C:\fakepath\pmp business plan-airport_2010 (sample)
1. Pamper Me Please
PAMPER ME PLEASE LLC
BUSINESS PLAN
Business Plan: Written and developed by MPerfect Enterprises Inc.
2. 1.0 Executive Summary
Introduction
The airport is often the central hub for the busiest, time-constrained, heavily stressed people within
our society. With unhealthy work/life strains continuously emerging for the 21st century business
traveler and traveler in general, a growing demand for customized stress-relieving, life-enhancing
services are paramount. As we embark upon a dynamic “microwave” culture where many
consumers want their needs and wants met as close to “instantaneous” as possible, the success of a
business will often lie within providing excellent customer service for a customer’s desires at an
ultra-convenience. In-between hectic flight commutes travelers now want to do more than eat fast
food, read daily newspapers, and buy expensive souvenirs during their traveling downtimes. They
want fast options to optimizing their entire emotional state of feeling and being at the greatest levels
of pleasure, health, and relaxation … of course with as much “pampering” as possible.
Business Plan Objective – Pamper Me Please at Ronald Reagan Washington National Airport
Pamper Me Please LLC seeks to continue its excellence in providing value adding spa and wellness
services by securing a day spa operation within the Ronald Reagan Washington National Airport by
October 2010. The ideal location would be within the pre-security National Hall section of the
airport so PMP can maximize upon the demand presented by not only travelers, but day-to-day local
patrons and airport employees. The purpose of this business plan is to show the overall operations
and strategy of PMP as a whole, with a specific focus on the operational and financial viability of
PMP within the Ronald Reagan Washington National Airport.
Sales Forecast
Conservative estimates project Pamper Me Please generating $23.1K as an airport RMU during the
1st year (3 months) beginning in Q4 2010. Massage services and retail products will be the core
offerings. Stronger sales at a full year of operation in 2011 will total over $240K at 14% net profit.
In 2012 PMP will use a $40K loan to expand the RMU to a full-line day spa at the airport, growing
its revenues from $484.8K in 2012 to $584.5K by 2014 at a net profit of 12%.
Pamper Me Please, LLC
Ronald Reagan Washington National Airport
Financial Highlights
5 Yr. Profitability Projection
$600,000
$500,000
Sales
$400,000
Gross Margin
$300,000
Net Profit
$200,000
$100,000
$0
($100,000)
2010 2011 2012 2013 2014
* Airport Day Spa RMU beginning Q4 2010
* Expansion to Full line airport day spa in 2012
CONFIDENTIAL AND PRORIETARY 1
3. Industry Overview
According to the International Spa Association (ISPA), in 2006 the US spa industry generated $9.4B
in gross revenue. Profits increased from 8% in 2003 to 17% in 2006 which suggests streamlined
operations that better manage expenses. The average revenue for a spa is $624,000 with the median
being $250,000. The Airport Spa segment is emerging but still mostly oligopolistic with less than 20
companies operating in over 20 airports. Numerous socio-cultural trends support a growing demand
for spa and wellness services amongst various target market segments. The most critical external
risks lie within the uncertain economic state of the US market.
Why Choose Pamper Me Please for the Ronald Reagan Washington National Airport?
In analyzing the lack of success with the previous spa company operating out of Ronald Reagan
Washington National Airport a couple of years ago, Pamper Me Please has identified a couple of
critical factors that will make its operation much more successful.
Pre-security National Hall location
Part of the failure of the previous spa company was its sub-optimal location post security inside
the terminals. This location is more hectic and unappealing to the busy traveler with less
downtime when choosing to remain within the terminal. Unlike an international airport, Ronald
Reagan Washington National Airport has fewer travelers with shorter wait times which impact
the base of demand for a spa company. Pamper Me Please will thrive by operating within the
heavy-traffic pre-security area of National Hall. Pamper Me Please will be able to maximize
upon the attractiveness and accessibility National Hall provides to traveling customers as well as
local non-traveling customers and airport employees who frequently patronize National Hall
vendors.
Increased demand for spa and wellness services
With the passing of several years since the previous spa’s operation, a boom in the demand for
spa and wellness services has been evident. Men have been identified as a growing sector for
such services in addition to kids. The image of spa and wellness services have emerged from
merely an exclusive activity for an exclusive market, to a significantly frequented service for
many seeking to maintain a healthy and stress-relieving lifestyle. This is reflected in the statistic
of 1 in 4 Americans now having received spa services.
“Pampering” High Quality Customer Service
Pamper Me Please brands itself with the slogan “You Deserve To Be Pampered!” This slogan is
reflected in the work ethic, professionalism, and customer service continuously provided by all
PMP technicians. Numerous company policies, management practices, promotions, and
branding activities will be implemented to ensure all Pamper Me Please customers have an
“irresistible” wellness experience … one in which they will want to tell everyone about. .
Pamper Me Please has several years of experience now in serving thousands within the Washington
DC area as a mobile day spa with high quality service in delivering “irresistible” wellness. Pamper
Me Please will be able to leverage upon the booming demand for wellness actualization by
channeling its “pampering” spa services in creating an “irresistible wellness pampering hub” for
Ronald Reagan Washington National Airport. Pamper Me Please’s ultra-relaxing massage services
adds a cutting-edge appeal to the airport’s value to business travelers needing to relieve stress,
personal travelers desiring a catalyst for their vacation, airport employees looking to temporarily
escape the tribulations of their work day, and local patron’s continuance towards enjoying the caveat
provided by National Hall.
CONFIDENTIAL AND PRORIETARY 2
4. Conservative projections shown in this business plan also reflect a strong revenue and profit
generating business to add to the airport’s vendor portfolio. By the end of the 6th month of
operation, Pamper Me Please will have recouped all initial investments and soon afterwards begin
generating over $20K on average a month while achieving net profits of 14% by end of year 2. Such
projections are conservative when identifying that these financials are achievable if Pamper Me
Please is able to provide an average of just 33 massage services a day which breaks down to
approximately just 3 an hour with 2 technicians on duty. Projections also reflect the airport’s break
even commissions totaling over $8.7K by end of year 2. Pamper Me Please will then be in a great
position to expand to a full-line day spa within the airport, achieving over $484.8K, $531.3K, and
$584.5K respectively over the course of year 3 thru year 5 with net profits reaching 12% after the
initial full-line spa investment. Projections show the airport’s break even commissions from year 3
to year 5 totaling over $45K. Such positive revenue and profit streams can be leveraged upon in
Pamper Me Please expanding to other Westfield airports across the country.
In addition, as a female African-American owned company, Pamper Me Please is in a great position
for securing a LDBE certification for Westfield and the airport’s accrediting purposes. Overall,
Pamper Me Please’s ability to provide phenomenal spa/wellness experiences and achieve attractive
financial projections in combination with being located within an ideal airport area within National
Hall (pre-security) makes Pamper Me Please a great business venture for Ronald Reagan
Washington National Airport.
2.0 Company Profile
2.1 Company Overview
Pamper Me Please LLC is a mobile beauty, spa, health, and wellness business that provides clients a
multitude of professional services to clients within their homes, offices, corporations, hotels, and
exclusive special event locations for all occasions. Pamper Me Please was founded in September of
2003 by Ms. Roland Turner in Washington D.C and has operated throughout the D.C, Maryland, and
Virginia areas. Pamper Me Please employs experienced, licensed, insured, and certified technicians
to provide customer service at the highest quality ensuring the highest levels of customer satisfaction
as a priority for all clientele. As a female owned - 100% minority owned business that can qualify as
a local disadvantaged business (LDBE), Pamper Me Please has positioned itself for significant
growth and multi-faceted success.
2.2 Background/History
2.21 Founder – Ms. Roland Turner
President, CEO, and Founder Ms. Roland Turner started Pamper Me Please to create more
opportunities and deliver greater customized solutions to professionals within the beauty, spa,
and wellness industry. With a 10-year background in communications and public relations, Ms.
Turner bridges the gap in employing spa professionals to service the community. Developing a
CONFIDENTIAL AND PRORIETARY 3
5. travel spa with wellness services is the niche she decided to fill in order to be a “day spa
alternative” in a world that has so many spas. “Everything is mobile these days from car
detailers to pet groomers, why not a wellness day spa to help those busy people like myself take
better care of themselves”, says Ms. Turner.
