Salon Eco Business Plan



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Salon Eco Business Plan

2012


Salon Eco


Nevada Harris

MGNT 3196

Table of Contents

Executive Summary 3

9 Step Strategic Planning Process 4 – 9

Keys to Success 10

Company Summary 10

Start-Up Summary 10

Start Up Overview 11

Financial Plan 11-19

Company Locations & Facilities 20-21

Services 22

Competitive Analysis 23

Marketing Strategy 24-27

Management Plan 28 – 29

Professional Services Synopsis 30

Executive Summary

Salon Eco is a full-service hair salon offering top quality all natural products with no chemicals. Salon Eco is dedicated to helping our client find the beauty in their relaxed hair with natural products. Salon Eco offers a knowledgeable staff well educated in the benefits of the natural hair products and services they use on your hair in an environment that was designed with sustainability in mind.



Our Mission:

Our mission is to educate and enrich the lifestyles of today’s men and women seeking beautiful and natural, chemical-free hair services and products transforming their natural beauty inside and out.

While creating a behavioral change to the salon experience, our mission is to provide an organic, eco-friendly, aroma-therapeutic atmosphere for both men and women seeking beautiful, natural and chemical free hair.

Our Vision:

To become the #1 all natural, Eco-hair salon located in the Coastal Empire with global brand recognition as leaders in the hair care industry.



9 Step Strategic Planning Process:
Step 1: Mission Statement

Our vision is to be the #1 all natural, eco-hair salon located in the coastal empire with brand recognition as leaders in the hair care industry. While creating a behavioral change to the salon experience, our mission is to provide an organic, eco-friendly, aroma therapeutic atmosphere for both men and women seeking beautiful, natural, and chemical free hair.



Step 2: Strengths and Weaknesses – Company

Strengths: SalonEco has many strengths to capitalize on. First and foremost our number one

strength is our unique product/service positioning. We are going to offer hair services that all

one hundred percent all-natural. Our hair color contains no chemicals and this is something that no salon in Savannah can currently offer. Our hair stylists are also going to be educated in the field of organic hair care as well as being educated in homeopathic therapies. We will pass this knowledge onto our clients. Another strength is a culturally diverse team of hairstylists and a cutting edge marketing team as well. Another strength which can also be considered a weakness is that we are targeting clients that are willing to spend a little more on their hair in an effort to be natural. Our business model seeks to transform the behavior of our client into a more natural you!
Weaknesses: Out weakness is that we are the first salon in Savannah to offer a completely

organic hair experience so we are doing something no one else has done and while we hope for

the best we know we must also prepare for the worst. Another weakness is our higher prices.

Organic hair color is more expensive and so is renewable energy which we plan to use in our

salon. We plan on having solar panels in the salon. The ROI on a solar panel can be up to ten

years because they are so new and expensive to manufacture and to install. Our prices for

services will be higher but our Marketing team plans to overcome this weakness by educating

our clients and potential clients about the dangers in putting chemicals in your hair.



Step 3: Opportunities and Threats – Environmental

Opportunities: The biggest opportunity we see is the market share that we can capture. The

population is becoming more aware of environmental factors that play a role in our health. All

trends point towards this new green movement and once our clientele is educated enough about the benefits of being all natural, they will surely want to choose our company for their hair service. Another opportunity is educating not only our cutting edge hair stylists but, passing that education on to our clients. This will surely set us apart from the competition and keep our clients coming back.
Threats: One threat that we are aware of is that once everyone in the community sees how

successful our business model is; we believe there will be competitors entering the market trying to take away our market share. Our business model is one that is much like other business models that are already successful in larger cities such as New York, San Francisco and Atlanta and so we know the potential for success is there. Once we show the community how it’s done, we have to worry about competition copying our idea and capitalizing on our market share.



