shelby mcleod. location key success factors awareness campaigncontinuous promotionnumber of...
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Shelby McLeod
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Location
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Key Success Factors
Awareness Campaign
Continuous PromotionNumber of Customers
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Decor
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Swift Current Population
2990; 17%
2180; 12%
3200; 18%4895; 28%
4270; 24% 0-14
15-24
25-39
40-60
65+
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Competitors
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Organization Structure
General Manager/Ow
ner
Administrative Assistant
Junior Instructor
Senior Instructor
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Promotion
Awareness Campaign• Social networking• Word of mouth
Grand Opening• Guerilla marketing
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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
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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
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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
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Final Considerations
Number of Customers
Population Size
Marketing Efforts
Competition
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Questions?
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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%
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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