Creating a Business Plan for a Salon Franchise that Will Help Get an SBA Loan
Q: I'm looking for help creating a business plan and financial model in order to get my bank loan approved for a franchise I'm purchasing for a hair-cutting salon. My banker is looking for detailed financials including an Income Statement, Balance Sheet, and Cash Flow statements with a sales forecast. It's important that the model shows our ability to repay the loan. I also plan on adding multiple salons over time. Will your startup financial model handle that?
A: Yes, our financial model will nicely fit the bill for you. Not only has our model been licensed by the largest SBA loan consultancy in the U.S. that has successfully closed over 4,000 SBA loans, but we've actually used the Salon business model as an example in our Sales Channels instruction video. By watching the video, you will get a good sense for the power of our model to create what you need. As a salon owner, you will want to model the number of stores you open, the amount of customer traffic per store (and you will want the flexibility to see that grow over time the longer a salon has been opened, but to still model new salons at the slower initial traffic rate), the types of services mix sold to those customers, in-store product sales, products sold over your website, etc. On the cost side, you will want to be able to model the labor per customer, the COGS for the product used for each customer, the CapEx for each salon buildout with the appropriate depreciation, etc. The Startup Financial Model was designed for you as the entrepreneur to quickly and easily enter all of those assumptions, as well as your bank loan assumptions. We do offering modeling services for customers that need that, but you should be able to easily enter these assumptions yourself by following our step-by-step input forms.
In terms of interfacing with your banker, you can produce a nicely formatted PDF summary report of all of the typical financial reports to attach to your loan application and, when your banker wants to see the details behind your model, you can simply invite them to log in as a "read only" user to your model so they can quickly and easily navigate the monthly, quarterly, and annual details of all of your inputs and all of the results. You can also run alternate scenarios to get a sense for the various sensitivities for your plan.
