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Dulce Domum Beauty & Spa Business Plan Ashli Allmond; Student Id: 4309138American Military University 12/13/2016Dulce Domum Beauty & Spa Business Plan“Serenity’s Home Sweet Home"Virginia Beach Town Center, Virginia Beach, Virginia | 757-803-5357Ashli Allmond, TITLE | 5772 Accomac Square, Virginia Beach, Virginia 23455 | 757-803-5357Prepared By Ashli Allmond | December 2016TABLE OF CONTENTSEXECUTIVE SUMMARYORGANIZATIONAL PLANMission StatementIndustry OverviewCOMPETITIVE ANALYSISSales ForecastProfit ForecastCustomer AnalysisMARKETING PLANCompany ImpactMarketing Strategy STRATEGIC AND IMPLEMENTATIONOrganizational StructureCore OperationsDEVELOPMENT AND MILESTONESEXECUTIVE SUMMARYDulce Domum Beauty and Spa is an up and coming Day spa located in Virginia Beach, Virginia. Not only does it offer rejuvenation services, we have a full-service hair and nail salon which makes Dulce Domum an innovative contender in the spa industry. We offer a variety of massage styles, body treatments, nail services for those requiring acrylic additives or natural nail care and hair care for ALL hair types. In fact, for location, we prefer being located near hair and nail salon for co-marketing opportunities. This business plan has been developed to track progress prior to grand opening and following through with a five-year projection. In addition, this plan has been written to secure a small portion of the start-up funding necessary for Dulce Domum Beauty and Spa's successful kick-off.Dulce Domum Beauty and Spa has been a dream of mine since my first deployment in the US Navy. As my career progresses and my coursework towards my degree is nearly complete, my dream has flourished from a small dream to an extraordinary vision. Dulce Domum Beauty and Spa is not an idea and a business for me and my board of directors. It is a way of life, a true passion- It is us sharing our gifts and vision with the world. Dulce Domum is going to dominant the market and innovate the spa industry. ORGANIZATIONAL PLANDulce Domum Beauty & Spa is a dream I came up with on my first naval deployment in 2008. As my business knowledge and experience developed has developed, that dream has transformed into a reality in the form of my business model for a day spa that will revolutionize the spa industry from the ($$$) industry you will find in chains like Massage Envy into the ($$$) industry you will find in the rejuvenation empires of COUNTRY COUNTRY COUNTRY. Dulce Domum will be more than your typical small business although this is how our journey will begin. The plan is to transform our beauty spa into a nationwide chain and multimillion dollar corporation. Dulce Domum Beauty and Spa will make is industry debut in the heart of Hampton Roads, Virginia Beach. There is not a more perfect location to establish our business than Virginia Beach’s Town Center. Town Center is prime real estate for all the leading competitors of the food, shopping, health, and beauty industries. This first location will become our primary corporate headquarters once our company transforms from one location into a nationwide chain by 2030. Our Mission:At Dulce Domum Beauty and Spa, we believe that the elimination of stress and tension are essential to the overall health and wellbeing of everyone. Our mission to provide a world-class spa experience unlike anything our customers would experience in the region. Our unique environment and use of the highest quality products combined with exceptional customer service is sure to build lasting relationships with our customers. We provide a rejuvenation experience that is unique to each customer that makes them feel so relaxed and comfortable- almost as if they have found a home away from home. Products and ServicesDulce Domum Beauty Spa will be every woman's dream; offering all your hair, nail, skin and body rejuvenation services in one convenient location. Our employees will be licensed artist with the ability to offer a unique experience for every customer that enters our premises. Start your journey with a massage and body scrub. We will have several types of massages available to include Swedish, deep tissue, hot stone, and pregnancy massage. Our body scrubs will provide a different invigorating experience based on which you choose- Detox, Moisture Replenishment, and Aroma Therapy. We will also offer body wrap treatments, waxing services and facials. Upon completion of your services, our customers will have the option to continue to their next service area or have a cup a of tea and relax in our pool sized Jacuzzi. There will be no hair follicle left behind! Our stylist will be experts in every hair type and our facility will have a full-service hair salon that will style, cut, color or repair each unique hair type that walks through our doors. Our nail technicians will offer the best in hand and foot care. We will offer the best in manicure and pedicure services the region at the MOST affordable prices. Because we offer so many exclusive rejuvenation services at rates that are neck and neck without competitors, we can offer our hair and nail services at competitively low rates due to the generous revenue generated in our main industry, Spa services.Industry OverviewThe health and beauty industry will continue to grow as the health and fitness awareness trends continue to grow. Our products and services are quite like that of other businesses in our industry. As the American Heart Associate continues to shed light on the importance diet and fitness has on the heart (AHA, 2014), there will always be a need for a full-service spa to rejuvenate and relax those