Business plan

Business plan

Executive Summary

Bodywise Hair Salon (B.H.S) will be the registered name of the business entity. It will be a private limited company located in London City, next to the University of London. The location of the business is a busy place.  Therefore, the corporation will be located at a strategic point.  The high quality service will also be an added advantage. The business will offer salon services such as plaiting, blow-dry, hair setting, steaming, and chemical application. These will be provided for individuals and institutions. The business will also hire its services, for example, door to door services on request by the customers who cannot make it to the premises.

The location of Bodywise Hair Salon will significantly influence the marketing of its services. The salon will be surrounded by many university colleges and offices where ladies work. The business will be better than its competitors within the town because it will provide door to door services to customers, and the employees will always see that they offer quality services in time. The company will offer fair and affordable prices to attract as many customers as possible.

Enough capital will be needed for the smooth running of the business. The finance will be mainly obtained from shareholders. Since the aim of the company is profit-making, the pricing of the services will depend on production cost. The salon is anticipated to increase sales revenues from $ 500,000 in FY2021 to $ 775, 000 in the next three years. Bodywise Hair Salon shall realize growth in net returns from $ 100,000 to $ 125,000 in the same financial year, as it shall strive to sustain gross profit margins of 50%.

Products and Services Offered

The Bodywise Hair Salon will be a service business. It will offer salon services to high school students, college and university students, and ladies from the neighborhood community. The services offered will depend on the existing technology and customers’ expectation. The services will improve as technology improves, and customers’ expectation changes. It will also provide hairpieces, pony-tail, weaves, and ornaments such as bangles, necklaces, earrings, rings and wristwatches, chemicals, and food hail oils.

Its primary services will include plaiting, weaving, blow-dry, wash and set,  chemical application, and blow-out. A price list will be availed, and the prices will depend on the particular hairstyle and the chemical or oil used for the services. A 20% discount will be available for new visiting customers to encourage them to revisit the salon. The nails will be polished for free to loyal customers. There will also be compensation for work whenever one backfires. In addition to this, soft music, magazines, and novels will be offered to the customer as they wait to be served. Make-ups like different brands of powder will be availed, and regular customers will be allowed to receive the services on credit on request.

Customers and Market

The aim of starting a business is to get customers who can purchase the products or services. These people who buy these services or products constitute the business market. Bodywise Hair Salon targets a group of customers who includes students from learning institutions such as colleges, high schools and universities, and ladies working around the University of London. The business will also serve domestic customers who are mostly the resident who stay near the salon. The company will be located next to the university to enable hairstylists and hairdressers to serve their customers without any delay. The potential customers of Bodywise Hair Salon will be of different ages, religions, occupations, education levels, and income levels. They will, therefore, need various services at different times. The management will ensure that each client receives the right service at the right time, quality, and at an affordable cost.  The frequency of customer visitation will mainly depend on satisfaction and quality. Otherwise, most of the customers will approximately visit the salon twice a month. That is an interval of every two weeks. The population of people in need of salon services will tend to very high during festive seasons.

Competitive Analysis

Bodywise Hair Salon will operate under the beauty industry. The industry is currently experiencing very rapid growth. This is due to the fact many people have realized the need for beauty. There is, therefore, high demand for the services. Competition is also very stiff, although the business is differentiating its services and using the current technology to cope with the stiff competition. The salon business will boom mostly during festive seasons such as Christmas, new-year, weddings among other parties. Nowadays, the sale increment also shoots when schools, colleges, and universities resume in session. The trends and prospects of technology is also improving as modern equipment are being introduced. They will be replacing the old machines like blow-drier, heater, steamer, rolling machines, and drying machines. There are also new types of hairstyles and hair treatment.

The Bodywise Hair Salon is likely to face stiff competition from three (3) salons: Eurega, Georgia, and Victory hair salons. These salons have more considerable advantages over Bodywise Hair Salon because they have been in existence. Therefore they have loyal customers, and some have good returns and are well established in terms of capital.

