Hairdressing equipment both fixed and manual is required along with consumables stock. Product supplier will arrange for short term credit against orders if an exclusive is agreed, and stock will be offered for customer purchases. This will be more a convenience than anticipate profit opportunity although the markup will permit a 50% gross margin on sales.
The customer have each saved $5,000 for the venture, Leigh Wilson’s fiancé is investing $3,000 as a silent partner for a total cash investment of $13,000. A $5,000 bank overdraft facility is needed to support negative cash flow during the first 6 months of operation. The overdraft may be secured by the purchased equipment (47% of value) and cash flow access. (Personal guarantees will be provided including the silent partner). Each operator partner will be paid, or credited, a wage of $20,000 per annum on a monthly basis. This is less than wages at the Elegance Salon (exclusive of tips) but the longer term rewards are significantly greater.
Given the good location, experience and qualifications of the partners, the business prospects are sound. At the end of three years operation, all external loans will have been repaid, and the cash accumulation will permit achievement of the objective of expansion to provide each partner with a salon to manage.
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The JANLEE STYLES Salon recommended pricelist:
Shampoo & set 9.00
Shampoo & Blow Wave 10.00
Shampoo & Style Cut 19.50
Hair Cuts from 10.00
Style Cuts from 11.00
Children’s Haircuts from 6.00
High School Cuts from 8.00
