Executive Summary
Investment overview, market opportunity, financial highlights, and funding request.
1. Business Overview
Luxa Salon Suites is a new independent salon suites facility that will lease 18 private, fully-equipped mini-salon spaces to independent beauty and wellness professionals in South Riding, Virginia. The facility will be structured as a Limited Liability Company (LLC) and will operate as the first salon suite facility in South Riding, addressing a significant geographic gap: South Riding and Centreville together represent over 106,000 residents with zero salon suites.
2. Investment Thesis
Market Opportunity
The South Riding/Loudoun County market presents a compelling opportunity for a new salon suites facility. South Riding and Centreville together represent over 106,000 residents with zero salon suites, creating a significant geographic gap. The closest competitors (Sola Salon Studios in Chantilly, 4 miles away, and Phenix Salon Suites in Ashburn) are operating at high occupancy, confirming that demand is strong in the broader Northern Virginia market.
The trade area encompasses approximately 325,000 residents with a median household income of $190,701, substantially above regional and national averages. This affluent demographic supports a robust market for personal care services and creates favorable conditions for independent beauty professionals seeking private workspace.
Business Model
Luxa Salon Suites will differentiate through a "Quality-Value Leader" positioning strategy: matching competitor pricing ($325-$425/week) while delivering superior build quality and owner-operated concierge service. Key competitive advantages include:
- First in South Riding: No salon suites currently exist in South Riding; our facility fills a geographic gap serving 106,000+ residents
- Owner-Operated Concierge Service: Direct owner involvement provides personalized attention that franchise competitors cannot match
- Superior Build Quality: Personal contractor relationships enable higher-quality finishes at competitive cost
- Premium Amenities at Value Pricing: China sourcing capability delivers premium furniture and fixtures at 30-50% savings
The facility will offer four suite tiers (Standard, Plus, Large, Executive) ranging from 100 to 200 square feet, accommodating diverse professional needs from entry-level independents to established high-volume practitioners.
3. Financial Highlights
| Metric | Value |
|---|---|
| Total Project Cost | $320,000 |
| SBA 7(a) Loan Request | $228,000 |
| Owner Equity Injection | $57,000 (20%) |
| Working Capital Reserve | $35,000 |
| Break-Even Occupancy | 62% |
| Target Occupancy | 85% |
| Year 1 Gross Profit | $8,105 |
| Year 2 Gross Profit | $56,812 |
| Year 3 Gross Profit | $58,476 |
| 3-Year Cumulative Profit | $123,393 |
| DSCR at 85% Occupancy | 1.54x |
Revenue Projections
| Year | Revenue | Operating Expenses | Gross Profit | Gross Margin |
|---|---|---|---|---|
| Year 1 | $185,871 | $177,766 | $8,105 | 4.4% |
| Year 2 | $235,684 | $178,872 | $56,812 | 24.1% |
| Year 3 | $242,720 | $184,244 | $58,476 | 24.1% |
Key Metrics
- Monthly Break-Even: Month 6
- Cumulative Break-Even: Month 11
- Blended Weekly Rent: $365/week (~$1,581/month)
- Annual Revenue at Stabilization: $250,000+ at 85% occupancy
4. Use of Funds
| Category | Amount | % of Build-Out |
|---|---|---|
| Construction/Build-Out | $150,000 | 65.8% |
| FF&E (Furniture, Fixtures, Equipment) | $35,000 | 15.4% |
| Permits & Fees | $5,000 | 2.2% |
| Professional Fees | $10,000 | 4.4% |
| Contingency | $20,000 | 8.8% |
| Security Deposits | $8,000 | 3.5% |
| Total SBA Loan Proceeds | $228,000 | 100% |
Additional Owner Investment
| Category | Amount | Source |
|---|---|---|
| Working Capital Reserve | $35,000 | Personal savings |
| Remaining Contingency Buffer | $58,000 | Personal savings (reserve) |
5. Management
Owner-Operated Model
The facility will be owner-operated for Years 1-3, which provides two key benefits:
- Cost Reduction: Eliminates management payroll during the critical ramp-up period, preserving cash flow for debt service
- Competitive Differentiation: Enables concierge-level service that exceeds Sola's self-service approach
Owner Qualifications
The owner brings specific capabilities that reduce execution risk and project costs:
- Contractor Relationships: Personal relationships with contractors enable build-out quality 15-25% below typical costs
- China Sourcing Capability: Established relationships with Chinese manufacturers provide 30-50% savings on furniture, fixtures, and equipment
- Available Capital: $150,000 in personal savings supports equity injection and working capital requirements
- Operational Commitment: Full-time involvement in facility operations during launch and stabilization
Management Transition
At 93%+ sustained occupancy, the facility could support a hired facility manager if the owner elects to reduce day-to-day involvement. However, owner-operated management is the planned model for the initial 3-year period covered by this business plan.
6. Funding Request
Loan Details
Luxa Salon Suites is requesting an SBA 7(a) Small Loan in the amount of $228,000 for leasehold improvements and business startup.
| Parameter | Value |
|---|---|
| Loan Amount | $228,000 |
| Loan Type | SBA 7(a) Small Loan |
| Term | 10 years |
| Estimated Rate | Prime + 2.75% (~10.5%) |
| Monthly P&I Payment | ~$3,064 |
| Annual Debt Service | ~$36,768 |
| SBA Guarantee | 75% |
Debt Service Capacity
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Gross Profit | $8,105 | $56,812 | $58,476 |
| Debt Service | $36,984 | $36,984 | $36,984 |
| DSCR | 0.22x* | 1.54x | 1.58x |
*Year 1 shortfall covered by $35,000 working capital reserve
Risk Mitigants
- Working Capital Bridge: $35,000 reserve covers Year 1 cash flow deficit during occupancy ramp
- Conservative Break-Even: 62% break-even occupancy well below 85% target
- Market Validation: High competitor occupancy and geographic gap confirm unmet demand exists
- Owner-Operated Model: Reduces fixed costs during critical startup period
- Remaining Cash Buffer: $58,000 available after equity and working capital injection
Collateral Offered
- Personal guarantee (owner)
- Assignment of commercial lease
- Business assets (furniture, fixtures, equipment)
Summary
Luxa Salon Suites represents a well-researched, conservatively structured investment in a validated market. The combination of proven demand (high competitor occupancy and geographic gap), favorable demographics ($190K median income), and owner resources (contractor relationships, China sourcing, available capital) creates conditions for successful market entry. The SBA 7(a) loan request of $228,000 will fund a quality facility that meets market demand while maintaining comfortable debt service coverage ratios above 1.5x at target occupancy.
Executive Summary prepared as part of SBA-bankable business plan. Document: Phase 14-01 Task 1 Date: January 2026
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