Barbered Design Logistics, Location and Costings

This morning I had a look at potential locations for where the company could be based and had a look at how the finances would work out. 

We discussed yesterday that we think we'd like the company to be based somewhere around the edge of Leeds, with Headingley being a favourite because of how it's a student area and has a lively atmosphere about it because of this.

Given that the concept of the company is based around a barbers shop, a regular office in a big corporate tower block wouldn't be suitable, we'd need a shop style space on a main road so we can show of the decorating, and this is going to cost more. We don't see this as a problem though, as the concept of the company will attract business and make the extra money worth spending

We'd be based at Granby House on Otley Road

The rent is £12.50 per square foot per annum. Based on there being 5 of us that will be working predominantly on computers at desks which doesn't require too much room, and a fairly large meeting area to talk to clients in, based on this guide I found on the internet, 1000 square feet should be plenty. 

This means the yearly cost would be £12,500. Whilst this is more than is necessary for a regular office, we think that it would be worth paying the extra money for a perfect office. I set up this spreadsheet for working out costs

We decided to budget it a £21,000 salary each, which is based on Numiko's salaries. We'd only need one Mac as 4 out of the 5 of us already own one. We decided not to factor in travel and food costs as we feel that's something that we should pay for individually rather than out of the company, especially given that we've allocated a salary each.

Given that we've got about £10,500 costs per month and that income isn't going to be consistent, I based the hourly rate on trying to earn £20,000 a month, as this gives us plenty of room to turn a profit even if we're not working at full capacity. This correlates to an hourly charge of £28.50. Charging this relates to a yearly income of about £230,000 based on 46 working weeks, as according to the governments website:

Going back to the problem that business and cashflow is unlikely to be constant, assuming that we're working at least two thirds capacity all the time (which is very achievable), our income will be about £153,000 leaving a minimum profit of roughly £27,500

The company would be a limited company as this protects us personality more from any issues that would arise if the company were to fail.