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Hairdressing Unit 2- Revision . Please watch this video. Write down all the costs you can think of when running a barber shop. http://barberconnect.co.uk (video on homepage). What is a cost?. http:// www.salonsdirect.com. What is a cost?. - PowerPoint PPT Presentation
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Hairdressing Unit 2- Revision
Please watch this videoWrite down all the costs you can think of
when running a barber shop.
http://barberconnect.co.uk (video on homepage)
What is a cost?http://www.salonsdirect.com
What is a cost?
TASK- Imagine a new Hairdressers is going to open in Wickford
Please list the start-up costs and Running costs this hairdresser may have.
Start-up costs Running costs
• Electricity bills• Shelving and shop fittings,• Staff wages • Cleaning materials, • A sign for the shop• Hairdryers• Clippers• Gel .
What is Revenue?
Discuss; What ways do Hairdressers earn revenue? What items do they sell?
Which of the below is revenue for a Hairdresser? Staff wagesAdvertising Cutting clients hair
Task- Are the items fixed or variable costs?
Item Fixed Costs (Does not changed based on how you produce)
Variable Costs (Changes based on how much you produce)
RentShampooBarber ChairsStaff wages Razor Blades
Rent
Shampoo Staff wages
Razor Blades
Barber Chairs
Electricity
Task
400 clients
Variable Costs £Fixed Costs £Total Costs £
Super Cutz various clients hair in their shops. Below are the estimated monthly costs if they cut 400 clients hair. Total fixed costs = £100,000Variable costs = £1 per haircut a) Work out the fixed costs, variable costs and total costs below
TASK- Supercutz cut clients hair through a walk in service. The price of a haircut £12. The business has cut 850 clients hair last
month. Work out the total revenue Supercutz receive from cutting hair?
Show your workings
£
Type in your answer in the box
TASK- Give the correct formula for calculating profit. Please drag and drop the correct items into the formula.
Revenue Number of Sales Inflows
Variable Costs Fixed Costs Expenditure
Profit
Match the keywords to the definitionsTotal costs =
Revenue =
Profit =
Gross profit =
Net profit =
Cash inflows are often called…Cash outflows are often called…
fixed costs + variable costs
number of sales x price per
unit
revenue –
expenditure
revenue – cost of
sales
gross profit –
expenditure
receiptsPayments
TASK – complete the Profit and Loss account below.This is based on Supercutz in Basildon
COSTS REVENUES
£ £
Income from Sales
Cost of Sales
Gross Profit
Expenses
Salaries
Rent
Net Profit
Revenue is £10,000 per month from cutting hair and selling hair products
Cost of sales (directly linked to cutting hair) is £1000 per month
Salaries are £2,500 per month
Rent is £2,400 per month
What is the difference between Gross Profit and Net Profit?
Identify two ways Hairdresser can improve its Net Profit in 2012?
Please type your answers
What is breakeven?
Add the items onto the graph correctlyLabel the diagram below. Drag and drop all
items. Please put the on the breakeven point
Profit
Total Revenue
Margin of safety
Loss
Fixed Costs
Variable costs
Add the items onto the graph correctlyLabel the diagram below. Drag and drop all
items. Please put the on the breakeven point
Profit
Total Revenue
Margin of safety
Loss Fixed Costs
Variable costs
Task- How many units do I need to sell to breakeven?
Add the items onto the graph correctlyLabel the diagram below. Drag and drop all
items. Please put the on the breakeven point
Profit
Total Revenue
Margin of safety
Loss Fixed Costs
Variable costs
TASK-What is the total revenue if the business sells 1000 units?
Task How many Haircuts would Supercutz
need to cut to breakeven? (cover costs)
£Selling Price £10Variable cost per Unit 50pFixed Costs £100,000
Type your answer in the box
Why is it important for Supercutz to know their Break-even point?
Breakeven is important because
Importance of Breakeven analysis to business when planning success
It is needed to identify and track costs (both fixed and variable costs)
• It can help businesses identify where they can change their costs, for example, buying cheaper materials or finding a cheaper supplier
It is needed to highlight the margin of safety
CASHFLOW FORECASTING TASK- Which of the items above are cash
inflows? Please drag and drop them below
Share Capital
Staff wages Haircuts
Monthly rent
Telephone bill
L'Oreal shampoo sales
Which of the items above are cash inflows? Please drag and drop them below
Electricity bill
Please work complete the cashflow table below 2012.2013 January (£)
February (£)
March (£)
Total Receipts
120,000 125,000 115,000
Total Payments
90,000 130,000 50,000
Net inflow/outflow
Receipts- payments30,000
Opening Balance
150,000 Closing balance of January180,000
Closing Balance
180,000 Add net cashflow to your closing balance)
BUDGETING
Why is it important that a hairdresser budgets?
Considers its ….
What items could a hairdresser own? (Asset)
Own for a short long amount of time? (Long term liabilities)
Own (ASSET) for a short amount of time? (current asset)
Who could a hairdresser owe money to? (Liability)
Own for a short long amount of time?
Own for a short amount of time?
Balance sheetWhat items could a Barber own?ASSETS
LIABILITIES
- What the business OWNS to others including current liabilities and long term liabilities
-What the business OWES to others including current liabilities and long term liabilities
Balance sheet ADD in TASK