SBI Project for Hair Is, Inc.
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Hair Is, Inc. is a privately owned and operated business located in Kalamazoo, Michigan. As its title suggests, Hair Is is a hair salon specializing in multi-ethnic hair care. The salon also provides a nail care station for its customers. The salon has been in existence since 1988, founded by Nancy Williams, and reached incorporated status in late 1991. Nancy is still the current owner of the salon, but she has received financial assistance from her friend, Sharon Lockhart. Due to annually accumulating problems, Hair Is is currently operating under a heavy. debt load. Despite its increased sales totals in 1992, the income statement for the salon showed a negative net income. The objective of this project was to determine the cause of this negative net income and to suggest solutions which would provide positive profit levels in the future. In examining the salon, the main area of concern lies in the high levels of expenditures registered by Hair Is in 1992. The sales total of $121,000 is in line with the industry average for smaller hair salons, yet their expense totals were well above this industry average. To combat this problem, the author presented the salon with a budget to work with in 1993. The sales total in the budget has been increased by 9.0 percent, which is a reasonable goal for a young, growing hair salon. In comparison, the expense total was lowered by 15.5 percent from the previous years total.