BUSINESS PLAN FOR A BEAUTY SALON

BEAUTIFUL ARABIA   

Submitted To:

Prof. Tahira Nisar Submitted By:

Ramsha Khalid 10Shazmira Ahmad

40Mahwish Ijaz

32

INTRODUCTION

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

INDUSTRY ANALYSIS

SWOT Analysis

Strengths, Weakness, Opportunities and Threats

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.

Market Share

Marium's 20 Madehas's 10 Athur Shahzad 6 Nicki's 4 Others 60

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

SELECTING THE MARKET SEGMENT

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

4 C’s OF MARKETING PLAN 

Character

Contribution of Equity

Collateral

Cash Flows

ORGANIZATIONAL PLAN

LEGAL STRUCTURE

ORGANIZATIONAL CHART

   ORGANIZATIONAL CHART

FINANCIAL PLAN

PROJECTED INCOME STATEMENT

  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

Projected Cash Flow Statement

  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

PROJECTED BALANCE SHEET

  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

MAJOR RISK

Hazardous products Slips and TripsFireHygiene

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.

CONCLUSION

  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