HAIR BEAUTY SALON

ADDRESS OF THE BUSINESS:

LECTURER:

PREPARED BY: DATE OF SUBMISSION: 28 September 2010

SECTION 1

INTRODUCTION

SECTION 2

PURPOSES

SECTION 3

BUSINESS BACKGROUND

SECTION 4

OWNERS BACKGROUND

SECTION 5

ADMINISTRATION PLAN

SECTION 6

MARKETING PLAN

SECTION 7

OPERATIONAL PLAN

SECTION 8

FINANCIAL PLAN

APPENDICES

1.0

Introduction

1.1

Name of the company

Hair Beauty Salon

No. 48, Jalan Plumbum V 7/V, Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan.

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 Shah Alam was the marketable place for us to commence the business. It is located at No. 48, Jalan Plumbum V 7/V, Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan. 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 will be started on 1 January 2011.

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 UiTM students and we have find out a great demand from them. Besides that, it can create a healthy competition among the other salon.

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.

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.

3.0

BUSINESS BACKGROUND

Name of Company

: Hair Beauty Salon

Company Address

Telephone/Fax Number

: 03-55664323

E-mail

: hairbeautysalon@hotmail.com

Form of Business

: Partnership

Main Activity colouring

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

and hair treatment

Date of Registration

: 18 November 2010

Number of Registration

: 516656

Date of Commencement

: 1 January 2011

Initial Capital

: Partners capital - RM 60 000

Name of Bank

: Bank Islam Malaysia Bhd. (BIMB)

Bank Account No.

: 12142040025522

4.0

PARTNERS BACKGROUND

Name Identity card no Permanent address Correspondence address Telephone no Date of birth Age Skills Experiences Present occupation Previous business experiences Capital contribution

: : : : : : : : : : : : RM :

5.0

Administration Plan

5.1 Introduction

Hair Beauty Salon is a partnership business form to carry out the business that provides services for hair care. Hair Beauty Salon will provides 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.

5.2

Vision

Hair Beauty 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 Shah Alam by opening new branches within 10 years after commencement.

5.3

Mission

To make profit and increase the profit year by year. To increase the number of customer day by day.

5.4

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.

5.5

Business Address

No. 48, Jalan Plumbum V 7/V, Section 7, 40000 Shah Alam, Selangor Darul Ehsan.

5.6

Organization Chart

General Manager

Marketing Manager

Administration Manager

Operations Manager

Hairdresser

5.7

List of Administration Personnel

Position General manager/Hairdresser Administration manager/Hairdresser Marketing manager/Hair dresser Operations manager/Hair dresser

No. of Personnel 1 1 1 1

5.8

Schedule of Tasks and Responsibilities

Position General manager -

Task and Responsibilities 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 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 that will effective lead to pricing more

strategies

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 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 care hair and

conditions,

proper

maintenance. Provide hair extension, wig and

restorative services Responsible for keeping their work area clean and their equipment health and sterile, safety

meeting standards

state

5.9

SCHEDULE OF REMUNERATION

MONTHLY POSITION NO. SALARY (RM) GENERAL MANAGER OPERATIONAL MANAGER 1 1200

EPF (12%)

SOCSO (2% OR 2.5%)

TOTAL (RM)

1400

168

35

1603

144

30

1374

FINANCIAL MANAGER

1200

144

30

1374

MARKETING 1 MANAGER 1200 144 30 1374

TOTAL

5000

600

125

5752

Allowances: It is additional benefits paid to workers. They are considered incentives to motivates and encourages workers to perform their work better.

5.10

List of office equipment and supplies

Types Styling Chair Styling Station Utility Tray Portable Washing Total

Quantity 3 3 3 2

Price/unit (RM) 200 1876 100 300

Total (RM) 600 7504 300 600 9004

Office Furnitures Types Sofa Table Total Quantity 1 1 Price/unit (RM) 1000 350 Total (RM) 1000 350 1350

Other Expenses Types Air-conditioner Magazines Dustbin Total Quantity 2 10 2 Price/unit (RM) 900 15 20 Total (RM) 1800 150 40 1990

5.11

Administration budget

ADMINISTRATIVE BUDGET Monthly Exp.

