Executive Summary

Trend Unisex Saloon is a full-service beauty salon dedicated to consistently providing

high customer satisfaction by rendering excellent service, quality products, and
furnishing an enjoyable atmosphere at an acceptable price/value relationship. We will
also maintain a friendly, fair, and creative work environment, which respects diversity,
ideas, and hard work.

Our Mission: To supply services and products that enhance our clients' physical
appearance and mental relaxation.

Our Motto: "The Trend Begins Here!"

The timing is right for starting this new venture. Patiently searching for six months
for the perfect location, one was finally found. The demand from the owner's clients, as
well as the ambitions of the owner to one day start her own salon, and the procurement of
highly professional and qualified beauticians to support the salon, has made this business
one of great potential.
The owner, has worked in a prestigious, upscale salon in Jos, Plateau State for the
past two years. She has created a large client following through hard work and
dedication. She and her talented team of beauticians, has what it takes to make this
venture an extremely successful one. We expect our growing reputation to lead to new
clients and beauticians to support our anticipated growth.
To achieve our objectives, Trend Unisex Saloon is seeking additional loan
financing. This loan will be paid from the cash flow from the business, and will be
collateralized by the assets of the company, and backed by the character, experience, and
personal guarantees of the owners.
Company Summary
Trend Unisex Saloon will, upon commencement of operations, sell a wide range of
beauty services and products. We will provide quality hair, nail, and skin services, along
with top lines of beauty products. What will set Trend Unisex Saloon apart from the
competition is our commitment to providing all of these services in one convenient
location.
The salon will be located in a retail strip mall at Plateau state polytechnic. The
location is strategically situated on one of the busiest tertiary institutions. It is a high-
profile area, with easy access from all parts of town.
Start-up Summary
After spending several months searching for a salon to purchase, the owners
decided to start a salon from the ground up. The start-up capital will be used for the
design and equipment of the salon.
Salon equipment will cost about N540,000. The owner will invest N10,000 for
cash-on-hand at starting date.
Start-up Funding
Start-up Expenses to Fund N36,340
Start-up Assets to Fund N1,212,000
Total Funding Required N1,248,340
Assets
Non-cash Assets from Start-up 1,202,000
Cash Requirements from Start-up 10,000
Additional Cash Raised 0
Cash Balance on Starting Date 10,000
Total Assets 1,212,000
Liabilities and Capital
Liabilities
Current Borrowing 0
Long-term Liabilities 1,238,340
Accounts Payable (Outstanding Bills) 0
Other Current Liabilities (interest-free) 0
Total Liabilities 1,238,340
Capital

Planned Investment
Owner 10,000
Investor 0
Additional Investment Requirement 0
Total Planned Investment 10,000
Loss at Start-up (Start-up Expenses) (36,340)
Total Capital (26,340)
Total Capital and Liabilities 1,212,000
Total Funding 1,248,340

Products and Services

Trend Unisex Saloon is considered an upscale full-service beauty salon. We will offer a
wide range of services that include:

Hair
- Cuts
- Relaxers
- Perms
- Colors
- Shampoo
- Conditioning
- Curling
- Reconstructing
- Weaving
- waving.
Nails
- Manicures
- Pedicures
- Polish
- Sculptured nails

Skin Care
- Body waxing
- Massage

Strategy and Implementation Summary

Skill at what we do, good customer service, and creating a pleasant environment for our
customers will be important to implementing our business plan.
Competitive Edge

Trend Unisex Saloon wants to set itself apart from other beauty salons that may offer
only one or two types of services. Having come from such a salon, the owner realized,
from talking with her clients, that they desire all of the services that we are proposing, but
they remain frustrated because they must get their hair done at one place, and nails done
at another. Although the focus of Trend Unisex Saloon is hair services, we do wish to
offer our clients the convenience of these other services in one location.

There are a number of salons like ours, but they are mainly in the very high-income parts
of Jos and surrounding areas. We do not intend to compete with these so called "Day
Spas." We wish to offer a middle ground for those clients who can't quite afford those
high-end luxury salons.