muscles. The convenience of having a spa, nail, and hair salon in one location will give my business a significant competitive advantage in the health and spa industry. Although it would seem like a likely/convenient compilation of services, there are only two spas in the Hampton Roads area that provide these services in one location. It would also be even more convenient to expand our business into the health industry by considering expanding our facilities to include an on-site gym. The location of my business is extremely important to the success of my business. Setting up shop in Virginia Beach would be the smartest choice due to the wide range of customers that can be reached in this area. Virginia Beach is the Atlanta of Hampton Roads Area. Another advantage is the huge military presence in the area. Their steady income and consistent need for our services will also ensure operations remain steady and constant. Management CapabilityIn this industry, it is especially important to ensure that our employees are licensed, skilled, or certified to provide services in whichever area they are hired to perform. I think it would be wise to hire and outside human resource firm to assist with the task of ensuring that trained/licensed employees are hired to fill the necessary position. With so many different services that require certification or licensure in our facility, outsourcing these tasks would be in the best interest of the business being that this is such a tedious initial task. needs citesFinancial ProjectionsDulce Domum Spa will be incorporated into a small business in Virginia Beach in 2025. Initial funding will come from the savings of the members of the board and the use of Veteran's Affair's loan of the President and Vice President, Ashli Allmond and Cleirra Robinson, which guarantees to pay a quarter of the loan amount required for startup (DVA, 2015). Managerial duties and responsibilities will be filled by Tyeisha and Carmen Watkins. In 2030, we will launch Dulce Domum Beauty and Spa as a corporation and chain to be expanded in several locations to include Tampa, Florida; San Diego California; Savannah, Georgia; and Dallas, Texas. Boards will be developed for each location and shares will be issued to the board members in the amount of 1000 shares per $10,000 investment. Remaining shares will be issued to future investors based on the market share pricing. Competition AnalysisThe spa industry in Hampton Roads is desperately in need of innovation. There are several generic chains in the area that offer a broad range of services that are typical to the industry. What sets Dulce Domum apart from the competition is, not only do we provide an environment to rejuvenate your body that is as relaxing as if the services were being provided in your own bed, but our facility offers the opportunity to imagine yourself on a vacation around the world. The facility will be divided into different segments- each segment designed to emulate the style and culture of different parts of the world- to include India, China, Central America, and U.A.E. This will spark a great deal of interest in our services since we are the only business in the state with such a unique style. Eventually the buzz will wear on the style of our facility but the goal is to have secured enough of the market share to be able to continue business success with customer loyalty. Our unique style, convenient set up, and quality service put our facility in the top three of number one competitors in our industry in the Hampton Roads area. needs citesDemographic TrendsIn this section, the report describes the kind of population that the business would be serving; this is a beauty and spa company and therefore, the main targets are the women. In addition, even men often go to the beauty and spa companies for massage as well as other activities. Virginia Beach in the Hampton Roads area is one populated area as well as frequented by several local and international guests; therefore, the company would have a lot of customers who would be willing to get the services of the beauty and spa salon. Virginia is largely populated area in the United States ad so it will be able to attract several customers and thus make profits, better sales as well as higher revenues.Geographical LocationVirginia Beach is a tourist attractive location and is frequented by several visitors from various states from around the world. Dulce Domum Beauty and Spa Salon has selected one of the most strategic places for business with the intention of getting and attracting reliable customers. In addition, this location is also neighboring several other places that also host very many customers, for instance; Chic’s Beach is just a distant away and thus as frequented by women, this can also make a good target for the company. In addition, there are other location such as Bay Island, Janaf Shopping Center and Northeast Virginia Beach (Kotler, 2002).LifestyleDulce Domum Beauty and Spa Salon targets customers with the different lifestyle; it is not every person who visits the beauty and spa salons since these are facilities that are used for services that are mostly expensive and thus most of the people who are having a higher lifestyle are the ones that would be attending this salon for services and products. Lifestyles determine the profitability of companies that offer products like salon and spa; these are some services that are classified as luxury and thus they attract several costs and so businesses open where they have targets of high living clients who can spend anything to have their hair and nails done. Therefore, the lifestyles of the people