B U S I N E S S N A I L T A M M Y & T A Y L O R N A I L S P L A N P E D I S A F R A N C H I S I N G B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D B A R P T Y LT D 1. EXECUTIVE SUMMARY 1.1 BUSINESS DESCRIPTION Tammy Taylor Nails is a company that operates as a franchise to Tammy Taylor Nails SA Franchising (Pty) Ltd. The company has exclusive distribution rights to the USA based product that has been developed by Tammy Taylor herself over the last 35 plus years. Our New Generation salons offer a full service which includes acrylic nails, gel nails, hybrid nails, facials, spray-tanning, eyelash extensions, massage services & more. Tammy Taylor Nails also retail products in the salons from the Tammy Taylor care lines as well as a skincare range that is exclusive to Tammy Taylor as a nail salon franchise group. The company’s market research has shown that there is sufficient room for the nail and beauty industry in South Africa. The experience, knowledge, and skills of the management team and employees are the foundation of the envisioned growth. The management style is flexible, progressive and energetic D E TA I L S Business Name: Tammy Taylor Nails SA Franchising Pty Ltd t/a Tammy Taylor Nails Contact: Franchising Division Email Address: franchising@tammytaylornails.co.za The members are responsible to fulfil the company’s mission and legal accountability for its operations. The management will further monitor and evaluate the organisation’s operational performance and financial results and ensure the availability of adequate human resources and efficient management. The purpose of this business plan is to provide the financier with the necessary information to evaluate the start-up of a Tammy Taylor Nails Franchise. Additionally, it will serve as a guide to the management by highlighting the goals against which future performance can be measured. Tammy Taylor as a brand have many unique factors that set us apart from all other brands in the industry. The main and most relevant fact is that we are a PRODUCT and not a concept. Phone: 010 591 1034 Industry: Beauty, Cosmetics Number of HO Employees: 12 Registration Number: 2014/269894/07 Amount of Funding Needed: R1,105,000,00 Our salons are luxurious and have been designed to service the higher LSM woman (and man). The extra special touches that ensure your clients are getting an experience they will crave on a monthly basis is what sets our salon designs apart from any other salon in the country. We offer a full turnkey solution from the moment you purchase your franchise license. Once you have purchased your license, our location specialists will ensure you are placed in the perfect location. Our Shopfitting & Design team will work closely with you to design and bring to life your dream salon. Our Training & Recruitment division will ensure you start off with qualified staff who have been trained to not only build amazing nails but also how to receive your clients, how to create and manage targets and so much more. Our inhouse branding specialists will ensure that you and your team always look your best. Our PR & Marketing team will operate at the highest level to ensure brand awareness and keep our brand at the top at all times. TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 1.4 KEYS TO SUCCESS For the business to operate successfully and sustainably, several specific ingredients are needed. We have identified the following key aspects that will ensure the long-term survival of the company, which include but are not limited to: 1.2 OBJECTIVES The company has identified the following critical success factors to support the goals and objectives in a sustainable way: • Salons must be owner run and managed daily on the highest level • Consistent high-quality care and service • Provide a clean, upscale, luxurious, and enjoyable environment conducive to giving professional trusting service • Credibility, integrity, and 100% dedication to uphold high levels of customer service • Implement a solid marketing strategy and programmes that will aim, at its foundation, to educate and attract the target market segments • Position the Tammy Taylor Nails products and services as a first choice in the market • We also have an option for a Franchisee to recruit a Tammy Taylor trained & certified Salon Manager 1.3 VALUES The organisation will operate by the following key values: • The company deliver outstanding exclusive products and unsurpassed services, that together deliver premium quality to their customers • They uphold the highest standard of integrity in all their actions • They value their people encourage their development and reward their performance The vision of Tammy Taylor Nails is to be the market leader in Africa, the Middle East, New Zealand, Mauritius and Australia providing exceptional nail, beauty training, services and products that are simple, fast, extraordinary and aimed at the high LSM. In order to achieve the vision, the company must ensure that it keeps ahead of the competition and up to date with the latest innovations in all related products and services. This is done flawlessly by our USA counterparts in the constant evolving, innovating & bettering of the products, colours & services. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D R E L AT I O N S H I P S Develop fruitful 1 . O W N E R R U N SALONS • Salons operated by the owners are more successful as the customer is being received by a relatable person and quality is a sure thing when the owner is at the wheel • Staff turnover is substantially lower as the staff are being managed daily and not being left to their own devices to create an irreversible culture of bad service • The client being received and handled by the owner has more confidence in the salon and therefore it creates a solid customer loyalty • As you are managing your salon on a daily basis, your staff will be led and motivated, this will always result in a higher turnover, higher success rate and your salon being fully booked sooner • We also have an option for a Franchisee to recruit a Tammy Taylor trained & certified Salon Manager 2. FINANCE: • Implement and follow a financial model that is rooted in industry facts, not optimism • Costs have been based on the company’s knowledge and research of the industry; validated against competitors’ cost averages, and analyses against local market standards • Ensure the design of a cushioned financial plan that provides adequate capitalisation 3 . R E L AT I O N S H I P S : • Develop fruitful relationships with third-party service providers and strategic alliances to facilitate the exchange of information and establish a formal supplier and key stakeholder database • Focus on long-term relationships; develop excellent supplier relations, strategic partnerships with key stakeholders, and long-standing relationships with target market customers to build brand awareness and ensure the long-term survival of the company • Maintain existing strategic alliances and establish relationships with suppliers, and industry stakeholders Through the implementation of these plans, the company will be able to draw seasoned and elite professionals and build a committed workforce. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 2 . C O M PA N Y OV E R V I E W 2.1 COMPANY OWNERSHIP Tammy Taylor Nails has one shareholder; Melany Juanita Viljoen, who is also a hands-on Managing Director of the business. Name:ID number:Shareholding % Melany Juanita Viljoen 860408 0028 088 100% 2.2 COMPANY HISTORY Tammy Taylor Nails is an existing, well-established business concept with a brilliant and recognisable Trademark and history of almost four decades in the international nail industry. Melany Viljoen, a young South African entrepreneur, discovered this jewel when she was searching for alternative nail techniques and products in 2015. Nail care has been a passion of hers from a young age. After Mel familiarized herself with the Tammy Taylor techniques and applied those with Tammy Taylor products, she knew that this is a business concept with the right attributes to roll out in South Africa through a Franchise network. Mel secured the sole distribution rights, along with exclusive brand usage, for Africa during a visit in March 2016 to Tammy Taylor Head Office in the USA. Nail care has been a P A S S I O N of hers from a young age. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 3. PRODUCTS AND SERVICES 3.1 DESCRIPTION The new generation full-service Tammy Taylor salons provide the following products and services: (dependent on salon variant): • • • • Exclusive Acrylic & Gel Nail Services | Tammy Taylor Retail Products Optiphi Peels & Facials | Retail Items Dermalogica Retail Items Massages | Waxing | Laser Treatments | Eyelash Extensions 3 . 2 O P E R AT I O N S T R AT E GY Operations Strategy will deal with how the company will expand and also the operations strategy in getting your salon up and running: LICENSE PURCHASE Location Sourcing & Lease Shopfitting Training & Recruitment Stock C O R P O R AT E S T R AT E GY : • • • • Align all departments towards the same corporate goal Weekly interaction amongst individual departments and team leaders Identify key issues within each department Provide solutions to key issues with the involvement of external departments C US TO M E R - D R I V E N S T R AT E G I E S : • • • • • • • • Interaction with existing clients to identify problems with the salon and services On-going market research on market trends and competitors Mystery Shopper Program Public Education & Marketing Campaigns with our American Branding team every quarter Social Media driven campaigns In-Store Activations with our product and service partners Customer Experiences Consumer environment evaluation to be conducted on a bi-annual basis B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D A LW A Y S C O N S I D E R T H E N E E D S OF THE CUSTOMERS AND I N T E G R AT E I N TO the service DEVELOPING CORE COMPETENCIES: • • • • • • Regular staff