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Salon Operating Facts

Salon Operating Facts. “Rent, Operator Potential and 10 Percent !”. Operator Potential!. Objectives: Given the square footage of a salon, you will be able to determine your rent costs. Determine how much money you should you gross in order to stay within your operating budget

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Salon Operating Facts

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  1. Salon Operating Facts “Rent, Operator Potential and 10 Percent !”

  2. Operator Potential! • Objectives: • Given the square footage of a salon, you will be able to determine your rent costs. • Determine how much money you should you gross in order to stay within your operating budget • calculate the potential income of one operator in your salon.

  3. The Facts • Given: Your current landlord charges you: $5/square foot/month. (estimate) • The salon measures: 28ft. x 32ft. • One operator can complete 2 haircuts/hour • You charge $20/customer for a haircut • Your salon is open 5 days/week

  4. How do you cover the cost…? • Yearly rent cost = ? • How many operators do we need to cover the budget?

  5. How much is the rent? • 28 x 32 = 896 square feet • $5/square foot/month • $5 x 896 = $4,480 • rent = $4,480/month • 12 x $4,480 = $53,760 • Rent = $53,760/year

  6. What is the “gross budget” amount? • Rent = $53,760 • (because the rent is approximately 10% of the overall budget in a salon, multiply the rent by 10) • therefore the yearly gross budget target is: $537,600

  7. How much can one operator make? • $20/cut • 2 cuts/hour • 8 hours/day • 5 days/week • 50 weeks/year • $20 x 2 x 8 x 5 x 50= • = $80,000 • Yearly gross “cash flow” for one full-time operator!

  8. How many operators do I need to meet my annual budget? • $537,600 (yearly budget) • $80,000 (yearly cash flow per operator) • $537,600/80,000 = • = 6.72 operators • 6 full time people, and approximately 2/3 person, (part-time) • Note: this does not include any other “cash flows” you may make from product sales, perms, colors or other services you offer the customer.

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