Comprehensive Business Plan: Nail Salon Financial Analysis Report

This business plan outlines the essential components for establishing a nail salon, encompassing a thorough market analysis, risk assessment, and funding strategies. It delves into the specifics of fixed and variable costs, alongside detailed budget profit forecasts, and cash flow projections, including break-even points and safety margins. Key performance indicators (KPIs) are established to evaluate business progress, while recommendations are provided to enhance the salon's operational efficiency and profitability. The plan covers the salon's unique selling proposition, which includes specialized nail services, and the importance of skilled employees. The financial data includes income projections, cost breakdowns, and projected profit margins, with a focus on financial sustainability. This business plan serves as a roadmap for the nail salon's development, highlighting its competitive advantages and strategies for long-term success.

Business plan of a Nail
Salon

Table of Contents
Business plan of a Nail Salon..........................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Summary of business idea along with analyses of its risk and source of funding.......................3
Key fixed and variable cost.........................................................................................................4
Budget profit forecasting.............................................................................................................5
Budgeted cash flow......................................................................................................................6
Breakeven point and margin of safety.........................................................................................7
Key performance indicators.........................................................................................................8
Recommendations............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The business plan plays important role for the success of company and business idea
establishment. This will require proper examination of feasibility analysis so that each business
idea can sustain in the long period of time. This is one type of written document plan that leads
to associate with in detail describe overall business start-up idea. This will define proper
optimum objective in order to achieve goal of business. This will act as roadmap so that business
plan can manage overall essential department in respect of marketing, financial as well as
operational (Boone, 2019). The business plan are layout of essential document so that they can
attract most of the investment so that company gets proper gateway to record. This will also
facilitate good way of company so that it will target on forward themselves in goal completion.
The chosen business plan in this report is Nail Salon. This is ladies salon where nails are done in
more professionalism way. The report aim towards summary of business idea, that analysis risk
of business along with the source of funding of business. The report discuss fixed and variable
cost along with the budget profit forecast along with breakeven point and safety margin of
company. The report combines KPI to evaluate business process in achieving goal.
MAIN BODY
Summary of business idea along with analyses of its risk and source of funding
Before implementation of business idea there must be proper structure and layout must be
develop so that whole idea of the business leads to cover and increase chance of successful
business plan execution (Hopp, 2018). This will cover all aspect such as analysis of risk
assessment or finding appropriate source of funding so that proper execution of the business will
remain more sustainable in competitive market. Here in this report the business idea has been
taken about starting a Nail Salon that is specialised for the ladies and services included about nail
done in more attractive and professional way. This salon of nail is introduced itself by its unique
selling proposition from other Salon as it deliver more unique and creative concept that rarely
anyone have in the marketplace. The location of this nail salon must be established in most
suitable location so that they get more chance to attract more consumer and profitability such as

in Bucharest which capital of Romania. This is nice and preferable location majorly locate in the
centre of the city. This is totally owned by entrepreneurship business of Voicu Lrina. There is
great scope of location that is associated with same services from the past year. That is why nail
salon has great opportunity to attract more loyal and creative consumer towards business plan.
This will stand out in great quality from its competitors. Here the entrepreneur Voicu Lrina is
mainly famous for its technician work as well planning this business opportunity while
introducing new salon with unique concept.
The entrepreneur is very talented and famous in its own working in this particular field
and analysis of risk that is associated with this business plan came across with its competitors
(Hutchinson, 2017). That is why major risk is associated with its competitors as they has to be
more prepared while facing high level of competition as they has deal with more high quality of
product and services so that they can satisfy large number of client that wish for more extensive
practice. This practical service is learned by the entrepreneur from the international trainer. The
whole business plan will executed after its completion and whole team has been selected that
deliver proper professional services. While selecting proper skilled employee they schedule
interview through suitable evidence so that business plan will take all expert hiring team that has
greater ability to more revenue of business and deliver more satisfies services to attract more
consumer base (Katz, 2018). The business plan of nail salon will likely to grow after some times
with growing passing years. For day to day expense and operation proper funding is required for
this business. The main source of funding involve retained earnings, debt capital and equity.
Here entrepreneur use retain earning from the source of business to enlarge and provide its
dividend to its shareholder. Another source is business may raise fund in respect of borrowing
overall debt capital from debt security such as bank or public.
Key fixed and variable cost
Here are some list of fixed and variable cost that is associated in operating and executing
business plan (Lämmle, 2020). In starting if the business it is expected that it has fairly accurate
864 regular client per month and 10.368 customers per year, on the other hand income is
generated approx 86.400 RON for each month as well as 1.036.800 RON for each year.
Price list:
 Nails structure with gel four-sided figure and almond outline cover 150 RON
 Nails structure with gel immense outline cover 200 RON

