Walking Beauty - Company Overview - Assignment Example

Walking Beauty Business Plan TABLE OF CONTENTS Section I 0 Executive Summary 2.0 Company Summary 2 Start-up Summary a. Table: Start-up 3.0 Services 4.0 Market Analysis Summary a. Table: Market Analysis 5.0 Strategy and Implementation Summary 1. 5.1 Sales Forecast a. Table: Sales Forecast 2. 5.2 Milestones a. Table: Milestones 6.0 Management Summary Section II 7.0 Financial Plan 1. 7.1 Start-up Funding a. Table: Start-up Funding 2. 7.2 Projected Profit and Loss a. Table: Profit and Loss SECTION 1SECTION I 1.0 Executive Summary Walking beauty is a mobile beauty parlour that provides a full service to both females and males customers. Walking beauty is ever devoted consistently to provide a high customer satisfaction level by offering quality products and excellent services. The salon is also dedicated to make services and products readily available at doors of customers. The mobility initiative is aimed at making services more comfortable for customer transport. Walking beauty saves time by moving products and services to residential places and working places of clients. The objective of the Walking beauty salon is to maintain friendly, creative and fair services which respect ideas, diversity and hard work. Walking Beauty mission The mission of Walking Beauty is to provide services at reasonable prices and enhance the physical appearance as well as mental relaxation. Walking Beauty motto Our existence is destined to change and maintain the beauty of our clients. 2.0 Company overview The solon business can manage to allure and create a large customer base. Many of our esteemed customers come from far distance to enjoy the services. In this regard, the salon management have opted to embrace change as far as our brand, services, products, activities are concerned. It is the ambitions of owners to serve the entire city of London, demand from clients, and procurement of professional beauticians that made the management embrace the transition and venture into mobile beauty. Two ladies own the venture; Jane Sever and Susan Comb. The two together one gentlemen form the management team of walking beauty salon. The salon’s premises are located in the Baker Street on the south side. Walking beauty has talented and qualified team of beauticians. Also, the management team has personnel qualified in the field of hairdressing and beauty. With a new venture and strategies in place, the walking beauty expects a growing reputation to attract new customers and other beauticians into the new venture. To shift to mobile beauty operation and achieve the set goal, walking beauty seeks a loan to finance the new venture sufficiently. The loan will be serviced from the cash-inflow of the business. The loan will also be collateralized by the firms assets and backed by the personal guarantees, experience and character of the management. Chart 1: walking beauty expected cash flow for the three years 2.1 Start-up The firm needs new and more assets to transform the firms ways of operation. The firm will require start-up capital for leasehold, assets, maintenance and improvements in to start a new operation. The requirements to start the operation are legal fees, premises deposits, van, dryers, large mirror, two sided mirror, assorted brushes and combs, electric razors, pairs of scissors, computer, printer and spray bottle. The depreciation of long-term assets will be based on a straight line method. Chart 2: components of the start-up capital Requirements Start-up Expenses Fitting and fixtures $ 100.00 Legal fee $ 2500.00 Design fee $ 1300.00 Rental deposit $ 2900.00 Stationery $ 200.00 Miscellaneous expenses $ 200.00 Total Start-up Expenses $ 7,200.00   Start-up Assets   Cash Assets $ 30,000.00 Other Current Assets $ 0 Long-term Assets (van & equipment) $ 750,000.00 Total Assets $ 780,000.00   Total Requirements $ 787,200.00   3.0 Services Walking beauty salon provides all the cosmetics products such as henna, waxing, braids, earrings and makeup among others. It also renders the following services; massage, waxing, hair removal, makeup and others. The main services are hair curling, shampoo, weaving, perms, conditioning and relaxers. It also offers nails pedicures, polish and manicures. In addition, walking beauty provides skin care services such as body waxing, European facials and massage. These services are rendered to all clients by seven nine beauticians. The firm plans to employee more beauticians and expand the business in the future. The salon reaches its customer appointments and also goes for them at their locations. The services are rendered on first come first served basis (Tezak.at al.2012.p.2). 