Particulars

F.Assets

Others

Total

Fixed Assets 1, Office Furniture 350 Working Capital 2,9 Salaries, EPF, SOCSO Miscellaneous 77 500 Pre-Operations & Other Expenditure Other Expenditure 1,3 Total 50 77 3,4 836 5,836 5, 63 5,836 10,6 77 500 2,9 50 1,3

6.0 6.1

Marketing Plan 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.

6.2

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.

Customer satisfaction

We are trying to identify the customers 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.

6.3

Service Description

Hair Beauty 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 but it is also safe to use and halal for Muslims. 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 Section 7, Shah Alam which is near to the Universiti Teknologi Mara (UiTM) and residential area. . We will open the business 6 days per week. The business will be closed on Friday and Public Holiday.

6.4

Target Market

Hair Beauty Salon has identified the target market based on the market segmentation which are the students from Universiti Teknologi Mara (UiTM) Shah Alam, 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.

6.5

Market size

Market size is referring to the total potential purchases of the target market. This is included the purchases of competitors product or services within the same market. Normally, it stated in terms of unit or ringgit. The market size can be calculated by daily, weekly, monthly or yearly. Target market in Section 7, Shah Alam

=200 000 people

Market size Target market of people going to salon Target market Student Resident Total People going to salon 80 000 (15%) 120 000 (10%) Total (people) 12 000 12 000 24 000

Estimated money spend per year for hair care services per person = RM 80 x 24 000 = RM 1,920,000

6.6

Market potential

6.6.1 Types of customers

Customers Students Residents Total Market size 12 000 12 000 24 000 Purchasing power RM80 x12 000 RM80 x12 000 Total (RM) 960 000 960 000 1,920,000

Teenagers and youngsters who describe student will be dominating our types of customers. However, not forgotten by us another target group is working person because our business is the area of industrial zone.

6.7

Competition

Competitor refers to other business that offer similar products, substitute or alternatives products or services to the same target market. Two businesses may involve in the same industry or may offer the same products or services but are not considered competitors if they do not reach out to the same target market.

We had identified a few competitors to our company:

Name of the company

Strengths

Weaknesses

Duration in market

La Hair

Offer scrup Offer

body

Open 4 days per week More expensive

1 year

reflexology

Glamour and Beautiful

Located near the main city Offer own treatment product their hair

Their are small Less

shop

More than 1 years

convenient

Shine Hair

Offer manicure

nail

Their market for people

target only working

More than 1 years

Services are less convenient

Market share refers to the portion of the market that the business can control after taking into consideration market size and the competitors position in the same market. Market share is often quoted in terms of percentage of total market size.

Market share before entry of Hair Beauty Salon: Name of the company La Hair Glamour and beautiful Shine Hair Total Percentage 30% 50% 20% 100% Total (people) 7 200 12 000 4 800 24 000

After analysing the competitors strength and weaknesses, Hair Beauty Saloon is confident it can control 14% of the market. This will mean that the existing competitors will lose some of their market after the entry of Hair Beauty Saloon.

Adjusted market share after the entry of Hair Beauty Salon: Name of the company La Hair Glamour and Beautiful Shine Hair Hair Beauty Salon Total Percentage 24% 46% 17% 14% 100% Total (people) 5 760 11 040 3 840 3 360 24 000

6.6 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.

Month Units (people) January February March April May June July August September October November December Year 1 total sales 237 272 306 305 275 249 279 307 313 298 273 246 3360

Sales RM 18 960 21 760 24 480 24 400 22 000 19 920 22 320 24 560 25 040 23 840 21 840 19 680 268 800

6.7

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.

6.7.1 Product strategy (service)

Our product strategy is referring to customer service. All of salons employees have been trained in exceptional customer service. We are offering the best quality and up to date services due to customer satisfaction. Our services include shampoo treatment, rebonding, trim and cut and also colour and bleach.

6.7.2 Distribution strategy

The saloon is located at No. 48, Jalan Plumbum V7/V, Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan 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.

6.7.3 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. 6.7.3.1 Competition Based Pricing Going Rate Pricing We based our service price largely on the competitors prices. The assumption is that customer judges a products value on the prices competitors charge for their product.