Ms. Turner has over 15 years of experience within the cosmetology industry. She has
established a partnership with the Baltimore School of Massage and is a member of the Advisory
Board. Ms. Turner also created and instituted an entire wellness program as the appointed
Director of the Massage Program at Fairland Sports and Aquatics Complex, which is the largest
recreational facility in Prince George County serving 1500 patrons daily. This facility is under
the Maryland State Government’s PG Parks and Recreation where she supervises a massage staff
of eight trained professionals. In addition, Ms. Turner currently hosts a Radio Talk Show on
WPGC 95.5 FM on Sunday mornings at 6:00am and Saturday mornings on Heaven1580am at
6:00am for the Greater Washington Urban League. She has also worked for NBC Television,
BET Cable Networks, and National Public Radio. Her educational background includes a B.S.
Degree in Journalism and a minor in Business.
2.22 Accomplishments
Pamper Me Please has conducted over 100 events in serving over 1,500 individuals and 50
companies that include:
CONFIDENTIAL AND PRORIETARY 4
6. Other special events and conferences for organizations include:
Miner Elementary School
The National Urban League Conference
Jack and Jill of America
US Marshalls Court House
Alpha Kappa Alpha Sorority
The Annual CITE Conference for Verizon
7th Annual Celebrity Golf Tournament - Greater Washington Urban League
The Annual Sister to Sister Sorority Luncheon
The Young Lawyers Association of Baltimore
The Heart and Style Conference for Heart Disease
Pamper Me Please LLC was selected to receive the prestigious Top 100 Minority Business®
Enterprise Award for 2009. This honor is designed to acknowledge and pay tribute to
outstanding women and minority business owners in Maryland, Virginia, Delaware, and the
Washington DC. Pamper Me Please was also recognized by BlackEnterprise.com as a rising
mobile beauty, spa, and wellness minority owned company.
2.3 Vision/Mission
The vision for Pamper Me Please is to lead a life-fulfillment movement that enhances the overall
well-being of people by providing the most therapeutic, convenient, and relaxing experiences to our
customers while leveraging goodwill and economic prosperity to all employed and partnered with
our company.
CONFIDENTIAL AND PRORIETARY 5
7. Our mission statement is:
“To promote wellness services throughout the community in an effort to educate clients on the
importance of taking better care of themselves in order to lead more productive, healthier, and
happier lives. We will also provide employment opportunities to technicians in the trade industry in
an effort to increase their economic stability while providing more career opportunities. We are
committed to educating trade professionals through our approach to quality customer service,
marketing, promotion, and business sophistication.”
2.4 Management & Organization
The executive management for Pamper Me Please currently falls within the responsibilities of Ms.
Turner as Founder/CEO/President. Independent consultants with MBA experience have been
outsourced consistently to contribute to the business development and marketing planning.
Consulting services to date have been provided by MPerfect Enterprises Inc. and Teneya Gholston,
MBA. In addition, Pamper Me Please has outsourced its accounting functions to ACS Business and
Accounting Solutions. All legal functions are outsourced by Michael K. Catoe. 18 technicians are
currently employed as independent contractors, each being trained and groomed to carryout
managerial responsibilities.
2.41 Divisions
Pamper Me Please has operated within 4 mobile business divisions entitled: Corporate,
Tradeshows & Conferences (T&C), Special Events, and In-Home. The Airport division has been
most recently developed to maximize upon the growing opportunities for flight travelers.
2.411 Airport
Function: To provide travelers, employees, and patrons within airport facilities wellness
services to enhance the traveling airport frequenting experience
2.412 Mobile
Corporate
Function: To provide corporations/organizations on-site wellness services for employees
to relieve stress, increase productivity, and boost morale within the workplace
In-Home
Function: To provide individuals, families, and groups wellness services within the
comfort of their own homes for an ultra convenient relaxation experience
CONFIDENTIAL AND PRORIETARY 6
8. Special Events
Function: To provide individuals in group settings associated with special events (i.e.
weddings, spa parties, birthdays, reunions) wellness services to enhance such happy
momentous occasions
Tradeshows & Conferences
Function: To provide the attendees and coordinators of tradeshows on-site wellness
services to enhance the attraction and satisfaction value of the events
Organization Chart (functional)
EXECUTIVE * Mktg Consulting
* Acctg/Legal
* Sales
*Technicians
Staff
AIRPORT MOBILE
In-home Tradeshows &
Conferences
Corporate Special
* Outsourced Events
functions
Pamper Me Please will also establish a Hotel Division in 2010.
2.42 Company Culture
We strive to sustain a culture of professionalism, happiness, and overachievement to create a
wellness utopia-like experience for our customers in addition to our technicians. We believe that
“pampering” is a divine gift that should be shared with as many people as possible at the highest
quality to reflect a true relaxation experience.
2.43 Core Values
Integrity – Maintain the highest ethical standards
100% Customer Satisfaction – Create the most gratifying wellness experience
Leverage – Always build upon our competencies as platforms for excellence
Optimal Balance – Optimize all areas of work and personal life to fully enjoy both
Life Fulfillment – Create, experience, and “feel” the desired results
CONFIDENTIAL AND PRORIETARY 7
9. 2.44 Start-up Summary: Ronald Reagan Washington Airport PMP Day Spa Site
PMP seeks to secure a kiosk location at the Ronald Reagan Washington Airport, pre-security ideally
below the escalator within National Hall. The combinational influx of numerous travelers and local
patrons at National Hall presents an optimal marketplace for driving business. Below are the
estimated start-up costs for the PMP day spa kiosk:
Start-up Expenses $
Legal $400
Business Consultation $500
Brochures, Marketing $3,500
Materials, Grand Opening
Coupons, Flyers, website
Massage Chairs (3) $1,350
Reflexology Chairs (2) $500
Retail Product $450
Product Supplies $288
Computer & Software $1,000
Insurance $600
Rent $2,500
Maintenance Fee $55
Signage Fee $250
Security Deposit $500
Accountant $400
Linens/Wipes/Paper Towels $300
Oils & Lotions $100
Décor & Furniture $500
Advertising $500
Other (set up fees) $500
Total Start-up Expenses $14,193
Start-Up Summary
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Expenses Assets Investments Loans
* Initial Investment made by owner
CONFIDENTIAL AND PRORIETARY 8
10. 3.0 Products & Services
3.1 Airport
Pamper Me Please is a service-driven wellness business. All professional services and products that
will be provided at the Airport(s) include:
3.11 Chair Massage
Customers remain fully clothed while receiving a corporate seated chair massage treatment based
on Acupressure and Swedish massaging from an expert technician upon their neck, shoulders,
back, arms, and hands.
3.12 Reflexology
Customers receive an intense massage incorporating manipulation and pressure, applied to reflex
points located on the feet and hands to help balance the entire body (shoes and socks can be
removed).
3.13 Beauty & Wellness Products
Various high quality wellness products and sales literature will be made available for sale to
provide further therapeutic valuables to our customers (i.e. lotions, balm, oils, candles, spa &
grooming products, etc.)
3.2 Other Divisions - Products & Services
Pamper Me Please is a full-service mobile “1 Stop Shop” for beauty, spa, health, and wellness
services. Thus, the Corporate, Tradeshows & Conferences, Special Events, and In-Home
divisions provide the following products and professional services:
CONFIDENTIAL AND PRORIETARY 9
11. Full Body Massage Therapy
Corporate On-Site Seated Massage
Reflexology
Facials and Waxing
Manicures and Pedicures
Body Wraps and Treatments
Make-Up
(Brochures and product/service descriptions are available in the appendix)
4.0 Industry Analysis
4.1 Industry Overview
4.11 Spa Market Financials & Statistics
The US spa industry includes several operations including health, beauty, wellness, nutrition,
fitness, and recreation. According to the International Spa Association (ISPA), in 2006 the US
spa industry generated $9.4B in gross revenue. This is a slight 3.4% decline from the 2005
$9.7B revenue total which falls well within the margin of error according to ISPA. The revenue
generated within the industry as a whole has grown significantly since its total of $7B in 2003.
Profits increased from 8% in 2003 to 17% in 2006 which suggests streamlined operations that
better manage expenses.
