Purchasing a sample or template for your day spa business plan can be extremely valuable, but only if there is a well-done and customizable financial model spreadsheet that comes with it. To know if the financial model you’re working with makes the cut, look for the following elements.
Multiple Revenue Streams
As the years go by, you may expect to move customer from one service to another (for example, increasingly sell massages, while at first customers only purchased facial treatments). To do this, the financial model must let you play with multiple revenue streams by letting you choose as many as possible and alter the sales mix between them over time.
Automated Financial Statements
The financial statements themselves require some accounting knowledge to put together, and the model should not require you to create them from scratch or even have to adjust them much at all. A well-made financial model will let you make adjustments on worksheets about your assumptions of costs, revenues, and debt and equity you will raise, and then populate the income statement, balance sheet, and cash flow statement automatically. For a model to be robust it must allow for a change made in one place to automatically effect all the other sheets and statements.
The model should give you the opportunity to lay out the startup costs you have identified, such as for your furniture, booths, sinks, supplies, inventory, and improvements to the location itself (leasehold improvements). The model should know which costs are depreciated over time and which must be expensed at the time they are incurred, so that you don’t have to learn this on your own or set up your own depreciation schedule.
Debt or Equity
Finally, the model should let you choose whether you will fund your day spa through debt (loans) or equity (stockholder investment). It should allow you to choose interest rates, a repayment schedule, and use a combination of both debt and equity if you choose. This should serve the purposes of most day spa entrepreneurs without complicated customization.
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Are you looking for more tips on starting a spa or advice on developing spa business plans? Call 877-BIZ-PLAN to learn how Growthink can help you build your spa business. Author: Eric Powers