Step 4: Key Success Factors

Key Factors for Success

These factors will lead to our immediate success because we have focused objectives and goals for our business. Our factors as follows:


  1. Providing an eco-friendly environment for the customers.

  2. Licensed hair technicians with educational backgrounds (5 years +).

  3. Locations in major traffic areas.

  4. Excellent advertisement team with educational backgrounds (5 years +).

  5. Family-oriented management environment

  6. Diverse employment



Step 5: Analysis of Competition

Knowing who your competition is in the market as well as you know your own company is essential with having a successful business. Having this competitive advantage allows your company to grow to extraordinary heights. The planned achievements only come with preparation and time management.




Salon-ECO

Collaborates with recycling companies in the city to create an eco-friendly environment for the salon. This brings a serene energy to our business which transcends through the hair stylist. The energy establishes a beautiful hairstyle for every customer and allows them to walk with their head held high plus an extraordinary hairstyle.

COLORBOXX HAIR SALON

Provides advanced customer service by personalizing our approach to every client's desires. Colorboxx Salon is dedicated to outstanding service and beautiful personalized hair. Each stylist is continually training and attending classes to stay current on trends in the hair industry.

(OUR COMPETITVE ADVANTAGE)

Bringing light to our ecosystem and the fragile state in which it suffers. The biggest advantage against the other competition is the fact that a hair salon is known for being a vital global warming reality. Our business provides essential component in keeping our environment a clean one. This allows customer to leave the salon with a good feeling along with great hair.

Step 6: Company Goals and Objectives

Goals

1. Salon Eco will continuously provide our clientele with an experience of superb quality at each and every visit. This will ensure that our clients will love our salon and return for future visits.


2. Salon Eco will always provide our clients with the leading edge products (top of the line)? Products to insure that we stay current and consistent with their hair care services.
3. Our salon will always provide great Eco Friendly services and an outstanding atmosphere to insure that our clients have the best service experience as well as provide vegan snacks, wine and cheese, as well as water and a variety of healthy food choices.

Objectives

1. To combine a knowledgeable staff with years of experience, the proper use of quality products, and the necessary tools to provide our outstanding and consistent services.


2. To achieve a consistent encouraging work environment, equipped with product knowledge and retail sales training, and business etiquette training to assure that our staff will continuously produce revenue.
3. To create longevity and a lasting presence in the salon ownership arena by opening salon chains in several cities across the U.S. to also create a brand that will speak for itself across the globe.
4. To ensure our brand and continuously develop our salons in communities where we can make a difference in the economy of these cities, we will increase our workforce and employing within these communities.

Step 7: Strategic Options

Between the three strategic options, Salon Eco plummets under the differentiation and focus strategies. Our products will contain all natural ingredients that will not cause any skin, scalp or air irritations. We will carry a natural line of shampoos, conditioners, oils, and hair dyes, all the chemical free products available at your fingertips. Nevertheless, how do we differentiate from all other salons who claim they are eco-friendly? We will start by only using eco friendly cleaning supplies, recycled furniture and chemical free products. As for the destructions of the design, the entire building will be modified using recycled material that is not harmful to the environment. Salon Eco’s core group will play a great part in deciding which products will be best for each type of hair texture that we will experience. That is something that we are trying to do with our Salon Eco brand, trying to be different. This will also cause us to increase our services that we will offer and reap the benefits of customer loyalty and preservation. We will not only be different in the amount of training we are willing to achieve but willing to put our own special twist to the hair industry by using chemical free products. Even though it will be costly, the experience will be breathtaking and this will keep our clientele satisfied. By building a rapport with our clientele this will cause a domino effect because everyone would want that fresh feeling of chemical free healthy hair and the look of being all-natural.


Knowing what your client wants, needs and their characteristics are seems to be very important in the hair industry. Salon Eco will be gathering this information on their first visit to the Salon in order to strategize on the focus strategy within our development. At the clients first visit we will have them fill out a customer card that will have a series of questions about their hair and skin. By establishing this strategy we, as a team will be able to focus more on our customer needs as an individual. Being able to know your clients do have and don’ts will make a difference during each visit to the salon. The stylist or barber will already know what their customer is expecting. With our atmosphere calming with lavender, lots of natural sunlight, sounds from the waterfall in the wall the aura will speak for itself as you take a natural ride to Salon Eco, where we embrace your natural beauty inside and out.

