Eco-Beauty Centre Beauty Business Plan
Eco-Beauty Centre Beauty Business Plan
By (Name)
The Name of the Class (Course)
Professor (Tutor)
The Name of the School (University)
The City and State where it is located
The Date
Table of Contents
1.0 Business Description ………………………………………………………………………….3
1.1 Executive Summary …………………………………………………………………………..3
1.2 Mission, Vision and Objectives ………………………………………………………………3
1.3 Financial and Strategic Objectives ……………………………………………………………………………….4
1.4 Performance Highlights ………………………………………………………………………………………………5
1.5 Location of the Business …………………………………………………………………………………………….6
1.6 Ownership and Management ………………………………………………………………….7
1.7 Sources of Finances and Funds ……………………………………………………………….7
1.8 Keys to Success ……………………………………………………………………………….8
2.0 Company Summary …………………………………………………………………………..8
2.1 Start-up Summary …………………………………………………………………………….8
3.0 Products and Services …………………………………………………………………………9
4.0 Marketing Strategy and Implementation ……………………………………………………..9
4.1 Competitive Edge ……………………………………………………………………………10
4.2 Marketing Strategy …………………………………………………………………………..11
4.3 Sales Forecast ………………………………………………………………………………..12
4.4 Milestones ……………………………………………………………………………………14
5.0 Management Summary ………………………………………………………………………15
5.1 Personnel Plan ……………………………………………………………………………….16
6.0 Financial Plan ………………………………………………………………………………..17
6.1 Projected Cash Flow …………………………………………………………………………18
6.2 Projected Balance Sheet …………………………………………………………………….19
6.3 Financial Assumptions ………………………………………………………………………21
Bibliography …………………………………………………………………………………….22
BUSINESS DESCRIPTION
1.1 Executive Summary
Eco-Beauty Centre will be 24/7 salon and beauty center that will be dedicated to providing superior and quality beauty and salon services to its clients mainly to satisfy their diverse needs and demands. Its primary objective will be to ensure that quality services and products are offered to its customers at affordable prices. Eco-Beauty Centre aims at rendering exceptional quality products and set an environment that is comfortable for the clients/customers and the staff members. Eco-Beauty Centre’s management and the staff will focus on creating a customer friendly environment by considering the diversity of customers’ ideas, cultures, and preferences. As the name suggests, Eco-Beauty Centre will focus on promoting environmental awareness and conservation in its services and products to the larger community and the preservation of nature. The spirit of hard work and undying efforts of this noble idea will be facilitated by the high demand from our potential customers at friendship level. Besides, the recruitment of highly qualified beauty professionals to support the venture will make it a potential creation.
1.2 Mission, Vision and Objectives
Our Mission: The mission of Eco-Beauty Centre will be to offer and supply beauty products and services that will enhance the physical beauty and mental relaxation of the clients, thereby promoting healthy living in the society.
Vision: To become the preferred and most affordable beauty center in London over the next three years.
Our Motto: “The Trend Begins with Eco-Beauty Centre!”
Overview of Key Objectives
To provide quality and professional beauty and salon services and products to its customers.
To offer services and products at differentiated rates in order to make them affordable to all income groups.
To increase the access to beauty and salon services to the low and medium class groups in London and its surrounding.
Capturing more than half of the existing market size in this industry within three years.
1.3 Financial and Strategic Objectives
To post a net earnings (after-tax profit) of over £50,000 within the first three years of its operations.
To achieving a good command of the beauty market share in London over the first two years.
To realize an asset base of £500,000 within the first three years of its operation in London.
1.4 Performance Highlights
1.5 Location of the Business
This venture has will be started at the right time and in the best location. After a relentless exploration of possible sites for seven months, it was established the London will be the best location. The choice of London is founded on the high population in the city that potentially represents a strong customer base. Besides, being a preferred business hub in U.K., the city enjoys favourable business environment characterized by higher business returns and auxiliary services that enhances business growth and development. The higher number of learning institutions and students of medium income level in London are one of the target customers for Eco-Beauty Centre, hence the decision to locate the enterprise in London. Preferably, the enterprise will be located in Cambridge Center. The site of the business is strategic given the heavy human traffic that uses the road and will likely bump on the magnificent salon. It is at a junction and this will increase its accessibility to many potential clients/customers from either side of the city.
