Executive Summary

Overview:  Dapper Fellas Barber Shop is a well-established company. From the beginning, we decided to hire only competent and licensed barbers and hairstylists for our barbershop’s numerous jobs. We are well-versed in the norms and regulations that regulate the barbering and cosmetology industries, so we chose only the most experienced and competent personnel to serve as the organization’s core team. We aim to use their knowledge and experience to help us develop a company brand that will be well-received across California and the United States.

Mission:  Customers will be able to relax both their mind and body via various services at Dapper Fellas Barber Shop, which will give a cozy, but exciting old-world gentleman’s club environment.

Vision: Dapper Fellas Barbershop will develop itself as a world-class service provider where customers may escape the strains of everyday life, revitalize their energy, and enjoy the companionship of their coworkers and friends.

Industry Overview: Barber Shops are predicted to increase by 2.9 percent yearly to $4.5 billion in sales during the next five years. Revenues are expected to increase by 1.5 percent in 2021 alone. As more high-end barbershops operate, income for industry owners has increased. Furthermore, as the population of the United States grows, so does the number of barbershop customers. Again, during the last five years, per capita disposable income has increased, allowing clients to spend more money on specialist services. Despite the widespread closure of barbershops in the first half of 2020, these developments helped sustain demand for industry services during the COVID-19 (coronavirus) pandemic.

Financial Overview

Financial Highlights

Liquidity	2020A	2021A	2022F	2023F	2024F
Current ratio	6	12	23	32	42
Quick ratio	6	11	22	31	40
DSO	8	8	8	8	8
Solvency
Interest coverage ratio			8.2	11.1	14.2
Debt to asset ratio	0.01	0.01	0.2	0.18	0.16
Profitability
Gross profit margin	51%	51%	53%	53%	53%
EBITDA margin	12%	14%	21%	22%	22%
Return on asset	5%	6%	13%	14%	14%
Return on equity	5%	6%	16%	17%	17%

Fund Usage

Industry Analysis

Men are now treated to the luxury of high-end services. Many barbershops directly provide personal grooming services, such as shaves, beard trims, and massages. You may accomplish this task while enjoying a free brew or coffee and watching a football game on the big screen. The average national employment growth rate is 7.4%. Thus the haircutting profession is expected to increase faster than that. Even in tough economic times, there is employment stability in this field. Accept technological advancements. There is now inexpensive automation software available to manage the administrative tasks involved in running a barbershop. Without employing a receptionist, you may save money by using low-cost software that enables consumers to make appointments online, issue reminders, and receive payments.

There would be a substantial competitive advantage if you could provide good service at a reasonable price. Customers would not come back to your store if you charged exorbitant pricing. If you establish low pricing, more people will become repeat customers. As a result, building long-term consumer relationships is critical. A barbershop is a gathering place for many guys, one of the most significant aspects. There are folks in your neighborhood that you will not be able to locate. You will, however, get the opportunity to meet them at a barbershop.

Barbershops in the United States employ over 150,000 people and are a $5 billion business. In the last three years, the barbershop sector in the United States has grown by 5.9% annually, bringing in $1.1 billion in revenue. In the United States, there are roughly 131,077 barbershops. People still need haircuts, regardless of the market or the state of the economy. 44% of American males went to a barber in the previous year. Future generations will inherit this personal upkeep behavior. Barbershops accounted for $21,395 in federal spending in 2020 and have given three contracts totaling $7,132 to three different businesses.

The worldwide barber supply industry is expected to grow by over $20 billion. Shampoo, hair gel, and conditioners are part of this large business. From 2012 to 2017, the sector had a yearly growth of 1.9 percent. The industry is expected to grow at a rate of 3% each year between 2017 and 2022. There are 4,377 barbershops in 4,845 locations in the barbershop business. Employees are on average 39.5 years old. This implies a diverse group of barber professionals, including young, elderly, and middle-aged men and women. The average yearly salary per employee in California is $23,590. In the United States, the average annual salary is USD 30,414. Shops in low-income areas may only be able to charge $7–10 for a haircut. Think about what kind of barbershop you want to run and who you want to serve. The barbershop sector in the United States has grown at a rate of 6% per year over the last three years, reaching a revenue of $1 billion.