Our business atmosphere will be a relaxing one where clients can kick back and be
pampered. Soft drinks will be offered to clients as they enter for service. Televisions will
be located in the waiting and hair-drying area.

Marketing Strategy
Our marketing strategy is a simple one: satisfied clients are our best marketing tool.
When a client leaves our business with a new look, he or she is broadcasting our name
and quality to the public. Most of our clients will be referrals from existing clients.

No major advertising campaigns are anticipated. Our research has shown that word of
mouth is the best advertising for this type of business. We will, however, run specials
throughout the week. We will also ask clients for referrals, and reward them with
discounted or free services depending on the number of clients they bring. We will also
offer discounts to the new clients who have been referred.
Sales Forecast
We anticipate the highest peak on the months of November and December in our sales
forecast, due to the holiday seasons. In November, there is Ramadan, and for non-muslim
Nigerians, it means vacation time. Then in December, we anticipate more tourists coming
into Jos; this explains the jumped of sales in these last two months of the year.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Owner 992,000 1,140,800 1,313,920
Stylist 992,000 1,140,800 1,311,920
Barber 336,000 386,400 444,360
Nails and massage 360,000 400,000 440,000
Product sales 192,000 200,000 220,000
Total Sales 2,872,000 3,268,000 3,730,200
Direct Cost of Sales Year 1 Year 2 Year 3
Product Costs 86,400 86,000 88,000
Subtotal Direct Cost of Sales 86,400 86,000 88,000

Management Summary
Trend Unisex Saloon will be organized and managed in a creative and innovative
fashion to generate very high levels of customer satisfaction, and to create a working
climate conducive to a high degree of personal development and economic satisfaction
for employees.
Training classes to help improve employee product knowledge and skills will be
conducted on a regular basis. As the business grows, the company will consider offering
an employee benefit package to include health and vacation benefits for everyone.
Personnel Plan
The personnel plan calls for a receptionist who will greet customers and receive
payments for services and products. There will be five hair stylists, one barber, one nail
technician, one facialist, and a massage therapist. Everyone but the receptionist will be
contract workers, and will be paid a sliding commission scale based on the amount of
revenue created. Future plans include the hiring of a shampoo technician as the business
expands.
In the first year, assumptions are that there will only be three hair stylists, a barber,
and part time nail, facial, and massage technician until the business can build a reputation
that will attract others to work there.

Personnel Plan
Year 1 Year 2 Year 3
Owner (Stylist) 480,000 500,000 520,000
Receptionist 288,000 302,400 317,520
Shampoo Tech 160,000 248,000 260,000
Total People 3 3 3
Total Payroll 928,000 1,050,400 1,097,520

Financial Plan
Our goal is to be a profitable business beginning in the first month. The business
will not have to wait long for clients to learn about it since the stylists will already have
an existing client base.
To assure the start-up funds lender that the owners are financially stable, a
personal financial statement is enclosed illustrating other sources of income that include
interest and dividend income from investments (56,800), salary income (593,160), and
commission income (300,000).
Important Assumptions
The financials that are enclosed have a number of assumptions:
Revenues will grow at an annual rate of 15%, increasing 20% in November and
December due to a historical jump in revenues at this time of year. We anticipate this
increase to stay steady throughout the following year to account for the normal flow of
new clients coming into the salon. Estimates for sales revenue and growth are
intentionally low, while anticipated expenses are exaggerated to the high side to illustrate
a worst-case scenario.
We did not use cost of goods sold in our calculations of net service sales, but
included all related recurring expenses, such as payroll and supplies, in the operating
expenses area of the profit and loss table. The only direct costs in the sales forecast are
for projected product sales.
Product sales are a minimal part of our market. We are not quite sure how much
revenue will be derived from products, so we took a low-ball approach and estimated
sales of N16,000 a month.
Also in the sales projections table are services such as nails and massages. We are
not quite sure how much revenue these two services will generate. We are certain that in
time these services will be a large part of our revenue, but to err on the conservative side,
we estimate revenues from these services to be only N30,000 a month for the first year.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10% 10% 10%
Long-Term Interest Rate 10% 10% 10%
Tax Rate 30% 30% 30%
Other 0 0 0

