Looking for a lingerie shop business plan? You're in the right place.
A boutique that sells imported bras and bridal lingerie has to answer hard questions before it signs a lease. How much stock does a full run of sizes cost? How many customers does the rent need? What happens to cash in January, before Valentine's Day and the holidays arrive? A generic retail template will not answer any of them.
In this article we'll walk through a complete sample plan for a lingerie boutique in southern Johnson County, Kansas, section by section, finishing with the financials: the stock budget, the first twelve months, payroll and a 20% sales shortfall.
Here's what you'll take away:
- The executive summary: fit the shop, the loan and three years of results on one page, so a lender sees the ask at a glance
- The competitor and SWOT tables: position an imported-brand specialist against department stores and online sellers without naming rivals you can't source
- The stock plan: work out how much opening inventory a deep size run needs, and how fast it has to turn
- The first year, month by month: see the slow months and the holiday surge before they happen, and size your reserve to the low point
- The staffing schedule: match fitters and associates to appointments and seasons so payroll follows sales
- The five-year profit and loss, cash flow and balance sheet: see how stock, rent and pay decisions show up in each
- The downside case: have an answer ready for "what if sales run 20% short?", with the steps the owner takes
If you're opening a lingerie shop, read this before you write your own. The shop is fictional, so keep what fits your market and change the rest.
In this plan
Looking for a lingerie shop business plan template? The Toolkit builds yours with your own numbers.
Pacific Gable on One Page
Pacific Gable is a European-influenced lingerie boutique that opens in January 2027 in a 1,300 square foot unit in a neighborhood retail center in southern Johnson County, Kansas. It sells fitted bras from imported labels, sleepwear and loungewear, matching sets, and bridal and occasion lingerie, with a small web store for reorders and gifts from April. Elise Brandt, the founder, owns 100%.
The shop raises $175,000: $80,000 of Elise's savings and a $95,000 bank term loan. Opening stock takes $66,000, the fit-out, fixtures and point of sale $47,000, and $19,300 covers legal work, licensing, launch marketing and the weeks of rent and training before opening. The last $42,700 is held back as a cash reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $469,400 | $580,560 | $676,906 |
| Gross profit | $242,575 | $300,020 | $349,809 |
| Net income after opening costs | ($20,441) | $20,173 | $13,502 |
| Closing cash | $49,029 | $71,056 | $85,549 |
Year 1 is a loss only once $19,300 of opening costs are counted; before them the shop is $1,141 short of break-even. Six months run at an operating loss, and November and December earn 29% of the year. The downside case cuts revenue by a fifth, delays two hires and trims pay, marketing and distributions. Cash stays positive in every year of it.
The pitch is specific. A customer books a 40-minute fitting, leaves in a size that actually fits, and comes back for the matching set, the robe at Christmas or the trousseau before a wedding.
About the Company
Legal name: Pacific Gable, LLC, a Kansas limited liability company. Owner: Elise Brandt, 100%. Premises: 1,300 square feet in a neighborhood retail center, with four fitting suites. Opening: January 2027, following a few weeks of stocking and training. Stage: pre-launch. Lease terms are drafted and two vendor accounts are open.
The gap it fills
Southern Johnson County has department-store intimates floors and online sellers, but few places where a customer can be fitted in private and choose from a deep run of European bands and cups. Pacific Gable takes that position.
Goals
| Period | Target |
|---|---|
| Year 1 | About 1,450 first-time customers; web store live by April; reserve never below $9,000 |
| Year 2 | $580,560 of revenue, the first year of profit after tax |
| Year 3 | Assistant manager in post since month 22; $676,906 of revenue |
| Years 4 and 5 | Repay 36% of the loan by Year 5 and start owner distributions in Year 4 |
What goes on the shelves
| Department | Typical price | Year 1 share of sales |
|---|---|---|
| Fitted European bras | $98 average | 34% |
| Sleepwear, robes and loungewear | $72 average piece | 22% |
| Panties and matching sets | $42 average item | 16% |
| Bridal, trousseau and occasion lingerie | $165 average | 11% |
| Hosiery, gifts and gift cards | $34 average | 9% |
| Web orders | $85 average order | 7% |
Licenses and house rules
The shop needs a city business license, state sales tax registration and a sign permit, budgeted at $800 together. Elise would check current requirements with the state and the city before filing. Bras may be exchanged, while underwear and hosiery are final sale for hygiene reasons, and fitting suites are never covered by cameras.