According to the Bureau of Labor Statistics, barbershops employed 738k workers in 2019. According to ACS statistics, the number of persons employed in the Barbershops Industry Group has decreased by 5.2 percent, from 83.3k in 2018 to 79k in 2019. Barbers hold the most barbershop jobs (89.9%), followed by hairdressers, hairstylists, and cosmetologists (3.73%), and supervisors of personal care and service employees (3.22%).

There would be a substantial competitive advantage if you could provide good service at a reasonable price. Customers would not come back to your store if you charged exorbitant pricing. If you establish low pricing, more people will become repeat customers. As a result, building long-term consumer relationships is critical. A barbershop is a gathering place for many guys, one of the most significant aspects. There are folks in your neighborhood that you will not be able to locate. You will, however, get the opportunity to meet them at a barbershop.

The sector is likely to benefit from the use of social media platforms. This increase will aid the business in attracting specialized service consumers. Barbers may utilize social media to sell their services and demonstrate their abilities to a large audience. Barbers will be sought out by customers who frequently read their web material as they develop a reputation for providing excellent services. As demand for specialized barbers grows, they will be able to boost service prices as surplus demand from customers outnumbers the barbershop’s capacity. As a result of increased premium product costs, industry demand for industrial goods is likely to increase.

Marketing Plan

Content Marketing: Create a blog on the website with material catering to prospective customers of Dapper Fellas Barber Shop.

Discounts: Provide multiple rewards or incentives where Dapper Fellas Barber Shop members get a deal if they successfully recommend someone.

Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your space and events.

SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer. It creates trust with potential members seeking what your place offers.

Email Marketing: Sending automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email as really important, they are more likely to forward it or share it with others, so include social media share buttons in every email.

Organogram

Financial Plan

Earnings:

Break-Even Analysis

Income Statement

	2020A	2021A	2022F	2023F	2024F
ANNUAL REVENUE
Item 1	9,217	59,117	175,410	415,277	781,357
Item 2	34,701	222,558	660,368	1,563,394	2,941,580
Item 3	4,067	19,561	46,432	78,519	114,905
Total annual revenue	47,985	301,236	882,211	2,057,189	3,837,842
% increase		528%	193%	133%	87%
COST of REVENUE
Item 1	360	2,259	6,617	15,429	28,784
Item 2	480	3,012	8,822	20,572	38,378
Item 3	52,000	65,000	78,000	91,000	104,000
Item 4	720	3,615	8,822	16,458	23,027
Item 5	140,000	336,000	560,000	840,000	1,120,000
Item 6	60,000	144,000	240,000	360,000	480,000
Item 7	32,000	61,333	85,533	112,153	141,435
Total Cost of Revenue	285,560	615,220	987,794	1,455,612	1,935,625
as % of revenue	595%	204%	112%	71%	50%
Gross Profit	-237,575	-313,984	-105,583	601,578	1,902,218
SELLING & ADMIN EXPENSES
Item 1	28,000	96,800	154,880	175,692	193,261
Item 2	75,000	105,000	120,000	120,000	120,000
Item 3	36,000	96,000	108,000	120,000	120,000
Item 4	8,000	12,000	12,000	12,000	12,000
Item 5	3,839	18,074	44,111	61,716	115,135
Item 6	3,359	12,049	26,466	41,144	76,757
Item 7	5,600	10,000	12,904	15,034	17,376
Item 8	6,667	14,000	22,067	30,940	40,701
Total selling & admin expenses	166,464	363,924	500,428	576,525	695,230
as % of revenue	347%	121%	57%	28%	18%
Net profit	-404,039	-677,907	-606,011	25,052	1,206,987
Accumulated net profit	-404,039	-1,081,947	-1,687,957	-1,662,905	-455,918

