1.0 Executive Summary
The purpose of this business plan is to showcase ongoing development of a barber shop based in Biloxi, Mississippi. Matt’s Hair Haven LLC (“the Company”) was founded this year by Matthew Deutsch. Management will establish these operations over the next six months once the capital has been secured in the buildout of the barber shop has been completed. Revenue generating operations are expected to commence in the fourth quarter of this year.
Operations
The primary revenue center for Matt’s Hair Haven will come from providing a wide range of hair and beard grooming services to the general public. Matthew Deutsch will directly render barbering services while also having a number of independently contracted barbers provide their services. They will receive a fee equal to 50% of their billings.
The Company’s secondary revenue center will come from product sales encompassing hair care products, beard care products, scissors, trimmers, and related goods for personal grooming.
The third section of this barber shop business plan will further document the operations of the business.
The Financing
The Company is currently seeking a $50,000 loan in order to establish operations. This business plan assumes that the Company will receive a 10-year loan carrying an 8% interest rate. Matthew Deutsch will contribute $10,000 towards the development of Matt’s Hair Haven. The funds will be primarily used for the following:
• Location development in Biloxi
• Barber shop equipment
• Working capital
Moving forward, in the event that additional barbershop locations are to be developed then Matthew Deutsch may seek additional financing to establish secondary locations. However, this event is not expected to occur within the first five years of operation.
The Future
One of the most important aspects of the Company’s growth plan is to develop a repeat customer base that will use Matt’s Hair Haven for all of their personal grooming needs. This will be accomplished through ever expanding marketing campaigns throughout the greater Biloxi market.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $10,000 of equity capital and $50,000 of debt capital will be used as follows:
2.2 Management and Investor Equity
Matthew Deutsch is a 100% owner of Matt’s Hair Haven LLC.
2.3 Exit Strategies
In all likeliness, in the event that Mr. Deutsch wishes who would retire then he will work with the Company’s independently contracted barbers to acquire the business from him. A structured buyout would occur over a three-to-five-year timeframe. There is also the possibility that the business could be outright sold to an individual barber that is seeking to acquire an established business within the target market.
3.0 Operations
As noted in the executive summary, Matt’s Hair Haven will be actively involved in providing exceptional haircuts from its easy to reach location in Biloxi. The location will feature for barber chairs so that Mr. Deutsch as well as retained barbers can render their services.
In order to provide an exceptional experience for customers, the locational feature a number of TVs as well as complementary beverages in order to create an ongoing customer base. The social aspect of the Company’s operations will be a major driver in achieving this goal.
The business will carry a wide range of personal grooming products specific for hair and beard care. These products will be sourced across the number of manufacturers. This will be a more modest income center for the business with contribution margin of 70% on each product sale.
4.0 Overview of the Organization
4.1 Registered Name
Matt’s Hair Haven LLC. The business is registered as a limited liability company in the State of Mississippi.
4.2 Commencement of Operations
Revenue generating operations will start in the fourth quarter.
4.3 Mission Statement
To provide exceptional haircut to an affordable rate to the Biloxi general public
4.4 Vision Statement
To become a widely respected barbershop within this market that operates as a grooming and social institution.
4.5 Organizational Objectives
• During the development period, work with barbers that will render their services at Matt’s Hair Haven.
• Implement a number of marketing strategies that will create awareness during the development period and through the grand opening.
• Adhere to all laws and regulations regarding barbering services.
• Maintain strong fiscal control so that the business can remain profitable at all times.
• Implement a number of promotions that will drive people to the location during the grand opening.
• Establish referral relationships with other hair care professionals in the Biloxi market.
• Provide appropriate discounts for members of the military, young people, and senior citizens.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the barber shop business plan will detail the industry, the current economic climate, the demographics, and the ongoing competition that the business will face moving forward.
At this time, the economic climate with any United States is moderate. Due to changing trade policies, there has been a higher degree of inflation than what was initially anticipated by the US Federal Reserve. This has caused a number of operating costs for business to increase over the past twelve months. It should be noted that the government is taking appropriate measures to keep the rate of inflation in check while t also encouraging ongoing economic growth.