Spa Industry - Revenue
10
9
8
7
Revenue
(billions) 6
5
4
3
* N/A
2
1
0
2003 2004 2005 2006
•Discrepancy identified with ISPA 2004 report due to change
in how revenue is calculated
The average revenue for a spa is $624,000 with the median being $250,000. These statistics are
heavily determined and skewed by variances amongst the significant number of day spas. The
SpaFinder Day Spa Report showed that day spas either have relatively small revenue where more
than 50% of spas have revenues of less than $250,000 per year, or have revenues over $1
CONFIDENTIAL AND PRORIETARY 10
12. million.
The US spa industry employed an estimated 232,700 people in 2007. Average annual growth
from 2004 to 2007 was 4% for total employees, 2% for full-time employees, 3% for part-time
employees, and 10% for contract employees reflecting a greater number of technicians who are
contracted at spas to reduce overhead costs.
4.12 Spa Market Segmentation
The spa industry is segmented into 6 primary categories: Day Spas, Hotel/Resort Spas, Club
Spas, Medical Spas, Destination Spas, and Mineral Spas. Day Spas, which include mobile and
airport spas, represent 80% of total spas. Medical spas are the fastest growing segments while
Hotel/Resort spas have achieved the highest revenue as they have represented over 41% of
revenue despite accounting for 9% of spas. Day spas, the largest segment, accounts for just 49%.
Medical spas have achieved the largest profit margins at 28% followed by Hotel/Resort spas at
24%.
Spa Industry – Segmentation
(%)
Club 7% Mineral & Destination 1%
Medical 9%
Hotel-Resort
9%
Day Spa
80%
Spa Industry - Profits by Segment
30 28%
24%
25
Profit 17%
(%) 20 16%
15
10
5
0
Day
Day Resort- Medical
Medical Club
Hotel
CONFIDENTIAL AND PRORIETARY 11
13. 4.13 Additional External Factors
Economic
Macro
The US economy is in a state of slow recovery due to the negative impact from the decline in
the housing market, rising oil prices, and tight credit markets
According to Standard & Poor’s, GDP growth is expected to decrease from 2.2% in 2007 to
1.9% in 2008. Consumer spending growth is expected to decrease to 1.8% in 2008 (from
3.1% in 2006 and 2.8% in 2007). Such factors create a risk of economic recession within the
near future.
During 2007 the unemployment rate in the US rose to 5%, Washington DC rose to 5.7%
The inflation rate decreased to 2.3% in 2007 but a hike in November of over 4% threatens to
stop the interest rate cuts that had been consistently implemented to revive the sluggish
economy
Political
A significant geopolitical risk remains with the war and turbulence within the Middle East
The 2008 US Presidential election represented an extraordinary change in government with
the unique historical election of Barack Obama, the 1st African-American US President.
New anticipations of hope and change can create a psychological and financial spike within
the wellness industry
Socio-cultural
1 in 4 Americans have been to a spa as there are more than 32 million active spa-goers
Increased work and life responsibilities have created and additional demand for reducing
stress in addition to engaging in more health, beauty, and wellness-oriented activities
31% of all US spa goers are men, reflecting a growing demand and cosmetic male revolution
Growing demand for kid beauty and wellness services
Evolving spa goers desire spa experiences customized to their personal needs and desires
The leading education programs and workshops offered by US spas include those focused on
nutrition, healthy eating, and stress management
Integration of day spas within fitness clubs
Technological
New spa equipment is being developed with greater ergonomic, digital, and environmental
friendly capabilities
A growing number of website and blogging communities have been set up to share spa-
related information and experiences
Cutting edge technological advancements have been made in the realm of endermologie
(reducing cellulite via massaging). Led by LPG, a leading company in body treatment and
tissue technology, the latest “E6” model was released with greater ergonomic and precision
and qualities
4.2 Competition
(The competitive assessment of this plan is focused on airport spas)
CONFIDENTIAL AND PRORIETARY 12
14. 4.21 Supply Chain
Vendors at an airport are essential to adding financial and brand value to an airport, its
constituents, and the overall experience of the airport traveler (end consumer). In evaluating the
value components of the airport spa industry (an emerging niche spa segment with limited data
available) an assessment incorporates identifying the value each supply chain member adds as it
is reflected through its share of the price incurred by the airport traveler. With $375 being the
estimated average price of an airplane ticket and $30 being the estimated average price for a
service at an airport spa, the average total price for an airport traveler/spa service patron is $405.
Airport Day Spa Supply Chain
Value Chain Analysis
(Based on est. $405 total airport/spa service total price
Day Technicians End
Airlines Airport
Spa Consumer
Value
Value Value Value Over 50% are
$263
$112 $24 $6 Business
65%
28% 6% 1% travelers
Growth Growth Growth Growing use Time sensitive
Rate: 4% Rate:3% Rate:12% of
contracted Accustom to
Cost Cost Cost technicians premium pricing
Drivers Drivers Drivers
Oil/Fuel Labor Labor
Labor Maintenance Operational Products
Operational Professional
Products
Airline companies are the chain captains and are strongly affiliated with Airport companies.
Collectively they represent 93% of the value primarily because they provide the core service for
the traveler. Therefore, airport day spas are highly susceptible to the fluctuations of the airline
industry. However, with lower growth rates Airport Day Spas provide a unique service in
growing demand that can optimize airline/airport revenues. The technicians deliver the spa
service to the end consumer. Technicians make up only 1% of the value but 20% of the spa
revenue on average. Based on these factors, the Airport Day Spa can do the following to
optimize its value within the supply chain.
Align with target airline companies to build spas close to airline gates
Add value to specific airports with more sites to increase revenue/profits
Optimize arrangements with technicians by establishing core groups to contract out and ramp
up to daily compensation rates with commissions to better manage costs
4.22 Competitive Forces
Rivalry among competitive firms – LOW
There is normally just 1 company with a spa in an airport, 2 at the most.
CONFIDENTIAL AND PRORIETARY 13
15. Potential entry of new competitors – LOW
Although most spa companies in airports have similar capabilities, there is a significant
limit on entering an airport if another spa is currently there. However, there is a risk of
existing day spas leveraging their operation to enter the emerging Airport Spa sector
Potential development of substitute products - LOW
Due to the niche service orientation of spas and the airports’ tendency to optimize space
with a variety of vendors most appropriate to travelers
Bargaining power of suppliers – HIGH
Airports have full autonomy of approving vendors and determining terms to operating
Bargaining power of customers – LOW
Airport travelers are isolated in locations with extreme time constraints and low to no
alternatives for spa services while at an airport.
The multiple low competitive forces due to the niche services of an airport spa in
combination with constrained traveling dynamics provide and attractive market segment
with minimal competition once operating within an airport location
4.23 Airport Spa Competitors
An independent survey of airport spas showed that the entire Airport Spa segment is
emerging but still oligopolistic with less than 20 companies. They are located in over 20
airports and over 40 locations within those airports, plus several are expanding. Most of
these spas are located post security (primarily due to the setup of the airport with minimal
pre-security vendors) and are full line stores that service multiple massages, facials,
manicures, pedicures, and other treatments. Spa companies with multiple locations
throughout a specific airport tend to have a kiosk site within their mix as a means to
enhancing coverage and brand value within the airport. Some of the smaller companies
also service from kiosks to better manage profitability.
Airport Spa Competitors Financials/Statistics Summary
Avg. Avg.
Daily Monthly Avg. # Avg. Tech Avg. Hrs
Sales Sales Avg. Yearly Techs Daily Pay of
est. est. Sales est. est. est. Operation
$2,000 $56,000 $672,000 10 $100 14
CONFIDENTIAL AND PRORIETARY 14
16. Airport Spa Chair/Foot Massage Pricing – Avg. est.
Service Avg.
Chair Massage - 10m $ 13
Chair Massage - 15m $ 20
Chair Massage - 20m $ 27
Chair Massage - 30m $ 41
Foot Massage & Soak – 10m $ 18
Foot Massage & Soak – 15m $ 24
Foot Massage & Soak – 20m $ 35
Foot Massage & Soak – 30m $ 48
* Reflexology was not a standard service with most foot massage and soak services.
