Big Hoss Barbershop and Lounge Financial Plan
The following Financial plan was conducted for Big Hoss Barbershop and Lounge. The numbers and
information were based off of other competitors in the industry and projections that the owners believe to
be feasible.
Sources and Uses of Funds
Before operations can begin, Big Hoss Barbershop and Lounge must first have a location, employees,
equipment, and other materials necessary, ready to go. In order to make this happen, we decided that
two loans from Bank of America, one for $100,000, and the other for $200,000, along with the $200,000
we believe we could collect from owners, investors, family, and friends, would give us $500,000. This
would be more than sufficient for startup because as stated in the Sources and Uses of Funds statement
below, Total Startup expenses are $383,200, giving us a substantial amount of capital to work with.
Sources of Capital
Owners' Investment (name and percent
ownership)
Sam Henig (40%)
$ 80,000
Ryan Holland (35%)
$70,000
Toan Huynh (25%)
$50,000
Other investor
-
Total Investment
$ 200,000
Bank Loans
Bank 1
$ 100,000
Bank 2
$200,000
Total Bank Loans
$ 300,000
Startup Expenses
Buildings/Real Estate
Purchase
$ 250,000
Construction
Remodeling
$15,000
Other
$5,000
Total Buildings/Real Estate
$ 270,000
Capital Equipment List
Furniture
$ 50,000
Equipment
$15,000
Fixtures
$5,000
Other
-
Total Capital Equipment
$ 70,000
Location and Admin Expenses
Utility deposits
-
Business License
$200
Owners License
$250
Barber License
$150
Liquor License
$20,000
Legal and accounting fees
-
Prepaid insurance
$4,000
Pre-opening salaries
-
Other
-
Total Location and Admin Expenses
$ 24,600
Opening Inventory
Bar Materials
$ 16,000
Hair Products
$200
Barbershop Materials
$200
Total Inventory
$ 16,400
Advertising and Promotional Expenses
Advertising
$ 1,200
Signage
$1,000
Other/additional categories
-
Total Advertising/Promotional Expenses
$ 2,200
Summary Statement
Sources of Capital
Owners' and other investments
$ 200,000
Bank loans
$300,000
Other loans
-
Total Source of Funds
$ 500,000
Startup Expenses
Buildings/real estate
$ 270,000
Leasehold improvements
-
Capital equipment
$70,000
Location/administration expenses
$24,600
Opening inventory
$16,400
Advertising/promotional expenses
$2,200
Other expenses
-
Contingency fund
-
Working capital
-
Total Startup Expenses
$ 383,200
Important Assumptions
In order to project the first three years of operation for Big Hoss Barbershop and Lounge we had to make
the following assumptions:
Sales
Year 1:
●
●
●
●
●
19,584 Haircuts given
13,536 Drinks sold
2,016 Massage Chair uses
864 Movie/Show plays
4,320 Jukebox plays
Year 2:
●
●
●
●
●
Year 3:
●
●
●
●
●
24,768 Haircuts given
19,584 Drinks sold
3,744 Massage Chair uses
576 Movie/Show plays
5,472 Jukebox plays
28,512 Haircuts given
26,208 Drinks sold
4,896 Massage Chair uses
288 Movie/Show plays
6,048 Jukebox plays
Business Assumptions:
● At least 5 Barbers are employed
● Big Hoss Barbershop is open up to 6 days a week
These numbers are based off of local barber responses, which is further explained in the Market and
Industry Analysis section, and off of the assumption that Big Hoss Barbershop has up to 5 Barbers and
respective chairs.
Projected Cash Flow
Big Hoss Barbershop and Lounge plans to maintain a positively growing cash flow over the next three
years and therefore will be able to cover its expenses within that time period.