around this place or those who visit this place are rich and thus the Dulce Domum Salon would have several wealthy customers while still being able to provide affordable services to all classes. PsychographicsThe Psychographics is the study of personality, values, opinions, attitudes, interests, and lifestyles; in a nutshell, this are focuses on interests, attitudes, and opinions; therefore, the psychographic factors are also called IAO variables cite. The clients around Virginia are very rich, focused and they already have their preferred places to get the services that they need; there are several salons and spas around the area and soa new salon would face stiff competition before they can catch up in the market. Rich clients have their values; they need good services, they need protection, and they are interested in services that match their lifestyles and so they would only come to this salon if they can get the services they expect (Kotler, 2002).Purchasing PatternsThe City of Virginia Beach is inhabited by people who have their purchasing patterns; their do shopping occasionally like in the weekends when they do not go to work. For the sake of salons and the beauty care products, they are also bought during the days that the residents are free and are not engaged in any other activity. Therefore, the beauty and spa company would expect most of its customers during the weekends and holidays when the customers are free and can sit down for the services; in addition, some of the customers can also spare their time later or earlier in the day; before or after work so that they can attend the spa and beauty therapies. Therefore, the facility would expect mixed patterns of purchase from their customers and this would be the thing across the year. needs citesBuying SensitivityThe buying sensitivity of the residents of Virginia Beach is based on demand; they would go for services when they need the services. For instance, those who want to go for the salon and spa services would do so at their planned time. The city is occupied by busy residents with their schedules of attending salons and the spa; therefore, the sensitivity of buying products and acquiring services is based on the timing, the schedule and when the products are urgently needed. In addition, during special occasions like weddings and church functions, most of the people would like to look good; therefore, they seek for services such as nail polish, spa, and massage among other services. needs citesMarket Size TrendsFinally, the market size is wide and there are also other players in the market; therefore, the new beauty and spa salon would face competition event though the location is wider with several people together with visitors that visit the city and might need these services. The city has schools, military bases; institution of the government as well as private and all these institutions including the recreational services all attract clients who might need the services of the salon. Therefore, it is approximated that the city has the capacity of very many customers and Dulce Domum Salon goes into a market with customers but they must be ready to offer the best services or they risk having no customers at all (Sakunke, 2011). COMPETITIVE ANALYSISThe local competition is not a reflection of the nationwide competition in the industry in terms of creativity and novelty. The same boring nail, hair and massage parlors are simply servicing their customers instead of truly ‘serving’ their customers. Dulce Domum’s true competition will come from outside the region. The area has visitors coming to Virginia Beach who come from different areas and thus Dulce Domum Beauty and Spa will be competing for this group with others from without the locality. Furthermore, it is in the plans of the business to expand outside the locality. The competition out there is on a different level but with creativity and provision of value, Dulce Domum will be competitive (Tucci, 2016). Market Share DistributionThe market share is fairly distributed among the current players in the market. All the spa businesses in the locality have some share of the market though others have more share than the others. It is not easy to quantify the percentages but the market is perfectly competitive demonstrating the presence of many players and many buyers. Every business has an opportunity to compete.Advantage over CompetitionDulce Domum Beauty and Spa’s competitive advantage will be centrally inclined on the quality of service and product offerings and the customer service levels. We will be focusing on enhancing the customer experiences with our service so that we can surpass what is currently offered in the market. Furthermore, the business will offer variety of services apart from the traditional offering including different cultural practices of massage like the Indian, Chinese, and Central American. These will attract many customers who are interested in exploring new experiences. In addition, the organization will focus on creating long-term relationships with the clients so that we master high levels of customer loyalty. The key will be to initially attract as many clients as possible by causing a disruption in the market. We will then concentrate on retaining the clients as we keep on growing the market share (Tucci, 2016). Competitive PositionsThe spa market is characterized by customers who are aware of their wants and therefore, competitive positions are defined by the ability of every business to address these needs. Dulce Domum targets to be, at least, the third company in terms of market share once it starts its full operations. Barriers