Competitor Analysis Takeaways
Airport spas achieve a much higher profit margin, with bigger stores achieving an even
greater margin due to lower payout scales to technicians
Bigger day spas with more services can provide greater revenues and profits only when
the spa can efficiently manage higher overhead costs
Chair massages are the most popular services
Revenue can double during busy/peak times
Pricing is very consistent amongst airport spas
5.0 Challenge Assessment
(For operating an Airport Spa)
Challenges
Maintaining and managing a reliable, quality technician work force
Minimizing impact of slow times
Optimizing revenue and profits with a small limited-service store
Securing additional management to carryout tactical operational responsibilities
Solutions
Secure an abundance of technicians and stabilize schedule routine
Implement quality assurance regimen/program
Empower core technician group with managerial responsibilities and hire management/assistant
upon expansion once demand is fully determined
CONFIDENTIAL AND PRORIETARY 15
17. Create significant promos and discounts to maximize sales from consistent base of airport
employees
Create traveler customer incentives to maintain consistent traffic
6.0 Strategy and Implementation
6.1 Macro Business Strategy
Pamper Me Please will implement focus strategies to grow the business organically primarily
through market penetration, market development, and alliances. This strategy includes increasing
market share for wellness products and services within the current Pamper Me Please business
portfolio for the DC metro area through the implementation of greater marketing efforts. In
addition, the business seeks to consistently grow by introducing the core spa and wellness
services/products into new market segments. The airport RMU within Ronald Reagan Washington
National Airport serves as the cornerstone market development and alliance initiative. Pamper Me
Please will leverage upon the success of its airport division to expand into other major US
metropolitan areas as an airport and mobile day spa conglomerate with a plethora of value-adding
alliances. Pamper Me Please will also leverage its brand value upon new service/product
development opportunities that are aligned with its wellness competencies.
Pamper Me Please Business Strategy
Market Penetration Market Development
Chair Massages Airports
Reflexology Massages Hotels
Wellness Products Kids Spa
Full Line Services Major US cities
ALLIANCES
Businesses
Organizations
Service/Product Development
PMP Products
Wellness Education
Professional Development (Techs)
6.2 Strategic Goals and Objectives
6.21 Goals
1. Become a leading conglomerate for mobile, airport, hotel, and children day spas within the
DC metro market
2. Expand PMP to multiple major US markets
3. Build multiple streams of revenue by leveraging the PMP brand
CONFIDENTIAL AND PRORIETARY 16
18. 4. Build significant technical and professional development opportunities for wellness
professionals
5. Catapult a philanthropic and education platform for promoting physical, economic, and civic
fulfillment
6.22 Objectives
1st yr.
1. Generate total revenue of $70k
$20K - Airport
$50K - Mobile
2. Achieve 50% gross margin with Airport Division
3. Secure corporate clientele with re-occurring weekly, bi-weekly, and monthly requests
4. Donate to sickle cell and breast cancer foundations
3rd yr.
1. Expand to Full-Line Day Spa at Ronald Reagan Washington National Airport
2. Generate total revenue of $590k
$480K - Airport
$110K - Mobile
3. Achieve 45% gross margin and 8% net profit with Airport Division
$230K – Airport Gross Margin
$39K – Airport Net Profit
4. Secure investment of $40K
5. Employ 2 part-time technicians at Ronald Reagan Washington National Airport
6. Establish Manager and Assistant at Full-Line Airport Spa
7. Establish Marketing and Sales functions (in-house/outsource)
8. Increase donations to sickle cell and breast cancer foundations in correlation to business
growth
5th yr.
1. Generate total revenue of $745k
$580K - Airport
$175K - Mobile
2. Achieve 45% gross margin and 12% net profit with Airport Division
$260K – Airport Gross Margin
$70K – Airport Net Profit
3. Expand Full-Line Day Spa to 2 additional airports within major US markets
CONFIDENTIAL AND PRORIETARY 17
19. 4. Secure investment of $100K
5. Increase technicians staff, part-time technicians, managers, assistants, and marketing-sales
functions in direct correlation with business growth
6. Increase donations to sickle cell and breast cancer foundations in correlation to business
growth
6.3 Management Plan
6.31 Personnel Plan
The PMP personnel are mostly contracted technicians that are all experienced, licensed, insured,
and certified. All technicians are 1099 and will initially get paid 100% commission. This is
effective for significantly minimizing overhead and insuring that PMP’s biggest cost driver will
only be incurred in direct proportions to sales generated. The Ronald Reagan Washington
National Airport RMU will make use of the available pull of 18 technicians within the mobile
operation in addition to securing more. A total of at least 8 technicians will be solely dedicated
to the airport kiosk. At least 4 technicians will work daily; 2 technicians per 6 hour shift during a
12 hour work day from 7am-9pm (the normal operating hours for vendors within National Hall
at Ronald Reagan National Washington Airport). During busy seasons and identified peak times
such as the holidays when travel is more extensive, there will be 3 massage technicians staffed
during each shift. If there is ever a problem and a customer needs to speak with a manager
immediately, the owner’s cell phone number will be posted on the RMU to handle issues.
By year 3 PMP plans to expand into a full-line spa within the Ronald Reagan Washington
National Airport. 12 additional technicians will be contracted during these expansions; PMP will
also initially hire a part-time manager, assistant, and 2 part-time technicians for the Ronald
Reagan Washington National Airport full-line spa. PMP will continue to hire technicians,
managers, and assistants at a similar rate during expansions in enhancing PMP’s personnel
stability, quality, and cohesiveness. By year 5 an average of at least 18 technicians will be
secured for each full-line airport expansion.
.
PMP Personnel Plan – Airports
# of
# of # of Part- Technicians
Contracted Time Total # of per 6hr.shift
PMP Airport Site Technicians Technicians Technicians (12hr. day)
Washington Airport Kiosk - Yr. 1 8 0 8 2
Washington Airport Full Line - Yr. 3 17 3 20 5
(Yr. 1 WA RMU are included within Yr. 3 WA Full-line)
Executive management will consistently explore qualified technicians for sourcing. An
orientation and training will be conducted for every new technician that works at the airport spa.
Technicians will be trained to carryout managerial, cashier, communication, and re-stocking
responsibilities. Technicians will initially be compensated $6 per 15 minute massage, with all
compensations for other massage durations being in direct correlation to this rate. Incentives
will include sliding scale rate compensation based on production and percentage of service sales
to retail. In addition, contests will be held monthly to generously reward high performers.
Competitive hourly wages will be paid to part-time employees in addition to annual raises.
CONFIDENTIAL AND PRORIETARY 18
20. 6.4 Marketing Plan
6.41 Target Market
Pamper Me Please’s primary target consumers are middle class adults with average
household incomes of $100,000 between the ages of 35-55 who either reside within or
frequently visit the DC metro area. PMP’s business portfolio seeks to initially penetrate
the market segments encompassing the following demographics and psychographics
within the DC metro area:
Moderate to high frequenting female spa goers (1-4 times a month) in groups
engaging in special events (weddings/birthdays/etc.)
Businessmen and white collar male workers
Fortune 500 companies
Government-based organizations
Airport business travelers (male & female) who reside in 4 star or better hotels
Airport vacation travelers (male & female) who reside in 4 star or better hotels
Consumers with chronic pain or old injury issues
The demographics of Ronald Reagan Washington National Airport/Westfield greatly
compliment the target market strategy of PMP. Thus, the Ronald Reagan Washington
National Airport will initially garner the greatest focus due to the high traffic and strong
concentration of PMP’s target consumers. The primary target market within the airport
will be the business traveler. Over 18 million customers travel through the airport with
56% business travelers and 44% personal. 52% are male and 48% are female of an
average age of 44 yrs., with the average household income being $107,600. PMP will be
able to thrive within such an environment and add a unique growing service to a site
generating $71.2 million in sales with an average terminal dwelling time of 75 minutes,
more than enough time to receive a relaxing spa service. In addition, PMP will be able
to maximize upon the attractiveness and accessibility National Hall provides to non-
traveling customers, who frequently patronize National Hall vendors, as a stationary site
for driving PMP business.
Secondary targets for PMP’s entire operations, including the Airport, will include Airport
employees, pre-teens between the ages of 9-13, and young adults between the ages of 18-
30.