However, issues with the economy will only have a very modest impact on the business’ ability to generate revenue remain profitable. This is simply due to the fact that people require professional services in order to receive a haircut. The Company will generate substantial contribution margins on all revenue centers that will fully support the operations of Matt’s Hair Haven in the coming years.
5.2 Industry Analysis
There are 160,000 businesses that operate in a barbershop capacity within the United States. These businesses generate $7 billion revenue while providing employment for 175,000 people. It should be noted that most people that work within this industry are considered to be independent contractors.
One of the popular trends with this industry is to create barber shops that operate as a social center within their respective market. As noted in the third section of this document, Matt’s Hair Haven will have a number of TVs, couches, and complementary beverages. That will encourage people to stay at the facility and socialize. This will be instrumental in developing an ongoing customer base.
5.3 Customer Profile
Through the course of marketing, the following demographic profile will be applied:
• Average household income of $50,000
• Will spend $20 on a haircut
• Works or lives within 7 miles of the Matt’s Hair Haven location
5.4 Competitive Analysis
The ongoing competition that Matt’s Hair Haven will face as a establishes operations in Biloxi is moderate. In any market, there are always a number of barber shops and hair salons. As has been one of these throughout this document, the Company will maintain a differentiating factor as a business is striving to become not only a barber shop but a social center within Biloxi.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Matt’s Hair Haven will have sustainable operations as a result of the following:
• The business will able to remain profitable even during times of economic recession.
• Limited competition among barber shops that operating a similar capacity to Matt’s Hair Haven.
• And experienced Owner, Matthew Deutsch, that has more than 15 years of experience of a professional barber.
• Matthew Deutsch will also render barbering services which will increase the profitability and economic stability of the business.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued onboarding of independently contracted barbers that will render their services at the location.
• Potential development of a second barbershop location within Southern Mississippi.
• Integration of services that complement the Company’s primary barbering operations.
7.0 Marketing Plan
7.1 Marketing Objectives
• Engage in a wide-ranging pre-launch marketing campaign in order to create brand name awareness during the development period.
• Develop a proprietary website that showcases all aspect of operations.
• Maintaining a significant presence on also social media pages.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• Revenue will reach $396,000 in the first year.
• The business will have gross profits of $208,000.
Year 2
• In Year 2, revenue will reach $424,000.
• The business will have its revenue increase by 7%.
Years 3-5
• In Year 5, total income will reach $520,000.
• The business will generate gross profits of $273,000.
7.4 Marketing Strategies
Management will use numerous strategies in order to create significant awareness for Matt’s Hair Haven during the development period as well as through the grand opening. Most importantly, the business will distribute a number of mailed advertisements within a 5-mile radius of the Company’s location one month prior to opening. These mailed advertisements will feature discounts on an individual’s first haircut. It will also be indicated that senior citizens and members of the military will also receive a significant discount. This will lead to rapid onboarding of the customer base at the onset of operation operations.
In regards to the Company’s website, this platform will showcase the location, video walk-through of the facilities, an interview with Mr. Deutsch, and showcasing all aspects of the barbering services offered. This website will undergo substantial search engine optimization so that when searches for barber shops within the Biloxi market are conducted, the website will appear frequently within the search.
In regards to social media, the business will maintain pages on Facebook, Instagram, X, TikTok, and YouTube. Ongoing content will be uploaded in order to an increase engagement with current and potential customers.
The business will also establish ongoing relationships with real estate brokers and agents that can provide referrals to people that have recently moved to the Biloxi area.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• Matt’s Hair Haven will have a compounded annual growth rate of 7% per year.
• Matthew Deutsch will invest $10,000 to establish the operation of the business.
• The Company will acquire a $50,000 business loan.
9.2 Financial Highlights
• Aggregately, the company will achieve contribution margins to 50% on all barbering services.
• Product sales will generate contribution margins of 70%.
9.3 Sensitivity Analysis
Even during a highly severe economic recession, the demand for barbering services tends to remain incredibly strong. These services can only be rendered by a professional and the cost of receiving a haircut at Matt’s Hair Haven will be affordable to the Biloxi public, even during challenging economic climates.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