to EntryAs mentioned earlier, the spa market is perfectly competitive. Therefore, there are little or no barriers to entering the market. It will therefore be easy for Dulce Domum to gain a footing in the market. The only barrier perhaps is the existing competition but with the right strategies to overcome it, it will be easy, (Abrams, 2010). There are several opportunities available for the business once its sets foo firmly into the market. These include expansion to other locations in the country and diversification of product and service to target men equally. Furthermore, upon initially success in the market, the company can acquire other operations in the area to form several branches, (Valentin, 2001). MARKETING PLANA marketing plan is a written presentation of how a new business intends to conduct its operations in the market. For a new business, a marketing plan reflects the businesses intention and plans to meet and exceed the current marketing projections in their industry The contents of a marketing plan are based on information collected from the market on customer behaviors, and information on the conduct of competitors in the market. It presents the strategy that a company is supposed to follow in order to achieve is marketing goals and objectives. It is important to prepare a marketing plan since its gives a business the tools and improves the odds of competing with the existing competitors. For Dulce Domum Beauty Spa, a marketing plan will be of great importance. It will be important in determining the success of the company as a new business in the new market (Kotler, 2002). Sales ObjectivesDulce Domum Beauty Spa is a new business and therefore there are no historical data on sales which the company can use to benchmark for the sales. However, considering the performance of industry and the performance of other business in the industry, the business is targeting to generate at least $400,000 in the first year of operation. However, this being the first year, many factors come into play with regards to the level of sales that the business can achieve. As according to the theory of the product life cycle, we expect that the business might start low but as the year goes by will be able to realize a growth in sales and market share. From then, we will have a solid project of the targeted sales. The accountant at the spa will prepare quarterly reports on the performance of the business in the market. Back this with citesProfit ObjectivesIt is the goal of every business to be profitable. Profitability is a good measure of the success of the business. Despite making efforts to increase the sales revenues so as to be profitable, the business will also focus on being cost effective. The business will target a profits margin of 30%. This is highly efficient and we will still seek to improve it. Our great efforts to maintain profitability will be based on the growth of sales revenues. We will seek to continually increase our sales using different strategies in order to have a sustained profitability, (Bevers, Waller, Amosson, & McCorkle, 2008). Because Dulce Domum is the first spa in its industry to provide all these unique services under one location, profits will initially be slow due to the cost of operations but quickly pick up with the increased interest in our facility. Customer analysisThis refers to the act of studying the different consumers’ needs or wants in the market. A market research will be conducted to categorize the different types of customers that the business will be targeting. The customer analysis will give information about the demographic trends in the market, the geographical location of the customers, the lifestyles, psychographics and purchasing patterns of the customers. This information will be principally important in determining the type of marketing strategies that the business will apply. For instance, it will it help the business to determine the promotion strategies to apply. Our advantage in this section includes the convenience of being able to provide all their beauty and rejuvenation services in one location. Another unique advantage is our facility provides the elegance of an expensive spa at affordable prices for our customers. Needs citesMarketing mixThe marketing mix revolves around the four P’s of marketing namely, pricing, product, promotion, and place (Abrams, 2010). The pricing strategy and promotion strategy for the business will be discussed below. The company will include a lot of creativity and imagination into its products. Products and services in this industry are not scripted and/or limited. It is all about the imagination of the business owners. We will be innovative in design services so that we offer our customers a completely new experience from what they have been experiencing. Our products will be exclusive to our store so that our customers will not be able to find our unique and high quality products at any other spa. In addition, our facility will be in central location where many people in the locality can access it easily, (Bevers, Waller, Amosson, & McCorkle, 2008). PricingThe business will use penetration pricing. This is the approach used for new products entering a new market. In this case, the company will observe the prevailing market prices for similar products and then decide on a price that is lower. The idea is to attract the price-sensitive customer into trying the product first. This approach is very effective in drawing away the attention from the competitors to the new product. However, in most cases, it leads to loss of profits for the company and the company might not break even easily. It