1. Operations Overview
Management Model
Luxa Salon Suites operates as an owner-managed property during Years 1-3, transitioning to professional management only if portfolio growth justifies the expense.
| Aspect | Details |
|---|
| Management Type | Owner-operated |
| Time Commitment | 10-15 hours/week for property management |
| Primary Focus | Tenant relationships and retention |
| On-Site Staff | None required (self-service model) |
| Remote Management | Cloud-based systems enable management from anywhere |
Operational Philosophy
The salon suite model is fundamentally a real estate business with hospitality touches:
- Tenant Independence: Tenants are independent contractors who control their own businesses
- Facility Excellence: Owner responsibility is maintaining a premium, professional environment
- Responsive Service: Quick response to maintenance and tenant needs drives retention
- Community Building: Fostering positive relationships among tenants creates stickiness
2. Location Requirements
Site Selection Criteria
Based on Phase 6 site selection research and competitive analysis:
| Requirement | Specification | Priority |
|---|
| Size | 3,000-3,500 sq ft gross | MUST HAVE |
| Parking | 4-5 spaces per 1,000 sq ft (14-18 spaces minimum) | DEALBREAKER if under 4:1000 |
| Zoning | Commercial (personal services permitted) | MUST HAVE |
| Visibility | Major road frontage with visible signage | HIGH |
| Accessibility | Ground floor preferred, ADA compliant | MUST HAVE |
| Target Area | Route 50 corridor (South Riding/Centreville) | STRATEGIC |
| Ceiling Height | 9 ft minimum (10 ft preferred) | MUST HAVE |
Parking Analysis
Salon suites have high parking demand because every occupied suite has simultaneous clients:
| Calculation | Details |
|---|
| 3,500 sq ft at 4/1000 | 14 spaces minimum |
| 3,500 sq ft at 5/1000 | 18 spaces recommended |
| Peak demand estimate | 18 suites x 80% occupancy = 14-15 client vehicles + 9 tenant vehicles = 23-24 spaces |
Requirement: Prioritize sites with 20+ dedicated parking spaces.
Zoning Requirements
- Zoning Certificate of Use (ZCU) required from Loudoun County
- Verify personal services are permitted use before lease signing
- Fire Marshal pre-consultation recommended
3. Build-Out Process
Timeline Overview
Based on Phase 9 build-out planning, total project duration is 18 weeks base case:
| Phase | Duration | Key Activities |
|---|
| Pre-Construction | 2-4 weeks | Design, contractor bidding, equipment ordering |
| Permits | 3-6 weeks | Loudoun County permit review (may overlap) |
| Construction | 6-10 weeks | Demolition, framing, MEP rough-in, finishes |
| Closeout | 2 weeks | Inspections, Certificate of Occupancy |
| TOTAL | 13-22 weeks | Base case: 18 weeks |
Build-Out Budget
| Category | Mid Estimate | Details |
|---|
| Construction | $150,000 | All trades (demo, framing, MEP, finishes) |
| FF&E | $35,000 | Furniture, fixtures, equipment |
| Permits & Fees | $5,000 | Building permits, inspections |
| Professional Fees | $10,000 | Architect, legal, customs |
| Contingency (10%) | $20,000 | Unexpected costs |
| TOTAL | $220,000 | $63/sq ft |
Cost Advantage: Luxa's split-sourcing strategy (China FF&E for furniture, US for plumbing/tech) delivers franchise-quality build-out at 72% below franchise costs (~$224/sf).