6.42 Brand Positioning
The company name “Pamper Me Please” represents a consumers’ call to action for an
extraordinary above and beyond service they deserve. PMP responds to the consumer’s
demand for special attention and treatment with the following slogan:
“You Deserve To Be Pampered!”
The PMP brand will represent the premiere spa of ultra-customizing mobility for
delivering “irresistible” wellness. PMP will provide luxurious spa services and products
at a level of quality comparable to the Waldorf Astoria in combination with the on-
demand responsiveness and availability of a Pizza Hut delivery. PMP creates an
CONFIDENTIAL AND PRORIETARY 19
21. environment for men and women to receive quick, accessible, convenient, long-lasting,
and affordable stress relief both physically and mentally.
PMP’s airport RMU at Ronald Reagan Washington National Airport will incorporate the
aforementioned brand qualities and become the “irresistible wellness pampering hub” for
business travelers needing to relieve stress, personal travelers desiring a catalyst for their
vacation, and airport employees looking to temporarily escape the tribulations of their
work day.
6.43 Products and Services
6.431 Airport
PMP will initially implement a core-service focus strategy to efficiently respond
to the demand at the airport RMU with the highest level of customer service.
PMP will provide a small select group of high quality massage services in
combination with unique wellness products in delivering a fast, high-impact
wellness experience to its customers. This will also enable the busy traveler to
make a comfortable quick decision regarding their preferred service available.
All PMP services provide a natural means to strengthening and healing the body
The massage and reflexology services refresh the mind, body, and soul long after
the client has left the airport. The product lines sold will relax and invigorate our
clients at their offices or in their homes days and months later as they use the
products - remembering PMP at the same time.
The On-Site Seated Massage is the number #1 wellness program geared towards
the well being of corporate travelers. In today’s busy workforce, the business
traveler is often already stressed on a highly demanding job. Traveling just adds
to this stress level as passengers deal with check-in, go through extensive security
checks, and take airport shuttles to New York, Boston, and other destinations.
PMP’s concept of the Seated Massage takes this stress level into account and
alleviates it through timed increments of massage on ergonomically designed
massage chairs.
Chair Massage
The corporate seated chair massage is the standard and most requested service
within the day spa industry. Swedish massaging is combined with acupressure
techniques by hand, elbow, or the aid of various devices on different acupuncture
points on the surface of the body (primarily upon the neck, shoulders, back, arms,
and hands). This massage treatment improves circulation, eases muscle aches and
tension, improves flexibility, and creates relaxation. Massages are given in 10,
15, 20, and 30 minute increments while customer is seated in an ergonomic chair.
Foot Massage & Soak/Reflexology
Customers recline in a comfortable chaise lounge and receive an intense massage
from an expert technician with choose of the standard Swedish therapy or the
Reflexology treatment. Reflexology incorporates manipulation and pressure
applied to reflex points on the feet and hands to help balance the entire body. It
also improves circulation and stimulates the nervous system. Foot Balm is
massaged into the feet for a soothing sensation. Treatments are given in 10, 15,
20 and 30 minute increments. The customer is allowed to remove shoes & socks.
CONFIDENTIAL AND PRORIETARY 20
22. Massage Therapy
Service (Swedish/Acupressure) Reflexology
To improve the
To improve the function function of organs,
of tissue directly glands, and all
Purpose stimulated systems of the body
Neck, Shoulder, Back,
Body Part Focus Arms, & Hands Hands & Feet
Uses large muscle
movements (hands, Uses small muscle
arms, elbows, & other movements
Technique Applied devices) (thumbs/fingers)
Seated Yes Yes
Use of Oils/Lotions No Yes
Clothing Removal of shoes &
Requirements Fully-clothed socks
Time Durations (m) 10/15/20/30 10/15/20/30
Total Body
Relaxation; Balance;
Local muscle relaxation; Circulation, Nervous
Benefits Circulation System Stimulation
Beauty & Wellness Products
PMP will carry and continuously stock high quality wellness product
consumables and literature as add-on sales to massage services in addition to
stand-alone products for a variety of therapeutic purposes. These items include:
Lotions (skin/sun-tan)
Balms
Oil/Aroma Baths
Candles
Spa & Grooming Products
Creams/Preservatives
Body Wraps/Face Masks
Body Packs
Wellness books
Relaxation Music CDs
Competitive Advantages
PMP’s comprehensive beauty, spa, health, and wellness service/product portfolio
will provide unique competitive points of difference in separating itself from
other airport and day spas through the following:
Supreme customer service and professionalism
High-quality massages
A haven like relaxing environment with “irresistible” wellness attractions
(will include aromas, soothing music, and enticing spa décor)
Emerging wellness knowledge literature and insight
Cutting edge high quality products
CONFIDENTIAL AND PRORIETARY 21
23. Competitive Points of Parity
PMP will maintain an equal degree of industry product-service competencies in
relation to airport and day spas through the following:
Industry standard massage equipment
(ergonomically designed chairs that can hold 400lbs)
Use of standard operational and professional products with services
Supply of experienced, licensed, and certified technicians relative to
operations
Pricing model
6.432 Other Divisions - Mobile
Brand value will continuously build, adding to the success of the Airport site due
to the operational activity of PMP amongst its other divisions as an emerging
mobile day spa conglomerate. PMP also plans on expanding to a full-line spa
within the Ronald Reagan Washington National Airport. As a full-service “1
Stop Shop” for beauty, spa, heath, and wellness services; the following products
and professional services will be offered:
Massage Therapy - Corporate seated chair
Reflexology
Full Body Massage Therapy
Swedish
Deep Tissue (targets deepest layers of muscle in over-stressed areas)
Combination (mix of Swedish & deep tissue massage)
Aromatherapy (aromatic oils fused with a soothing energy balancing massage)
Hot Stone (lava stones/granite rocks are applied to specific acupressure pts.)
Maternity (catered to pregnant women)
Cellulite (designed to reduce cellulite)
Scalp
Synchronized (use of 2 technicians on 1 person)
His & Her Couples (designed for couples to receive massage at same time)
Facials Waxing
European (classic pore cleansing & restoration)
Deep Cleansing (Deep cleansing exfoliation & steam used for extractions)
Refresher (fast facial)
Mesmerizing Eyes (focused on areas around the eyes)
Gentlemen’s Facial
Aromatherapy
Anti-aging
Back
Fruit Enzyme
Deep Hydration
Glycolic (use of glycolic to remove deep lines and wrinkles)
Acne
Facelift
Vitamin C (use of Vitamin C antioxidants)
CONFIDENTIAL AND PRORIETARY 22
24. Oxygen
Hot Stone
Waxing
Full Leg Half Leg Bikini
Brazilian Arm Underarm
Back Chest Entire Face
Chin Lip Brow
Nose Ears Cheek
Manicures and Pedicures
Essentials (standard)
Men’s Sport
Hot Oil
Aromatherapy
Specialty (use of natural stimulants)
Aromatic scrubs (a la carte)
Body Wraps Treatments
Detoxifying Seaweed (use of seaweed minerals)
Cellulite
Body Toning
Partial (tummy, arms, legs, thighs, etc.)
Body Treatments
Hydrating Body Gel (use of gel to moisturize skin)
Body Polish (softening & ridding of old dull skin)
Body Scrub (body scrub applied to entire body & rinsed)
Body Paraffin (use of paraffin to smooth, hydrate, & restore skin)
Body Mud (beautifying mud applied to tone, firm, & refresh skin)
Body Bronzing
Anti-Aging Skin Care
Make-Up
Lesson
Special Event Makeover
6.44 Pricing
PMP implements a penetration pricing strategy in which the prices of the services and
products are set at a standard competitive rate. PMP will maintain prices comparable to
median prices amongst the leading airport and day spa companies. The prices reflect
value, quality, and luxury at an affordable rate. Small discounts will be applied to
services requested in longer durations. Tips will also be encouraged for the technicians.
Below are the prices for the core services offered at the airport site.
Prices for all other PMP services and products mostly relevant to the mobile operations
can be found in the appendix.
