New Beauty Parlor Business Plan

AA

BUSINESS PLAN ONBUSINESS PLAN ON

“MENS “MENS HAIR SALON””

STYLZ HAIR SALONTowards partial fulfillment of

MASTER OF BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY:

MANVENDRA SINGH

ROLL NO – 12001114061SUBMITTED TO:

Dr. MOHD. ANEES

(Director/Coordinator)

MBA (F&C) Programme

(Session: 2012-2014)

INSTITUTE OF MANAGEMENT SCIENCES

LUCKNOW UNIVERSITY

MENS HAIR SALOON

TABLE OF CONTENT

1. INTRODUCTION 3

2. PURPOSES 6

3. BUSINESS BACKGROUND 8

4. ADMINISTRATION PLAN 10

5. MARKETING PLAN 21

6. OPERATIONAL PLAN 28

7. FINANCIAL PLAN 33

8. PROFORMA CASH FLOW STATEMENT 38

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INTRODUCTION

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1.0 Introduction

1.1 Name of the company

Stylz Hair Salon

Vivek Khand,

Gomtinagar, Lucknow

1.2 Nature of the business

Our company, Hair Beauty Salon have provide hair care services in order to fulfil the needs

and wants of community especially students.

1.3 Industry profile

Hair Beauty Salon is a partnership company that focuses in providing hair care services at

affordable and reasonable price to our target market.

1.4 Location of the business

Based on the research, we have found a strategic area at Gomti Nagar was the marketable

place for us to commence the business. It is located at Vivek Khand, Gomti Nagar, Lucknow.

Furthermore, customer easy to get parking around this area and the building are situated near

the main road.

1.5 Date of business commencement

Our business started on 2 April 2014.

1.6 Factors in selecting the proposed business

Based on the observation and survey, we have decided to operate the Hair Beauty Salon

because it is a profitable business and easy to manage. Because of our target market are

students, we did a research among the Lucknow students and we have find out a great

demand from them. Besides that, it can create a healthy competition among the other salon.

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1.7 Future prospect of the business

For the future of the business, we have discussed to open up new branches especially nearest

to the high education institution. In addition, the business can create job opportunity to the

professional workers and also helps to develop the economy for our country.

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PURPOSE

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2.0 Purposes of the Business Plan

Among the main purposes for our business preparing a business plan are:

To evaluate the project viability and growth potential

To act as guideline for the management of the proposed business

To allocate business resources effectively

A detailed description of our new business, including the company's product and

services, marketing plan, financial statements and projections and management

principles.

Its list a company's expected course of action for a specified period usually includes a

detailed listing and analysis of risks and uncertainties.

For our business, it should examine the proposed products and services, the market,

the industry, the management policies, the marketing policies, production needs and

financial needs.

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BUSINESS BACKGROUND

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3.0 BUSINESS BACKGROUND

Name of Company : Stylz Hair Beauty Salon

Company Address : Vivek Khand, Gomti Nagar Lucknow

Telephone/Fax Number : 0522-55664323

E-mail :stylz [email protected]

Form of Business : Sole prop writer

Main Activity : Provide hair care services such as blow-drying, cutting,

colouring and hair treatment

Date of Registration : 2 November2013

Number of Registration : 516656

Date of Commencement : 2 April 2014

Initial Capital : Rs. 4,50,000/- (Approx)

Name of Bank : Bank of India

Bank Account No. : 083710001119796

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ADMINISTRATION PLAN

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4.0 Administration Plan

4.1 Introduction

Stylz Hair Salon is a partnership business form to carry out the business that provides

services for hair care. Stylz Hair Salon will provide the best hair care services for the target

market. Administration is the management of public or business affair. Administration is one

of the important departments or parts of a business in order to control and administer all the

related work in the company. This department is controlled the partners which has

experiences and knowledge about this field. Besides that, there is also commitment from the

others to ensure the objective can be achieved by the company.

4.2 Vision

Stylz Hair Salon is set up to provide good quality hair care and treatment services at a

reasonable price for customers.