1.6 Ownership and Management
Since the idea was generated by Janet Thatcher and David Hey, Eco-Beauty Centre will be owned by the two partners, hence a partnership form of business. David Hey, co-owning this venture with Janet Thatcher, has a wealthy experience in running and managing business enterprises of the same nature given that have managed some high class salon and beauty supermarkets in UK. David has excellent skills and attractive dexterity when handling customers and this will be responsible for the fame that Eco-Beauty Centre will have over its competitors. Janet, on the other hand has gained years of experience in business management while serving as the sales and marketing manager at Birmingham Group Enterprises. Eco-Beauty Centre expects will therefore rely on the exceptional managerial and leadership abilities of its co-owners to play a role in the success of the enterprise.
1.7 Sources of Finances and Funds
The primary source of finance to start the business will be partners’ contributions and personal assets. In addition, given the higher financial demands for setting up the venture, Eco-Beauty Centre will seek to source additional finances through loans, donations, and family support. Existing assets and personal guarantors will serve as the collateral for the borrowed resources. These loans will be repaid from the firm’s revenues.
1.8 Keys to Success
The keys to the success of Eco-Beauty Centre enterprise will include:
Prime Location: Eco-Beauty Centre will be located in London, the heart businesses in UK that boast of highly population, hence potential customers. Besides, the location of London makes it accessible and open to all groups of people independent of their income.
Quality Products and Services and Environment: The management of Eco-Beauty Centre will strive to ensure comfort to their customers through use of ultra modern equipment for relaxation coupled with quality and affordable services and products.
Convenience: To ensure total satisfaction of the clients, Eco-Beauty Centre will provide a variety of services under one roof 24/7.
Reputation: The public image and perception of people about the staff and management of Eco-Beauty Centre will be important on the basis of excellent and faithful service to customers.
Management and Leadership Experience: The co-owners of Eco-Beauty Centre have in the past managed large business enterprises, thus giving the much needed experience for the success of the enterprise.
2.0 COMPANY SUMMARY
Eco-Beauty Centre is planning to commencement operating in February, 2014. The enterprise will deal in a range of beauty products and services that will meet the diverse needs of the potential customers. Eco-Beauty Centre will offer high quality and affordable nail, hair, and skincare services and variety of the global class beauty and skin care products. The Eco-Beauty Centre will be committed to acceptable business ethics and code of conduct to set pace ahead of its competitors in beauty and skincare services and products. This will be enhanced by providing the services under one roof in a convenient location.
2.1 Start-up Summary
The initial plan was to acquire an established salon but after this failed, the co-owners reached a decision to start Eco-Beauty Centre. Being a capital intensive venture, more capital and financial resources will be required to pay for the lease cost of the premises, finance interior design of the salon, and acquire essential assets and operational machines and equipments for the beauty center. The capital requirement for leasing is approximated at £32,500 while the acquisition of the basic salon equipment will approximately cost £27,000. There will be personal investment by the owner amounting to £50,000 per partner. 3.0 PRODUCTS AND SERVICES
Eco-Beauty Centre is set to scale the heights of a full service beauty and skin care center. The range of services and products enlisted by its management on offer will include:
Hair: relaxers, curling, perms, colors, cuts, shampoo, conditioning, curling, weaving, and waving
Nails: pedicures, polish, manicures, and sculptured nails.
Skin Care: Modern facials, body waxing, and massage.
Skin care products: body lotions, petroleum jelly and other skincare herbal oils.
Consultancy: The firm will offer free consultancy services to the clients/customers on basic beauty care issues and facts and myths surrounding skin care chemicals.
4.0 MARKETING STRATEGY AND IMPLEMENTATION
The strategic plan of Eco-Beauty Centre will be to win customers’ loyalty and through offering quality products and services at affordable rates for its customers. In addition to quality services and products, the enterprise will also focus on excellent customer relationship and creation of comfortable environment for its esteemed customers.