Shoppers and Rivals in Johnson County
Who buys
The main customer is a woman aged 28 to 60 who lives or works within a short drive and pays more for fit and an imported label. A second group is brides and their parties, and a third is partners and friends buying gifts, who concentrate in February and December.
Where else she could spend the money
| Alternative | What it offers | Why she goes there | Where Pacific Gable differs |
|---|---|---|---|
| Department-store intimates floors | Many labels in one building | Convenience and sale events | Private fittings and a deeper size run |
| National lingerie chains | Large assortments and heavy advertising | Familiar names and promotions | Imported labels the chains do not carry |
| Online retailers | Wide choice, price comparison | Price and home delivery | A fitting that corrects the size before she orders |
| Bridal salons | Gowns and some accessories | One stop for the dress | Foundation garments chosen for the dress, with fittings |
| Other independent boutiques | Curated fashion and gifts | Style and a local feel | Specialist fitting and sizes in depth |
The table describes kinds of seller, not particular companies. Each one's own site is the place to check its current range and prices.
Strengths, weak points, openings and threats
| Helps | Hurts | |
|---|---|---|
| From inside | An owner who fits most customers herself; a deep size run; low markdown rate | One location; Elise is the best fitter, so her absence slows sales; payroll is a quarter of revenue |
| From outside | Referrals from bridal salons and wedding planners; a growing web reorder base | Online price pressure; a slow January; vendor price rises |
Bringing Customers Through the Door
Marketing: $18,000 a year plus $8,000 to launch
The plan expects about 1,450 first-time customers in Year 1, or about $18 of marketing each. Four routes carry most of them.
- Local search. A Google Business Profile, an online booking page for fittings, and photos of the suites.
- Bridal referrals. Salons, planners and photographers send brides and receive a standing thank-you.
- Shopping-center events. A fitting evening each spring and a gifting evening in early December, run with neighboring tenants.
- Email and text. A nudge half a year after each fitting, since bras lose shape with wear. It drives repeat sales and the first web orders.
How a visit goes
A customer books a fitting or walks in. A stylist measures her, brings six to eight styles to the suite and adjusts straps and bands on the spot. A size the shelf lacks is ordered in, and the customer is told when it lands. At the wrap desk the stylist offers the matching set, which is how the average ticket reaches about $140. A message in week two asks how the fit is holding.
Pricing
Every price is marked in the shop. Imported labels set a retail price range and the shop sits inside it, so discounting is limited to end-of-season clearance, which the plan costs at 2.5% of sales.
Behind the Counter
The unit
The unit splits into a sales floor, four fitting suites and a compact stockroom. Year 1 rent of $39,000 ($30 a square foot) and $4,200 of utilities come to 9.2% of revenue, falling to 6.8% by Year 3.
Size runs and stock turns
A single bra style needs a dozen band and cup combinations, so the shelf holds far more items than the sales figures suggest. Point-of-sale software counts every size separately. Year 1 ends with $77,341 of stock, about 18 weeks of cost of goods sold and 2.9 turns, and turns reach 4.0 in Year 3 as the size run settles on what sells.
Buying calendar
Spring and bridal lines are ordered at the winter market weeks, holiday sleepwear and gift sets in August. The August order is the reason for the reserve. Elise attends two market weeks a year, budgeted with trunk-show costs at $4,500.
Vendors
The shop works with eight to ten labels on 30-day terms, with first-order minimums. No label should exceed a quarter of purchases. A backup supplier for core sizes covers a label that runs out.
Schedule
The shop opens Monday to Saturday, 10:00 to 18:00, and Sunday, 12:00 to 17:00. Elise works 45 hours a week. A stylist-fitter works about 24 hours, an associate about 17, and a seasonal associate joins in February, May, November and December.
Shrinkage and returns
Shrinkage and damage are costed at 1.0% of sales, with cameras on the floor and in the stockroom.
Leadership
Elise Brandt, founder
Elise has twelve years in intimate apparel. She spent seven as a fitter, then buyer, at a department-store group and five managing a specialty boutique, and has fitted thousands of customers across every buying season. The $80,000 she invests is those years of savings, and the shop pays her $48,000.
Where the team is thin
Elise has not signed a retail lease in her own name and has not run a web store. The plan covers the first with a lawyer's lease review, budgeted in the $3,500 of legal fees, and the second with an assistant manager from month 22 who also runs web orders.
Cover for absence
Sales depend on Elise's fitting, so a long absence would hurt. The stylists learn her method, but no key-person insurance is budgeted, and a lender may ask for it.