This company also wants to expand the business outside of Lucknow by opening new

branches within 10 years after commencement.

4.3 Mission

To make profit and increase the profit year by year.

To increase the number of customer day by day.

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4.4 Objective

We want to be known and famous among the target market.

To give full satisfaction to customer with excellent services.

To give an adequate return on investment to partners.

4.5 Business Address

Vivek Khand

Gomti Nagar

Lucknow

General Manager

Marketing ManagerAdministration

Manager Operations Manager

Hairdresser

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4.6 Organization Chart

4.7 List of Administration Personnel

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Position No. of Personnel

General manager/Hairdresser 1

Administration manager/Hairdresser 1

Marketing manager/Hair dresser 1

Operations manager/Hair dresser 1

4.8 Schedule of Tasks and Responsibilities

Position Task and Responsibilities

General manager - Oversees all areas of the facility on day

to day operations

- Schedules all staff

- Make sure all staff is keeping their area

operating as required

- Try to solve all concerns by members

and staff

- Promote health and wellness, educate

members and recruit new members

- Other duties as assigned

Administration manager - Carrying out the administrative duties,

using system and relevant processes to

the organization

- Design and implement staff

communication programs

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- Manage and order supplies within the

budget guidelines

- Prepare and review operational reports

and schedules to ensure the accuracy

and efficiency

- Plan, administer and control budgets for

contracts, equipment

- Monitor the facility to ensure that it

remains safe, secure, and well-

maintained

- Oversee the maintenance and repair of

machinery, equipment and mechanical

systems

Marketing manager - Responsible for the design of marketing

strategies for the firm

- Pinpoint potential markets that the firm

can target

- Come up with effective pricing

strategies that will lead to more

profitability for the company and help

in the consolidation of market share

- Marketing managers track trends in the

market and come up with products and

services that will satisfy new demands

- To advertise and promote our services

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and make them famous in the marketing

by using different techniques

Operational manager - Direct and coordinate activities of

businesses or departments concerned

with the production, pricing and sales

- Review financial statements, sales and

activity reports, and other performance

data to measure productivity and goal

achievement and to determine areas

needing cost reduction and program

improvement

- Manage staff, preparing work schedules

and assigning specific duties

- Determine staffing requirements, and

interview, hire and train new

employees, or oversee those personnel

processes

- Plan and direct activities such as sales

promotions, coordinating with other

department heads as required.

Hairdresser- Hairdressers cut, style and colour hair

- Provide permanent wave, straightening

and bleaching treatments

- Advise clients on problem hair

conditions, proper hair care and

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maintenance.

- Provide hair extension, wig and

restorative services

- Responsible for keeping their work area

clean and their equipment sterile,

meeting state health and safety

standards

4.9 SCHEDULE OF REMUNERATION

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Allowances:

It is additional benefits paid to workers. They are considered incentives to motivate and

encourage workers to perform their work better.

4.10 List of office equipment and supplies

POSITION NO.

MONTHLY

SALARY

(Rs)

GENERAL

MANAGER1 14000

OPERATIONA

L MANAGER1 12000

FINANCIAL

MANAGER1 12000

MARKETING

MANAGER1 12000

TOTAL 4 50000

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Types Quantity Price/unit (Rs) Total (Rs)

Styling Chair 3 5000 15000

Styling Station 3 21520 64560

Utility Tray 3 2000 6000

Portable Washing 2 5000 10000

Total 90040

Office FurnitureTypes Quantity Price/unit (Rs) Total (Rs)

Sofa 1 10000 10000

Table 1 3500 3500

Total 13500

Other ExpensesTypes Quantity Price/unit (Rs) Total (Rs)