Projected Balance Sheet
Balance Sheet
Year 0
Year 1
Year 2
Year 3
Assets
Cash
$116,800
Inventory
Total Current
$116,800
$96,800
$81,800
$86,800
$10,000
$15,000
$20,000
$106,800
$96,800
$106,800
Assets
Long-term Assets
$383,200
Accumulated
Depreciation
$383,200
$368,200
$348,200
($15,000)
($20,000)
($45,000)
Total Long-term
Assets
$383,200
$368,200
$348,200
$303,200
Total Assets
$500,000
$475,000
$445,000
$410,000
$100,000
$50,000
-
-
Long-Term
Liabilities
$200,000
$200,000
$200,000
$170,000
Total Liabilities
$300,000
$250,000
$200,000
$170,000
Paid-in Capital
$200,000
$200,000
$200,000
$200,000
Retained Earnings
-
$25,000
$45,000
$40,000
Total Capital
$200,000
$225,000
$245,000
$240,000
Total Liabilities and
Capital
$500,000
$475,000
$445,000
$410,000
Net Worth
$200,000
$225,000
$245,000
$240,000
Liabilities and
Capital
Current Liabilities
Other Current
Liabilities
Projected Income Statement
Big Hoss
Barbershop
Income Statement
3 Year Projection
Revenue
Year 1
Sales revenue
Total Revenues
Year 1
Year 2
Year 2
Year 3
$445,248
Year 3
$583,776
$704,160
Expenses
Advertising
$2,400
$2,400
$2,400
Commissions
$176,688
$224,496
$265,392
Cost of goods sold
$20,000
$30,000
$40,000
Insurance
$4,000
$4,000
$4,000
Interest expense
$17,000
$14,900
$10,350
Maintenance and
repairs
$5,000
$7,000
$10,000
Office supplies
$200
$200
$200
Salaries and wages
$69,600
$69,600
$69,600
Utilities
$28,800
$28,800
$28,800
$323,688
$381,396
$430,742
Net Income Before
Taxes
$121,560
$202,380
$273,418
Income tax expense
$36,468
$60,714
$82,025
$85,092
$141,666
$191,393
Depreciation
Employee benefits
Furniture and
equipment
Web hosting and
domains
Other
Total Expenses
Earning before Tax
Payroll taxes
Income from
Continuing
Operations
Below-the-Line
Items
Income from
discontinued
operations
Effect of accounting
changes
Extraordinary items
Net Income
Ratio Analysis
Ratio Analysis
Year 0
Total Current Assets
Year 1
Year 2
$116800
$106800
$96800
Long-term assets
$383200
$368200
$348200
Total Assets
$500000
$475000
$445000
Current Liabilities
$100000
$50000
$0
Long-term liabilities
$200000
$200000
$200000
Total Liabilities
$300000
$250000
$200000
Net Worth
$200000
$225000
$245000
Net Income
85092
141666
191393
Sales
445248
583776
704160
Growth Margin
0.2037516171
0.1361618155
Selling, General, and
administrative Expenses
69600
69600
69600
Commissions
176688
224496
265392
Advertising Expenses
2400
2400
2400
Interest Expense
17000
14900
10350
Profit Before Interest and
Taxes
196560
287280
366768
Current
1.168
2.136
Quick
1.168
2.136
Total Debt to Total
Assets
0.6
0.5263157895
0.4494382022
Pre-tax Return on Net
Worth
0.9828
1.2768
1.497012245
Pre-tax Return on Assets
0.39312
0.6048
0.8241977528
0.1911114705
0.2426718467
0.2718032833
1.5
1.111111111
0.8163265306
Percent of Sales
Main Ratios
Additional Ratios
Net Profit Margin
Debt Ratios
Debt to Net Worth
Liquidity Ratios
Net Working Capital
16800
56800
96800
Interest Coverage
11.56235294
19.28053691
35.43652174
Assets to Sales
1.122969671
0.8136682563
0.6319586458
Current Debt/Total
Assets
0.6
0.5263157895
0.4494382022
Sales/Net Worth
2.22624
2.59456
2.874122449
Additional Ratios
As you can see in the chart below, our projected Net Income and Sales Revenue have a strong positive
growth rate.