Advisers and the bank
A retired buyer reviews the buying plan each quarter, and a local accountant keeps the monthly books, covered by the $3,400 of professional fees. The loan carries a personal guarantee from Elise and quarterly financial reporting.
Pacific Gable in Numbers
One five-year model sits behind every table here. Year 1 runs month by month, because a boutique earns a large share of its year in a few weeks; later years are annual. The shop's operating figures are listed first; the statements that follow are built from them.
Stock, fit-out and the loan
| Use of funds | Amount |
|---|---|
| Opening stock: European bras, band 30 to 42 and cups A to H | $28,000 |
| Opening stock: sleepwear, robes and loungewear | $15,000 |
| Opening stock: panties and matching sets | $10,000 |
| Opening stock: bridal and occasion lingerie | $8,000 |
| Opening stock: hosiery, gifts and accessories | $5,000 |
| Fit-out of 1,300 square feet: finishes, lighting, four fitting suites, wrap desk | $30,000 |
| Fixtures: wall displays, tables, mannequins, steamer | $11,000 |
| Point of sale, web store set-up and photography kit | $6,000 |
| City business license, state sales tax registration, sign permit | $800 |
| Legal: LLC, lease review, vendor agreements | $3,500 |
| Pre-opening rent and staff training | $7,000 |
| Launch: branding, website, opening weekend, shopping-center partners | $8,000 |
| Cash reserve for the January lull and the autumn stock build | $42,700 |
| Total uses | $175,000 |
| Source of funds | Amount |
|---|---|
| Elise Brandt's savings | $80,000 |
| Bank term loan (ten years) | $95,000 |
| Total sources | $175,000 |
Elise Brandt puts in $80,000 of her savings, which is 46% of the $175,000 raised. A bank term loan of $95,000 supplies the other 54%, over ten years at 10.75% with the first three months interest-only. The lender would likely ask for Elise's personal guarantee and a claim on the fixtures; the 10.75% is an example rate, not an offer. Opening stock takes $66,000, the fit-out, fixtures and point of sale $47,000, and $19,300 goes on legal work, licensing, launch marketing and the pre-opening weeks of rent and staff training. That leaves $42,700 in the bank, sized to the September low point and to the autumn stock build that has to be paid for before holiday sales arrive.
Shop figures behind the forecast
- The shop leases 1,300 square feet in a neighborhood retail center in southern Johnson County at $30 a square foot a year all-in, or $39,000 in Year 1, with four fitting suites and a wrap desk. Elise would check the going rate with a local broker before signing, and rent climbs about 3% a year.
- Fitted European bras anchor the shop: 1,650 sold in Year 1 at an average of $98, which is about 1,180 bra customers buying 1.4 each. Sleepwear, robes and loungewear add 1,450 pieces at $72, panties and matching sets 1,800 items at $42, bridal and occasion lingerie 300 pieces at $165, and hosiery, gifts and gift cards 1,300 items at $34.
- Web orders start in April and reach 400 in Year 1 at an average of $85, mostly reorders of a known size and gifts. They are 7% of Year 1 revenue and 13% by Year 5. In-store sales are $435,400 in Year 1, or $335 a square foot, and $600,256 in Year 3, or $462.
- The average in-store ticket is about $140, a bra with a matching set, which gives about 3,100 transactions in Year 1, or 10 a day over 310 trading days. Prices rise 3% a year from Year 2, and volumes grow with repeat visits and referrals.
- Gross margin is 51.7% in every year. Line margins run from 50% on bridal, sleepwear and gifts to 53% on bras and 54% on sets. Three further leaks sit in operating costs: clearance markdowns (2.5% of sales), shrinkage (1.0%) and card fees (2.8%).
- About 1,450 first-time customers walk in during Year 1. With $18,000 of running marketing and $8,000 of launch spend, each costs about $18 to win. The channels are local search, wedding-planner and bridal-salon referrals, shopping-center events and an email list.
- Fitting time is not the constraint. At about 40 minutes a fitting, 1,180 bra customers use roughly 790 hours in Year 1, while Elise (about 20 hours a week) and the part-time stylist-fitter (24) offer around 2,200.
- Inventory is valued at cost. Year 1 closes with $77,341 on the shelves, roughly 18 weeks of sales at cost and 2.9 turns, and turns improve to 4.0 by Year 3. Lingerie turns slowly because every style needs a run of bands and cups, and the shop special-orders sizes it does not carry.
