1. P&L Framework
Scenario Selection
This P&L uses the Base Case occupancy scenario:
- Month 1: 35% occupancy (6.3 suites)
- Month 9: 85% occupancy achieved (15.3 suites)
- Year 2-3: 85% stabilized
Revenue and Cost Assumptions
| Category | Value | Source |
|---|
| Revenue per suite | $1,258/month | Phase 3: ~$315/week blended |
| 100% occupancy revenue | $22,640/month | 18 suites x $1,258 |
| Operating costs | $14,578/month | Phase 7 cost allocation (at 100% occ) |
| Fixed costs | $13,942/month | Occupancy + Insurance/Maint/Common/Admin |
| Variable costs | $636/month | Utilities (scales with occupancy) |
Cost Category Reference (From Phase 7)
| Category | Monthly | Annual | Type | Notes |
|---|
| Occupancy (rent/NNN) | $10,000 | $120,000 | Fixed | Committed regardless of vacancy |
| Utilities | $625 | $7,500 | Semi-variable | Base $375 + usage-based portion |
| Insurance | $400 | $4,800 | Fixed | GL + property coverage |
| Maintenance | $1,800 | $21,600 | Fixed | Includes capital reserve |
| Common Area | $950 | $11,400 | Fixed | Cleaning, supplies, laundry |
| Administrative | $800 | $9,600 | Fixed | Software, accounting, marketing |
| Total Operating | $14,575 | $174,900 | | Rounded to $14,578 |
2. Year 1 Monthly P&L (Base Case)
Revenue Section
| Line Item | M1 | M2 | M3 | M4 | M5 | M6 | M7 | M8 | M9 | M10 | M11 | M12 | Y1 Total |
|---|
| Occupancy % | 35% | 42% | 49% | 56% | 63% | 70% | 77% | 84% | 85% | 85% | 85% | 85% | 68% avg |
| Suites Occupied | 6.3 | 7.6 | 8.8 | 10.1 | 11.3 | 12.6 | 13.9 | 15.1 | 15.3 | 15.3 | 15.3 | 15.3 | |
| Rental Income | $7,925 | $9,561 | $11,197 | $12,706 | $14,215 | $15,848 | $17,481 | $19,002 | $19,244 | $19,244 | $19,244 | $19,244 | $184,911 |
| Admin/Late Fees | $50 | $50 | $60 | $70 | $75 | $80 | $85 | $90 | $100 | $100 | $100 | $100 | $960 |
| Total Revenue | $7,975 | $9,611 | $11,257 | $12,776 | $14,290 | $15,928 | $17,566 | $19,092 | $19,344 | $19,344 | $19,344 | $19,344 | $185,871 |
Operating Expenses
| Line Item | M1 | M2 | M3 | M4 | M5 | M6 | M7 | M8 | M9 | M10 | M11 | M12 | Y1 Total |
|---|
| Occupancy Costs | | | | | | | | | | | | | |
| Base Rent | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $84,000 |
| NNN/CAM | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $30,000 |
| Subtotal Occupancy | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $9,500 | $114,000 |
| | | | | | | | | | | | | |
| Utilities | | | | | | | | | | | | | |
| Electric/Gas/Water* | $438 | $473 | $509 | $548 | $586 | $625 | $663 | $700 | $706 | $706 | $706 | $706 | $7,366 |
| Subtotal Utilities | $438 | $473 | $509 | $548 | $586 | $625 | $663 | $700 | $706 | $706 | $706 | $706 | $7,366 |
| | | | | | | | | | | | | |
| Insurance | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $4,800 |
| | | | | | | | | | | | | |
| Maintenance | | | | | | | | | | | | | |
| Routine Maintenance | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $14,400 |
| Capital Reserve | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $7,200 |
| Subtotal Maintenance | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $21,600 |
| | | | | | | | | | | | | |
| Common Area | | | | | | | | | | | | | |