Projected Cash Flow

We expect to manage cash flow over the next three years simply by the growth of the
cash flow of the business. The business will generate more than enough cash flow to
cover all of its expenses.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales 3,328,000 4,220,440 4,799,500
Subtotal Cash from Operations 3,328,000 4,220,440 4,799,500
Subtotal Cash Received 3,328,000 4,220,440 4,799,500
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending 928,000 1,050,400 1,097,520
Bill Payments 1,990,800 2,574,600 2,945,700
Subtotal Spent on Operations 2,918,800 3,625,000 4,043,220
Additional Cash Spent
Long-term Liabilities Principal 240,000 240,000 240,000
Repayment
Subtotal Cash Spent 3,158,800 3,865,000 4,283,220
Net Cash Flow 169,200 355,440 516,280
Cash Balance 179,200 534,660 1,050,940

Break-even Analysis

The break-even analysis shows that Trend Unisex Saloon has a good balance of fixed
costs and sufficient sales strength to remain healthy. This calculation is focused on
service sales, and excludes costs related to product sales. Our conservative forecast shows
the salon just passing the break-even point throughout most of the first year, but we
expect actual sales to be higher.

Break-even Analysis

Monthly Revenue Break-even N259,900

Assumptions:
Average Percent Variable Cost 3%
Estimated Monthly Fixed Cost N253,140

Projected Profit and Loss

The following table shows our very conservative profit and loss projections for the next
three years. The table includes the payments for all independently contracted stylists and
technicians, as well for all regularly occurring supply expenses associated with service
sales.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales 3,328,000 4,220,440 4,799,500
Direct Cost of Sales 86,400 86,000 88,000
Total Cost of Sales 86,400 86,000 88,000
Gross Margin 3,241,600 4,134,440 4,711,500
Gross Margin % 97.40% 97.96% 98.17%

Expenses
Payroll 928,000 1,050,400 1,097,520
Marketing/Promotion 456,000 480,000 520,000
Depreciation 162,920 162,920 162,920
Rent 454,800 454,800 454,800
Utilities 84,000 84,000 84,000
Insurance 24,000 24,000 24,000
Independently contracted stylists 808,000 1,100,000 1,380,000
Supplies 120,000 120,000 120,000
Total Operating Expenses 3,037,720 3,476,120 3,843,240
Profit Before Interest and Taxes 203,880 658,320 868,260
Interest Expense 110,840 87,840 63,840
Taxes Incurred 27,920 171,140 241,320
Net Profit 65,140 399,340 563,100
Net Profit/Sales 1.96% 9.46% 11.73%

Balance Sheet

As shown in the balance sheet, we expect a healthy growth in net worth.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash 179,200 534,660 1,050,940
Other Current Assets 12,000 12,000 12,000
Total Current Assets 191,200 546,660 1,062,940
Long-term Assets
Long-term Assets 1,190,000 1,190,000 1,190,000
Accumulated Depreciation 162,920 325,840 488,760
Total Long-term Assets 1,027,080 864,160 701,240
Total Assets 1,218,280 1,410,820 1,764,180
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable 181,140 214,340 244,600
Subtotal Current Liabilities 181,140 214,340 244,600
Long-term Liabilities 998,340 758,340 518,340
Total Liabilities 1,179,480 972,680 762,940
Paid-in Capital 10,000 10,000 10,000
Retained Earnings (36,340) 28,800 428,140
Earnings 65,140 399,340 563,100
Total Capital 38,800 438,140 1,001,240
Total Liabilities and Capital 1,218,280 1,410,820 1,764,180
Net Worth 38,800 438,140 1,001,240