training conducted by experienced employees Formal employee training, especially with newly employed persons Innovation Identifying quality of service and information technology systems Provide excellent customer service The company must be flexible in accordance with customer preferences COMPETITIVE PRIORITIES: • • • Evaluating operational costs Evaluating the quality of the service Measure the time it takes to deliver the service P R O D U C T A N D S E R V I C E D E V E L O P M E N T: • • • • Find value-adding services to be attached to the base service The company must be the leader in the innovation in the market Improve on innovations that appear on the market Always consider the needs of the customers and integrate into the service 3.3 KEY FINANCIAL OBJECTIVES • • To achieve a turnover of R2.1 million for the first year as per budget Increase turnover to R2.5 million by the end of the following year 3 . 4 LO C AT I O N The company is situated in 291 Sprite Avenue, Pretoria. The company is inside the office park, Menlyn Woods Office Park, Block D. The neighbourhood mainly contains other businesses. There is a hospital situated close to the company, Life Faerie Glen Hospital. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D SA L O N L O CAT I O N R E Q U I R E M E N T S : The franchisee relies on the knowledge and experience of the Franchisor, Tammy Taylor Nails SA Franchising Pty Ltd. Rent for a business premises can vary from R5 000 for a residential house with business rights, up to R70 000 for a large shopping centre premises. CHOICE OF PREMISES MAY BE INFLUENCED BY THE FOLLOWING: L O CAT I O N : Shopping Centres guarantee a natural flow of consumers, whereas a residential premise with business right may need more marketing to attract customers. Ta m m y Tay l o r N a i l s CLIENT PREFERENCE: Depending on the franchise area, the target market (potential customers) may prefer a shopping centre environment or a more personalised environment such as a smaller more intimate local shopping centre. PLANNED FUTURE B U S I N E S S G R OW T H : The franchisee may start off with a smaller staff complement but has business growth plans in place within a certain rental agreement period which may force the franchisee to take a larger premise allowing for the future growth. RUNNING COSTS: Turnover based rental may have a substantial influence on the running cost of a nail salon. Your lease agreement will be reviewed by our location team to ensure you’re getting the best possible deal INSURANCE & S E C U R I T Y: Depending on the location of the business premises insurance and security may become a material factor. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D S E T- U P & I N T E R I O R : Set-up and interior must comply with the standards set by the franchisor and the premises should be accommodating to this. Tammy Taylor Nails has a dedicated shopfitting and design division, American Shop Fitters. Tammy Taylor Nails have taken the excessive shopfitting mark-ups out of the equation by introducing a project managing service with American Shopfitters. The company’s project manager will do the initial site visit, take photographs and measurements and attain the layout/plans from the centre management or landlord. These plans will then be submitted to the design team for renditions. Once final changes have been made by the franchisee, the renditions get approved by Tammy Taylor Nails head office. t h e f i v e - s t a r l e v e l s t h a t T a m m y T a y l o r N a i l’ s c u s t o m e r s e x p e c t B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D PRICING NAILS: The total average retail price for a combination of full sets of nails and fills is R450. The total average price is based on the average price for full set of nails (R550) and fills (R300). The company arrived at this price by factoring the cost of the nail sets, which has a total cost of R27,47 per set (exclusive of art) The average number of full sets of nails per technician minimum is three per day. The average number of fills per technician per day is two. The highest number of clients done in one day, per nail tech, is 14 clients. Tammy herself holds the world record for the fastest set of sculptured nails, done in less than 20 minutes. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D TA M M Y TAY L O R R E TA I L I T E M S : The total average price for the exclusive Tammy Taylor retail items is R300. The average cost of the items is R150. The average margin will be set at 50% WO R K I N G D A Y S P E R M O N T H : Pricing There will be 26 weekday workdays in the month and two weekend workdays in the month. Therefore, there will be a total of 26 workdays per month. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 4. THE MARKET 4.1 SOUTH AFRICAN ECONOMY Economic growth is set to strengthen in 2018-19, driven by increased business and consumer confidence. A rise in confidence in early 2018 and the recent upward revision of national accounts for the period 2015 to 2017 suggest that the country is recovering from a difficult 2015 and 2016, which marked the end of the super-commodity cycle and severe drought. Gross domestic product (GDP) growth is projected to gather pace, increasing from 1.3% in 2017 to 1.4% in 2018, 1.8% in 2019, and 1.9% in 2020. However, this would be well below the National Development Plan’s average annual growth target of 5.4% per annum over the period up to 2030. This in turn would contribute to a broader rebound among commodity exporters, emerging markets and developing economies, and overall global growth. Private consumption will expand, albeit at a slightly lower rate than in 2017 due to tax increases. Employment trends remain a concern. Although it provides little space for fiscal stimulus, the 2018 Budget Review’s reaffirmation of the government’s commitment to debt stabilization objectives is expected to generate more private investment. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 4.2 NAIL AND BEAUTY INDUSTRY IN SOUTH AFRICA 4.2.1. GLOBAL NAIL INDUSTRY Market research analysts at Technavio predict that the global nail care market will grow steadily at a CAGR of around 4% by 2021. This market research analysis identifies the premiumization of good quality cosmetic products as one of the primary growth factors for this market. There is a growing preference for good quality nail products that do not harm their health, less toxic and are longlasting. The customers opt for good quality and well-positioned products in the market and are willing to pay more amount of money for quality products. Premium products cost high due to the good quality of products. The willingness among customers to pay for premium products will inspire vendors to upgrade their product portfolio. The market research report identifies the evolving distribution channel formats and the use of augmented reality to enhance shopping experience as one of the key trends behind the growth of this market. With the increase in mobile and internet users, the companies have evolved their distribution channels from the traditional channels to the trending channels of the mobile application. Mobile applications are convenient to use and provide various features. There are several cosmetic shopping applications that provide products from numerous brands. COMPETITIVE LANDSCAPE: Due to the vast exclusivity & 35+ year development by Tammy Taylor on her product, Tammy Taylor SA has no competitors. Our acrylics are pigmented and triple sifted, our gels are the highest pigmented gels in the world. No chipping, high shine and backed by our non-lift guarantee. Tammy’s educated approach to nails sets the brand apart from all the rest B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 4.2.2. SOUTH AFRICAN NAIL I N D U S T R Y • Market size: R27.35 billion for all cosmetics and personal care together • Licensing: No government licensing; many nail schools but no standard curriculum • Trending nail styles: Gel-polish in solid colours; chrome looks, sculptured acrylic • Salon types: All kinds, including full-service, nail only, and home-based • Popular products: OPI, Essie, Morgan Taylor, CND, LCN, Gelish, NSI, Calgel, Star Nail, Bio Sculpture Gel • Until Tammy Taylor, nail bars & salons have only been concepts. Tammy Taylor is a PRODUCT & an experience constantly developing with our core focus being on hygiene & non damage to the natural nail Over the last two years the South African cosmetics industry has experienced an estimated compound annual growth rate of 4.6%. The value of the sector, which includes the manufacture of cosmetics, perfumes and other personal care preparations, is estimated to have grown to R27.35bn at retail level and R19.69bn at manufacturing level. In the formal cosmetics sector there are approximately 250 companies that employ more than 60,000 people. Though not as dominant as hair or skin care, South Africa’s nail industry has made marked strides. Nadia Erasmus, finalist for South Africa’s Nail Technician of the Year in 2016 (given by trade association Professional Beauty) in Cape Town, comments on some developments. “South Africa has come a long way in the past few years when it comes to the nail industry. There is a big change in the market for nails; getting your nails done is not spoiling yourself anymore. It has become a part of every woman’s budget,” she says. The salon- going population is truly diverse. “Everyone and anyone get their nails done here in South Africa: women, men, young girls and boys. There are salons catering to your more average income earners and then there are those in upmarket business areas that cater to career and business women and men, and even celebrities,” says van Rensburg. Men have become a lot more open and no longer have this stereotyped view, or feel embarrassed to have their nails, hands, and feet done. In fact, they feel it is a very important part of good grooming and looking good and how they are perceived as a man.” Basic manicures start at R180 and high-end spa manicures top out at about R750. Pedicures range from R220 to R400. NAIL TRENDS Tammy Taylor is constantly developing her product line. She recently manufactured & launched our SCULPT product. This is a hybrid gel that transforms into acrylic when it is cured. It is odourless & hypo-allergenic. The long wear & absolute nail strength is the most attractive thing about this product. Tammy also release new colours EVERY WEEK & Limited Editions every month. In South Africa, Tammy Taylor is the trend setter in all things nails & beauty. Being a USA product, we are always ahead of the local trends by season & design B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 4 . 