4.1 Competitive Edge
Eco-Beauty Centre will be committed to set standards in London and become the beauty place of choice for the customers. Given the large number of competitors in London offering the same services and products, Eco-Beauty Centre will therefore has to be smart to gain a competitive advantage over its competitors. In order to realize this, Eco-Beauty Centre will be unique in its services and products. Unlike the majority of the competitors that only offer limited services and products, Eco-Beauty Centre will deal in range of highly differentiated products and services. Eco-Beauty Centre will also offer these services and products within the same premise under one roof and thus saving the customers from distance walk in search of products and services.
The second competitive advantage that Eco-Beauty Centre will have over its competitors is affordability and relatively low cost products and services. Unlike its competitors that charge higher prices to maximize on the returns and sales revenue, Eco-Beauty Centre will be aiming at building a sustainable long relationship in the market. For this reason, the enterprise will offer lower rates (lower than what its competitors are charging) in order to make it affordable to the lower and medium income groups who have currently been economically marginalized given their lower purchasing and income powers.
The location of Eco-Beauty Centre will be important in taking care of the beauty demands of all clients drawn from different socio-economic classes and background. This will give Eco-Beauty Centre a competitive edge over similar ventures that are located in the middle of the town targeting only elite class and discriminating the middle and lower class. Eco-Beauty Centre will provide a relaxing and cozy environment for customers as they get served. Additional free services like soft drinks will be offered to customers at the waiting bay. The facility will also be fitted with entertainment devices including a television set for global and local news updates and music.
4.2 Marketing Strategy
The salon and beauty centre will engage the customers who profess satisfaction from services they have received to market itself. This will be strongest and economical marketing tool for the Eco-Beauty Centre. When clients leave the premise with products that meets the desires and expectations and sells the idea to their peers and friends within the community, more customers will enquire where the services or products were purchased and this will go a long way in building positive image of Eco-Beauty Centre and promoting its products and services. For this reason, Eco-Beauty Centre will rely on customer marketing as a method of promoting its products and services and exploring new customer markets with great potentials.
From the Eco-Beauty Centre market research and survey, beauty business does not require a lot of promotional campaign but instead it requires well structured oral advertisement of one on one. In support of this strategy Eco-Beauty Centre will offer special services as a mode of marketing mix. Customers who have been served and drawn satisfaction from the Eco-Beauty Centre services and products will serve as the primary marketing and promotional tools. Such customers will be entitled to fringe benefits, monetary compensations, and discounts for every customer referred to Eco-Beauty Centre. There will also be a lottery draw for a trip to the annual global beauty contest venue. In this case, the client will be provided with cards to drop each time they come to be served, purchase, or refer a new client and the higher the number of cards, the greater the chances of winning a fully sponsored trip to the annual beauty event.
To small extent, Eco-Beauty Centre will advertise its products and services to the public through social and electronic media such as television adverts and magazines. This will be important especially for the first few months of its operation. At the stage, the enterprise is not popular to many and therefore such media of advertising will be essential in promoting and popularizing its products and services. In the beginning of its third year of operation, Eco-Beauty Centre will take part in corporate social responsibilities including sponsoring sporting and social events in London inter-school and inter-university games. Such as move will further be vital in strengthening the public image of the enterprise; thereby potentially increasing its customers base in London and beyond.
4.3 Sales Forecast
Eco-Beauty Centre’s projected sales for a three year period of three is provided in the charts and table below. In summary, Eco-Beauty Centre expects a steady increase in the volume of projected sales revenue for the three year period. This would be possible as the business (Eco-Beauty Centre) will continue to build a strong reputation and image among the public and potential customers. Besides, the services and stylists of the beauty shop and other beauty products of the enterprise, Eco-Beauty Centre anticipates rapid rise in its market share, therefore, a possibility of increase in the sales volume as the enterprise grows in the industry. Unlike the first year of its operations, Eco-Beauty Centre’s sales is expected to increase by 25% in the second year. This will be attributed to increase resource allocation to products and services marketing and promotion. In the second year of operation, the business plans to introduce new product and services as a way of increasing its sales revenue and volume. These anticipated products and services over the second and third years will be essential in increasing the level of sales and service delivery.