4.0 Market Analysis Summary Walking beauty salon targets three groups in the market. The first group is female customers who cannot afford expensive and upscale salons in the city. Most women like to have beauty services in an expensive salon with plusher facilities but walking beauty is there for females facing financial constraints. However, this market forms the highest percent of our customers. The second group is male customers that like their hair, nails and skin to look smart and healthy. Most men like spending little to look attractive; therefore, walking beauty is likely them all. The group is the second largest in our market. The last group is composed mothers with young babies. Mothers with little babies have no time to go to salons. They are with their kids most of the time. Walking beauty salon seizes this advantage and takes services to the doors of these mothers (Kahn, K. B.2006.p.6). Pie chart 3: Groups that form the target market of walking beauty Table 1: Market Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Mothers with babies 9% 23,000 25,504  27,804 30,300 76,225 9.00% Males 10% 28,000 30,802 33,798 37, 270 40,995 10.00% Females 9% 54.000 58,861 64,156 69, 930 33,031 9.00% Total 0.00% 105,400 115,163 125,838 137, 500 150,251 9.00% 5.0 Strategy and Implementation Summary Men like short hair; therefore, they shave more often than ladies. In most hours in a day, men are busy and can shave only they are free. They tend to be free in late hours when most barber shops are closed. Walking beauty aims to take services at the working places during tea and lunch breaks and in the evening after they are done with working. To attract females from going to upscale salons, walking beauty salon offers quality hair styling at lower prices than what an upscale salon charges for the same service. Further, walking beauty will emphasize to offer sophisticated and ultra-hip styling. To cater for mothers with babies together with their children, walking beauty salon gives children toys to play with. It also provides friendly hair services and other children enticing things to maintain their tranquillity as they or their mothers are serviced. To encourage creativity, innovation and service development, the firm aims take its employees for training and development after every four years (Chappo, L.2011.p.312). The hair styling and cutting market has stiff competition. Therefore, to gain a competitive edge walking beauty has initiated a strategy that ensures faultless customer services. It offers a super customer service to every client. Walking beauty will put money and time into training to ensure that all workers are well equipped with skills that enable them give clients best services and make them long term clients (International business publications, USA. 2008. P, 131). Walking beauty has put down a major marketing strategy to increase its customer base. It has outsourced marketing activities to a specialised firm. It has also advertised its operations in the newspaper and social media. It offers discount for months to new customers and conducts in-store promotion to attract new customers. The business has a main sales strategy that ensures professional interactions with clients. It sells its brand by offering quick and inexpensive services. It also offers a discount to its products and a commission to an employee for selling certain quantity of items to the clients. 5.1 Sales Forecast Employees will take first four months to get accustomed to the new culture, values and procedures. Also, it will be a time of launching and marketing services and products dealt with. Therefore, the sales for this period will be slow as walking beauty builds its customer base. Nevertheless, the firm expects the income to steadily increase in the course of the three years as customers get to learn the image and benefits of the venture. The sales projection for the firm is shown in the chart and table below (Meltzer & Moon.2005. p347). Graph 3: Monthly sales projection chart 4: yearly sales projections Table 2: Sales Forecast Sales Year 1 Year 2 Year 3 Women with little children $2,170 $3,953 $4,110 Males $217,110 $395,457 $411,550 Females Retail beauty products $21,710 $ 36,150 $39,545 $65, 846 $41,153 $68524 Total Sales $ 277,140 $ 504,800 $ 525,337 Direct Cost of Sales Year 1 Year 2 Year 3 Women with small children $262 $474 $495 Males $26,052 $47,454 $49,385 Females Retail beauty products $2,604 $ 14,462 $4,745 $ 26,337 $4,940 27,410 Subtotal Direct Cost of Sales $ 43,380 $ 79,010 $ 82,230 5.2 Milestones Walking beauty salon uses milestones table to show details about the actual program of activities to take place over a year. Each milestone has the leader, starting and ending date, and the budget allocation. The owner will keep track of implementation of activities during the year about plan and draw a report on completion of activities. Table: Milestones Milestone Start Date End Date Budget Manager Department Drawing of Business Plan 1/5/2014 4/02/2014 $200 Jane Sever management