VIP HAIR STUDIO

1
Demographics
2
Advantages
Benton Harbor
St. Joseph

• No immediate competitors
• High female population (54)
• Close to current clientele

• Income level much higher than Benton Harbor
• High percentage of the population in the target
  age group of (25-44)
• High number of college graduates (20.7 compared
  to the national average of 15.9)

3
Disadvantages
Benton Harbor
St. Joseph

• More day spa competition
• Further from current clientele

• Very low income levels
• Many hair salons in area with low prices
• Very high youth population (short-term)
• Very low college graduate percentage

4
Client Survey Interpretations

• Tanning is not desired
• In Benton Harbor, there is a need for more
  massage therapies
• Massages, waxing, and manicures/pedicures have
  the highest demand
• Clients appreciate the professional atmosphere
  of your establishment

5
Competition

• The majority of the beauty salons are low-cost
  and impersonal
• A new day spa would attract clients looking for
  an elegant atmosphere along with personalized
  service
• There are two day spa competitors in St. Joseph
• Benton Harbor has no current day spa competition
• The number of spa locations has doubled every
  four years for the past eight years

6
Sales Forecast

• There were three views forecasted for sales
• Pessimistic
• Realistic
• Optimistic

7
Year 1 Sales

• Pessimistic 30,039.00
• Realistic 57,936.00
• Optimistic 88,371.00
• The reasoning for these numbers is included in
  the report.

8
Year 2 Sales

• Pessimistic 33,891.00
• Realistic 66,291.00
• Optimistic 97,416.00
• The reasoning for these numbers is included in
  the report.

9
Year 3 Sales

• Pessimistic 38,248.00
• Realistic 73,516.00
• Optimistic 107,478.00
• The reasoning for these numbers is included in
  the report.

10
Human Resources

• Future employees will include consist of six
  Full-time and six Part-time staff
• 1-Full Time Licensed Barber
• 1-Full Time Licensed Cosmetologist/ with
  Electrologist Specialist License
• 1-Full Time Licensed Cosmetologist/ with
  Esthetician Specialist License
• 1-Full Time Licensed Cosmetologist/ with
  Manicurist Specialist License
• 1-Full Time Licensed Cosmetologist/ with Hair
  Culturist Specialist License
• 1-Full-Time Massage Therapist
• 3-Part-Time Licensed Cosmetologist/Hair Stylist
• 1-Part-Time Licensed Cosmetologist/Manicurist
• 1-Part-Time Licensed Barber
• 1-Part-Time Massage Therapist

11
Compensation All employees of VIP Hair Studio
and Day Spa will be non-exempt/hourly workers.
Pay will be based on a three pay ranges, low,
middle, and high ranges
Low Middle High Barber 9.72 12.07
14.54 Cosmetologist- Electrologist
/Esthetician/Hair Stylist /Manicurist/Natural
Hair Culturist 8.55 10.25 12.59 Massage
Therapist 19.83 23.80 27.66 The
following is VIP Hair Studio and Day Spa pays
structure for full-time employees Low Middle Hi
gh Barber 20,212 annually 25,107
annually 30,236 annually 9.72 12.07
14.54 Cosmetologist- Electrologist
/Esthetician/Hair Stylist/Manicurist/Natural Hair
Culturist 17,786 annually 21,325
annually 26,129 annually 8.55 10.25
12.59 Massage Therapist 40,731
annually 49,509 annually 57,527
annually 19.83 23.80 27.66 TOTAL ANNUAL
PAYROLL ESTIMATE 223,600
12
Payroll and Benefits

• Associated Taxes
• Overtime Pay
• Payroll Services
• Health Insurance
• Vacation

13
Advertising

• Direct mail
• The Yellow Pages
• News Paper
• Website

14
Building and Location
Suggested amount of square footage needed
Main Room for Hair 800-1,000 sq ft 2 Massage
Rooms 240 sq ft 1 Main Nail and Makeup
Room 300-500 sq ft Mens Hair and Nail
Room 400-600 sq ft Lobby 200-400 sq ft 2
Tanning Rooms 160 sq ft Locker
Rooms/Bathrooms 200-400 sq ft Kitchen/Break
room 150-250 sq ft 2-3 Offices 250-300 sq
ft Total Square Footage Needed 2,900-4,050 sq ft
15
Suggested Option Leasing

• Available location at Orchards Park Shopping
  Center located at 1 Mall Drive, Benton Harbor,
  Michigan 49022
• Located between Lowes and Meijers off of exit
  29 on I-94
• Houses the Secretary of State which at times has
  generated over 800 visitors a day
• Plenty of available parking

16
Suggested Option Leasing

• Price of 15 per square foot
• 45,000 annual for a 3,000 sq ft space
• 3,750 a month for a 3,000 sq ft space
• Contact Earl Misch at 269-876-0715 or Loren
  Gerber at 269-429-8001
• Listing ID 2412812

17
Hours of Operation

• The spa should be open late at least one night a
  week
• To meet client needs it would be more logical to
  have hours from 10-6 instead of 9-5
• Suggested hours of operation
• Monday 10-6
• Tuesday 10-6
• Wednesday 10-8
• Thursday 10-6
• Friday 10-6
• Saturday 10-3

18
Equipment

• Miscellaneous Expense of 20,000 for equipment
  not accounted for
• CCI Beauty
• American Salon and Spa Equipment
• The Beauty Book

19
Equipment Prices

• American Salon and Beauty Equipment the total was
  14,617.25
• CCI Beauty the total was 14,870
• The Beauty Book total was 15,645.75
• Tanning Bed Pricing average was 3,865 from three
  resources
• Washer and Dryer average 810 from three

20
Equipment List

• Lockers average is 1,116
• Desks average is 1,633
• Refrigerator average is 795.30

21
Laws and Regulations

• Building Standards
• Minimum Equipment and Supplies
• Disinfecting Instruments
• Cosmetics
• Personal Health and Cleanliness
• Employee Certification

22
Financials

• Three years of forecasting
• After year three, with the current plans the day
  spa could be over 400,000 in debt
• Financial Recommendations
• Hire less employees
• The numbers show the payroll to be over 380 of
  the income in year 1 alone
• Rent spaces in the spa instead of paying salaries

The basis for these recommendations can be found
in the Financials section of the report
23
Recommendations

• Do not offer tanning services
• Start with six employees
• Lease
• Move the business to Saint Joseph
• Pay smaller wages

24
Limitations

• Surveys
• Location and proximity to Benton Harbor
• Sales forecast and financial assumptions