Step 8: Action Plan

Salon Eco will have a grand opening on September 5, 2013. This will give us time to secure our building and begin our interior design transformation. On our first day, we will give the first twenty five customers one free service. We will also have promotions and discounted services for the entire grand opening week.

Step 9: Accurate Controls


  1. Customer perspective- Customers get the opportunity to experience an all-natural hair salon treatment in a reasonable amount of time. Customers also will have the opportunity to choose what natural products they want and what kind of service they want.



  1. Internal Business Perspective- We will excel in good & quality customer satisfaction that generates a well-deserving profit. We will also set high expectations in total company efficiency and effectiveness. Our goals will make our business a complete success




  1. Innovation & learning perspective- We will develop new and innovated ideas to help expand our business. Our employees will undergo annual training workshops to enhance their skills and experience.




  1. Financial Perspective- Our shareholders will see a great and well develop company serving the greater Savannah community with the expectations of expanding not only outside of Savannah, but potentially nationwide. We will also venture for corporate sponsorships and endorsements so that our shareholders can see that their investment is a huge success



  1. Corporate Perspective- We will be introducing new ideas while maintaining its main image which is all-natural, ecofriendly. We will be a huge service to the community by putting on various community service projects, various hair shows, and many more while marketing the company to its highest potential.



  1. Keys to Success

Salon Eco will be the first salon in Savannah, Georgia to offer its clients an all-natural hair service with all natural hair products in an environment designed with sustainability in mind. All of our stylists are trained in the product line that we carry which is called Mizani. Mizani is a leading brand in the all-natural hair care product industry that originated in Europe where standards are higher for hair products and their contents. The Mizani brand is used by many all over the world and it has been featured in countless magazines for its natural ingredients and their benefits.

Salon Eco will also follow four factors to creating a successful business. First, there is the location of the business. The business is located in beautiful downtown Savannah. Secondly, making sure our employees are reputable in the Savannah area. Their work speaks for themselves. The customer satisfactions received from the clientele. Salon Eco will uphold the most respect for the business, its employees and its clientele. Third is the atmosphere and the surroundings we create for ourselves and our clients. This will be a calming and relaxing experience that our clients will be able to carry outside our doors of serenity.



  1. Company Summary

Salon Eco offers a truly all natural experience from the time you set foot in the door, from the all-natural décor, to the complimentary organic juice bar, organic refreshments

And the completely organic product line and services. We are the only hair salon where you can find the exclusive brand Mizani from Europe and all of our stylists are educated professionally on their products. We are located in beautiful historic downtown Savannah with convenient parking.



  1. Start-Up Summary

Salon Eco will renovate an existing building and then pay rent on that building every month. The total renovation costs are $40,000. Salon Eco will need to secure a loan for $145,000 in order to achieve their budget for start-up which is a total of $205,000. Salon Eco has six equal partners whom are all hair stylists and they each put in $10,000 of their own money as owners’ equity for start up.

Start-up costs
The budget for the eco-friendly unisex hair salon allows the different options for advertisement, finances and the restrictions to the initial cash flows of the business. Knowing this information, the business looks for suppliers that are willing to negotiate their prices by the bulk of purchase through the beginning stages of the business. These negotiating skills enhance the company’s power to make bigger deals with clients down the line. It is imperative that this business, amongst other businesses learn their finances and how to keep monitor the logistics of a new business or any other business, for that matter. The financial statements play a significant role in the business because it constructs a base that the company can work from and work their way up to achievement. The whole point of specific financial records is to have ultimate control over what is being spent and how much the company is profiting off of with service throughout the daily process.
Statements of financial recording give the business a sense of urgency to participate but while embarking on a substantial plan at the same time. This helps the business prioritize with what is needed over what could be a possible dead end decision. Decision making in the financial plans of this company can become your deal breakers or your money makers. The one thing that will save the company is having a strong and knowledgeable team.

Financial Plan & Statements


Partnerships allow the burden to be shared amongst fellow owners of the business.

Secure the assets with the team’s financial plans including business savings, the earnings power and health.