Key Milestones
| Milestone | Target Week | Trigger |
|---|
| Lease Executed | W0 | Project start |
| Design Complete | W1-2 | Floor plan and MEP approved |
| Permit Submitted | W2 | Application in system |
| China FF&E Ordered | W3-4 | 45-day lead time parallels permit review |
| Permit Issued | W6-8 | Building permit in hand |
| Rough-In Complete | W9-10 | Inspections passed |
| Certificate of Occupancy | W17-18 | Legal occupancy permitted |
4. Tenant Acquisition Process
Six-Step Onboarding Flow
| Step | Activity | Timing | Documents |
|---|
| 1 | Application | Day 1 | Tenant Application Form |
| 2 | Screening | Days 2-5 | License verification, credit check, references |
| 3 | Tour | Days 3-7 | Facility walkthrough |
| 4 | Lease Signing | Days 7-10 | Suite Rental Agreement, House Rules |
| 5 | Compliance Verification | Before move-in | COI, license copy, W-9 |
| 6 | Move-In | Scheduled date | Key issuance, orientation |
Screening Requirements
| Verification | Source | Requirement |
|---|
| License | Virginia DPOR lookup | Active Virginia cosmetology license |
| Insurance | Certificate of Insurance | $1M professional liability, $1M/$2M general liability |
| Credit | Credit bureau | Review for patterns (no hard cutoff) |
| References | Phone calls | 2-3 professional references |
Move-In Requirements
| Item | Amount/Details |
|---|
| Security Deposit | 2 weeks rent |
| First Week Rent | Due at signing |
| Key/Access Deposit | $50 |
| Insurance Certificate | With Luxa as Additional Insured |
| License Copy | Current and valid |
| W-9 | For 1099 reporting |
Post-Move-In Support
- Day 1: Orientation covering access, amenities, and house rules
- Day 7: Follow-up check-in call
- Day 30: Satisfaction survey
- Ongoing: Open communication via text/email
5. Lease Structure
Key Terms
Based on Phase 10 lease documentation:
| Term | Specification | Rationale |
|---|
| Initial Term | 6 months minimum | Industry standard, reduces turnover cost |
| Renewal | Month-to-month after initial | Flexibility for both parties |
| Rent Due | Weekly, paid in advance | Cash flow management |
| Payment Method | ACH/credit card autopay required | Reduces collection effort |
| Security Deposit | 2 weeks rent | Standard protection |
| Late Fee | $25 + $10/day (max $75/week) | Incentivizes timely payment |
| Renewal Notice | 60 days advance | Planning time for both parties |
| Rent Escalation | 3% annually | Keeps pace with costs |
Independent Contractor Classification
Critical lease provisions maintain IC status (avoiding employment classification):
| Provision | Purpose |
|---|
| Flat weekly rent | Not percentage-based (no revenue sharing) |
| Tenant sets prices | Full control over service pricing |
| Tenant sets schedule | No required hours or shifts |
| Tenant provides equipment | Own tools, products, supplies |
| No training provided | Not directed how to perform services |
| Form 1099-NEC | Tax reporting as non-employee |
6. Day-to-Day Operations
Rent Collection
| Process | Details |
|---|
| Method | Automated weekly via property management software |
| Due Date | Every Monday (configurable) |
| Grace Period | 5 days |
| Auto-Retry | 2-3 attempts over 5 days for failed payments |
| Receipts | Automatic after each transaction |
| Reporting | Real-time dashboard in PM software |
Maintenance Workflow
| Priority | Response Time | Examples | Process |
|---|
| Emergency | Within 1 hour | Water leak, no power, security breach, fire | Immediate call/text to owner, dispatch contractor |
| Urgent | Within 24 hours | HVAC not working, plumbing backup, lock issue | Same-day acknowledgment, next-day resolution |
| Standard | Within 5 business days | Light bulb, cosmetic issues, minor repairs | Ticket system, scheduled repair |
Common Area Maintenance
| Area | Frequency | Provider |
|---|
| Corridor/Reception | Weekly deep clean | Janitorial service |
| Restrooms | 2-3x per week | Janitorial service |
| Break Room | Weekly deep clean + tenant responsibility for dishes | Janitorial + tenants |
| Laundry Room | Weekly | Janitorial service |
| Parking Lot | As needed | Landlord or contracted |
Access Control Management
| Function | Process |
|---|
| New Tenant | Create account in access system, assign suite, issue credentials |
| Credential Issuance | Mobile app invite + backup PIN |
| Lost Credentials | Deactivate old, issue new ($50 replacement fee) |
| Move-Out | Deactivate access immediately at lease end |
| Audit Logs | Review monthly for anomalies |
Owner Communication
| Type | Channel | Frequency |
|---|
| Routine Matters | Text/email | As needed |
| Emergency | Phone call | Immediate |
| Announcements | Bulk SMS/email | As needed |
| Policy Updates | Written notice | 30 days advance |
| Rent Reminders | Automated | 3 days before due |
7. Policies and Enforcement
House Rules Summary
Key policies from Phase 10 House Rules document:
| Category | Key Rules |
|---|
| Common Areas | Clean up after yourself, remove laundry promptly, no storage in common areas |
| Suite Standards | Maintain sanitation per 18VAC41-70, no smoking, respect noise levels |
| Security | No sharing access credentials, lock suite when absent, report suspicious activity |
| Client Policies | Clients stay in suite or reception only, no unattended children |
| Business Operations | Display license, maintain insurance, no subletting |
| Prohibited | Illegal activities, modifications without approval, soliciting other tenants' clients |
Progressive Enforcement
| Offense | Action |
|---|
| First Offense | Written warning documenting the violation |
| Second Offense | $50 fine, payable with next rent payment |
| Third Offense | Lease review and possible termination |
| Serious Violations | May result in immediate termination |
Serious violations include: Illegal activity, violence or threats, deliberate property damage, insurance or license lapse, activity endangering others.