CONFIDENTIAL AND PRORIETARY 23
25. Service Price
Chair Massage - 10m $ 15
Chair Massage - 15m $ 21
Chair Massage - 20m $ 27
Chair Massage - 30m $ 39
Foot Massage - 10m $ 20
Foot Massage - 15m $ 27
Foot Massage - 20m $ 36
Foot Massage - 30m $ 48
Reflexology Foot Massage - 10m $ 27
Reflexology Foot Massage - 15m $ 38
Reflexology Foot Massage - 20m $ 50
Reflexology Foot Massage - 30m $ 70
6.45 Promotion
PMP will strive to lead the DC metro spa market in creative promotional activities that
generate significant business by:
Generating trial amongst 1st time PMP customers
Driving repeat customers
Creating a premiere, favorable, and lasting brand impression for “Pampering “ and
providing “Irresistible Wellness”
An aggressive promotional mix of sale discount promotions, advertising material
distribution, public relations, internet advertising, and airport signage will be
implemented to achieve these goals at a relatively low cost. A strong focus will be
placed on the Airport site as a central hub for PMP services. Mobile spa operations will
be simultaneously leveraged as well, creating a buzz where local Airport customers are
converted to mobile spa customers and vice-versa.
Media advertising such as radio and TV will not be used initially due to the high costs
incurred from achieving optimal frequency in combination with uncertain returns at a
moderate budget.
6.451 Sale Discount Promotions
PMP’s initial goal is to generate an influx of 1st time customer trials so the
“irresistible” quality of PMP’s core spa and wellness services can be fully
experienced at an optimal level of comfort for the customer. Sale discount
promotions will drive new customers to try PMP’s core massage services at the
Airport during traveling and non-traveling purposes, in addition to group setting
mobile spa events. Discount offers will be consistently aligned with most
promotional efforts to continuously catalyze demand and urgent point of purchase
transference. Sale discount promotions will include:
CONFIDENTIAL AND PRORIETARY 24
26. “3 for Free” Promotion
Customers will receive 3 extra minutes of massage or reflexology for free with
the purchase of at least a 15-minute massage or more. (Airport)
“Massage and Reflexology Combo Discount”
Customers can try a combo package and get $3 off 20minute combined services
and $5 off 30minute combined services. (Airport/Mobile)
“Monthly Drawing for a Free Full Body Massage”
Customers can enter their business cards for a monthly drawing where PMP will
give away a 1 hour full body massage for free at their home, office, or the airport.
This massage will be transferable to a friend or relative if they do not live in the
area. A key driver to creating traffic at the kiosk. (Airport)
Love Mate Spa Date
Couples receive $3 off 20minute combined services and $5 off 30minute
combined services (Airport/Mobile)
Family Discount
Each family member of at least 3 people with kid(s) receive a 5minute chair
massage at $7 (Airport/Mobile)
“Frequent Flyer Massage Discounts”
Customers who fly often will be able to purchase frequent flyer cards where they
will be able to purchase 5 same timed increment massages and get the 6th massage
half price or purchase 10 massages and get the11th massage free. (Airport)
Mobile Spa Event Group Discount
Airport customers will receive coupon for a 10% discount for a mobile spa event
with at least 10 people and 20% for at least 25 (customers must book event by
determined redemption date).
“No Empty Seats For Too Long”
If there are times when the massage chairs are empty, occasionally, therapists will
choose a random passenger and offer a 3 minute massage for free to keep a
customer in the chair periodically. When people see other people in the chairs it
often encourages them to get a massage as well. In addition, customers will often
want to purchase a service to extend their massage service or leave with a
wellness product. (Airport)
Seasonal discount promotions will also be offered during holidays and special
events like Christmas, Valentine’s Day, Mother’s Day, & Prom Season. Retail
discounts will be offered periodically as well.
6.452 Advertising Material Distribution
10,000 high resolution PMP brochures and coupon flyers will be created and
made available for distribution throughout 90 day intervals. All materials will
display the PMP logo, enticing “call to action” promotional statements, and
attractive spa-related visuals that capture the “irresistibility” of PMP’s wellness
CONFIDENTIAL AND PRORIETARY 25
27. services and sale discount promotional incentives. Sites of distribution within the
DC metro area will include:
Airport kiosk
Hotel concierges
Corporations/organizations that have been serviced by PMP
Corporations/organizations within close proximity to Washington
Airport/National Hall (to target the non-traveling patrons of National Hall)
6.453 Public Relations
Public Relations and publicity will serve as one of PMP’s strongest promotional
activities. PMP will implement a robust PR campaign, leveraging upon the
credibility typically received from various publications. This will create positive
word-of-mouth results to drive business at a relatively low cost. PMP will secure
a PR consultant at a monthly retainer to effectively saturate the PMP brand within
optimal magazine and newspaper sources viewed amongst target travelers and
spa/wellness consumers. Over 100 local and national sources will be targeted.
(view appendix for sources)
The owner will consistently network and explore opportunities amongst members
of charities, women’s groups, wedding planners, corporate special event
coordinators, meeting planners, and other significant groups. Philanthropic
activities will also be planned specifically for sickle cell, breast cancer, and
battered women organizations.
6.454 Internet Advertising
Website
PamperMePleaseSpa.com provides information on the entire gamete of beauty,
spa, health, and wellness services/products offered in detail. The layout currently
includes 10 web pages with detailed dropdown capabilities for general (home),
services-products, mobile operations, and contact info. Visual aesthetics and
content layout will be enhanced to optimize brand appeal in capturing interested
visitors. An Airport site page will also be added and heavily promoted with
coupons available on the site.
Internet directories (spa focused)
PMP will drive its visibility on popular search engines (i.e. google, yahoo, aol,
msn, etc.) by registering with a plethora of primarily free internet directories
geared towards spa and wellness companies. A goal of 200 sites to be listed upon
will be set to achieve initially. Afterwards, an internet directory exploration will
be conducted to achieve 50 new listings a month until reaching 1,000.
Afterwards, a staff worker will be hired to maintain a presence on these listings.
(view appendix for target sites):
Spa Sites/Blogging Communities
PMP’s owner will actively participate on numerous popular spa/wellness sites and
blogs that gather many “target consumers” to discuss spa-related topics. A top 50
list will be compiled and a staff worker will be hired to consistently participate.
(view appendix for target sites)
CONFIDENTIAL AND PRORIETARY 26
28. 6.455 Sales Forecast
The PMP sales forecast assumes a conservative and realistic growth trend for the airport
and mobile operations, with a projection of the airport site being open by the 4th quarter
of 2010. The areas of revenue for the airport during year 1 and 2 are massages and retail
beauty/wellness products. For the forecast a conservative average of $20 per 15 minute
service was estimated with $6 per 15 minute service paid to the technician (with a
minimum of 2 technicians on site). The basis for these projections is a conservative
estimate of 6 services (15m) per day during the 1st month of business, ramping up to 35
services (15m) per day by mid year 2011 (which breaks down to a conservative 3
customers per hour approximately) during a 12 hour 7 days a week work schedule. Retail
beauty/wellness products were conservatively estimated to be 10% of gross sales
although the retail revenue should increase in high correlation to an increased amount of
services performed. The gross margin for retail products was estimated to be 50%. By
Year 3 PMP’s site at Ronald Reagan Washington National Airport will expand into a
full-line store, conservative growth projections were applied.
SALES FORECAST - 5 Yr. Projections
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
SALES
Ronald Reagan Airport
Massages $ 21,000 $ 219,000 $ 383,250 $ 421,575 $ 463,733
Retail $ 2,100 $ 21,900 $ 44,074 $ 48,309 $ 53,140
Other Full-Line Services $ - $ - $ 57,488 $ 61,512 $ 67,663
Ronald Reagan Airport
Total $ 23,100 $ 240,900 $ 484,811 $ 531,395 $ 584,535
SALES FORECAST - 5 Yr. Projections (Breakdown)
Ronald Reagan Airport
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Avg. Avg. Avg. Avg. Avg.
# of # of # of # of # of
$ Serv. $ Serv. $ Serv. $ Serv. $ Serv.