Bodywise Hair Salon plans to provide services with the latest technology and a discount of 20%. It will also offer door to door services on request. The business also intends to allow credit agreement mainly with loyal customers. It will also organize compensation of work whenever one backfires. The firm plans to differentiate its services from others in the same industry. The company will also provide free services, for example, nail varnishing, among others. The business also aims to provide incentives and motivation to employees through training and development, payable holiday schemes, compensation schemes in case of injury during working hours, employee insurance, and medical programs.

Entry and Growth Strategy

Bodywise Hair Salon expects to enter the market with a significant advantage over others. The business will have great expansion opportunities since it will have links with other prominent international salons, which will assist in its publicity.  Posters and social sites will be used for advertisements. After sometimes, the business will be advertised by the use of mass media, newspapers, magazines, and newsletters.

Market Share

There is a need to capture a significant market share for any business. To achieve this, B.H.S will strive to offer its services faster than its competitors. The company will use the latest technology, provide after-sales services to all customers like free nail varnish applications, give discounts to the new customers and use market penetration strategy where the business will set lower prices below its competitors. The firm also tends to use the overall cost leadership strategy by being the most economical cost producer in its industry to attract more customers. This will be possible as the business will possess multiple cost advantages. The cost advantages include operation efficiency, superior technology, low overhead costs, and preferential access to factors of production. The business will focus on the niche in the market where nobody is interested in such body massage and male hair care. The management intends to understand its customers and set genuine customers’ needs. The business will also put in place an appropriate process to meet customers’ expectations. This will be done by getting customers’ views and acting on the views appropriately.

Pricing Strategy

The business will use a market penetration strategy. It will deliberately set low prices for its services and products to attract as many customers as possible. It will also maximize sales, and keep a distance from the competitors. This will happen as the business will be entering the new market and industry. Once the company has achieved the desired level of market share, it will gradually increase its prices to maximize profit.

Advertising and Promotion

A starting business requires a lot of exposure to be recognized by customers. Although there are many salons already existing in the market today, B.H.S will carry out business promotions such as after-sales services to all customers in form nail varnishing for free, discounts to loyal customers, and door to door services. The business also will be involved in sponsoring sporting activities, education, and preservation of the environment to improve its reputation or public image.

The poster will be placed at strategic locations displaying the photo of the premise, services offered, and the working hours. There will also be two signboards placed strategically. The business will open a website where it will receive customers’ expectations and requirements and upon them appropriately. It will also have a twitter and Facebook accounts where it will directly promote its services and receive the customers’ complaints and act upon them.

Sales Tactics

Bodywise Hair Salon will employ the direct selling method to its customers. This will be an advantage since both the management and customers will meet face to face and have this will promote direct customer contact. This will enable the manager to have immediate feedback from customers. The customers will be allowed to air out their views, and on the other hand, the hairstylists and dressers will be in a position to advise the customers on how to take care of their hair. By the end, the entire market will come out satisfied while the management will have identified their weaknesses and how to adjust them for the benefit of the business. Salespeople will also be sent out to hear what, when, where, and how the customers want to be served. After-sales services like free hairbands will also be offered to customers.

Organizational Plan and Management

For any business to prosper, employees need to be motivated and well paid. Some of the allowances that will be offered by B.H.S include medical allowance, transport allowance, insurance allowance, and education allowance in addition to the basic salary.

B.H.S will also build employees’ morale by providing overtime pay for any job done past regular working hours. For any additional hour, the employee will receive a 1% increment in his monthly salary. Employees will also be given insurance cover against accidents. Protective clothing such as gloves and aprons will also be provided during working hours. All the meals will be provided to the employees during working hours.

                                                                                             TOTAL= $ 65,000

Financial Plan

Pre-Operational Cost

Working Capital

Bodywise Hair Salon Pro-Forma Profit and Loss Account for The Next Three Years

Bodywise Salon Balance Sheet for The Next Three Years