is, however, the most successful method for market entry. We will adopt this price strategy for the new product in the introduction stage and then the price will go up as the product is established in the market, (Sakunke, 2011).Promotional strategiesAt the initial stages of the business, we will not adopt expensive promotional measures in order to save on costs. We will use social media like Facebook, Twitter, Snapchat, WhatsApp and the company website to create awareness about our products and services. These will be used to introduce the products and service to the potential customers as we announce our presence in the market. Furthermore, we will be dedicated to ensuring that we deliver memorable customer experiences to our clients so that they refer their friends to our store. We will also print flyers and circulate them in the locality for more awareness creation. The initial promotional strategies will be meant to create awareness about our presence in the market and communicate our products to the customers, (Jain, & Haley, 2009). STRATEGY AND IMPLEMENTATION SUMMARY Our strategy is to implement the most aggressive marketing and networking in the community as well as the best services in the business. Our prices are competitive for the area, and our personnel plan, which includes using a pool of skilled, commissioned therapists, cosmetologist and aestheticians, will give us a financial advantage.Competitive AdvantageOur competitive edge is our ability to market effectively and creatively to bring in the clients and then back that up with the best service and products in the business.  In addition, our combination of unique services, outstanding location and our interaction with the customers are setting us up for huge success.  Marketing StrategyLocal newspaper advertising, local fliers, grand opening party kick-off and promotional products will be printed and distributed for first 30 days after start-up. We will then continue regular advertising and plan for seasonal events like Christmas, Valentine's, Mother's Day, Prom and New Year's.   We would as like to take advantage of networking opportunities with local charities, women's groups, country clubs, wedding planners, and membership with the Metropolis Chamber of Commerce. Our board is especially fond of community outreach and establishing relationships with these local groups would not only be great for our new business, it would also give us the opportunity to get involved in their organizations to assist with and host charitable events. There is also a wealth of opportunity in networking with local health care organizations. Massage and rejuvenation services are therapeutic. Therefore, establishing contacts with health care providers, especially chiropractors would be beneficial to secure a relationship about referrals, etc.  This could lead to becoming a provider that health insurance companies that offer Alternative Care refer their patients to as well.  Massage therapy is sometimes paid by insurance when prescribed by a physician.  It would be beneficial to explore an investment in practice management software to handle medically billable massage.  When the insurance does not cover the entire amount of a service the client will pay the difference.  For that reason, we will not want to participate with any PPO's that require write-off for amounts over the usual and customary fee (which tends to be too low).  A list of acceptable insurance company plans will be maintained and those clients will be able to handle massage therapy through their insurance.  Any opportunity to convince allopathic physicians - MDs - to see massage as having long-term healing benefits for their patients will also be taken, since they hold to key to having massage paid for as "medically necessary."   The client will also help drive that with the physicians if they are properly educated.  Hotels that do not offer their own spa services will send their guests to our spa or use our out-call spa services. Prior to opening, I will make contacts with managers and concierges at local hotels to ensure they are aware of the services available. Promotions will be offered to professionals in these industries to create buzz and build relationships. Our spa will show up on every major search engine and in the phone directory. The website will have a full menu of services and, eventually, the ability to schedule appointments on-line using online software. Sales StrategyIt has been said the top three items which determine success in business are location, location, location. Town Center of Virginia Beach is a high end yet popular shopping center that is the home of several large shopping and restaurant chains- to include Ruth’s Chris, California Pizza Kitchen, Dicks Sporting Good, and ULTA- presents our top marketing strategy. With the owner focusing on the sales, marketing and management and delegating the massage and aesthetician therapies to employees--business profitability potential is exponentially maximized over a one or two-person operation by a direct care-giver without any marketing, management or sales background.DEVELOPMENT AND MILESTONESThe owner has done extensive market research and visited some of the best spas in the world -- Beverly Hills, Paris, Amsterdam, Vegas and Arizona -- and has taken ideas from the best to offer an upscale, ultra-amenity, spa experience. Once a client experiences the luxurious, high-end level of personalized care that we offer, we are confident that we will have a return client.  There are four main areas of income:  massage, aesthetician, retail and hair. For the forecast, massage and aesthetician services were conservatively estimated at $65 per service with 35% of that going to the service provider.  