Air-conditioner 2 90000 180000

Magazines 10 1500 15000

Dustbin 2 2000 4000

Total 19900

4.11 Administration budget

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ADMINISTRATIVE BUDGET

Particulars F.AssetsMonthly

Exp. Others Total

Fixed Assets

Office Furniture 1,3500

13,500

-

-

-

-

Working Capital

Salaries 50000

50000

Miscellaneous 5000

5000

-

-

-

-

Pre-Operations & Other Expenditure

Other Expenditure 5,8360 58,360

Total 13500

55000

58,360

1,26,860

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MARKETING PLAN

5.0 Marketing Plan

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5.1 Introduction

Marketing is a process that is vital in a company to create values for customers and build

relationships in order to attract customers to go for the services provided. It is also the

process of planning, executing the concept, pricing, promotion and distribution of ideas,

products or services to create exchange that can satisfy individuals and organizational

objectives. It is a very important element to manage a company. As a started of a new

business, the market condition and customers’ demands have been analysed. An analysis

from the marketing point of view is very important in order to make the business can reach

the sales target and profit as well.

The status of marketing encompasses the entire business. The business identifies the needs

and wants of the market for marketing plan. Marketing plan involves the activities that are

carries out systematically to encourage and increase the sales of products or services as long

as the activities are in line with ethical and religious practices. Therefore, Hair Beauty Salon

has developed some plans and strategies in order to introduce and inform about the services

provided to our target market.

5.2 Marketing Objective

The marketing concept rests on the philosophy that all activity must satisfy the needs and

wants of customer and to achieve the targeted profit. Based on this concept, the objective of

company can be satisfied. The marketing objective that needs to be achieved are stated as

follows:

Quality of services

We are aiming to provide quality services through well trained workers and as

well as the product that we used for hair care and treatment.

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Customer satisfaction

We are trying to identify the customer’s needs and wants based on the analysis

made. It can be successfully fulfilled by giving full commitment when doing our

job.

To encourage and improve our services

This can be achieved by preparing the effective promotion and as well as the good

business environment.

To ensure our salon is well known

All information needed regarding to our salon will be spreader through

promotions and advertisement.

To maximize profit

As all the objectives stated above are obtained, our targeted profit can be reached

at its maximum point.

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5.3 Service Description

Stylz Hair Salon is a service type of business which provides hair care and treatment to

customer. We are providing hair care services that are beneficial to customer. This is due to

our good quality services at the affordable price.

We are using hair care product that is formulated by using the natural ingredients such as

traditional herbs and plants extracts these not only the uniqueness of our services. Therefore,

we can easily attract the potential customer use our services.

Besides that, after we did some research, we have identified a strategic location to open the

business. We have decided to open the business at Vivek Khand, Gomti Nagar, Lucknow

which is prime residential area. . We will open the business 6 days per week. The business

will be closed on Friday and Public Holiday.

5.4 Target Market

Stylz Hair Salon has identified the target market based on the market segmentation which are

residents from the near residential area include the other potential buyer that is 7 kilometres

diameter from our business premise. We have chosen these target market because nowadays,

people are more sensitive towards the quality of services and the price level due to the

economics problems.

5.5 Forecasting Sales

The sales forecast is done on a monthly basis for the first year of business and can be used for

extended to cover sales for the second and third year. This section will offer a financial

overview of Hair Beauty Salon included the break-even analysis and sales forecast.

Sales forecasts

The first month will be used to set up the equipments that need in the saloon and hire and

train the employees properly. The instalment of the equipments will be officially done in the

second month.

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Month Sales

Units (people) Rs

January 237 18 9600

February 272 21 7600

March 306 24 4800

April 305 24 4000

May 275 22 0000

June 249 19 9200

July 279 22 3200

August 307 24 5600

September 313 25 0400

October 298 23 8400

November 273 21 8400

December 246 19 6800

Year 1 total sales 3360 268 8000

5.6 MARKETING STRATEGY

Developing marketing strategy is to enable business to plan in order to achieve stated

marketing objectives. The key idea of our business is to deliver customer satisfaction yet

provide business with a competitive advantage. Marketing strategy includes product, pricing,

place or distribution and promotion strategy.