| Janitorial | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $6,000 |
| Supplies | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $1,800 |
| Laundry Operations | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $1,800 |
| Break Room | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $1,800 |
| Subtotal Common Area | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $11,400 |
| | | | | | | | | | | | | |
| Administrative | | | | | | | | | | | | | |
| Software/Systems | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $3,600 |
| Accounting/Legal | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $3,000 |
| Marketing (ongoing) | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $1,800 |
| Miscellaneous | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $1,200 |
| Subtotal Administrative | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $9,600 |
| | | | | | | | | | | | | |
| Turnover Reserve | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $9,000 |
| | | | | | | | | | | | | |
| TOTAL OPERATING | $14,638 | $14,673 | $14,709 | $14,748 | $14,786 | $14,825 | $14,863 | $14,900 | $14,906 | $14,906 | $14,906 | $14,906 | $177,766 |
*Utilities modeled at 60% base + 40% variable based on occupancy (base $375 + variable $250 at 100%)
Gross Profit
| Line Item | M1 | M2 | M3 | M4 | M5 | M6 | M7 | M8 | M9 | M10 | M11 | M12 | Y1 Total |
|---|
| Total Revenue | $7,975 | $9,611 | $11,257 | $12,776 | $14,290 | $15,928 | $17,566 | $19,092 | $19,344 | $19,344 | $19,344 | $19,344 | $185,871 |
| Total Operating | $14,638 | $14,673 | $14,709 | $14,748 | $14,786 | $14,825 | $14,863 | $14,900 | $14,906 | $14,906 | $14,906 | $14,906 | $177,766 |
| Gross Profit | ($6,663) | ($5,062) | ($3,452) | ($1,972) | ($496) | $1,103 | $2,703 | $4,192 | $4,438 | $4,438 | $4,438 | $4,438 | $8,105 |
| Gross Margin % | -84% | -53% | -31% | -15% | -3% | 7% | 15% | 22% | 23% | 23% | 23% | 23% | 4.4% |
Below-the-Line Items (Placeholder)
| Line Item | M1-M12 | Notes |
|---|
| Debt Service | TBD | Modeled in Plan 08-02 |
| Owner Compensation | TBD | Modeled in Plan 08-02 |
| Capital Reserve (additional) | TBD | Modeled in Plan 08-02 |
3. Year 2 Quarterly P&L (Base Case)
Assumptions
- 85% stabilized occupancy throughout
- 3% rent escalation applied (tenant renewals)
- Operating costs assumed flat (inflation offset by efficiency gains)
| Line Item | Q1 Y2 | Q2 Y2 | Q3 Y2 | Q4 Y2 | Y2 Total |
|---|
| Occupancy % | 85% | 85% | 85% | 85% | 85% |
| Suites Occupied | 15.3 | 15.3 | 15.3 | 15.3 | 15.3 |
| | | | | |
| Revenue | | | | | |
| Rental Income | $58,621 | $58,621 | $58,621 | $58,621 | $234,484 |
| Admin/Late Fees | $300 | $300 | $300 | $300 | $1,200 |
| Total Revenue | $58,921 | $58,921 | $58,921 | $58,921 | $235,684 |
| | | | | |
| Operating Expenses | | | | | |
| Occupancy Costs | $28,500 | $28,500 | $28,500 | $28,500 | $114,000 |
| Utilities | $2,118 | $2,118 | $2,118 | $2,118 | $8,472 |
| Insurance | $1,200 | $1,200 | $1,200 | $1,200 | $4,800 |
| Maintenance | $5,400 | $5,400 | $5,400 | $5,400 | $21,600 |
| Common Area | $2,850 | $2,850 | $2,850 | $2,850 | $11,400 |
| Administrative | $2,400 | $2,400 | $2,400 | $2,400 | $9,600 |
| Turnover Reserve | $2,250 | $2,250 | $2,250 | $2,250 | $9,000 |