The basis for these projections is a conservative estimate of 7 services per day the first month in business, and 53 services per day by the end of the first year.  At 53 services per day, we would still only be operating 75% to capacity with 7 treatment rooms operating 7 days a week, 8-10 hours per day.  Outcall services will enhance the bottom line by allowing us to generate sales without using any of our retail space.  Out call also averages a higher per service charge, averaging around $80 per service with 65% to the therapist and virtually no overhead.On retail products, the gross margin is consistently 50% across the board. The retail lines go in conjunction with the spa services as an extension of the spa experienceSales Forecast Year 1 Year 2 Year 3 Year 4 Year 5SalesMassage Therapy$527,830 $550,000 $560,000 $575,000 $580,000 Facials and Anti-Aging Treatments$177,410 $180,000 $185,000 $186,000 $190,000 Hair Services$23,600 $27,000 $30,000 $35,000 $37,000 Retail$94,845 $100,000 $125,000 $150,000 $175,000 Total Sales$823,685 $857,000 $900,000 $946,000 $982,000 Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5Linens and Cleaning$3,644 $3,785 $3,875 $3,980 $4,035 Oils & Lotions$14,577 $6,140 $6,800 $7,420 $8,040 Cost of Retail products / 50% of Sales$47,423 $50,000 $62,500 $75,000 $87,500 Subtotal Direct Cost of Sales$65,644 $59,925 $73,175 $86,400 $99,575 MilestonesManagement and Personnel SummaryDulce Domum Beauty & Spa is a Sole Proprietorship owned by Ashli Allmond. Ashli spent 20 years in the United States Navy as a Logistics Specialist. During her naval career, her duties included procurement, financial management, and small business management among many other duties. She received her Bachelor’s degree in Business Administration: Entrepreneurship in 2017. She functions as developer and head manager for over Dulce Domum Spa.  She has two operations managers, Carmen Watkins who runs Cosmetology operations and Tyeisha Watkins who runs the Rejuvenation operations, and eventually the Food Service division once our small café opens in 2030. All employees are licensed, contract massage therapists, cosmetologist or aestheticians except for the secretarial staff. The employees are1099 and get paid 100% commission. This alleviates huge overhead for salaries as employees are only paid when sales are generated.  Employees are paid on a sliding scale based on production and % service sales to retail. There are more employees of this type available then there are jobs to fill them so it's an employer's market which is another positive. An on-call list of approximately 20 therapists will be available at any given time.A front office person will be hired within two months of the Spa Grand Opening. This person will relieve some of the phone, front desk and cashier duties from the manager. By the end of five months, a second office person will be hired.  The Personnel Plan below reflects our projected need at opening, and carries through five year of expenses. The owner draw and front desk are the only salaries. The rest of the payroll is commission and is only paid when the business is generating sales. Our Licensed Massage therapists will receive commission of 55% of the session price, aesthetician services will average 40% payments, and out-calls are budgeted at 65%, since most require some travel and will be largely massage calls.Financial PlanThe premier element to our financial plan is initiating, maintaining, and improving the factors that create, stabilize and increase our cash flow. Because of the commission structure of our contractor payments, our variable costs will exceed fixed costs for all years of this plan, which should help stabilize the cash flow - we only pay commission when we make a sale. We will surpass the break-even point by month four, and end the first year with a net profit margin of almost 11%. By quickly repaying our loan while increasing sales, and managing costs, we will increase the net worth of the business substantially in the first year, and continue increasing it for the foreseeable future.Break-even AnalysisThe break-even analysis table shows what we need to make in sales to meet costs. Our variable costs include both the direct costs shown in the Sales Forecast table, for linens, oils, and retail product inventory, but also include the commissions paid to contracted massage therapists and aestheticians. We should surpass the break-even point by month four of operations.Projected Profit and LossBecause we are paying our service-provider on commission, our variable costs will exceed our fixed costs. This keeps our overhead low, and means we paying ONLY for hours when they provide services. Keeping such a large pool of reliable massage therapists and cosmetology as we are recruiting will keep us from losing business with no-shows, especially since we will schedule our contractors, as much as possible, for full days or half-days, rather than individual appointments. Fixed expenses are the customary: rent, electric, advertising, insurance. There are four main areas of income: massage, aesthetician retail and out call. Massage and cosmetology services are $65 per service minimum, with 55% of that going to the service provider. The basis for the sales projections is a conservative estimate of 7 services per day the first month in business and 53 services per day by the end of the first year. At 53 services per day we would still only be operating 75% to capacity with 7 treatment rooms operating 7 days a week, 8-10 hours per day.  