BUSINESS PLAN FOR A BEAUTY SALON BEAUTIFUL ARABIA

Submitted To:

Prof. Tahira Nisar

Submitted By: Ramsha Khalid Shazmira Ahmad Mahwish Ijaz 10 40 32

INTRODUCTION

OUR MISSION: To supply services and products that enhances our clients 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 Threats Market Positioning

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: Mariums salon Madehas Salon Nickis Athur 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 Madehas's Athur Shahzad Nicki's Others

20 10 6 4 60

MARKETING OBJECTIVES
Increase profits by 4% on next year through increasing sales by 8 % Maintain positive steady growth in each month Retain existing customers Etc.

MARKETING STRATEGIES
Sell the Experience Appeal 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

Pricing Place

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 Cs 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
Sales/Revenue Cost of Sales 3,669 1,869

Year - II
4,326 2,008

Gross Profit Operating Expenses:

1,800

2,318

Administrative Expenses
Rent

723
960

710
1,056

Operating Profit
Financial Charges L C + Bank Charges

117
115 100 (98) (42) (56) (56)

552
91 110 352 151 200 (56) 144

Profit before Taxation Taxation 43% Profit after Taxation

Acc. Profit b/f Accumulated Profit c/f

Projected Cash Flow Statement

Year 1
Profit before Financial Charges & Taxation Amortization Depreciation Working Capital Change 117 36 16 168 57

Year 2
552 31 14 597 (7)

Cash from other Sources:

Owners Lenders Finance 863 863 1,726 -

Total Sources (A)

1,952

590

Applications:
Fixed Assets Preliminary Expenses 240 Re -Payment of Loan LC payment Tax 159 240 287 100 42 744 263 110 151 524 66

(B) Cash Increase/(Decrease) (A-B)= 1,207 C Opening Balance (D)

Depreciation Method Straight Line

1,207

PROJECTED BALANCE SHEET

Year 1
Tangible Fixed Assets Preliminary Expenses Current Assets: Accounts Receivable Cash in Hand / Bank 122 143 204

Year 2
129 173

144

1207

1273

1677
Owners Equity: Capital Accumulated Profit Long Term Loan Current Liabilities: 863 (56) 691

1720

863 144 518

Current Portion Accounts Payable 179 194

1677

1720

MAJOR RISK
Hazardous products Slips and Trips Fire Hygiene

The Control of Visible and Invisible Losses

Invisible losses Misusage of the employees.

products by the

Visible losses As during providing services like make up, haircuts etc.

CONCLUSION

PROPOSED CAPACITY
The 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

Facial Beds
Number 3

Hair Chairs
4

Dressing Makeup Chairs

2

Working hours per day

Effective hours per day

8
24

8
32 2 16 28

8
16 4 4

Hours utilized by one 3 client Maximum clients 8 entertained Capacity per day*

Total Project Cost Total 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.

Initial Project Cost

Following is the breakup of the initial project cost: 4 These include initial promotion expenses, initial marketing expenses
Project Cost Capital Cost
Equipment Furniture & Fixtures Pre-operating Costs4 Total Capital Cost 159,300 690,884 352,503 1,202,687 43,725

Costs (Rs)

Working Capital
Initial investment in beauty and makeup products Rent payment (6 months in advance) Total Working Capital

480,006 523,731

Total Project Cost Financing

Equity financing 50 % Debt financing 50 %

1,726,418

863,209 863,209

PROMOTION EXPENDITURES
Newspaper The dawn 20,000

The News

20,000

Promotion and Development Posters 15,000

Brochures Billboards

15,000 150,000

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 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:

Equipment/Machines Required
Electric facial unit Steamer for hair Steamer for facial Pedicure machine Back wash for washing hair Warmer for hot wax Magnifying glass Computers Telephone Software Total 1 2 2 1 1 1 1 1 3 1

Cost Per Machine (Rupees)

37,000 6,800 7,000 45000 22,000 2500 3200 25000 2,500 30,000

Total Cost (Rupees)

37,000 13,600 14,000 45000 22,000 2500 3200 25000 75000 30000 159300

Furniture& Fixtures Required

Carpeting Back rack Reception & cash counter Display counter Flooring Main door Parlor faade Counter chair Facial beds Hair dryer Hair dressing Make up chair Waiting area chairs Waiting area sofa set Air conditioners Television sets False Ceiling Lighting Total 400 93.73 1 3 760 1 180 2 3 4 4 2 12 1 5

Cost Per Unit (Rupees)

55 800 25,000 6000 180 25,000 80 3500 3500 3000 16,000 7500 1000 30,000 26,`000 20,000 45 20000

Total Cost (Rupees)

22,000 74,984 25,000 18,000 1,36,800 25,000 14,400 7000 10,500 12000 64,000 15,000 12,000 30,000 130,000 40000 34200 20000 690,884