5.7.1 Product strategy (service)

Our product strategy is referring to customer service. All of salon’s employees have been

trained in exceptional customer service. We are offering the best quality and up to date

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services due to customer satisfaction. Our services include shampoo treatment, rebonding,

trim and cut and also colour and bleach.

5.7.2 Distribution strategy

The saloon is located at Vivek Khand, Gomtinagar where it is the strategic place because it is

near the main road and located at the industrial area. The type of distribution channel that we

used is called direct marketing channel consists of the business selling directly to the

customers.

5.7.3 Pricing strategy

The price of the service is the amount of money charged to the customer for a particular

purchase. We have decided to use competition based pricing strategy.

5.7.3.1 Competition Based Pricing

Going Rate Pricing

We based our service price largely on the competitor’s prices. The assumption is that

customer judges a product’s value on the prices competitor’s charge for their product.

5.7.4 Promotion strategy

Promotion strategy is used to disseminate information about our company’s services with the

purpose of attracting the target market. The promotion tools that we have decided to use is

advertising by banner, pamphlet, and brochures.

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5.8 Marketing budget

MARKETING BUDGET

Particulars F.AssetsMonthly

Exp. Others Total Fixed Assets

Signboard 15,000

15,000

Banners 12000

12,000

Pumplets 17,400

1,740

-

-

-

-

-

-

Pre-Operations & Other Expenditure

Other Expenditure 77,270 77,270

Total 44,400

77270

1,06,010

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OPERATION PLAN

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6.0 OPERATIONAL PLAN

6.1 Activity chart for hair treatment services

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6.2 Layout

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6.3 Material planning

Material planning is important to determine the type and amount of materials need for

services. Below is the list of materials required from the producer that will be used in our hair

care service?

No. Name of Inventory Quantity required per month (unit)

Price per unit (RM)

Total Amount (RM)

1 Shampoo 10 250 2500

2 Conditioner 10 200 20003 Hairspray 10 180 1800

4 Root Lifter Spray Gel 5 250 1250

5 Curls Scrunching Mousse 15 220 3300

6 Styling Cream 20 180 3600

7 Sculpting Gel 10 200 2000

8 Hair Dye Cream-various colours

15 250 3750

9 Straightner 1 500 500

TOTAL 20,700

6.3.1 List of material required in the operation process

6.4 Machine and equipment planning

Types Quantity Price/unit (RM) Total (RM)

Hair dryer 3 1500 4500

Hair Steamer 2 5000 10000

Total 14500

6.5 Business and operation hours

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Days Period

Monday – Wednesday 10 am – 8 pm

Friday - Sunday 10 am – 9 pm

Thursday Closed

Festivals (Holi & Diwali only) Closed

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FINANCIAL PLAN

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7.0 Financial Plan

7.1 Projected Expenditure

ADMINISTRATIVE EXPENDITUREFixed Assets RsLand & Building Office Furniture 13,500

Working Capital

Salary 50,000 Miscellaneous 5000

Other Expenditure Other Administrative Expenditure 58,360

TOTAL ADMINISTRATIVE EXPENDITURE 1,26,860

MARKETING EXPENDITURE

Fixed Assets Rs

Signboard 15,000

Banners 12,000

Pumplets

1740

Other Expenditure Other Marketing Expenditure 7727 0

TOTAL MARKETING EXPENDITURE 1,06,010

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7.2 Projected Sales And Purchases

SALES PROJECTIONMonth 1 18,960 Month 2 21,760 Month 3 24,480 Month 4 24,400 Month 5 22,000 Month 6 19,920 Month 7 22,320 Month 8 24,560 Month 9 25,040 Month 10 23,840 Month 11 21,840 Month 12 19,680 Total Year 1 268,800 ToTal Year 2 295,680 Total Year 3 325,248

PURCHASE PROJECTIONMonth 1 2,070 Month 2 1,614 Month 3 1,614 Month 4 2,070 Month 5 1,614 Month 6 1,614 Month 7 2,070 Month 8 1,614 Month 9 1,614 Month 10 2,070 Month 11 1,614Month 12 1,614 Total Year 1 21,192 ToTal Year 2 22,888 Total Year 3 24,719

