Hairdressing
Unit 2- Revision
Please watch this video
 Write down all the costs you can think of when running a
barber shop.
http://barberconnect.co.uk (video on homepage)
What is a cost?
http://www.salonsdirect.com
What is a cost?
TASK- Imagine a new Hairdressers is
going to open in Wickford
• Electricity bills
• Shelving and shop fittings,
• Staff wages
• Cleaning materials,
• A sign for the shop
• Hairdryers
• Clippers
• Gel .
 Please list the start-up costs and
Running costs this hairdresser may
have.
Start-up costs
Running costs
What is Revenue?
Discuss; What ways do Hairdressers
earn revenue? What items do they
sell?
Which of the below is revenue for a
Hairdresser?
 Staff wages
 Advertising
 Cutting clients hair
Task- Are the items fixed or variable
costs?
Rent
Electricity
Item
Razor Blades
Shampoo
Shampoo
Barber Chairs
Staff wages
Razor Blades
Staff wages
Fixed Costs (Does not changed Variable Costs (Changes based
based on how you produce)
Rent
Barber Chairs
on how much you produce)
Task
Super Cutz various clients hair in their shops. Below are the estimated
monthly costs if they cut 400 clients hair.
Total fixed costs = £100,000
Variable costs = £1 per haircut
a) Work out the fixed costs, variable costs and total costs below
400 clients
Variable Costs
Fixed Costs
Total Costs
£
£
£
TASK- Supercutz cut clients hair
through a walk in service. The price of
a haircut £12.
 The business has cut 850 clients hair last month. Work out
the total revenue Supercutz receive from cutting hair?
Type in your answer in the box
£
Show your workings
TASK- Give the correct formula for calculating
profit.
Please drag and drop the correct items into the
formula.
Revenue
Fixed Costs
Profit
Number of
Sales
Expenditure
Inflows
Variable Costs
Match the keywords to the definitions
 Total costs =
 Revenue =
 Profit =
revenue –
expenditure
Payments
number of
sales x price
per unit
receipts
 Gross profit =
gross profit
– expenditure
 Cash inflows are often called…
 Cash outflows are often called…
 Net profit =
fixed costs +
variable
costs
revenue –
cost of
sales
TASK – complete the Profit and Loss
account below.
This is based on Supercutz in Basildon
Revenue is £10,000 per
month from cutting hair
and selling hair products
Cost of sales (directly
linked to cutting hair) is
£1000 per month
Income from Sales
Cost of Sales
Gross Profit
Salaries are £2,500 per
month
Rent is £2,400 per month
Expenses
Salaries
Rent
Net Profit
COSTS
REVENUES
£
£
What is the difference
between Gross Profit and
Net Profit?
Identify two ways Hairdresser can
improve its Net Profit in 2012?
Please type your answers
What is breakeven?
Add the items onto the graph correctly
 Label the diagram below. Drag and drop all items. Please put
the on the breakeven point
Loss
Fixed
Costs
Profit
Variable
costs
Margin of
safety
Total
Revenue
Add
the
items
onto
the
graph
correctly
 Label the diagram below. Drag and drop all items. Please put
Total
Revenue
the on the breakeven point
Profit
Loss
Margin of
safety
Task- How many units do
I need to sell to breakeven?
Variable
costs
Fixed
Costs
Add
the
items
onto
the
graph
correctly
 Label the diagram below. Drag and drop all items. Please put
Total
Revenue
the on the breakeven point
Profit
Loss
Margin of
safety
TASK-What
is the total revenue if the
business sells 1000 units?
Variable
costs
Fixed
Costs
Task
 How many Haircuts would Supercutz need to cut to
breakeven? (cover costs)
£
Selling Price
£10
Variable cost per Unit
50p
Fixed Costs
£100,000
Type your answer in the box
Why is it important for Supercutz to
know their Break-even point?
Breakeven is important because
Importance of Breakeven analysis to
business when planning success
 It is needed to identify
and track costs (both
fixed and variable
costs)
 It is needed to highlight
• It can help businesses
the margin of safety
identify where they can
change their costs, for
example, buying cheaper
materials or finding a
cheaper supplier
CASHFLOW FORECASTING
TASK-Which of the items above are cash inflows? Please drag
and drop them below
Electricity bill
Monthly rent
Haircuts
Staff wages
L'Oreal shampoo sales
Telephone bill
Share Capital
Which of the items above are cash inflows? Please drag and drop them below
Please work complete the cashflow
table below 2012.
2013
January (£)
February (£)
March (£)
Total Receipts
120,000
125,000
115,000
130,000
50,000
Total Payments 90,000
Net
inflow/outfl
ow
Receiptspayments
30,000
Opening
Balance
150,000
Closing
balance of
January
180,000
Closing
Balance
180,000
Add net
cashflow to
your closing
balance)
BUDGETING
 Why is it important that a hairdresser budgets?
 Considers its ….
What items could a hairdresser own?
(Asset)
 Own (ASSET) for a
short amount of time?
(current asset)
 Own for a short long
amount of time? (Long
term liabilities)
Who could a hairdresser owe money
to? (Liability)
 Own for a short amount
of time?
 Own for a short long
amount of time?
Balance sheet
What items could a Barber own?
 ASSETS
 LIABILITIES
- What the business OWNS to
others including current
liabilities and long term
liabilities
-What the business OWES
to others including current
liabilities and long term
liabilities
Balance sheet
 ADD in TASK