Monthly $7,000 350 $18,250 913 $31,938 1,597 $35,131 1,757 $ 38,644 1,932
Weekly $1,750 88 $ 4,563 228 $ 7,984 399 8,783 439 $ 9,661 483
Daily $ 250 13 $ 652 33 $ 1,141 57 1,255 63 $ 1,380 69
Hourly $ 21 1 $ 54 3 $ 95 5 105 5 $ 115 6
% Increase 161% 75% 10% 10%
CONFIDENTIAL AND PRORIETARY 27
29. As the aforementioned suggests, ultra conservative estimates were applied beginning
with a slow ramp up from year 1 to year 2. The significant growth to over $240K
represents an extra 9 months of operation throughout the full year (verses only 3 months
during year 1) in addition to operating at a much greater capacity. At a conservative
“average service rate” of just 3 customers per hour in year 2, sales projections are
definitely achievable. In Year 3 with the expansion into a full-line day spa within Ronald
Reagan Washington National Airport, a growth rate of 75% from year 2 is projected in
generating $484.8K at an average service rate of 5 customers per hour. A significant
increase in sales with the full-line store is highly achievable due to a greater number of
spa services being provided, more technicians to meet greater demands, and a stronger
brand/operational value due to management and promotional efficacy. Moderate growth
projections throughout 2014 are beyond achievable, with PMP being positioned strongly
for surpassing sales forecasts.
6.456 Milestones
PMP Airport Implementation
Secure core group of
technicians for airport site 7/31/10
Attain LDBE certification 8/15/10
Secure kiosk site at Ronald
Reagan Washington Airport 8/30/10
Purchase equipment, décor,
and initial products 9/15/10
Finalize initial schedule, set-up,
& airport operation 9/15/10
Begin kiosk airport operation at
Ronald Reagan Washington
Airport 10/1/10
7.0 Financial Analysis
7.1 Important Assumptions
The table below contains important assumptions that PMP incorporates in calculating achievable
financial projections. A primary assumption is that the economy and airline industry will not
experience a severe recession.
Important Assumptions
2010 2011 2012 2013 2014
Short-Term Interest Rate 7% 7% 7% 7% 7%
Tax Rate 35% 35% 35% 35% 35%
Avg. Annual Depreciation Rate (5yr.) 0.20% 0.20% 0.20% 0.20% 0.20%
Allowance for uncollectible accounts 0.3% 0.3% 0.3% 0.3% 0.3%
In addition, the following assumptions have been made for all the pro forma financial statements:
CONFIDENTIAL AND PRORIETARY 28
30. The PMP Ronald Reagan Washington National Airport RMU will be secured and operating at
the beginning of Q4 (October) 2010
The PMP Ronald Reagan Washington National Airport RMU will expand to a Full-Line Day
Spa at the beginning of 2012 (Year 3)
7.2 Break-Even Analysis
With the average variable costs being 35% in the first year and estimated average fixed monthly
expenses of approximately $2,615, the required monthly breakeven sales volume for PMP at the
Ronald Reagan Washington National Airport is approximately $4,023. This breaks down to 6
massages (15 minute average) and 3 retail products serviced a day. PMP is also projected to recoup
its initial start-up expenses by Q1 2011.
Monthly Break Even $ 4,023
Average % Variable Costs 35%
Fixed Costs $ 2,615
Avg. Monthly Break Even Units -
Massage Services 181
Avg. Monthly Break Even Units -
Retail Products 80
Avg. Daily Break Even Units -
Massage Services 6
Avg. Daily Break Even Units -
Retail Products 3
Break-Even Analysis Graph
$8000
$6000
$4000
$2000
$0
$-2000
$-4000
$-6000
$2000 $4000 $6000 $8000 $10000 $12000
Monthly break-even
point
* Break-even point = where line intersects with
0
CONFIDENTIAL AND PRORIETARY 29
31. 7.3 Pro Forma Profit and Loss
During Year 1 through 2 and all commissions will be directly correlated to sales, ensuring that
variable costs are controlled to maintain a solid level of profitability. Commissions will primarily be
distributed in a similar manner throughout 2014. As sales increase significantly form year 1 to year
2, so will expenses due to a full year of operation (verses 3 months). However, due to the higher
operational efficacy of PMP at a greater sales capacity, net profit increases to 14% in year 2. With
the expansion to a full-line store in year 3 (2012), the new initial investment cost drivers inclusive of
construction/design in addition to rent expenses that will at least double the rent of the kiosk
decrease net profits by 6%. The net profit increases by 4% in the 4th year and maintains at 10%
throughout year 5 at much larger revenues and profits with the full line verses the initial kiosk.
Pamper Me Please LLC - Airport Division
Pro Forma Profit and Loss - 5 Year Income Statement
Fiscal Year Ending Dec. 31, 2010-2014
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Sales $ 23,100 $240,900 $484,811 $531,395 $584,535
Direct Costs of Goods
Technician Commissions $ 6,300 $ 65,700 $153,300 $168,630 $185,493
Owner Commissions $ 1,320 $ 42,075 $ 63,025 $ 79,709 $ 87,680
Cost of Retail Products $ 1,050 $ 10,950 $ 22,037 $ 24,154 $ 26,570
Linens & Cleanings $ 630 $ 6,570 $ 11,498 $ 12,647 $ 13,912
Oils & Lotions/Polish $ 105 $ 1,095 $ 1,916 $ 2,108 $ 2,319
Other Product Supplies $ - $ - $ 2,874 $ 3,076 $ 3,383
Total Direct Cost of Goods Sold $ 9,405 $126,390 $254,650 $290,324 $319,357
Gross Margin $ 13,695 $114,510 $230,161 $241,071 $265,178
Gross Margin % 59% 48% 47% 45% 45%
Expenses
Payroll $ - $ - $ 7,800 $ 9,750 $ 11,700
Advertising/Promotion $ 6,500 $ 9,750 $ 14,300 $ 16,900 $ 18,000
Website $ 750 $ 300 $ 750 $ 600 $ 450
Other Sales & Marketing Expenses $ 4,875 $ 3,250 $ 6,500 $ 8,125 $ 9,000
Travel $ 600 $ 1,000 $ 1,700 $ 2,000 $ 2,400
Equipment $ 1,850 $ 450 $ 2,800 $ 500 $ 1,750
Professional Services $ 1,750 $ 1,400 $ 5,250 $ 2,500 $ 3,750
Rent $ 7,500 $ 30,000 $ 60,000 $ 60,000 $ 60,000
Utilities $ - $ - $ 2,400 $ 2,400 $ 2,400
Phone $ 180 $ 720 $ 1,440 $ 1,440 $ 1,800
Credit Card Charges $ 231 $ 2,409 $ 4,848 $ 5,314 $ 5,845
Construction & Design $ 500 $ 500 $ 35,000 $ 2,500 $ 2,000
Airport Break Even Fee $ - $ 8,710 $ 9,563 $ 14,805 $ 20,786
Depreciation $ 185 $ 460 $ 1,020 $ 1,120 $ 1,470
Insurance $ 600 $ 600 $ 1,800 $ 1,800 $ 1,800
Computer & Software $ 1,400 $ 700 $ 2,450 $ 1,050 $ 1,050
Donations $ 250 $ 375 $ 750 $ 1,250 $ 1,750
Other $ 2,074 $ 1,625 $ 3,900 $ 2,925 $ 2,600
Total Operating Expenses $ 29,245 $ 62,249 $162,271 $134,979 $148,551
Earnings Before Interest and
Taxes (EBIT) $(15,550) $ 52,261 $ 67,890 $106,092 $116,627
Interest Expense $ - $ - $ 6,419 $ 8,560 $ 8,560
Taxes Incurred $ - $ 18,291 $ 21,515 $ 34,136 $ 37,823
Extraordinary Items $ - $ - $ - $ - $ -
CONFIDENTIAL AND PRORIETARY 30
32. Net Profit $(15,550) $ 33,970 $ 39,956 $ 63,396 $ 70,243
Net Profit % (Net Profit/Sales) -67% 14% 8% 12% 12%
7.4 Pro Forma Cash Flow
Conservative estimates still reflect strong net cash growth for PMP throughout 2014.