 Nail’s safeguarding cover 100 RON
 Work of art nails cover 10-40 RON/for each nail.
 Manicure with semi permanent nail art + waterless manicure cover 100 RON
 Pedicure with semi permanent nail sparkle cover 80 RON
Costs
Opening set-up costs – The cost of equip the site and organize interior design up to 200.000
RON.
Nail’s products – To construction manicures business need gels, files, nail prep, finish gel,
work of art gel, brushes, cuticle equipment etc. that come under cost approx 20.000 RON
for each year (Mariani, 2019).
Electricity bills – Cost of 1.200 RON for each year.
Telephone/Internet bills – Cost of 200 RON for each month ,2.400 for each year.
Advertising- Cost of 100 RON every year form company website itself, 1.200 RON for
every year.
Salary- Skilled individual employee salary estimated of 30.000 for each yea (Robertson,
2021). The nail salon have 6 employees that will costs approx for the wages 180.000 RON
for each year.
Budget profit forecasting
£ £
Income from sales 300,000
Less variable costs:
Materials ( 40,000)
Staff costs ( 14,000)
Electricity ( 20,000)
Advertising ( 3,500)
Telephone ( 1,800)
(79,300)
Contribution 220,700
Less fixed costs:
Staff costs ( 76,000)
Electricity ( 4,000)

Administration ( 5,500)
Rent ( 16,000)
Bank interest ( 1,500)
Business Insurance ( 3,000)
Telephone ( 600)
Depreciation ( 20,000)
(126,600)
Profit 94,100
Notes:
The nail salon is accepted to formulate a earnings or profit of £94,100 on sales of £300,000, a
net profit of 31.4%. The contribution to sales relation is 73.6%.
Budgeted cash flow
£000s
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Inflows:
Sales 10 16 20 24 30 32 36 36 36 30 20
Outflows:
Initial set up costs 60.0
Materials 1.0 1.6 2.0 2.4 3.0 3.2 3.6 3.6 3.6 3.0 2.0 1.0
Rent 3.75 3.75 3.75 3.75
Electricity 8.75 8.75 8.75 8.75
Staff costs 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5
Bank interest 0.1250.125 0.125 0.125 0.125 0.125 0.125 0.125 0.125 0.125
0.1250.125
Advertising 2.5
Business Ins 3.0

Administration 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54
0.54 0.54
Telephone 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20
0.20 0.20
Total outflows 73.1 13.0 19.1 17.0 11.4 20.3 15.7 12.0 20.7 15.1 10.4
18.1
Net cash flow (73.1) (3.0) (3.1) 3.0 12.6 9.7 16.3 24.0 15.3 20.9 19.6
1.9
Bal b/fwd 100 26.9 23.9 20.8 23.8 36.4 46.1 62.4 86.4 101.7
122.6 142.2
Bal c/fwd 26.9 23.9 20.8 23.8 36.4 46.1 62.4 86.4 101.7 122.6
142.2 144.1
Breakeven point and margin of safety
The nail salon will break even when they attain sales approx 8,607 item that near about
£172,140 in sales worth (Roche, 2018). The margin of safety in respect of nail salon cover
43.6% that way sales can drop by up to 43.6% of the financial plan point previous to it will
create a failure or loss. It will lead towards strong margin of safety.
Calculation of break even point:
Total fixed costs £126,600
Contribution £220,700
Number of units sold 15,000
Contribution per unit £220,700 / 15000 = £14.71
Break even units £126,600 / 14.71 = 8,607
Break even point in
Sales value 8,607 x £20 = £172,140