The business is equally loved by each partner in the business so this gives incentive to stay open longer, do better and keep a consistent happiness for the business.

Keep a conscious mind to having a certain amount saved in case of emergency and also at a persistent level. Saving should not be restricted to a one time basis for a small business.

Budgeting is the key factor in running the business. Spending and expenses must be lower than the earnings and profit.
Budget

The budget for the eco-friendly unisex hair salon allows the different options for advertisement, finances and the restrictions to the initial cash flows of the business. Knowing this information, the business looks for suppliers that are willing to negotiate their prices by the bulk of purchase through the beginning stages of the business. These negotiating skills enhance the company’s power to make bigger deals with clients down the line. It is imperative that this business, amongst other businesses learn their finances and how to keep monitor the logistics of a new business or any other business, for that matter. The financial statements play a significant role in the business because it constructs a base that the company can work from and work their way up to achievement. The whole point of specific financial records is to have ultimate control over what is being spent and how much the company is profiting off of with service throughout the daily process.


Statements of financial recording give the business a sense of urgency to thrive while embarking on a substantial plan at the same time. This helps the business prioritize with what is needed over what could be a possible dead end decision. Decision making in the financial plans of this company can become your deal breakers or your money makers. The one thing that will save the company is having a strong and knowledgeable team.

PLANNING ACTIVITIES –

Business Planning

Tax Planning

Investment Planning

Estate Planning

Insurance Planning

Retirement Planning

SALON ECO’S BALANCE SHEET

Assets = Liabilities + Owners’ Equity (Salon ECO’s Net worth)

SALON ECO’S INCOME STATEMENT



Net Income = Revenue – Expenses + Gains – Losses

SALON ECO’S STATEMENT OF OWNER’S EQUITY



Ending Equity = Beginning Equity + Investments – Withdrawals + Income

SALON ECO’S CASH FLOW STATEMENT

Cash Sources + Cash Usage + Cash Balance Change

Operating Activities

Investing Activities

Financing Activities


Inventory $80,000

Furniture and Electrical Features $20,000

Deposits $2,500

Prepaid Insurance $3,000

Licenses $,000

Professional Fees $1,000

Salon Renovations $40,000

Cash Requirement $30,000

Advertising $10,000

Employee Training $13,500

Miscellaneous $3,500

$205,000


Owner’s Equity Mix ($60,000)

Bank Loan $145,000

Total Owner’s Equity & Loans $205,000

SALON ECO BALANCE SHEET

ASSETS

CURRENT ASSETS

CASH $30,000

INVENTORY 80,000

PREPAID INSURANCE 3,000

PREPAID ADVERTISING 10,000

PREPAID MISC. 3,500
STATIC ASSETS

FURNITURE AND ELECTRICAL FEATURES 20,000

LEASEHOLD IMPROVEMENTS 25,000

TOTAL ASSETS 205,000


LIABILITIES

CURRENT LIABILITIES

ACCOUNTS PAYABLE 0

CURRENT PORTION LOAN (») 0


LONG-TERM DEBT

L.T. LOAN 145,000

TOTAL LIABILITIES 145,000
OWNER EQUITY

EQUITY 60,000

TOTAL LIABILITIES &

OWNERS EQUITY 205,000



SALON ECO INCOME STATEMENT

REVENUES

LAND FEES 20,000.00

FINANCE CHARGE INCOME 500.00
TOTAL REVENUES 20,500.00
COST OF SALES 2,200.00

TOTAL COST OF SALES 2,200.00




EXPENSES

DUES AND SUBSCRIPTIONS EXPENSE 600.00

INSURANCE EXPENSE 250.00
TOTAL EXPENSES 850.00
NET INCOME 19,650.00

SALON ECO STATEMENT OF OWNER’S EQUITY
BALANCE 12,500.00
NET INCOME 19,650.00

CASH WITHDRAWALS (10,500.00)


BALANCE 9,150.00

SALON ECO CASH FLOW STATEMENT

CASH FROM OPERATIONS


INCOME FROM CONTINUING OPERATIONS 20,000

ADJUSTMENTS – INCOME TO NET CASH FROM OPERATIONS


DEPRECIATION 2,000

ACCOUNTS RECEIVABLE (0)

