

Total
Expenses

Net Profit

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Sample Company FY2017 FY2018 29

Net Profit / FY2019
Sales

Revenue
Direct Costs
Gross Margin
Gross Margin %
Operating Expenses

Salary
Employee Related Expenses
Total Operating Expenses
Operating Income
Interest Incurred
Depreciation and Amortization
Income Taxes
Total Expenses
Net Profit
Net Profit / Sales

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Sample Company 30

Balance Sheet

Balance Sheet (With Monthly Detail)

FY2017 Jun '16 Jul '16 Aug '16 Sep '16 Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17

Cash

Accounts
Receivable

Inventory

Other Current
Assets

Total
Current
Assets

Long-Term
Assets

Accumulated
Depreciation

Total Long-
Term Assets

Total Assets

Accounts
Payable

Income Taxes
Payable

Sales Taxes
Payable

Short-Term
Debt

Prepaid
Revenue

Total
Current
Liabilities

Long-Term Debt

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Sample Company 31

Total
Liabilities

Paid-in Capital
Retained
Earnings
Earnings
Total
Owner's
Equity

Total
Liabilities &
Equity

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Sample Company FY2017 FY2018 32

Cash FY2019
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-Term Assets
Accumulated Depreciation
Total Long-Term Assets
Total Assets
Accounts Payable
Income Taxes Payable
Sales Taxes Payable
Short-Term Debt
Prepaid Revenue
Total Current Liabilities
Long-Term Debt
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Owner's Equity
Total Liabilities & Equity

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Sample Company 33

Cash Flow Statement

Cash Flow Statement (With Monthly Detail)

FY2017 Jun '16 Jul '16 Aug '16 Sep '16 Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17

Net Cash
Flow from
Operations

Net Profit

Depreciation
and
Amortization

Change in
Accounts
Receivable

Change in
Inventory

Change in
Accounts
Payable

Change in
Income Tax
Payable

Change in
Sales Tax
Payable

Change in
Prepaid
Revenue

Net Cash
Flow from
Operations

Investing &
Financing

Assets
Purchased or
Sold

Investments
Received

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