Shelby McLeod

Location

Key Success Factors

Awareness Campaign

Continuous PromotionNumber of Customers

Decor

Swift Current Population

2990; 17%

2180; 12%

3200; 18%4895; 28%

4270; 24% 0-14

15-24

25-39

40-60

65+

Competitors

Organization Structure

General Manager/Ow

ner

Administrative Assistant

Junior Instructor

Senior Instructor

Promotion

Awareness Campaign• Social networking• Word of mouth

Grand Opening• Guerilla marketing

Profitability

Year Ended

2015 2016 2017 2018 2019

Sales

188,160 231,437 260,945 280,842 302,256 Total Operating Expenses

198,208 204,930 204,299 206,429 209,904 Net Income

(10,048) 24,368 49,282 64,740 80,346

Breakeven Analysis

1 2 3 4 5100

110

120

130

140

150

160

170

180

190

200

112

134

148

155

163

116 116 115 114 114

194 194 194 194 194

Breakeven Analysis

Base Case Cust/monthBreakeven Cust/monthCapacity

Year

Num

ber

of

Custo

mers

Sensitivity Analysis: Customers

Customers/Month Total Owner Compensation Average Compensation Per Hour

100 210,253 $19.41 Bankrupt

120 210,253 $19.41

Not economically feasible

140 323,952.00 $30.78 Middle ground

190 624,772.00 $59.55 Capacity=196

Base 625,901.00 $29.45 Base Case

Final Considerations

Number of Customers

Population Size

Marketing Efforts

Competition

Questions?

Total Capital RequiredCategory Cost

Leasehold Improvements

42,835

Electronics 22,000

Furniture and Equipment

8,094

Total $72,929

Category

Bank Debt 50,000

Equity 20,000

Total Financing 70,000

Debt To Equity Ratio 71%

Owner Compensation

Owner Compensation 1 2 3 4 5

Manager Salary 40,000 41,000 42,025 43,076 44,153

Dividends - - - 35,817 64,648

Total Owner Compensation 40,000 41,000 42,025 78,893 108,801

Average Hours Worked 2,500 2,500 2,000 2,000 2,000

Average Compensation/hour $16.00 $16.40 $21.01 $39.45 $54.40