- Labels extend 30 days of credit. Shoppers pay by card on the spot, so receivables are limited to 2 days of settlement.
- On-costs of 27% on full-time wages cover payroll taxes, health cover, workers' compensation and leave; part-time staff carry 15%. A 3% annual raise appears on its own line from Year 2. Hourly rates sit near the $17.10 median for retail sales workers published by the Bureau of Labor Statistics (May 2025).
- The model taxes profit at the 21% federal corporate rate plus a 6% state planning figure; Kansas uses graduated rates, so a tax adviser should confirm the number. An S corporation election would shift the tax onto Elise's personal return, which makes the corporate treatment here the cautious one.
- Owner distributions ($12,000 in Year 4, $20,000 in Year 5) wait until the loan is below $70,000 and cash tops $90,000.
Revenue by department
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Fitted European bras | $161,700 | $191,786 | $218,333 | $240,946 | $259,205 |
| Bridal, trousseau and occasion lingerie | $49,500 | $64,581 | $77,021 | $86,544 | $92,854 |
| Sleepwear, robes and loungewear | $104,400 | $126,072 | $145,131 | $161,287 | $174,229 |
| Panties and matching sets | $75,600 | $88,683 | $100,255 | $110,147 | $118,178 |
| Hosiery, gifts and gift cards | $44,200 | $52,530 | $59,516 | $65,017 | $68,881 |
| Web orders (reorders and gifts, from April) | $34,000 | $56,908 | $76,650 | $92,882 | $105,235 |
| Total revenue | $469,400 | $580,560 | $676,906 | $756,823 | $818,582 |
| Growth on prior year | – | 24% | 17% | 12% | 8% |
Bras plus the sets that go with them make up 51% of Year 1 sales, and sleepwear adds 22%. Bridal and occasion pieces are 11% and sell mostly between April and August: 64% of that line lands in those five months. Web orders are the fastest-growing line, from $34,000 in Year 1 to $105,235 in Year 5, because a fitted customer who knows her size can reorder without a trip.
The opening year, month by month
| Month | Fitted European bras | Bridal, trousseau and occasion lingerie | Sleepwear, robes and loungewear | Panties and matching sets | Hosiery, gifts and gift cards | Web orders (reorders and gifts, from April) | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|---|
| Jan 2027 | $6,566 | $1,485 | $3,600 | $2,184 | $1,054 | $0 | $14,889 | ($11,189) |
| Feb 2027 | $9,310 | $1,980 | $6,192 | $7,140 | $6,086 | $0 | $30,708 | ($3,014) |
| Mar 2027 | $10,290 | $3,630 | $4,032 | $3,612 | $1,428 | $0 | $22,992 | ($7,001) |
| Apr 2027 | $11,466 | $4,950 | $4,536 | $4,032 | $1,598 | $2,380 | $28,962 | ($3,916) |
| May 2027 | $13,524 | $6,435 | $11,016 | $5,922 | $6,154 | $2,720 | $45,771 | $4,770 |
| Jun 2027 | $13,622 | $7,095 | $5,328 | $4,746 | $1,428 | $2,720 | $34,939 | ($828) |
| Jul 2027 | $13,328 | $7,095 | $5,616 | $4,956 | $1,972 | $2,720 | $35,687 | ($441) |
| Aug 2027 | $14,700 | $6,270 | $5,760 | $5,124 | $2,040 | $2,720 | $36,614 | $38 |
| Sep 2027 | $16,072 | $4,620 | $7,128 | $6,174 | $2,108 | $3,060 | $39,162 | $1,355 |
| Oct 2027 | $16,072 | $2,970 | $9,504 | $7,056 | $3,128 | $3,740 | $42,470 | $3,064 |
| Nov 2027 | $17,934 | $1,815 | $17,856 | $8,820 | $6,290 | $5,780 | $58,495 | $11,346 |
| Dec 2027 | $18,816 | $1,155 | $23,832 | $15,834 | $10,914 | $8,160 | $78,711 | $21,793 |
November and December together bring in 29% of Year 1 revenue, and December alone is 17%. February is the first peak, with $30,708 against $14,889 in January, and May follows on Mother's Day. Operating profit is negative in January to April, June and July, roughly nil in August and positive in the other four months. The lowest month-end cash is Sep, at about $9,000, after the autumn stock has been bought and before holiday sales arrive.