| Total Operating | $44,718 | $44,718 | $44,718 | $44,718 | $178,872 |
| | | | | |
| Gross Profit | $14,203 | $14,203 | $14,203 | $14,203 | $56,812 |
| Gross Margin % | 24.1% | 24.1% | 24.1% | 24.1% | 24.1% |
*Note: Year 2 includes ~3% revenue increase from tenant escalations on renewals, phased in over the year
4. Year 3 Quarterly P&L (Base Case)
Assumptions
- 85% stabilized occupancy
- Cumulative 6% rent escalation from opening (3% Y2 + 3% Y3)
- 3% cost escalation for occupancy (lease escalation) and other categories
| Line Item | Q1 Y3 | Q2 Y3 | Q3 Y3 | Q4 Y3 | Y3 Total |
|---|
| Occupancy % | 85% | 85% | 85% | 85% | 85% |
| Suites Occupied | 15.3 | 15.3 | 15.3 | 15.3 | 15.3 |
| | | | | |
| Revenue | | | | | |
| Rental Income | $60,380 | $60,380 | $60,380 | $60,380 | $241,520 |
| Admin/Late Fees | $300 | $300 | $300 | $300 | $1,200 |
| Total Revenue | $60,680 | $60,680 | $60,680 | $60,680 | $242,720 |
| | | | | |
| Operating Expenses | | | | | |
| Occupancy Costs | $29,355 | $29,355 | $29,355 | $29,355 | $117,420 |
| Utilities | $2,182 | $2,182 | $2,182 | $2,182 | $8,728 |
| Insurance | $1,236 | $1,236 | $1,236 | $1,236 | $4,944 |
| Maintenance | $5,562 | $5,562 | $5,562 | $5,562 | $22,248 |
| Common Area | $2,936 | $2,936 | $2,936 | $2,936 | $11,744 |
| Administrative | $2,472 | $2,472 | $2,472 | $2,472 | $9,888 |
| Turnover Reserve | $2,318 | $2,318 | $2,318 | $2,318 | $9,272 |
| Total Operating | $46,061 | $46,061 | $46,061 | $46,061 | $184,244 |
| | | | | |
| Gross Profit | $14,619 | $14,619 | $14,619 | $14,619 | $58,476 |
| Gross Margin % | 24.1% | 24.1% | 24.1% | 24.1% | 24.1% |
5. Three-Year Summary
Annual P&L Comparison
| Line Item | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|
| Revenue | | | | |
| Rental Income | $184,911 | $234,484 | $241,520 | $660,915 |
| Admin/Late Fees | $960 | $1,200 | $1,200 | $3,360 |
| Total Revenue | $185,871 | $235,684 | $242,720 | $664,275 |
| | | | |
| Operating Expenses | | | | |
| Occupancy Costs | $114,000 | $114,000 | $117,420 | $345,420 |
| Utilities | $7,366 | $8,472 | $8,728 | $24,566 |
| Insurance | $4,800 | $4,800 | $4,944 | $14,544 |
| Maintenance | $21,600 | $21,600 | $22,248 | $65,448 |
| Common Area | $11,400 | $11,400 | $11,744 | $34,544 |
| Administrative | $9,600 | $9,600 | $9,888 | $29,088 |
| Turnover Reserve | $9,000 | $9,000 | $9,272 | $27,272 |
| Total Operating | $177,766 | $178,872 | $184,244 | $540,882 |
| | | | |
| Gross Profit | $8,105 | $56,812 | $58,476 | $123,393 |
| Gross Margin % | 4.4% | 24.1% | 24.1% | 18.6% |
Annual Key Metrics
| Metric | Year 1 | Year 2 | Year 3 |
|---|
| Average Occupancy | 68% | 85% | 85% |
| Revenue/Suite/Month | $856 | $1,089 | $1,122 |
| Operating Cost/Suite/Month | $822 | $827 | $852 |
| Gross Profit/Suite/Month | $34 | $262 | $270 |
| Annual Revenue Growth | - | 26.8% | 3.0% |
| Operating Expense Ratio | 95.6% | 75.9% | 75.9% |
6. Key Financial Ratios
Profitability Ratios
| Ratio | Year 1 | Year 2 | Year 3 | Target | Status |
|---|
| Gross Margin % | 4.4% | 24.1% | 24.1% | >20% | Year 1 below, Y2-3 above |
| Operating Expense Ratio | 95.6% | 75.9% | 75.9% | <80% | Year 1 above, Y2-3 on target |