6.7.4 Promotion strategy

Promotion strategy is used to disseminate information about our companys 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.

6.8

Marketing budget

MARKETING BUDGET

Particulars Fixed Assets

F.Assets

Monthly Exp.

Others

Total

1, Signboard 500 Working Capital 1, Salary EPF/SOCSO 200 174 Pre-Operations & Other Expenditure Other Expenditure 1, Total 500 603 1, 7,727 0,601 7,727 7,727 200 174 500 -

1,

1,

7.0 OPERATIONAL PLAN

7.1

Activity chart for hair treatment services

7.2

Layout

7.3

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.

7.3.1

List of material required in the operation process

7.4
No. 1 2 3 4 5 6 7 8

Machine and equipment planning

Name of Inventory Shampoo Conditioner Hairspray Root Lifter Spray Gel Curls Scrunching Mousse Styling Cream Sculpting Gel Hair Dye Cream -various colours TOTAL Quantity required per month (unit) 15 15 15 10 10 20 10 15 Price per unit (RM) 15 18 16 20 20 18 20 25 Total Amount (RM) 225 270 240 200 200 360 200 375 2070

Types Hair dryer Hair Steamer Total 3 2

Quantity

Price/unit (RM) 150 500 450

Total (RM)

1000 1450

7.5

Location plan

We choose to commence our business at section 7, Shah Alam because of several factors. One of the factors is the distance from market or customers. The distance from customer will influence sales revenue. Increase in revenue will contribute in increase in profit. Based on

UITM SHAH ALAM

KFC AND PIZZA HUT JAKEL

our research, some of the people that live at section 7 in the flat let are consists of non resident students from UiTM that are our target market.

Key : Hair Beauty Salon

7.6

Business and operation hours

Days Period 10 am 7 pm 10 am 11 pm Closed Closed

Monday Thursday Weekends Friday Public Holidays

7.7

Operation Budget

OPERATIONS BUDGET

Particulars

F.Assets

Monthly Exp.

Others

Total

Fixed Assets Hair dryer Hair steamer Equipment Operation Working Capital Raw Materials Salaries, EPF & SOCSO Rental Utilities 2,0 70 1,3 74 1,000 700 Pre-Operations & Other Expenditure Other Expenditure Deposit (rent, utilities, etc.) Business Registration & Licences Other Pre-Operations Expenditure Total 10, 454 5,1 44 11,373 1,700 70 13,143 11,373 1,700 70 28,741 2,0 70 1,3 74 1,000 700 450 1000 9004 4 50 1,0 00 9,004 -

8.0 8.1

Financial Plan Projected Expenditure

ADMINISTRATIVE EXPENDITURE

Fixed Assets

RM

Land & Building Office Furniture Working Capital Fixed Salary, Epf,Assets SOCSO Miscellaneous Hair Dryer Hair Steamer Other Expenditure Equipment Other Administrative Expenditure Working Capital TOTAL ADMINISTRATIVE EXPENDITURE Raw Materials Carriage Inward & Duty Salaries, EPF & SOCSO Rental Utilities Bills
MARKETING EXPENDITURE OPERATIONS EXPENDITURE

1,350

RM 2,977 500 450 1,000 9,004 5,836 10,663 2,070 1,374 1,000 700 RM 11,373 1,500 1,700 70 28,741 1,200 174

Fixed Assets Other Expenditure Other Operations Expenditure Pre-Operations Signboard Deposit (rent, utilities, etc.) Business Registration & Licences Working Capital TOTAL OPERATIONS EXPENDITURE Salary EPF/SOCSO

Other Expenditure Other Marketing Expenditure TOTAL MARKETING EXPENDITURE 7,727 10,601

8.2

Projected Sales And Purchases

SALES PROJECTION 18,960 21,760 24,480 24,400 22,000 19,920 22,320 24,560

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8

Month 9 Month 10 Month 11 Month 12 Total Year 1 ToTal Year 2 Total Year 3

25,040 23,840 21,840 19,680 268,800 295,680 325,248

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Year 1 ToTal Year 2 Total Year 3