Cash Flow Statement

	2020A	2021A	2022F	2023F	2024F
CASH FLOW from OPERATING ACTIVITIES
Net profit before tax	-$404,039	-$677,907	-$606,011	$25,052	$1,206,987
Depreciation	$44,267	$85,333	$120,504	$158,127	$199,512
Payables
Item 1	$4,333	$5,417	$6,500	$7,583	$8,667
Item 2	$11,667	$28,000	$46,667	$70,000	$93,333
Item 3	$6,250	$8,750	$10,000	$10,000	$10,000
Item 4	$3,000	$8,000	$9,000	$10,000	$10,000
Item 5	$667	$1,000	$1,000	$1,000	$1,000
Total payables	$25,917	$51,167	$73,167	$98,583	$123,000
change in payables	$25,917	$25,250	$22,000	$25,417	$24,417
Receivables
Item 1	$320	$1,506	$3,676	$5,143	$9,595
Item 2	$360	$1,807	$4,411	$8,229	$11,514
Total receivables	$680	$3,314	$8,087	$13,372	$21,108
change in receivables	-$680	-$2,634	-$4,773	-$5,285	-$7,736
Net cash flow from operating activities	-$334,536	-$569,958	-$468,280	$203,311	$1,423,180
CASH FLOW from INVESTING ACTIVITIES
Item 1	$16,000	$13,200	$14,520	$15,972	$17,569
Item 2	$20,000	$22,000	$24,200	$26,620	$29,282
Item 3	$28,000	$22,000	$14,520	$10,648	$11,713
Item 4	$96,000	$88,000	$72,600	$79,860	$87,846
Item 5	$20,000	$22,000	$24,200	$26,620	$29,282
Net cash flow/ (outflow) from investing activities	-$180,000	-$167,200	-$150,040	-$159,720	-$175,692
CASH FLOW from FINANCING ACTIVITIES
Equity	$400,000	$440,000	$484,000	$532,400	$585,640
Net cash flow from financing activities	$400,000	$440,000	$484,000	$532,400	$585,640
Net (decrease)/ increase in cash/ cash equivalents	-$114,536	-$297,158	-$134,320	$575,991	$1,833,128
Cash and cash equivalents at the beginning of the year	–	-$114,536	-$411,693	-$546,014	$29,978
Cash & cash equivalents at the end of the year	-$114,536	-$411,693	-$546,014	$29,978	$1,863,105

Balance Sheet

	2020A	2021A	2022F	2023F	2024F
NON-CURRENT ASSETS
Item 1	$16,000	$29,200	$43,720	$59,692	$77,261
Item 2	$20,000	$42,000	$66,200	$92,820	$122,102
Item 3	$28,000	$50,000	$64,520	$75,168	$86,881
Item 4	$96,000	$184,000	$256,600	$336,460	$424,306
Item 5	$20,000	$42,000	$66,200	$92,820	$122,102
Total	$180,000	$347,200	$497,240	$656,960	$832,652
Accumulated depreciation	$44,267	$129,600	$250,104	$408,231	$607,743
Net non-current assets	$135,733	$217,600	$247,136	$248,729	$224,909
CURRENT ASSETS
Cash	-$114,536	-$411,693	-$546,014	$29,978	$1,863,105
Accounts receivables	$680	$3,314	$8,087	$13,372	$21,108
Total current assets	-$113,856	-$408,380	-$537,927	$43,349	$1,884,214
Total Assets	$21,878	-$190,780	-$290,791	$292,078	$2,109,122
LIABILITIES
Account payables	$25,917	$51,167	$73,167	$98,583	$123,000
Total liabilities	$25,917	$51,167	$73,167	$98,583	$123,000
EQUITIES
Owner’s equity	$400,000	$840,000	$1,324,000	$1,856,400	$2,442,040
Accumulated net profit	-$404,039	-$1,081,947	-$1,687,957	-$1,662,905	-$455,918
Total equities	-$4,039	-$241,947	-$363,957	$193,495	$1,986,122
Total liabilities & equities	$21,878	-$190,780	-$290,791	$292,078	$2,109,122