Acquire Financing 3/16/2014 5/28/2014 $300 Tom Brown Finance Grand Opening 6/04/2014 6/20/2014 $500 Mrs. comb Sales Marketing Program Starts 6/10/2014 11/20/2014 $1,000 Mr. hart Marketing Plan review 11/14/2014 12/22/2014 $0 Mrs. sever management First Break-even Month 12/27/2014 2/02/2015 $0 Miss June Sales Hire Employees 1/28/20115 2/28/2015 $150 Mrs. White HRM Upgrade Business Plan Program 3/20/2015 4/20/2015 $100 Duke IT and Stores Profitability evaluation 4/10/2015 5/05/2015 $100 Mr Brown finance End of year report 5/01/2015 5/10/2015 $ 80 Mr Sever Management Totals $ 2,430 6.0 Management Summary Walking beauty salon is run based innovation and creativity in order to achieve high levels of client satisfaction and create conducive working environment. The management promotes personal development to acquire skills for handling customers well (Mokotoff, 2009. P 20). Walking beauty emphasizes team work to stimulate a customer oriented culture. The training and development is conducted on a regular basis to help personnel improve product knowledge and skills for services. The firm plans to offer employees with benefit packages. The package will include vacation and health benefits. The recruitment of new personnel is based on merits. Section II 7.0 Financial Plan Walking beauty salon expects the growth of revenues to be 15% annually and increase to 20% during November and December because of the increase in demand for beauty products and services. The firm deliberately have low Estimates for revenues, sale and annual growth while those for expenses are exaggerated to reflect the worst economic scenario. To calculate the net service sales, the firm overlooks direct cost of goods and include all the expenses. It is only direct sales for beauty products that are used in the determine sale forecast Projected Cash Flow The business expects to manage cash flow simple by cash flow growth over the next three years. The must generate more cash flow to cover expenses (Fight, A.2006.p86). Chart 5: projected cash flow Break-even Analysis The analysis of breaking even shows that walking beauty salon has a good balance of sufficient sales strength and fixed cost to remain healthy. The breaking even calculation considers service sales and overlooks costs incurred in selling the products. Break-even point is a point where a business neither makes profit or loss (Mason, & Tarling, l.2009. p. 128). Graph 1: breaking even analysis 7.1 Start-up Funding To start the mobile beauty venture, the business intends to get the fund from obtaining a long term loan and earnings of the former stationary salon. The loan will be a service yearly. The will include the start-up requirements as the table below shows. Table: Start-up Funding Start-up Expenses to Fund $ 7,200.00 Start-up Assets to Fund $780,000.00 Total Funding Required $780,000.00   Assets   Non-cash Assets from Start-up $ 150.000.00 Cash Requirements from Start-up $ 7,000.00 Additional Cash Raised $0 Cash Balance on Starting Date $ 200,000 Total Assets $ 357,000.00     Liabilities and Capital     Liabilities   Current Borrowing Long-term Liabilities $ 180,000.00 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $ 180,000.00   Capital     Planned Investment   Owner $1500,000.000 Investor $ 100,000.000 Additional Investment Requirement $0 Total Planned Investment $ 250,000.000   Loss at Start-up (Start-up Expenses) $ 200 Total Capital $250,200.00     Total Capital and Liabilities $ 430,200.00   Total Funding $ 787,200.00 (Makroo,&Stewart.2014.p.93) 7.2 Projected Profit and Loss The charts and table show the projection of profit and loss over the three years. The expenses include payments to contracted technicians and stylists. It also includes supply expenses incurred during the sale of services (Tyson, e., & Schell, j. 2008. P.73). Chart 6: monthly gross margin Chart 7: gross margin over the years Chart 8: profit in every month Chart 9: profit in every year Table: Profit and Loss Year 1 Year 2 Year 3 Sales $166, 500 $211,300 $239,970 Direct Cost of Sales $4,420 $4,022 $4.400 Other Costs of Sales $0 $0 $0 Total Cost of Sales $ 4,420 $4,022 $4,400   Gross Margin $162,080 $207,278 $235,570 Gross Margin % 94.76% 98.09% 98.17% Expenses Marketing $22,500 $24,200 $26100 Payroll $ 46,500 $52,500 $54,876 Depreciation $8,100 $8,100 $8100 Utilities $4200 $4200 $4200 Rent $ 12, 500 $12,500 $12,500 Insurance $1300 $1300 $1300 Payroll Taxes $0 $0 $0 Other $6,000 $6000 $6000 Total Operating Expenses $ 101,100 $108,800 $113,076 Profit Before Interest and Taxes $60,980 $98,478 $122,494 EBITDA $69,080 $106,578 130,594 Interest Expense (10%) $18,000 $16,000 $14,580 Taxes Incurred $5,108 $9,057.80 $11,601.40 Net Profit $45,972 $81,520.20 $104412.60 Net Profit/Sales 27.61% 38.58% 44.04% Reference List INTERNATIONAL BUSINESS PUBLICATIONS, USA. 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