PURCHASE PROJECTION 2,070 1,614 1,614 2,070 1,614 1,614 2,070 1,614 1,614 2,070 1,614 1,614 21,192 22,888 24,719

8.3

Projected Implementation Cost & Source Of Finance

Hair Beauty saloon PROJECT IMPLEMENTATION COST & SOURCES OF FINANCE

Project Implementation Cost Requirements Fixed Assets Land & Building Office Furniture Cost Loan

Sources of Finance Hire-Purchase Own Contribution Cash Existing F. Assets 1,350

1,350

Signboard

1,500

1,500

Hair Dryer Hair Steamer Equipment Working Capital 2 months Administrative Marketing Operations Pre-Operations & Other Expenditure Contingencies TOTAL

450 1,000 9,004 6,954 2,748 10,288 26,706

450 1,000 9,004 6,954 2,748 10,288 26,706

60,000

60,000

8.4

Office Furniture Depreciation Schedule

Office Furniture 1,350 Straight Line 8 Accumulated Depreciation 169 338 506 675 844 1,013 1,181 1,350

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Year Depreciation 1 169 2 169 3 169 4 169 5 169 6 169 7 169 8 169

Book Value 1,350 1,181 1,013 844 675 506 338 169 -

Signboard Depreciation Schedule

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Year Depreciation 1 2 3 4 5 6 7 8 188 188 188 188 188 188 188 188

Signboard 1,500 Straight Line 8 Accumulated Depreciation 188 375 563 750 938 1,125 1,313 1,500

Book Value 1,500 1,313 1,125 938 750 563 375 188 -

Hair Dryer Depreciation Schedule

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Year Depreciation 1 2 3 4 5 6 7 8 56 56 56 56 56 56 56 56

Hair Dryer 450 Straight Line 8 Accumulated Depreciation 56 113 169 225 281 338 394 450

Book Value 450 394 338 281 225 169 113 56 -

Hair Steamer Depreciation Schedule

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Year Depreciation 1 125 2 125 3 125 4 125 5 125 6 125 7 125 8 125

Hair Steamer 1,000 Straight Line 8 Accumulated Depreciation 125 250 375 500 625 750 875 1,000

Book Value 1,000 875 750 625 500 375 250 125 -

8.5

PROFORMA CASHFLOW STATEMENT

8.6

Proforma income statement

Hair Beauty saloon PRO-FORMA INCOME STATEMENT

Sales Less: Cost of Sales Opening stock Purchases Less: Ending Stock Carriage Inward & Duty Gross Profit Less: Enpenditure Administrative Expenditure Marketing Expenditure Other Expenditure Business Registration & Licences Insurance & Road Tax for Motor Vehicle Other Pre-Operations Expenditure Interest on HirePurchase Interest on Loan Depreciation of Fixed Assets Operations Expenditure Total Expenditure Net Profit Before Tax Tax Net Profit After Tax Accumulated Net Profit

Year 1 268,800

Year 2 295,680

Year 3 325,248

21,192

22,888

24,719

41,724 16,488 24,936 70

41,724 16,488 24,936

41,724 16,488 24,936

1,663 36,888 142,961 125,839 0 125,839 125,839

1,663 36,888 144,587 151,093 0 151,093 276,932

1,663 36,888 146,418 178,830 0 178,830 455,762

8.7

Proforma Balance Sheet

Hair Beauty saloon PRO-FORMA BALANCE SHEET

Year 1 ASSETS Non-Current Assets (Book Value) Land & Building Office Furniture

Year 2

Year 3

1,181

1,013

844

Signboard

1,313

1,125

938

Hair Dryer Hair Steamer Equipment Other Assets Deposit

394 875 7,879 1,700 13,341

338 750 6,753 1,700 11,678 0 0 325,254 325,254 336,932 60,000 276,932 336,932

281 625 5,628 1,700 10,015 0 0 505,747 505,747 515,762 60,000 455,762 515,762

Current Assets Stock of Raw Materials Stock of Finished Goods Accounts Receivable Cash Balance

0 0 172,498 172,498 185,839 60,000 125,839 185,839

TOTAL ASSETS Owners' Equity Capital Accumulated Profit Long-Term Liabilities Loan Balance Hire-Purchase Balance Current Liabilities Accounts Payable TOTAL EQUITY & LIABILITIES

185,839

336,932

515,762