ACCOUNTS PAYABLE (0)

DEFFERED REVENUE 3,000

ACCRUED TAXES 402
NET CASH FROM OPERATIONS
CASH FLOWS FROM INVESTING

CAPITAL EXPENDITURES 6,000


CASH FLOWS FROM FINANCING

NOTES PAYABLE 6,200

OWNER’S DRAWS 10,225
NET CASH FLOWS FROM FINANCING (4,025)
CASH, BEGINNING OF THE YEAR 8,234

CASH, END OF THE YEAR 7,921



SALON ECO BREAK EVEN ANALYSIS

1. In my proposed financial plan for our business, I had us purchasing the building so that we can have ownership even though we would have to pay taxes. The area is going to bring business. 


2. I did include the fees for the charge of licenses for all aspects of the licenses that need to be inquired.
3. Since we all are coming into this partnership with master experience in cosmetology, I kept those fees lower than everything else which allows us to budget our funds on other expenses.
4. The reception salary should be 25,000 to 28,000.
The profit we will need each month is based on a combination of the general fees, for example, utilities (electricity, water), inventory, equipment (if anything goes wrong with them) and salary fees. Those monthly fees are vital in our budget every month. We are looking at having to make a profit of 16,000/month to cover charges every month.

SALON ECO BALANCE SHEET BAR GRAPH


SALON ECO INCOME STATEMENT



SALON ECO CASH FLOW STATEMENT



  1. Company Locations and Facilities

Salon Eco will have one location at 1111 West Jones Street in beautiful downtown historic Savannah, Georgia. We have our own parking lot which is a competitive advantage that we have over all other salons in downtown Savannah. Salon Eco’s location boasts sustainability from corner to corner and was designed with Eco-friendly products, paints and materials.

Floor plan that we have designed for Salon Eco




  1. Services

Salon Eco services both men and women of all hair types. Our diverse staff of stylists allows us to cater to all of our client’s needs no matter what their hair type. In addition to the list of services below, Salon Eco will be available for wedding parties and for hair show events:


Salon Eco’s Price List
Salon Eco caters to anyone who wants to experience healthy hair.
Women Signature Hair Cut and Blow Dry $ 75.00

Blow Dry and Style $ 60.00

Men's Hair Cut and Blow Dry $ 60.00

Men Blackout $30.00

Temp Fades $25.00

Designs starting at $30.00 ( +)


Men/Women Color $ 135.00



(Highlights, Lowlights, Clear Gaze, Color Gloss, etc)


Extensions $ 400.00 - $1200.00
Steam Therapy (Hydration) $

Natural Hair Care

Natural Braids, Twist Sets & Locks $ 150.00 - $350.00

Keratin Treatment $ 100.00
Hot oil Organic Soak $ 150.00
Dominican Straighten $ 175.00


Lash and Eye Brow

Eyebrow Wax $ 15.00

Natural Lash Extension $ 45.00

Extreme Eyelash Extensions $ 100.00

Individual Eyelash Extensions $ 45.00


  1. Competitive Comparison

Knowing who your competition is in the market as well as you know your own company is essential with having a successful business. Having this competitive advantage allows your company to grow to extraordinary heights. The planned achievements only come with preparation and time management.


Since Salon Eden will be the first Salon in the Savannah area to offer a fully natural experience in an eco-friendly environment using chemical free hair products, we feel that this is our unique competitive advantage over the competition. In reality we are competing with all other salons.
Salon Eco will try to educate the masses on the dangers of using chemicals in your hair care products and try to pull these customers and clients into our salon using this unique Product Position.