On retail products, the gross margin is consistently 50% across the board. The retail lines go in conjunction with the spa services as an extension of the spa experience. These high-end cosmetics and spa products are hard to find items that generate repeat purchases.The following table shows the projected business ratios for the first five years of business for Dulce Domum Beauty and Spa. Industry projections and ratios based on the Standard Industrial Classification (SIC) code 7991.0103, Spas, were used to estimate these projections. Profit and Loss ProjectionsPro Forma Profit and Loss Year 1 Year 2 Year 3 Year 4 Year 5Sales$823,685 $857,000 $900,000 $946,000 $982,000 Direct Cost of Sales$65,644 $59,925 $73,175 $86,400 $99,575 Massage Therapists' commission$290,307 $302,500 $308,000 $316,250 $319,000 Beauticians commission$70,964 $72,000 $74,000 $74,400 $76,000 Aestheticians’ Services commission$15,340 $17,550 $19,500 $22,750 $24,050 Total Cost of Sales$442,254 $451,975 $474,675 $499,800 $518,625 Gross Margin$381,431 $405,025 $425,325 $446,200 $463,375 Gross Margin %46.31% 47.26% 47.26% 47.17% 47.19% ExpensesPayroll$137,510 $145,000 $155,000 $160,000 $167,000 Marketing/Promotion$7,500 $5,000 $5,000 $8,000 $5,000 Depreciation$0 $50 $50 $50 $50 Rent$66,000 $66,000 $66,000 $66,000 $66,000 Utilities$3,000 $3,100 $3,200 $3,300 $3,400 Advertising$3,000 $3,000 $3,000 $3,000 $3,000 Insurance$1,500 $700 $700 $700 $700 Payroll Taxes$0 $0 $0 $0 $0 Phone$1,500 $1,600 $1,700 $1,800 $1,900 Software Support$0 $495 $495 $495 $495 Other$6,700 $6,700 $6,700 $6,700 $6,700 Total Operating Expenses$226,710 $231,645 $241,845 $250,045 $254,245 Profit Before Interest and Taxes$154,721 $173,380 $183,480 $196,155 $209,130 EBITDA$154,721 $173,430 $183,530 $196,205 $209,180 Interest Expense$2,132 $1,568 $980 $392 $49 Taxes Incurred$42,612 $48,107 $51,404 $54,814 $58,891 Net Profit$109,978 $123,705 $131,096 $140,949 $150,190 Net Profit/Sales13.35% 14.43% 14.57% 14.90% 15.29% Cash Flow Projections Pro Forma Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5Cash ReceivedCash from OperationsCash Sales$799,494 $831,290 $875,250 $917,620 $954,995 Cash from Receivables$14,068 $25,075 $25,152 $26,861 $27,580 Subtotal Cash from Operations$813,562 $856,365 $900,402 $944,481 $982,575 Additional Cash ReceivedSales Tax, VAT, HST/GST Received$0 $0 $0 $0 $0 New Current Borrowing$0 $0 $0 $0 $0 New Other Liabilities (interest-free)$0 $0 $0 $0 $0 New Long-term Liabilities$0 $0 $0 $0 $0 Sales of Other Current Assets$0 $0 $0 $0 $0 Sales of Long-term Assets$0 $0 $0 $0 $0 New Investment Received$0 $0 $0 $0 $0 Subtotal Cash Received$813,562 $856,365 $900,402 $944,481 $982,575 Expenditures Year 1 Year 2 Year 3 Year 4 Year 5Expenditures from OperationsCash Spending$137,510 $145,000 $155,000 $160,000 $167,000 Bill Payments$500,843 $615,218 $614,301 $643,865 $664,390 Subtotal Spent on Operations$638,353 $760,218 $769,301 $803,865 $831,390 Additional Cash SpentSales Tax, VAT, HST/GST Paid Out$0 $0 $0 $0 $0 Principal Repayment of Current Borrowing$8,400 $8,400 $8,400 $8,400 $1,400 Other Liabilities Principal Repayment$0 $0 $0 $0 $0 Long-term Liabilities Principal Repayment$0 $0 $0 $0 $0 Purchase Other Current Assets$0 $0 $0 $0 $0 Purchase Long-term Assets$0 $2,000 $2,000 $0 $0 Dividends$0 $0 $0 $0 $0 Subtotal Cash Spent$646,753 $770,618 $779,701 $812,265 $832,790 Net Cash Flow$166,808 $85,747 $120,700 $132,216 $149,785 Cash Balance$213,263 $299,010 $419,711 $551,926 $701,711 Balance Sheet ProjectionsThe Balance Sheet shows a steady increase in earnings and net worth over the next five years.Pro Forma Balance Sheet Year 1 Year 2 Year 3 Year 4 Year 5AssetsCurrent AssetsCash$213,263 $299,010 $419,711 $551,926 $701,711 Accounts Receivable$10,123 $10,759 $10,357 $11,876 $11,301 Inventory$12,441 $5,387 $8,800 $10,046 $11,301 Other Current Assets$32,095 $32,095 $32,095 $32,095 $32,095 Total Current Assets$267,923 $347,251 $470,962 $605,944 $756,408 Long-term AssetsLong-term Assets$0 $2,000 $4,000 $4,000 $4,000 Accumulated Depreciation$0 $50 $100 $150 $200 Total Long-term Assets$0 $1,950 $3,900 $3,850 $3,800 Total Assets$267,923 $349,201 $474,862 $609,794 $760,208 Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5Current LiabilitiesAccounts Payable$81,795 $47,769 $50,734 $53,116 $54,741 Current Borrowing$26,600 $18,200 $9,800 $1,400 $0 Other Current Liabilities$0 $0 $0 $0 $0 Subtotal Current Liabilities$108,395 $65,969 $60,534 $54,516 $54,741 Long-term Liabilities$0 $0 $0 $0 $0 Total Liabilities$108,395 $65,969 $60,534 $54,516 $54,741 Paid-in Capital$130,000 $130,000 $130,000 $130,000 $130,000 Retained Earnings($80,450)$29,528 $153,232 $284,328 $425,277 Earnings$109,978 $123,705 $131,096 $140,949 $150,190 Total Capital$159,528 $283,232 $414,328 $555,277 $705,467 Total Liabilities and Capital$267,923 $349,201 $474,862 $609,794 $760,208 Net Worth$159,528 $283,232 $414,328 $555,277 $705,467 Sales Forecast ProjectionsSales Forecast Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12SalesMassage Therapy0%$9,000 $14,105 $20,150 $29,250 $40,300 $42,900 $50,375 $56,420 $54,600 $64,480 $68,250 $78,000 Facials and Anti-Aging Treatments0%$3,600 $6,045 $8,060 $9,750 $12,090 $13,650 $16,120 $18,135 $18,200 $22,165 $23,400 $26,195 Outcall Services0%$400 $800 $1,200 $1,600 $1,600 $1,760 $2,080 $2,400 $2,560 $2,800 $3,200 $3,200 Retail0%$1,240 $2,480 $3,100 $3,600 $4,650 $6,000 $6,975 $7,750 $9,800 $15,500 $16,500 $17,250 Total Sales$14,240 $23,430 $32,510 $44,200 $58,640 $64,310 $75,550 $84,705 $85,160 $104,945 $111,350 $124,645 Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Linens and Cleaning1%$65 $105 $147 $203 $270 $292 $343 $385 $377 $447 $474 $537 Oils & Lotions2%$260 $419 $588 $812 $1,080 $1,166 $1,372 $1,539 $1,507 $1,789 $1,897 $2,148 Cost of Retail products / 50% of Sales50%$620 $1,240 $1,550 $1,800 $2,325 $3,000 $3,488 $3,875 $4,900 $7,750 $8,250 $8,625 Subtotal Direct Cost of Sales$945 $1,764 $2,285 $2,815 $3,675 $4,458 $5,202 $5,799 $6,784 $9,986 $10,621 $11,310 Areas of ImprovementI have lived in the Hampton Roads area for almost 10 years, so I have a vague overview of the specifics and demographics in the area. I would like to dedicate more time and efforts to researching more specific demographics statistics in my area. This information would allow me to make more informed decisions and plans about several aspects of my business such as location and narrowing my target market. These statistics would also be helpful with predicting trend and competition not to mention assess and plan for various risks and issues that may be applicable to operations.Production is another aspect of my business that will need a great deal of additional research. In all my years of dreaming, it has taken me until this course to realize that the financial and operative specifics of the spa are the most important pieces of my vision. Both are areas that I need to research extensively if I am to put together a business plan that will help me to bring my vision to light. Production analysis includes key elements of operations such as employees, management, equipment, supplies, technology, and all that it takes to make the business run. Information about location and the specifics about the facility that my business needs to accommodate operations are also in the category. In short, these are the details that turn my vision from a dream I cooked up one evening on duty into an actual attainable venture. I would need to conduct research on whether it would be cost effective to build a facility or to lease building and expand later. One positive detail is that I wouldn’t have to worry about the headache of producing a product but keeping inventory of supplies can be just as big of a head ache if inventory and storage is not effectively managed. Luckily for me, I spent about 6 years of my naval career in inventory management. Lastly and the most important details to work out is the financial analysis and projections. This is the meat and potatoes of the business plan because this is the information that is going to appeal to the banks and investors that I will need to start up my venture. Any business owner or entrepreneur will need to have a general knowledge of the financial analysis of their business, not only to be able to provide details to a group of investors about how much to drop on the initial investment, but to be able to have a sound conversation about the past, present and future of your business affairs. After all, this is the money business. Details like start-up costs and projections are elementary numbers that can be painless computations to come up with, but the financial projections need to be strengthened by a more detailed comparison of our numbers to that of our competitors. I need to refresh and expand my knowledge on accounting and business operations. I do not want to be the owner that is solely and investor with no knowledge of operations. In this sense, I will spend a great deal of time working hands on with customers and staff. I want to be able to step in if I am needed and to fully grasp and appreciate my business, I must be knowledgeable about operations. ReferencesKotler P. (2002). Marketing Management. 13th Edition, Prentice Hall of India. –Sakunke, D. S. (2011, December). Impact of Future Trends on Marketing Strategy. Far East Journals. Retrieved from http://www.fareastjournals.com/files/fejmmv1n1p2Bevers, S., Waller, M., Amosson, S., & McCorkle, D. (2008). Developing a Marketing Plan. RM3-3.0 Texas Agricultural Extension Service, Texas A&M University.Jain, S. C., & Haley, G. T. (2009). Marketing planning and strategy. Cincinnati South-Western Publishing Company 1985..Kotler Phillip (2002). Marketing Management. 13th Edition, Prentice Hall of India. Page 40 - 60Sakunke, D. S. (2011, December). Impact of Future Trends on Marketing Strategy. Retrieved from Far East Journals: http://www.fareastjournals.com/files/fejmmv1n1p2.pdfAbrams, R.  (2010). Successful Business Plan: Secrets & Strategies.  The Planning Shop.  Palo Alto, California.  ISBN: 978-933895-14-7Valentin, E. K. (2001). SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice, 9(2), 54-69. Retrieved from http://search.proquest.com/docview/212164985?accountid=8289Harrison-Walker, L. (2011). STRATEGIC POSITIONING OF NATIONS AS BRANDS. Journal of International Business Research, 10(2), 135-147. Retrieved from http://search.proquest.com/docview/886544700?accountid=8289Consumer Health and Wellness Industry Trends. (2013). Retrieved December 1, 2016, from https://www.accenture.com/us-en/insight-consumer-healthcare-market-high-performance-business-research-2013 Tucci, C. (2016, June 16). Topic: Wellness and spa industry. Retrieved December 05, 2016, from https://www.statista.com/topics/1336/wellness-and-spa/
Dolce Domum Destination Spa

Dolce Domum Destination Spa

Question # 00540781 Posted By: bribri_09 Updated on: 06/05/2017 02:18 PM Due on: 06/17/2017
Subject Marketing Topic Marketing Tutorials:
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The term project is a 15 page marketing plan for the product or service that was our week one proposal (see attachment).
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allmonda-MKTG600-assigntment1.docx (20.96 KB)
Dulce_Domum_Beauty_BIZ_PLAN.docx (132.21 KB)
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