Pamper Me Please LLC
Pro Forma Profit and Loss - 5 Year Cash Flow Statement
Fiscal Year Ending Dec. 31, 2010-2014
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Cash Flow From Operations
Net Income From Operations $(15,550) $33,970 $ 39,956 $ 63,396 $ 70,243
Depreciation and other Amortization $ 185 $ 460 $ 1,020 $ 1,120 $ 1,470
Changes in Operating Assets & Liabilities
Accounts Receivable $ (46) $ (371) $ (746) $ (818) $ (899)
Inventories $ (350) $ (2,738) $ (5,509) $ (6,039) $ (6,642)
Accounts Payable $ 750 $ 1,130 $ 11,538 $ 12,550 $ 14,000
Deferred Taxes $ - $ - $ - $ - $ -
Net Cash Flow From Operations $(15,011) $32,452 $ 46,258 $ 70,210 $ 78,172
Cash Flow From Investments
Purchase of Property, Plant, Equipment $ (3,750) $ (5,650) $(46,150) $ (50,200) $ (56,000)
Acquisition of Intangibles $ - $ (750) $ (750) $ (1,500) $ (1,500)
Net Cash used in Investing Activities $ (3,750) $ (6,400) $(46,900) $ (51,700) $ (57,500)
Cash Flow From Financing
Net Increase in Debt $ - $ - $ 32,096 $ 21,396 $ 10,696
Equity Contributions $ 20,000 $20,000 $ 20,000 $ 20,000 $ 20,000
Net Cash used in Financing Activities $ 20,000 $20,000 $ 52,096 $ 41,396 $ 30,696
Net (Decrease) Increase in Cash and Cash
Equivalents $ 1,239 $46,052 $ 51,454 $ 59,906 $ 51,368
Cash & Cash Equivalents, Beginning $ - $ 1,239 $ 47,291 $ 98,745 $158,651
Cash & Cash Equivalents, Ending $ 1,239 $47,291 $ 98,745 $158,651 $210,019
CONFIDENTIAL AND PRORIETARY 31
33. Pamper Me Please, LLC
Ronald Reagan Washington National Airport
Pro Forma Cash Flow
$250,000
$200,000
Net Cash Flow
$150,000
Cash Balance
$100,000
$50,000
$0
-$50,000
2010 2011 2012 2013 2014
CONFIDENTIAL AND PRORIETARY 32
35. 7.6 Pro Forma Financial Ratios
Financial Ratios for the forecasted income, balance, and cash flow statements are provide below:
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
LIQUIDITY
Current Ratio (Current
Assets/Current Liabilities) 66.85 29.50 3.71 6.63 10.91
Quick Ratio (Current ratio
less inventory) 66.52 28.75 3.60 6.48 10.71
Net Working Capital
(Current Assets-Current
Liabilities) $ 70,131 $104,221 $134,976 $229,646 $320,040
Current Cash Debt
Coverage Ratio (Net Cash
oper. Activ/avg current
liabilities) -14.09 8.87 0.93 1.72 2.42
ACTIVITY
Inventory Turnover
(CGS/Inventory) 26.87 46.17 46.22 48.08 48.08
Accounts Receivable
Turnover (Net sales/Avg
trade receivables) 296 309 309 295 295
Accounts Receivable - Avg
Days Outstanding 1.39 1.81 1.81 1.81 1.81
Asset Turnover (Net
Sales/Avg Total Assets) 0.18 1.01 1.00 0.75 0.65
PROFITABILITY
Profit Margin on Sales (Net
income/Net sales) -1.14 0.30 0.17 0.26 0.26
Rate of Return on Assets
(Net income/Avg total
assets) -0.21 0.30 0.17 0.20 0.17
Rate of Return on Equity
(Net income/Equity) -0.21 0.31 0.22 0.23 0.19
DEBT
Debt (Total liabilities/total
assets) 0.01 0.03 0.22 0.13 0.08
Debt-Equity (Debt/Equity) 0 0 0.18 0.08 0.03
CONFIDENTIAL AND PRORIETARY 34
36. Appendix
Corporate Client List
1. Southwest Airlines
2. Progressive Insurance
3. Aetna
4. Westin Hotels & Resorts
5. Microsoft
6. Heritage Financial
7. ManorCare (Nursing Home Chain)
8. Goucher College
9. R.J. Princinsky and Associates
10. Quest Insurance
11. Van Bokkelen Elementary School
12. Emerson House (Nursing Home)
13. Stoddard Baptist Nursing Home
14. Howrey LLP (Law Firm)
15. State Farm
16. Allstate
17. National Urban League (National Conference)
18. Greater Washington Urban League
19. Heart and Style Conference for Heart Disease
20. General Dynamics
21. Laurel Regional Hospital
22. Holy Cross Hospital
23. PMMI
24. DC Child and Family Services
25. Harbour Square Apartments
26. Jack and Jill of America
27. Sidney and Company
28. Mary McLeod Academy
29. DC Ballet School
30. Carrol Lutheran Village (Nursing Home)
31. University of Maryland Residence Life
32. US Marshalls Court House
33. Howard University Homecoming
34. PEPCO Golf Tournament
35. The Trizetto Group
36. JEM Engineering
37. Alpha Kappa Alpha Sorority
38. Ebenezer Church (Baltimore)
39. The One Love Festival
40. Verizon CITE Conference
41. Novastar Mortgage
42. Saks 5th Avenue
CONFIDENTIAL AND PRORIETARY 35
37. 43. Sister 2 Sister Sorority Luncheon
44. Business Executive Exchange Conference for National Urban League (Orlando, Florida)
45. Minor Elementary School
46. Thursday Network
47. D.C. Public Schools – Speaking Engagement
48. The High Academy – Speaking Engagement
49. Fairland Community Center--Speaking Engagement
Testimonials
Thank you for making my spa party a success. My guests really enjoyed their day of pampering. I will be
calling you soon to book my next party.
Sincerely,
Tanya Phifer
I just wanted to express my deepest appreciation for the work your staff did on my wedding day. Everyone
commented that I was a beautiful bride. That was awesome! I will forward pictures to you soon.
Thank you so much,
Stephanie Brooks
Thanks for making tax season so painless. The seated massages were exactly what we needed. Let's do it again
next year!
Best regards,
Kehinde Kolawole, CPA
My friends are still talking about my party. It was an excellent way to kick off my new business. Thank you
for all of your help.
God Bless You,
Michella Jackson
CONFIDENTIAL AND PRORIETARY 36
38. Target PR Sources
Magazines
Local/Regional (DC)
Washingtonian Magazine (#1 in market penetration of all city-regional magazines)
Washington Business Journal
Washington Parent
Washington Woman
The Nation
Bethesda Magazine
Virginia Business Magazine
Guide to Retirement Living Magazine
National/Travel
Travel + Leisure
Arthur Frommer’s Budget Travel Magazine
Travel Holiday
National Geographic Traveler
Travel 50 & Beyond
Vacations Magazine
National/Consumer
Allure
Brides
Cosmopolitan
Elle
Essence
Glamore
Good Housekeeping
Bizarre
InStyle
Home Journal
Lucky
More
Oprah
People
Red Book
Self
Seventeen
Shape
Teen Vogue
Town & Country
Town & Country Wedding
W
CONFIDENTIAL AND PRORIETARY 37
39. National/Trade
American Salon
American Spa
Day Spa
D
Laun
Modern Salon
Nail Pro
Nails
Salon
Salon City
Salon Plus
Salon Today
Spa
Vidia
Viet Beauty
WWP Salon
Newspapers
Local (DC)
Washington Times
Washington Post
The Examiner
Washington City Paper
Capitol Hill Blue
The Common Denominator
The Hill
The InTowner
Henderson Hall News
Town Hall
Voice of the Hill
Roll Call
National
USA Today
New York Times
Websites
Local registries for main search engines (google, yahoo, msn, & aol)
Spafinder.com
about.com (dc spas)
spaindex.com
gayot.com
dayspastopten.com
openlist.com
craigslist.com
myhealthbriefcase.com
mydcwedding.com
CONFIDENTIAL AND PRORIETARY 38
40. georgetowndc.com
magicyellow.com
howstuffworks.com
yelp.com
partypop.com
Blogs
blog.spafinder.com (Susie’s Spa Blog)
Dayspa-massage.com
Thelandofspa.blogspot.com
Traveltowellness.com
Spaflyer.com
Spasoflife.blogspot.com
spacollegeblog.wordpress.com
travel.timesonline.co.uk
Websites of the aforementioned PR publications and sources will also be targeted
Photos – PMP Events
CONFIDENTIAL AND PRORIETARY 39