Hookah supplies 2,500€ Drink supplies 3,200€ Hookah supplies 3,500€

Hookah
masters are not just a staff. Hookah masters should be specialists in their
business, they should perfectly understand the peculiarities of different types
of tobacco, its flavors, aromas and smells, and also possess the technology of
filling the hookah. Often, avid hookah lovers choose the ideal hookah master
for themselves and go only to him. Therefore, simply hiring the staff from
advertisements is not an option at all. If the entrepreneur wants to succeed
with his start-up business, he needs to think about the question, where and how
to find real professionals who can create a good reputation for the hookah
business.

 

1.1      
Financial plan

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In line with expenses at an early
level before the opening, it is essential not to forget the location and the
whole thing that is related to the brand new business enterprise like layout,
furniture, repairing works, other equipment, kitchen, and so on. It is also
crucial not to forget about payments for purchasing numerous licenses,
permissions and registration procedures.
Operational costs have to be considered too. They consist of expenses for
public utilities, network facilities and internet providing. As well as stock
bar, stock kitchen and stock hookahs. It is important not to forget about
expenses for rent, in general location maintenance and wages for staff.

 

Start-up
requirements, besides legal help, permits, music license, stationery and rent,
consist of expenses for insurance, health and safety regulations and, one of
the most essential, start-up marketing and web platform building. It is planned
to invest for marketing and website development approximately 10.000 € in the first year. Start-up marketing includes aggressive social
media marketing research and development, professional SMM and SEO implication,
PR, after succeeding local famous people or celebrity invitation to some of the
events for being promoted and also, local communities support.

 

Projected start-up capital

 

Business start-up year

2018

Assets

 

Registration costs

350€

Initial inventory

8,700€

Cash

1,500€

Leasehold acquisition and improvements

3,800€

Insurance

1,000€

FF&E (furniture, fixtures, and equipment)

 

IT + internet

400€

Production equipment

42,000€

Digital and
electronic devices (tablets, computers, etc.)

4,500€

Furniture

18,000€

Installations

2,500€

Business Premises Renovation Allowance

3,300€

Expenses

 

Permits and licenses

1,700€

Initial marketing (5 months)

5,100€

Equipment rental

1,500€

Miscellaneous

2,500€

Production costs

 

Food supplies

2,500€

Drink supplies

3,200€

Hookah supplies

3,500€

Labor costs

 

Wages

51,500€

TOTAL START-UP COSTS

155,550€

 

Table 6: Start-up capital requirements

 

Financing

 

Shareholder capital
(70/30)

100,000€

External investment

6,000€

Shareholder bank
loan

50,000€

Fixed interest rate
6%

3,000€/ year

Payback 4 years

15,500€/ year

Payback monthly

1,292€/ month

 

Table 7: Estimated
financing

 

Tables 6 and 7 above represent start-up capital requirements and its
estimated financing. The key points, which are mentioned in the tables are the
essential parts, which will make Hookah Space function. The approximate
predicted capital needed is 155,550€. The shareholder capital is 100,000€, of
which 30% is from Vladislav Borouhhin and 70% is from Valeria Karganova. The
start-up also gets an external investment in quantity of 6,000€. The
shareholder bank loan is going to consist of 50,000€ and will be paid during 4
years with the 6% of fixed interest rate. The payback yearly consists of
15,500€, which means monthly is 1,292€. The profit from Hookah Space business
is going to be divided into shareholders based on the initial investment
percentage.

 

Break-Even Analysis

 

Average Percent Variable Cost

22%

 

Estimated Monthly Fixed Cost

15,000€

 

 

 

Product

Hookah

Drink

Food

 

Price per Unit

14,00€

9.00€

10.00€

 

Variable Cost per Unit

11,00€

7,00€

8,00€

 

Contribution Margin per Unit

3,00€

2,00€

2,00€

 

x Sales Mix Percentage

32%

40%

28%

 

 

0,96€

0,8€

0,56€

 

Sum: Average
Contribution Margin per Unit

2,32€

 

 

 

Fixed Costs

15,000€

 

 

 

Break-Even Number of Units to Sell

500

750

750

2000

Product Sales in €

7,000€

6,750€

7,500€

 

Sum: Break-Even
Sales in €

21,250€

 

Daily revenue

? 708.30€

 

 

Table 8: Predicted
break-even analysis monthly revenue

 

Table 8 shows the break-even analysis for all
of three products to be offered at Hookah Space: hookah, drinks and food.
Estimated monthly fixed cost is about 15,000€, which
includes payment for rent, labor wages, insurance and marketing. The break-even
months revenue is approximately 21,250€, from which raises a daily revenue about
708.30€.

 

In the table 9, which is possible to find
below, it is demonstrated projected profit and loss calculation during first
three years at Hookah Space lounge bar. The start-up will show the
profitability already in the first year, which will be as a consequence
significantly growing during the next years. The fast grow is affected by a
high gross margin of selling to people products and offering them a top-graded
services as a hookah smoking, cocktails making and food providing.