1.0 Executive Summary
The purpose of this business plan is to secure $150,000 of capital for the development of a barber school based in Houston, Texas, Barber School LLC (“the Company”) was founded by Jeffrey Morrison. The Company will provide a wide range of instruction so that individuals that complete the Company’s course can properly receive their licensure to operate as a barber within the state. The business will generate substantial revenues from tuition fees as well as ongoing income among individuals that are looking to receive a low-cost haircut at the Company’s location.
1.1 Operations
As noted above, the primary revenue Center for the business will come from the ongoing tuition fees that are charged to students that are looking to become licensed barbers. The Company will charge $20,000 for the entirety of the program which will last 14 months. The business will acquire the necessary accreditation from the State of Texas in order to render these services to students. The Company will also assist students with their tuition by helping them apply for academic grants and scholarships that cover specialized vocational educations.
The Company’s second revenue center will come from haircuts that are rendered to the public that are provided to students that are enrolled in the Company’s programs. The business will charge a substantially discounted rate as compared to that of traditional barber shops given the fact that a student will be completing the work. This will produce a highly predictable showing revenue on a daily basis.
The third section of the business plan will further document the operations of the Company.
1.2 Financing
At this time the Company is seeking $150,000 of debt capital to establish the Company’s operations. Mr. Morrison will contribute $25,000 to the venture. It is anticipated that the Company will receive a 10-year loan carrying a 7% interest rate. The funds will be primarily used for the following:
• Location development
• Equipment
• Working capital
If it is financially prudent to do so, the Company would be a strong candidate for a revolving credit facility or a business expansion loan should management decided to establish additional locations within the State of Texas. However, this document assumes that no further capital will be needed during the course of the first three years of operation.
1.3 Mission Statement
The Barber School’s mission is to provide cost effective courses that allow individuals to become licensed barbers.
1.4 Management
Jeffrey Morrison has been a Barber for the past seven years. He has also engaged in instruction for students that are looking to enter this field. Through his experience, he will be able to bring the operations of this business to profitability.
1.5 Sales Forecast
1.6 Expansion Plan
The Company will make ongoing expansions into its marketing infrastructure so that by the second year of operation the business operates at 100% capacity at all times. After the third year of operation, the founder may establish additional Barber Schools that are located at least 25 miles on the initial location.
2.0 Financing
2.1 Registered Name
Barber School LLC. The business is registered as a limited liability company.
2.2 Use of Funds
The $125,000 of debt capital and $25,000 of equity capital will be allocated as follows:
2.3 Management and Investor Equity
Jeffrey Morrison retains 100% ownership interest in the business.
2.4 Exit Strategies
In the event of a business sale, Mr. Morrison will coordinate with a business broker to market the Company to a individual that is looking to get into this field via an acquisition. Historically, Barber schools and specialized vocational schools typically carry a price to earnings multiple of three times the prior year’s income. This event is not expected to occur for a substantial period of time.
3.0 Operations
As discussed in the executive summary the Barber School provide a wide range of educational services that are accredited by the State of Texas. Upon completion, these individuals receive a certificate that indicates that they are fully trained as to all of the best practices within the field of barbering. They will then be able to take the necessary tests in order to receive their licensure from the state. As noted earlier, the business will charge $20,000 for the entirety of the 14-month course. At the onset of operation, management expects to have 20 enrollees. The location will have the ability to provide training for up to 45 people at any given time.
As it relates to providing haircuts to the general public, students that have completed the necessary initial coursework will be able to directly provide these services to the public under the guidance of staff instructors. Typically, the Company will charge $10 per haircut for beer trimming engagement. This will allow students to receive the proper training and experience they need to operate professionally and on their own. For the public, this will provide them with a cost-effective way of receiving proper grooming without incurring an exorbitant fee.