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7.4 Office Furniture Depreciation Schedule

Fixed Asset Office FurnitureCost (Rs) 13500 Method Straight Line Economic Life (yrs) 8

Annual Accumulated Year Depreciation Depreciation Book Value

- - 13501 169 169 11812 169 338 10133 169 506 8444 169 675 6755 169 844 5066 169 1,013 3387 169 1,181 1698 169 1,350 -

Signboard Depreciation Schedule

Fixed Asset SignboardCost (RM) 15000 Method Straight Line Economic Life (yrs) 8 Annual Accumulated Year Depreciation Depreciation Book Value - - 1,500 01 188 0 188 0 1,313 02 188 0 375 0 1,125 03 188 0 563 0 938 04 188 0 750 0 750 05 188 0 938 0 563 06 188 0 1,125 0 375 07 188 0 1,313 0 188 08 188 0 15,00 0 -

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Hair Dryer Depreciation Schedule

Fixed Asset Hair DryerCost (Rs) 450 Method Straight Line Economic Life (yrs) 8 Annual Accumulated Year Depreciation Depreciation Book Value - - 450 1 56 56 394 2 56 113 338 3 56 169 281 4 56 225 225 5 56 281 169 6 56 338 113 7 56 394 56 8 56 450 -

Hair Steamer Depreciation Schedule

Fixed Asset Hair SteamerCost (Rs) 1,000 Method Straight Line Economic Life (yrs) 8

Annual AccumulatedYear Depreciation Depreciation Book Value

- - 1,0001 125 125 8752 125 250 7503 125 375 6254 125 500 5005 125 625 3756 125 750 2507 125 875 1258 125 1,000 -

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PROFORMA CASHFLOWSTATEMENT

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8.1 Performa income statement

Stylz Hair SaloonPRO-FORMA INCOME STATEMENT

Year 1 Year 2 Year 3 Sales 268,800 295,680 325,248 Less: Cost of Sales Opening stock Purchases 21,192 22,888 24,719 Less: Ending Stock Carriage Inward & Duty Gross Profit Less: Expenditure

Administrative Expenditure 41,724 41,724 41,724

Marketing Expenditure 16,488 16,488 16,488 Other Expenditure 24,936 24,936 24,936

Business Registration & Licences 70

Insurance & Road Tax for Motor Vehicle

Other Pre-Operations Expenditure

Interest on Hire-Purchase Interest on Loan

Depreciation of Fixed Assets 1,663 1,663 1,663

Operations Expenditure 36,888 36,888 36,888 Total Expenditure 142,961 144,587 146,418 Net Profit Before Tax 125,839 151,093 178,830 Tax 0 0 0 Net Profit After Tax 125,839 151,093 178,830 Accumulated Net Profit 125,839 276,932 455,762

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8.2 Performa Balance Sheet

Stylz Hair SaloonPRO-FORMA BALANCE SHEET

Year 1 Year 2 Year 3 ASSETS

Non-Current Assets (Book Value)

Land & Building Office Furniture 1,181 1,013 844 Signboard 1,313 1,125 938 Hair Dryer 394 338 281 Hair Steamer 875 750 625 Equipment 7,879 6,753 5,628 Other Assets Deposit 1700 1,700 1,700 13,341 11,678 10,015 Current Assets Stock of Raw Materials 0 0 0 Stock of Finished Goods 0 0 0 Accounts Receivable Cash Balance 172,498 325,254 505,747 172,498 325,254 505,747 TOTAL ASSETS 185,839 336,932 515,762 Owners' Equity Capital 60,000 60,000 60,000 Accumulated Profit 125,839 276,932 455,762 185,839 336,932 515,762 Long-Term Liabilities Loan Balance Hire-Purchase Balance Current Liabilities

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Accounts Payable

TOTAL EQUITY & LIABILITIES 185,839 336,932 515,762

New Beauty Parlor Business Plan

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