8. Technology Systems
Property Management Software
| Function | System | Details |
|---|
| Platform | Salon Suite Solutions (S3) or Suite Manager | Purpose-built for salon suite model |
| Rent Collection | Automated weekly billing | ACH and credit card |
| Tenant Portal | Balance, payments, maintenance requests | Mobile-accessible |
| Compliance | License and insurance expiration tracking | 90/60/30 day alerts |
| Communication | Bulk and individual SMS/email | Template library |
| Reporting | Financial exports to QuickBooks | Monthly reconciliation |
Access Control
| System | Details |
|---|
| Primary Option | Nexkey (budget) or ButterflyMX (premium) |
| Entry Methods | Mobile app + PIN code |
| Coverage | Main entrance + 18 suite doors + back entrance |
| Features | Remote management, audit logs, visitor passes |
| Monthly Cost | $300-500 (Nexkey) or $700-1,100 (ButterflyMX) |
Security Cameras
| System | Details |
|---|
| Platform | UniFi Protect |
| Cameras | 8 cameras (common areas and entrances only) |
| Recording | Local NVR with 30-day retention |
| Resolution | 1080p standard, 4K at entrances |
| Monthly Cost | $0 (no subscription fees) |
| Privacy | NO cameras inside suites |
Network Infrastructure
| System | Details |
|---|
| Platform | UniFi commercial networking |
| Architecture | 3-VLAN design (Management, Tenant, Guest) |
| WiFi | Business-class coverage throughout facility |
| Access Points | 2-3 UniFi U7 Pro for full coverage |
Business Phone
| System | Details |
|---|
| Platform | Nextiva Core (VOIP) |
| Features | Call forwarding, voicemail, mobile app |
| Use Case | Business line separate from personal |
| Monthly Cost | ~$30-40/month |
9. Regulatory Compliance
Facility Compliance
| Requirement | Authority | Process |
|---|
| Zoning Certificate of Use | Loudoun County OPZ | Apply during site selection |
| Building Permit | Loudoun County I&P | Submit via LUN portal |
| Fire Inspection | Loudoun Fire Marshal | Coordinate during build-out |
| Certificate of Occupancy | Loudoun County | After all inspections pass |
| Business License | Loudoun County | Annual renewal |
| Facility GL Insurance | Insurance provider | $1M per occurrence minimum |
Tenant Compliance (Tenant Responsibility)
| Requirement | Authority | Verification |
|---|
| Cosmetology License | Virginia DPOR (Board for Barbers and Cosmetology) | DPOR lookup, copy on file |
| Salon Permit | Virginia DPOR (Board for Barbers and Cosmetology) | Tenant obtains for their suite |
| Professional Liability | Insurance provider | COI with Luxa as Additional Insured |
| General Liability | Insurance provider | COI on file |
| Business License | Loudoun County | Tenant responsibility |
Independent Contractor Compliance
Critical operational practices to maintain IC classification:
| Practice | Implementation |
|---|
| Flat rent only | Weekly rate regardless of tenant revenue |
| No schedule control | Tenants set their own hours |
| No pricing control | Tenants set their own service prices |
| No mandatory training | Optional networking only |
| Tenant equipment | Tenants provide own tools and products |
| 1099-NEC reporting | Issue annually for rent payments |
10. Key Operational Metrics
Target Performance Indicators
| Metric | Target | Measurement |
|---|
| Occupancy Rate | 85% at stabilization | Occupied suites / Total suites |
| Average Monthly Rent | $1,366 (weighted) | Total rent / Occupied suites |
| Tenant Turnover Rate | <20% annually | Move-outs / Total suites / 12 months |
| Rent Collection Rate | >98% | Collected / Billed |
| Maintenance Response | 100% SLA compliance | On-time responses / Total requests |
Financial Targets
| Metric | Target | Notes |
|---|
| Gross Monthly Revenue | $20,923 at 85% occupancy | Based on pricing model |
| Operating Expenses | ~$7,000-8,000/month | Including debt service |
| NOI Margin | ~60% | Before owner salary/debt |
| Stabilization Timeline | Month 6-9 | Gradual fill during lease-up |
Maintenance Budget
| Category | Monthly Budget | Annual |
|---|
| Routine Repairs | $500-800 | $6,000-9,600 |
| Janitorial Service | $400-600 | $4,800-7,200 |
| Capital Reserve | $400-500 | $4,800-6,000 |
| TOTAL | $1,300-1,900 | $15,600-22,800 |
Service Level Agreements
| Priority | Response Target | Resolution Target |
|---|
| Emergency | 1 hour | Same day |
| Urgent | 24 hours | 1-2 business days |
| Standard | 5 business days | 5-10 business days |
Operational Readiness Checklist
Pre-Opening (8 weeks before)
Opening Week
Ongoing (Monthly)
Operations Plan - Luxa Salon Suites Business Plan