Who is on the schedule
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Owner, buyer and lead fitter | $48,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Stylist-fitter (part time, about 24 hours a week) | $24,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Sales associate (part time, afternoons and Saturdays) | $16,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Seasonal associate (part time, February, May, November and December) | $14,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Assistant manager and online orders | $38,000 | Month 22 | – | 1 | 1 | 1 | 1 |
| Weekend stylist (part time, about 16 hours a week) | $16,000 | Month 34 | – | – | 0.5 | 0.5 | 0.5 |
| Total payroll incl. on-costs | $112,327 | $124,392 | $165,187 | $178,987 | $178,987 |
Elise works the floor from day one and does most Year 1 fittings. A part-time stylist-fitter works about 24 hours a week and a part-time associate about 17, with a seasonal associate added in February, May, November and December. The assistant manager joins in month 22 and also runs web orders, and a weekend stylist follows in month 34. The seasonal associate's $14,000 is an annual-equivalent rate, paid over four months. Elise's $48,000 pay is a cost line, so the profit figures are after her salary.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $469,400 | $580,560 | $676,906 | $756,823 | $818,582 |
| Cost of goods sold | ($226,825) | ($280,540) | ($327,097) | ($365,714) | ($395,558) |
| Gross profit | $242,575 | $300,020 | $349,809 | $391,109 | $423,024 |
| Payroll incl. on-costs | ($112,327) | ($124,392) | ($165,187) | ($178,987) | ($178,987) |
| Rent | ($39,000) | ($40,200) | ($41,400) | ($42,600) | ($43,900) |
| Utilities | ($4,200) | ($4,300) | ($4,450) | ($4,600) | ($4,750) |
| Marketing | ($18,000) | ($19,500) | ($20,500) | ($21,500) | ($22,500) |
| Insurance | ($3,800) | ($4,100) | ($4,400) | ($4,700) | ($5,000) |
| Professional fees | ($3,400) | ($3,600) | ($3,800) | ($4,000) | ($4,200) |
| Software subscriptions | ($3,600) | ($3,900) | ($4,200) | ($4,400) | ($4,600) |
| Card processing fees (2.8% of sales) | ($13,143) | ($16,256) | ($18,953) | ($21,191) | ($22,920) |
| Markdowns beyond planned margin (2.5% of sales) | ($11,735) | ($14,514) | ($16,923) | ($18,921) | ($20,465) |
| Shrinkage and damage (1.0% of sales) | ($4,694) | ($5,806) | ($6,769) | ($7,568) | ($8,186) |
| Web shipping and packaging | ($1,900) | ($3,100) | ($4,100) | ($4,800) | ($5,300) |
| Bags, tissue, hangers and store supplies | ($3,000) | ($3,300) | ($3,600) | ($3,800) | ($4,000) |
| Market-week buying trips and trunk-show costs | ($4,500) | ($5,000) | ($5,300) | ($5,600) | ($5,800) |
| Cleaning, alarm monitoring and repairs | ($2,600) | ($2,800) | ($2,900) | ($3,000) | ($3,100) |
| Licenses, permits and filings | ($700) | ($750) | ($800) | ($850) | ($900) |
| Fixture refresh and equipment replacement | $0 | ($1,500) | ($2,500) | ($7,500) | ($3,500) |
| Annual pay raises (3% a year) | $0 | ($3,732) | ($10,060) | ($16,597) | ($22,464) |
| EBITDA | $15,976 | $43,270 | $33,968 | $40,495 | $62,452 |
| Depreciation | ($7,057) | ($7,057) | ($7,057) | ($7,057) | ($7,057) |
| Interest | ($10,060) | ($9,443) | ($8,729) | ($7,934) | ($7,049) |
| Income tax | $0 | ($6,597) | ($4,680) | ($6,565) | ($12,444) |
| Net income before start-up costs | ($1,141) | $20,173 | $13,502 | $18,939 | $35,902 |
| Opening costs expensed in Year 1 (legal, licensing, launch marketing, pre-opening rent and training) | ($19,300) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($20,441) | $20,173 | $13,502 | $18,939 | $35,902 |
Year 1 loses $1,141 before opening costs and $20,441 after them. Net income is $20,173 in Year 2, then eases to $13,502 in Year 3 because the assistant manager's first full year and the accumulating pay raises arrive together. It recovers to $18,939 in Year 4, even with a $7,500 fixture refresh, and reaches $35,902 in Year 5. Payroll including raises climbs from 24% of sales to 26% in Years 3 and 4, a heavy share for retail that comes from one-to-one fitting. Tax is worked out on operating profit, before the opening costs.