4.0 Market and Industry Analysis
4.1 Economic Analysis
Currently, the economic climate in the United States is strong. Although there were substantial issues regarding inflation as a result of the COVID-19 pandemic this matter has fully abated due to the aggressive and proper policies implemented by the US Federal Reserve. While there may be additional inflation in the future, the Company will continue to generate substantial high margin revenues which will support the operations of the business.
The revenues of the Company are only modestly sensitive to negative changes in the economy. It is a simple fact that people need to get a haircut, and the demand among individuals that have specialized skills such as barbering remained strong in any economic climate. Even during times of economic recession, many individuals pivot their careers and the business will be able to provide ongoing instruction on a cost-effective basis to people within the greater Houston metropolitan area.
4.2 Industry Analysis
There are 1,000 number of barber schools that are in operation with the United States. Each year these businesses generate $400 million of revenue while providing jobs for 15,000 people. One of the nice things about these businesses is that they are relatively immune from continued changes in technology given that this is a personal service business that must be rendered by a human being. This will further contribute to the economic stability of the business over its life.
This is a mature industry and the future growth rate of that will be similar to that of the US economy as a whole. As noted above, even during times of economic recession this type of vocational training remains strong.
4.3 Customer Profile
Among individuals that will enroll in the Company’s program, management has developed the following demographic profile that will be used in tandem with marketing operations:
• Between the ages of 18 to 30
• Lives within 25 miles of the Company’s location
• Will spend $20,000 on becoming a barber
4.4 Competition
The ongoing competition that the business will face within the greater Houston metropolitan area is moderate. Although there are other barber schools in operation, the business will maintain a differentiating factor given that it’ll be less expensive than the competition while also providing a more comprehensive training program that focuses heavily on ongoing hands-on experience. The Company’s ability to provide affordable haircuts that will be rendered by enrolled students will further set their business apart within this market. This will also provide students with the ability to develop an ongoing client base of their own as they complete their educations and receive their licensure to work as a barber.
5.0 Marketing Plan
5.1 Marketing Objectives
• Leverage multiple online marketing strategies to promote the barber school.
• Conduct direct outreach with guidance counselors.
• Use targeted social media for the Company’s website.
5.2 Revenue Forecast
5.3 Marketing Strategies
The Company will use a number of marketing strategies in order to drive enrollment to the Barber School. Most importantly, the business will conduct a substantial degree of direct outreach with high schools within a 25-mile radius of the Company’s location. Among students that are looking to learn a vocation, the business will distribute a substantial amount of sales literature to guidance counselors that can recommend that they enroll with the Barber School in order to receive an accredited education. Throughout the life of the business, this will be the primary way in which the Company generates its enrollment.
The Barber School will also maintain a massive online presence. The business’s website will undergo search engine optimization and specific for the Houston market so that when applicable searches for barbering schools in this market are conducted, the business will appear frequently within the search. The website will feature a substantial amount of information regarding the in-depth programs that are offered and the Company’s ability to provide an accredited education so that people can received their licensure upon completion. Management will have the website listed among numerous directories which will further contribute to the search engine optimization campaigns.
Additionally, the business will maintain a substantial presence among all social media platforms. As almost all young people use social media, the Company will use specialized targeted advertisements among individuals that have recently searched for how to become a barber or specialized vocational construction. This type of advertising will be conducted throughout the life of the business. To complement these operations, the business will also frequently attend job fairs within the greater Houston metropolitan area. Here, the business will rent booths and showcase the cost effective nature of becoming a Barber through the Company’s specialized programs. At these events, the business will distribute brochures that showcase the Company extensive nature of the training offered.
6.0 Organizational Plan
6.1 Organizational Structure
6.2 Organizational Expenditures
7.0 Financial Plan
7.1 Underlying Assumptions
• The business will have an average annual growth rate of 16%.
• Barber School will acquire $150,000 to establish its operations.
7.2 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. This is due to the fact that people are always going to want to become barbers in any economic climate given the stability of this type of profession. Additionally, the Barber School will receive ongoing support from both state based and federally based programs that provide tuition reimbursement and tuition assistance for people becoming barbers and hair stylists.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