| Revenue per SF | $62/SF/yr | $79/SF/yr | $81/SF/yr | >$75/SF | Y2-3 above target |
Efficiency Ratios
| Ratio | Year 1 | Year 2 | Year 3 | Notes |
|---|
| Revenue/Suite | $10,326 | $13,094 | $13,484 | Growing due to ramp + escalations |
| Cost/Suite | $9,876 | $9,937 | $10,236 | Relatively flat |
| Profit/Suite | $450 | $3,156 | $3,248 | Strong improvement Y2+ |
| Occupancy Cost % | 61.3% | 48.4% | 48.4% | Leverage as revenue grows |
Coverage Ratios
| Ratio | Year 1 | Year 2 | Year 3 | Notes |
|---|
| Revenue/Operating Costs | 1.05x | 1.32x | 1.32x | Above 1x = positive margin |
| Gross Profit/Turnover | 0.9x | 6.3x | 6.3x | Strong retention economics Y2+ |
7. Break-Even Analysis
Monthly Break-Even Point
| Occupancy Level | Monthly Revenue | Operating Costs | Gross Profit | Status |
|---|
| 50% | $11,320 | $14,688 | ($3,368) | Loss |
| 55% | $12,452 | $14,735 | ($2,283) | Loss |
| 60% | $13,584 | $14,783 | ($1,199) | Loss |
| 62% (Break-Even) | $14,037 | $14,816 | ($779) | Near break-even |
| 65% | $14,716 | $14,850 | ($134) | Minimal loss |
| 67% | $15,169 | $14,878 | $291 | Breakeven point |
| 70% | $15,848 | $14,903 | $945 | Profitable |
| 75% | $16,980 | $14,953 | $2,027 | Profitable |
| 80% | $18,112 | $15,003 | $3,109 | Profitable |
| 85% | $19,244 | $15,050 | $4,194 | Target |
| 90% | $20,376 | $15,100 | $5,276 | Optimal |
| 100% | $22,640 | $15,200 | $7,440 | Full capacity |
Cash Flow Break-Even: 67% occupancy (12 suites)
Break-Even Timeline (Base Case)
| Month | Occupancy | Revenue | Costs | Monthly P&L | Cumulative P&L |
|---|
| M1 | 35% | $7,975 | $14,638 | ($6,663) | ($6,663) |
| M2 | 42% | $9,611 | $14,673 | ($5,062) | ($11,725) |
| M3 | 49% | $11,257 | $14,709 | ($3,452) | ($15,177) |
| M4 | 56% | $12,776 | $14,748 | ($1,972) | ($17,149) |
| M5 | 63% | $14,290 | $14,786 | ($496) | ($17,645) |
| M6 | 70% | $15,928 | $14,825 | $1,103 | ($16,542) |
| M7 | 77% | $17,566 | $14,863 | $2,703 | ($13,839) |
| M8 | 84% | $19,092 | $14,900 | $4,192 | ($9,647) |
| M9 | 85% | $19,344 | $14,906 | $4,438 | ($5,209) |
| M10 | 85% | $19,344 | $14,906 | $4,438 | ($771) |
| M11 | 85% | $19,344 | $14,906 | $4,438 | $3,667 |
| M12 | 85% | $19,344 | $14,906 | $4,438 | $8,105 |
Monthly Break-Even: Month 6
Cumulative Break-Even: Month 11
8. Expense Analysis
Fixed vs. Variable Cost Structure
| Category | Amount/Month | % of Total | Fixed/Variable |
|---|
| Occupancy | $9,500-$9,785 | 65% | Fixed |
| Utilities | $438-$706 | 4% | Variable |
| Insurance | $400-$412 | 3% | Fixed |
| Maintenance | $1,800-$1,854 | 12% | Fixed |
| Common Area | $950-$978 | 6% | Fixed |
| Administrative | $800-$824 | 5% | Fixed |
| Turnover Reserve | $750-$773 | 5% | Fixed |
| Total | ~$14,600-$15,350 | 100% | 96% Fixed |
Cost Sensitivity
Impact of 10% increase in major cost categories:
| Category | Current | +10% | Annual Impact | Margin Impact |
|---|
| Occupancy (rent) | $114,000 | $125,400 | +$11,400 | -4.8% |
| Maintenance | $21,600 | $23,760 | +$2,160 | -0.9% |
| Utilities | ~$8,000 | $8,800 | +$800 | -0.3% |
| All Operating | $178,872 | $196,759 | +$17,887 | -7.6% |
Key Finding: Occupancy costs dominate the expense structure. Negotiating rent is the highest-leverage cost control.