  1. Marketing Strategy: 1 year for a total investment of $10,000.00



Radio: 1 year / $5500.00 Salon Eco will run a one month long radio campaign on three different radio stations that show high ratings for women and men in between the ages of 18 and 60 since this is our target demographic. Our radio commercial will be a testimonial from a happy client that no longer has as many health issues after embarking on an all-natural lifestyle. Salon Eco is not only selling a service and a product, we are selling a lifestyle. There are numerous benefits to consuming all natural products as well as using all natural hair care and services and these benefits will be the subject of our marketing campaign. The tag line will be “Salon Eco…discover the benefits of the natural you”

We will a one month blitz for the opening in which we spend $1000.00 for the first month on radio. This will get us four weeks of high frequency commercials. We will get a total of 200 commercials (50 per week) for four weeks for an investment of $1000.00. After the first month, we plan to allocate at least $500 per month to radio advertising. Radio is a great way to talk about any promotion we may be having such as “Free brow wax with any color” If we spend $1000.00 in the first month and $500.00 each month after that is a total of $5500.00 for the year for radio.



Television: 3 weeks / $750.00. We will run television ads for three weeks leading up to our grand opening. Two weeks will run prior to the grand opening and the last week will run the week of the grand opening. We will feature models getting their hair done naturally in our salon on our commercial. We will also feature the salon itself and all of the amenities in our commercial. We will also feature our products in the commercial and our vendor has agreed to pay for the entire television campaign as long as their products are featured so the $750.00 for television will be paid for by the brand, Mizani.

Print: 1 year, 2 magazines, $1200.00. We will run one ad every month for one year in two different magazines, Savannah Magazine and South Magazine. Each ad is $50 so for two magazines for one year that is a total investment of $1200.00.


Direct Mail: $2300.00. The mailing list is $1300.00 and we will spend about $1000.00 on having our coupons made and postage. We will purchase a list of females and males between the ages of 18 and 65 who live within a 20 mile radius of our salon and make over $30,000 per year. We are targeting the middle aged working male or female with a little or a lot of disposable income. The mailing will drop in potential customer’s mailboxes the day that we open so if anyone has any questions they can call and speak to someone. In the mail will be a coupon redeemable for a free brow wax for the ladies and for the males, a free haircut. The coupons will have an expiration date on them of Feb 28th so they will have approximately two months to redeem.

Promotion: Each month we will have a new promotion and our vendor, Mizani will be supplying the free product so the promotions will not cost us any money. We will do viral promotions through Facebook and twitter where we give away free product and the winner has to come into the salon to claim their prize. Once or twice a year, we will give away something in addition to the free product like a free style and color or a free cut and color.

Here is the front page of our website looks like. We designed it ourselves at no cost.

It can be found by going to www.salonecosavannah.weebly.com



Our Featured Products: Salon Eco will carry, exclusively, Mizani products which are all natural and cannot be found in any other salon in the Savannah area.





Management Summary

To support our business development and growth at Salon Eco, Mr. Harris will build a management team based on honesty, loyalty and integrity. Each person on our management team has received a Bachelor’s degree either in Management, Accounting or Marketing.

Training classes will be offered to develop the knowledge of the new styles and trends, as well as any new cutting, curling, trimming techniques to improve the stylist background and skills.

At the opening of this establishment Salon Eco will employ nine employees plus one Salon Operations Manager. The Salon Operations Manager (SOM) will assist the incoming customers to sign in at their time of appointment. The SOM will then lead the client to their stylist chair. During that point the customer will consult with their stylist on the services that they will be provided to their client. The SOM will maintain the custodial services throughout the salon on a daily basis. He or she will be scheduled Monday through Saturday between the hours of 7:30 am until the close of business.



Professional Services

Listed below are the professional services that Salon Eco will be including in their endeavors:

Our Attorney, Mr. Richard Metts is located on 2324 Abercorn Extension, located in Savannah, Georgia. His contact information is 912-238-4426.

The Banking Institute that Salon Eco will use is Wells Fargo local branch, address is 136 Bull Street in Savannah Georgia. Location Phone number is 912-651-0555.



The business consulting company that Salon Eco will establish a vast relationship with is the Small Business Association, located at 111 East Liberty Street, located in Savannah Georgia. Their contact information is 912-652-4355. The relationship we will have with this firm will help us to familiarize ourselves with the regulations on developing our business as well helping us with the loan for our business.




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