Cash in and out
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($74,654) | $28,350 | $21,530 | $26,802 | $43,581 |
| Fit-out and fixtures | ($47,000) | $0 | $0 | $0 | $0 |
| Funding received | $175,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($4,317) | ($6,323) | ($7,037) | ($7,832) | ($8,717) |
| Owner distributions | $0 | $0 | $0 | ($12,000) | ($20,000) |
| Net change in cash | $49,029 | $22,028 | $14,493 | $6,970 | $14,865 |
| Closing cash | $49,029 | $71,056 | $85,549 | $92,519 | $107,383 |
Year-end cash never falls below $49,029. Operations absorb $74,654 in Year 1, mostly to stock the shelves, and the raise covers it. By the end of Year 5 about 36% of the loan is repaid, and owner payouts begin in Year 4.
Balance sheet with the stockroom
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $49,029 | $71,056 | $85,549 | $92,519 | $107,383 |
| Accounts receivable | $2,572 | $3,181 | $3,709 | $4,147 | $4,485 |
| Inventory (at cost) | $77,341 | $80,027 | $82,355 | $84,286 | $85,778 |
| Fit-out and fixtures (net) | $39,943 | $32,886 | $25,829 | $18,771 | $11,714 |
| Total assets | $168,885 | $187,150 | $197,442 | $199,723 | $209,361 |
| Accounts payable (vendor terms) | $18,643 | $23,058 | $26,885 | $30,059 | $32,512 |
| Bank term loan | $90,683 | $84,360 | $77,323 | $69,491 | $60,774 |
| Paid-in capital | $80,000 | $80,000 | $80,000 | $80,000 | $80,000 |
| Retained earnings | ($20,441) | ($268) | $13,234 | $20,173 | $36,075 |
| Total liabilities and equity | $168,885 | $187,150 | $197,442 | $199,723 | $209,361 |
Break-even and loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | 3.4% | 7.4% | 5.0% | 5.3% | 7.6% |
| Net margin (before start-up costs) | -0.2% | 3.5% | 2.0% | 2.5% | 4.4% |
| Payroll incl. pay raises as share of revenue | 24% | 22% | 26% | 26% | 25% |
| Revenue per full-time equivalent at year end | $187,760 | $165,874 | $169,227 | $189,206 | $204,646 |
| Average monthly revenue | $39,117 | $48,380 | $56,409 | $63,069 | $68,215 |
| Monthly revenue needed to cover operating costs | $36,540 | $41,402 | $50,931 | $56,539 | $58,144 |
| Debt service cover (EBITDA / interest + principal) | 1.1x | 2.7x | 2.2x | 2.6x | 4.0x |
Compare the last two rows of the ratios table: operating costs are covered when average monthly revenue exceeds the figure the shop needs. Year 1 averages $39,117 against $36,540 needed, a cushion of 7%, though six months fall below the line. Loan cover is 1.1x in Year 1, which is thin, and runs between 2.2x and 4.0x from Year 2.
A soft-sales scenario: revenue 20% lower
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $375,520 | $464,448 | $541,525 | $605,458 | $654,866 |
| Net income before start-up costs | ($19,864) | $13,022 | $2,959 | ($1,391) | $7,755 |
| Net income after start-up costs | ($39,164) | $13,022 | $2,959 | ($1,391) | $7,755 |
| Closing cash | $29,360 | $44,012 | $47,768 | $46,247 | $52,840 |
Here every revenue line runs 20% under plan for all five years. Elise answers in stages: the assistant manager slips to month 28 and the weekend stylist to month 40, marketing drops 20%, part-time pay drops 15%, her own salary falls to $38,400, the fixture refresh is dropped and nothing is paid out to the owner. Card fees, markdowns, shrinkage and web shipping shrink with sales. On those terms Year 1 ends $39,164 down after opening costs, Years 2, 3 and 5 make a profit, and year-end cash never goes below $29,360. Year 1 equity ends at $40,836. Year 4 is a small loss of $1,391, so a second weak stretch would force deeper cuts or a rent concession.
Sources
- Bureau of Labor Statistics, Retail sales workers, Occupational Outlook Handbook: median pay of $17.10 an hour for May 2025.
- Tax Foundation, Kansas state tax index page: describes a graduated corporate income tax but gives no rate on the page, so the 6% state figure is a planning figure.
- Census Bureau QuickFacts for Overland Park returned an access error, so no population or income figures are quoted.
- Rents, prices, fees and the loan rate are planning figures for this example business. Confirm them locally before using them in a real plan.
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