9. Revenue Enhancement Opportunities
Additional Revenue Streams (Not Modeled)
| Opportunity | Monthly Potential | Annual | Notes |
|---|
| Late fees | $50-$100 | $600-$1,200 | Already included at $80/mo avg |
| Key replacement | $25-$50 | $300-$600 | Low volume |
| Storage rental | $100-$200 | $1,200-$2,400 | If space available |
| Vending/amenities | $50-$100 | $600-$1,200 | Coffee, products |
| Referral bonuses | ($200)/referral | Variable | Tenant incentive (cost) |
| Total Upside | $175-$350 | $2,100-$4,200 | 1-2% revenue lift |
Pricing Power (Year 2+)
| Strategy | Revenue Impact | Risk |
|---|
| 3% annual escalation | +$7,000/yr | Low (market standard) |
| 5% escalation | +$12,000/yr | Medium (above market) |
| Suite upgrades | +$30-$50/suite | Low (value-add) |
| Premium services | +$50-$100/suite | Medium (market dependent) |
10. P&L Presentation for SBA
Executive Summary Format
Luxa Salon Suites - 3-Year Financial Summary
| Metric | Year 1 | Year 2 | Year 3 |
|---|
| Total Revenue | $185,871 | $235,684 | $242,720 |
| Operating Expenses | $177,766 | $178,872 | $184,244 |
| Gross Profit | $8,105 | $56,812 | $58,476 |
| Gross Margin | 4.4% | 24.1% | 24.1% |
Key Metrics:
- Break-even occupancy: 67%
- Target occupancy: 85%
- Time to monthly break-even: Month 6
- Time to cumulative break-even: Month 11
- 3-year cumulative gross profit: $123,393
Debt Service Capacity (Preview for Plan 08-02)
| Metric | Year 1 | Year 2 | Year 3 |
|---|
| Gross Profit | $8,105 | $56,812 | $58,476 |
| Available for Debt Service* | ~$0 | ~$45,000 | ~$45,000 |
| Est. Annual Debt Service | ~$30,000 | ~$30,000 | ~$30,000 |
| Coverage Ratio | 0.0x | 1.5x | 1.5x |
*After ~$12,000 minimum owner draw
Note: Year 1 may require working capital bridge; Years 2-3 support debt service with cushion. Full debt service model in Plan 08-02.
Appendix: Monthly Detail Tables
A.1 Revenue by Suite Type (at Stabilization)
| Suite Type | Count | Weekly Rate | Monthly Rate | Monthly Revenue | Annual Revenue |
|---|
| Standard | 6.8 (8×85%) | $285 | $1,234 | $8,391 | $100,692 |
| Plus | 4.25 (5×85%) | $315 | $1,364 | $5,797 | $69,564 |
| Large | 2.55 (3×85%) | $345 | $1,494 | $3,810 | $45,720 |
| Executive | 1.7 (2×85%) | $385 | $1,667 | $2,834 | $34,008 |
| Total | 15.3 | - | - | $20,832 | $249,984 |
*Note: Table shows theoretical maximum at 85% occupancy by tier. Actual mix may vary.
A.2 Year 1 Cash Flow Summary
| Month | Revenue | Expenses | Net | Cumulative |
|---|
| M1 | $7,975 | $14,638 | ($6,663) | ($6,663) |
| M2 | $9,611 | $14,673 | ($5,062) | ($11,725) |
| M3 | $11,257 | $14,709 | ($3,452) | ($15,177) |
| M4 | $12,776 | $14,748 | ($1,972) | ($17,149) |
| M5 | $14,290 | $14,786 | ($496) | ($17,645) |
| M6 | $15,928 | $14,825 | $1,103 | ($16,542) |
| M7 | $17,566 | $14,863 | $2,703 | ($13,839) |
| M8 | $19,092 | $14,900 | $4,192 | ($9,647) |
| M9 | $19,344 | $14,906 | $4,438 | ($5,209) |
| M10 | $19,344 | $14,906 | $4,438 | ($771) |
| M11 | $19,344 | $14,906 | $4,438 | $3,667 |
| M12 | $19,344 | $14,906 | $4,438 | $8,105 |
Maximum Cash Deficit: Month 5 at ($17,645)
Facility P&L Projections Complete
Phase 8: Facility Financial Model - Task 2 Complete
Ready for 08-01-SUMMARY.md