A small shop adjoining the arcade has become vacant and can be leased for $150 per week on a three year plus three year extension agreement. Rent review will be required if the extension is taken. The shop is virtually empty and will need fittings to make it into a salon; satisfactory electrical and water (hot and cold) services are installed.
Public rest room facilities are available in the arcade. The shop area will permit a double sink setup for hair washing, four chairs for service a small walled, separate room for stock and office making as well as a waiting area with two chairs and a two seat lounge plus magazine table. Plot plants will be used as area separators and add a feeling of comfort. Coffee will be offered to customers.
Based on three year of salon experience and college instruction, it can be conservatively estimated that each operator / partner will have at least 6 customers per day –this is minimum figure for prudent planning. It is expected that an average customer bill will be $20 – 25 given that prices in the area must be lower than in city shops such as the Elegance Salon where the average bill is approximately $30 – 35. Based on a minimum of 12 customers per day spending $20 each, monthly revenue would be at least $5760 leading to a minimum annual gross of approximately $70,000. Consumables used in hairdressing constitute approximately 15% of sales resulting in an 85% Net Income.
If overhead costs are carefully managed the Net Profit for a business can include a reasonable wage for the owner operator with an opportunity to build a reputation permitting expansion. The later point is an objective of the partner.
