Business Plan for a Beauty Salon
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Transcript of Business Plan for a Beauty Salon
OUR MISSION:To supply services and
products that enhances our client’s physical appearance and mental relaxation
OUR MOTTO:Customer Satisfaction
Guaranteed
OPPORTUNITY RATIONALE
The KEYS TO SUCCESS in our business are:
Location: Providing an easily accessible location for customers.
Environment: Providing an environment conducive to giving a relaxing and professional service.
Convenience: Offering clients a wide range of services in one setting, and extended business hours.
Reputation: The owner and other beauticians have a reputation for providing superior personal service.
MARKET RESEARCH
Industry Analysis
National Trends
Local Trends
Competitive Analysis
Opportunities and ThreatsMarket Position
ing
NATIONAL TRENDS
The general public has been revitalized with an increased sense of personal responsibility for their health and wellbeing.
LOCAL TRENDS
It is common sense that salon professionals will be successful if they are able to keep more of their existing clients through developing strong client loyalty and attract new clients through standing out from the competition.
COMPETITIVE LANDSCAPE
There are a number of salons like ours but they are mainly very expensive like:
Marium’s salonMadeha’s SalonNicki’sAthur Shahzad Salon Others
MARKET POSITIONING
Market Share
Marium's
Madehas's
Athur Shahzad
Nicki's
Others
As if now we stand among the others but by this yearend we plan to gain as much as 10 percent of the market share.
MARKETING OBJECTIVES
Increase profits by 4% on next year through increasing sales by 8 %
Maintain positive steady growth in each month
Retain existing customersEtc.
MARKETING STRATEGIES
Sell the ExperienceAppeal to target market: Focus on Customer Retention:Encourage Word-of-Mouth Promotion:Encourage Product Sales
MARKETING MIX
Products and Services ◦Body treatment◦Beauty treatment◦Hair treatment
PricingPlace
◦Demographic Analysis◦Geographic analysis◦Psychographic analysis
Promotion
ACTION PLAN
Opening on January 1st 2014
Loan will be taken from the lender to pay the rent for the salon building
Concentrate on the marketing aspect
We expect to service approximately 196 customers a week
As the client base increases, Beautiful Arabia would expand its employees, including the owners
Year - I Year - II
Sales/Revenue 3,669 4,326
Cost of Sales 1,869 2,008
Gross Profit 1,800 2,318
Operating Expenses:
Administrative Expenses 723 710
Rent 960 1,056
Operating Profit 117 552
Financial Charges 115 91
L C + Bank Charges 100 110
Profit before Taxation (98) 352
Taxation 43% (42) 151
Profit after Taxation (56) 200
Acc. Profit b/f - (56)
Accumulated Profit c/f (56) 144
Year 1 Year 2Profit before Financial Charges & Taxation
117 552
Amortization 36 31Depreciation 16 14 168 597Working Capital Change 57 (7)
Cash from other Sources: Owners 863 -Lender’s Finance 863 - 1,726
-
Total Sources (A) 1,952 590
Applications:
Fixed Assets
159
-
Preliminary Expenses 240
240 -
Re -Payment of Loan 287 263LC payment 100 110Tax 42 151
(B) 744 524
Cash Increase/(Decrease) (A-B)= C
1,207 66
Opening Balance (D) - 1,207 Closing Balance (C+D) 1,207 1,273
Depreciation Method Straight Line
Year 1 Year 2Tangible Fixed Assets
143
129
Preliminary Expenses
204
173
Current Assets:
Accounts Receivable
122
144
Cash in Hand / Bank
1207 1273
1677 1720Owners’ Equity:
Capital
863
863
Accumulated Profit
(56)
144
Long Term Loan
691
518
Current Liabilities:
Current Portion
Accounts Payable
179
194
1677 1720
The Control of Visible and Invisible Losses
Invisible losses Misusage of the products by the employees.
Visible losses As during providing services like
make up, haircuts etc.
Facial Beds
Hair Dressing Chairs
Makeup Chairs
Number 3 4 2
Working hours per day
8 8 8
Effective hours per day
24 32 16
Hours utilized by one client
3 2 4
Maximum clients entertained
8 16 4
Capacity per day* 28
PROPOSED CAPACITYThe proposed Beauty Salon will handle 28 customers per day. This is worked out as follows:*Capacity per day= Facial Beds+ Hair Dressing Chairs +Makeup Chairs/ 5= 142/5 =28
Total Project CostTotal project cost is 1.726 million rupees approximately. Out of the total project cost, 850,184 rupees would be used for the purchase of fixed asset.
Project Cost
Costs (Rs)
Capital Cost
Equipment 159,300
Furniture & Fixtures 690,884Pre-operating Costs4 352,503Total Capital Cost 1,202,687
Working Capital
Initial investment in beauty and makeup products
43,725
Rent payment (6 months in advance) 480,006
Total Working Capital 523,731
Total Project Cost 1,726,418
Financing
Equity financing – 50 % 863,209Debt financing – 50 % 863,209
Initial Project CostFollowing is the breakup of the initial project cost: 4 These include initial promotion expenses, initial marketing expenses
PROMOTION EXPENDITURES
Newspaper
The dawn 20,000
The News 20,000
Promotion and Development
Posters 15,000
Brochures 15,000 Billboards 150,000
Special Hampers 132,503
Total 352,503
Recommended Mode
Sq, ft. Rent Per sq. Ft Monthly Rent Rent Expense 1st Year
2,700.0 29.63 80,001 960,012
Equipment/Machines Required Cost Per Machine (Rupees)
Total Cost (Rupees)
Electric facial unit 1 37,000 37,000
Steamer for hair 2 6,800 13,600
Steamer for facial 2 7,000 14,000
Pedicure machine 1 45000 45000
Back wash for washing hair
1 22,000 22,000
Warmer for hot wax 1 2500 2500
Magnifying glass 1 3200 3200
Computers 1 25000 25000
Telephone 3 2,500 75000
Software 1 30,000 30000
Total 159300
EQUIPMENT DETAILS Following equipment would be required for the proposed beauty clinic. Equipment is chosen keeping in mind the services that would be offered at the clinic. Approximate prices are also given along with the list:
Furniture& Fixtures Required Cost Per Unit (Rupees)
Total Cost (Rupees)
Carpeting 400 55 22,000Back rack 93.73 800 74,984Reception & cash counter
1 25,000 25,000
Display counter 3 6000 18,000Flooring 760 180 1,36,800Main door 1 25,000 25,000Parlor façade 180 80 14,400Counter chair 2 3500 7000Facial beds 3 3500 10,500Hair dryer 4 3000 12000Hair dressing 4 16,000 64,000
Make up chair 2 7500 15,000Waiting area chairs 12 1000 12,000Waiting area sofa set 1 30,000 30,000Air conditioners 5 26,`000 130,000Television sets 20,000 40000False Ceiling 45 34200Lighting 20000 20000Total 690,884