Margin of safety: Budgeted output less BEP
= 15,000 - 8,607 = 6,393
= 6,393 / 15,000 = 42.6%
Key performance indicators
Performance of the nail salon will be observed by means of the subsequent KPIs:
Financial
Measure Target
 Enlargement in sales profits 15% increase year on year
 Decrease costs 10% annual reduction in costs
 Progress profit margin 35% by end of next year
Customer
Measure Target
 client acquisition 20 new clients for each month
 client satisfaction 85% rate item for consumption as “good”
 client loyalty 20% buy > 1 item for consumption
Inner processes
Measure Target
 Decrease item for consumption cycle time Decrease cycle days to 5
 Progress item for consumption quality Decrease rejects to <1 per 100
Learning and expansion
Measure Target

 Progress staff self-confidence Decrease absenteeism to <5%
 Enlarge range of stuff > 2 new products per year
These measures have been chosen because this will define clear picture of key performance
indicators as this will refers as set quantifiable measurement that leads towards nail salon long
period of actual performance measurement (Tipu, 2019). This will determine clear view of
strategic, financial as well as operational achievement that leads to compare business plan in
significant way. By monitoring key performance indicator this is mentioned above about its
learning and expansion, inner processes, customer, financial. The performance of the company is
very impressive and enough strong position to compete with its competitors in terms of revenue
and profitability (Voronetskaya, 2019). The staff are not that much capable to attract more
clients towards business of nail salon so they need to be focus upon training and development of
their worker so that they can increase their client loyalty as well as satisfaction.
Recommendations
The actual performance of nail salon is not going on the right track by measuring the key
performance tool as the employee are not much confident so it is highly recommended that
company must focus upon executing educational programme to trained the skill of their
employee. Apart from this company need to work upon its product and service offerings through
introducing more unification so that each client gets attached with company for long period of
time. This will aids in improving its consumer experience along with break even point. The
company must plan with optimum future along with externalities in mind. They must adopted
globalised vision to understand consumer preference trend and then redesign its business model
as per it target audience.
The nail salon must keep on monitoring or observing its actual performance on the basis of
period wise. The company must focus upon appointing right employee so that this will
integrated towards the proper strategy with the effective operation. This will company needs and
culture of their client so that they improve its performance at the greater level while combined all
strategy in favour of company. This will determine all task must be determine by setting actual
goal and setting to remove all types of complexities that affect business performance. While

prioritising goal and leads to pursuing with full form of certainty and reduce the level of
competition in their sector. This will turn around as real success outcome by improving their
process model.
CONCLUSION
From the above report it has been concluded that proper and appropriate business plan is
most essential for the successful expansion of the business plan while sustainable goal for long
term. That is why proper plan budget must be examined in advance so that whole scenario will
be directed towards increasing more revenue and profit. The key performance indicators plays
major role as this will determine actual performance of company in greater context. This will
help in improving actual performance and enhance rank order from its competitors. The break
even analysis as well as margin of safety determine firm revenue and price of asset. This one of
the greatest financial tool that measure overall financial performance of company.

REFERENCES
Books and Journals
Boone, L.E., Kurtz, D.L. and Berston, S., 2019. Contemporary business. John Wiley & Sons.
Gottlieb, M., 2017. Open for business. Professional Beauty, (Jul/Aug 2017), pp.134-135.
Hopp, C. and Greene, F.J., 2018. In pursuit of time: Business plan sequencing, duration and
intraentrainment effects on new venture viability. Journal of Management Studies, 55(2), pp.320-
351.
Hutchinson, C.E., 2017. Engineering Entrepreneurship, from Idea to Business Plan. Technology
and Innovation, 19(1), p.451.
Katz, J.A. and Green, R.P., 2018. Entrepreneurial small business. McGraw-Hill Education,.
Lämmle, A., 2020. Business Plan Handbook: Practical guide to create a business plan. BoD–
Books on Demand.
Mariani, G., Bartoloni, L. and Morelli, D., 2019. Managing uncertainty in the start-up
environment: is a business plan an incentive or a limitation?. Managing uncertainty in the start-
up environment: is a business plan an incentive or a limitation?, pp.73-96.
Robertson, N.L., 2021. A Qualitative Study on Business Operational Sustainability Within the
Nail Salon Industry (Doctoral dissertation, Trident University International).
Roche, Y., 2018. Matoi Business Plan.
Tipu, S.A.A., 2019. Business plan competitions in developed and emerging economies: What do
we still need to know?. Journal of entrepreneurship in emerging economies.
Voronetskaya, O., 2019. Business Plan: Articipate With Me Podcast.