NB: direct cost related to sales or services are not accounted for in this table but instead, only direct costs for products are included.
Sales Forecast (a 3-year plan)
Sales/Costs Year 1 Year 2 Year 3
Stylist 1 45,000 50,000 58,000
Stylist 2 22,000 23,500 27,000
Nails & massage 18,500 21,000 23,000
Products sales 45,000 51,000 62,000
Barber 14,000 21,000 23,000
Total sales 144,500 166,500 193,000
Direct sales cost 15,000 18,500 14,000
Products’ costs 45,100 43,000 30,000
Net Sales £84,400 £105,500 £149,000
This figures show that the business will report a constant net sales figured over the first two years. However, in the third year after establishing itself, Eco-Beauty Centre beauty will post a masive increase in sales volume, hence, more net sales.
4.4 Milestones
This is a sample charts and tables showing the details of the actual programs and activities which Eco-Beauty Centre plans to undertake in a given financial period. These programs are designed such that they will be controlled and regulated by specific managers and with a restricted financial budget. Throughout the year, Eco-Beauty Centre will keep track of its implementation against the plans and report the planned activities.
Milestones Duration (months) Budget (£) Manager
Business plan 1 100 Owner
Acquiring Financial Resources 2 200 Owner
Grand opening 1 day 300 All the staff
Marketing programs 1 1000 Marketing manager
Plans vs. Reviews 1 0 Planner& owner
Break-even 1 0 Financial manager
Hiring staff 1 150 Human resource
Business plan upgrading 1 week 100 All the staff
Total 1,850 5.0 MANAGEMENT SUMMARY
Eco-Beauty Centre will be structured, managed, and organized in an innovative and creative fashion in order to generate higher levels of profitability index as well as satisfy the diverse need of its customer. Besides, the management will focus on creating a positive and conducive working environment to foster economic satisfaction of its staff and facilitate personal development among the staff. The employees will be trained on a regular basis to build their knowledge and skills on the range of products and services the business (Eco-Beauty Centre) will be offering to its customers. Eco-Beauty Centre will consider offering employment packages and benefits including vacations, insurance cover, and healthcare to its staff, depending on the economic growth and other financial bearings. To enhance its competence and competitiveness, Eco-Beauty Centre will only employ persons with at least two years experience in beauty and salon and must have specialized in beauty therapy and solon management.
Janet Thatcher and David Hey (the co-owners) will also form part of the management team of Eco-Beauty Centre. David Hey has a wealthy experience in running and managing business enterprises of the same nature given that have managed some high class salon and beauty supermarkets in UK. David has excellent skills and attractive dexterity when handling customers and this will be responsible for the fame that Eco-Beauty Centre will have over its competitors. Janet, on the other hand, has gained years of experience in business management while serving as the sales and marketing manager at Birmingham Group Enterprises. Eco-Beauty Centre expects will therefore rely on the exceptional managerial and leadership abilities of its co-owners to play a role in the success of the enterprise.
5.1 Personnel Plan
To oversee its operations, a personnel planner (a receptionist) will be employed in order to receive customers and offer the guide on the range of products and services Eco-Beauty Centre will be offering. Eco-Beauty Centre will specialize in more than five hair styles, beauty products, and barber shop. The business with therefore employ 5 hair stylists, a barber, nails technician, a massage therapist, and one facialist. Except the receptionist, the rest of the staff will be employed on contract, and given a sliding commission rate based on their personal performance. As the business grows, Eco-Beauty Centre plans to hire a shampoo technician in order to expand on the quality of the services it offers to its esteemed customers. In the first year of operation, Eco-Beauty Centre will only hire three hair stylists, part-time nail, massage and facial technicians, and one barber. The business with then expand its workforce as it continue to establish itself in the market. In the first year, part-time employees will be paid a monthly basic salary and commissions estimated at £ 15,000.
Personnel plan Year 1 Year 2 Year 3
Owner (stylist) 24,000 24,500 25,000
Receptionist 12,000 13,000 15,000
Shampoo Tech 8,000 10,000 12,000
Barber Part time 12,000 14,000
Massage Specialist Part time 15,000 15,000
Stylists Part-time 30,000 50,000
Total £44,000 £104,500 £131,000
6.0 FINANCIAL PLAN
This being a profit making entity, our core objection is to remain profitable from the onset to the end. However, over the first few months of its operations, Eco-Beauty Centre will not post high profitability index until it establish itself in the market. The business will generate its start-up capital from owner’s contribution, financial lending, family and friends’ contribution.
6.1 Projected Cash Flow
The business is expected to generate excess revenue over the expenditures in order to remain profitable over the three years.
Pro-Forma CF Year 1 Year 2 Year 3
Cash-Inflows from operations £300,000 335,000 420,000
Additional Inflows 10,000 15,000 30,000
TOTAL CIF £310,000 £350, 000 £450,000
Expenditures Operational Exp. 35,000 10,000 10,000
Cash Exp. 5,000 5,000 5,000
Bills/Recurrent Exp. 100,000 120,000 100,000
Fixed Asset Repayment 15,000 15,000 15,000
Sales tax, HST, VAT 0 0 0
TOTAL COF £155,000 £150,000 £130,000
NET C/F £155,000 £200,000 £320,000
6.2 Projected Balance Sheet
The net-worth of Eco-Beauty Centre is expected to be healthy for the three years as tabulated below:
Balance Sheet
Item Year 1 Year 2 Year 3
Current assets (cash) 17,000 166,000 260,000
Long-term assets 100,000 200,000 500,000
Less Acc. Depreciation (8%) (8,000) (16,000) (40,000)
TOTAL ASSETS £117,000 350,000 700,000
Current Liab. payables 9,000 25,000 30,000
Long-term Liab. 31,000 45,000 70,000
TOTAL LIAB. 40,000 70,000 100,000
NET WORTH £77,000 £280,000 £600,000
6.3 Important Assumptions
The financial operations of Eco Beauty are laid on the following assumptions:
The annual growth rate for revenues is estimated at 15% from first to their quarter. In the last quarter of the year, the revenues will increase to 20%.
Provision for depreciation of the fixed assets will be accounted for in the financial records at 8% per annum.
The costs of goods sold are excluded in calculating the net sales. Other expenses are used in working the net sales figures for each accounting period.
Our products sales are estimated using the common low-ball approach to sales and hence provided for at £850 per month.
The financial resources will be acquired at the effective market rate of interest.
Bibliography
Altstiel, Tom, and Jean Grow, 2006. Advertising Strategy: Creative Tactics from the Outside/in. Thousand Oaks, Calif: Sage Publications.
Chase, Charles, 2012. Demand-driven Forecasting: A Structured Approach to Forecasting. McGraw.
Crum, Colleen, and George, 2013. Demand Management Best Practices: Process, Principles, and Collaboration. Boca Raton, Fla: J. Ross Pub.
Cunningham, J., & Harney, B. 2012. Strategy & strategists. Oxford: Oxford University Press.
Henderson, J. P. 2009. The small business self-starter handbook: How to manage pitfalls of small business start up. New York: IUniverse.
Kurtz, D. L. 2012. Boone & Kurtz contemporary marketing / David L. Kurtz. Mason, OH: South-Western Cengage Learning.
Madura, J. 2007. Introduction to Business. Mason, OH: Thompson/South-Western.
Meehan, Julie, 2011. Pricing and Profitability Management: A Practical Guide for Business Leaders. Hoboken, NJ: Wiley.
Mernagh-Ward, D., & Cartwright, J. 1997. Good practice in salon management. Cheltenham: Stanley Thornes.
Stahlberg, Markus, and Ville Maila, 2012. Shopper Marketing: How to Increase Purchase Decisions at the Point of Sale. London: Kogan Page.
Webb, Michael, and Tom, Gorman, 2006. Sales and Marketing the Six Sigma Way. Chicago, IL: Kaplan Pub.