3 TA RG E T M A R K E T Tammy Taylor Nails target the affluent higher LSM target market, because the company offers highend services, retail products & experiences. Tammy Taylor Nails (new generations salons) have only trained & certified technicians that perform the services, providing a premium and high quality service. The age segment that the company will be targeting will be women between the ages of 18 to 44. Most bookings will be received from woman between the ages of 25 and 40 and is thus the company’s main target market to achieve a higher return on investment with the company’s marketing budget. Tammy Taylor Nails has done research from Social Media Insights provide the following statistics about the interested market in the nail industry: A G E % AGE 18 - 24 20% 25 - 34 40% 35 - 44 32% Other 8% The above-mentioned statistics give a clear indication that there is a greater interest in nails between the ages of 18 to 44. This is a wide market to target. However, the client base dominates between the ages of 25 to 40, as they are more likely to earn a stable income. It is important to keep the age group of 18 to 24 interested as they will be future customers. 4.4 COMPETITORS Tammy Taylor Nails has by perception only, a direct competitor that will apply competitive pressure on the company. However, it is vital to note that our said competitors are concepts who all use similar products & we are an exclusive superior product. The primary competitors identified by the company include the following: • Sorbet • Soho 4 . 5 C O M P E T I TO R A N A LYS I S Sorbet: This is one of the most popular nail and body salons in South Africa. They have a number of franchises spread across the country. Apart from nails, the company also provides waxing, massage, eyelash, and facial services. The company provides their own range of retail products, as well as partner retail products, including Dermalogica, Environ, Redken, Rapid Lash and La Tweez. Soho: This company has salons located in both Johannesburg and Cape Town. Soho target both men and women clients, offering manicure, pedicure, nail, beauty, and waxing services. It has only two salons operating in South Africa; one in Cape Town and one in Sandton. However, a glaring weakness is that the salons only sell Soho retail products. This immediately places Tammy Taylor Nails in a competitive advantage. Clients going into Soho do not get a variety of options to maintain their nail or body service. Another weakness is that there is no booking policy, only for parties of four or more. This may put clients at a disadvantage, due to the fact that they might have to wait for long periods of time until another technician or consultant is available B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D • Who are the competitors, what will they offer and what is their unique selling point? This will identify the areas the team needs to compete in and provide an opportunity for differentiating • Establishing what matters to the customers and revising the marketing strategy accordingly • It’s essential to offer customers good reasons to use the company’s products and services rather than an opponents’ offering. The USP will meet the expectations of the customers, and it will be communicated • Continuously update the image with the design of the business cards, stationery, and the website and email correspondence to reflect the USP • The company will provide better customer service by being more responsive to their needs and expectations • Selling into a more significant number of markets can increase the customer base and spread the risk • The company will keep up with developments in the sector, following consumer and industry trends, invest in new technology and - crucially - have a clear idea of where the company will be in one, three- and five-years’ time B U S I N E S S Customer Service The company will as part of its continuous market research; employ the following strategies to combat competitive pressures: B E T T E R 4 . 6 COMPETITIVE ADVANTAGE P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 5. MILESTONES 1: LUCRATIVE BUSINESS MODEL A business model should tell the story of how their entire business works. Their story should focus on three core questions: • Who is their client? • What does their client value? • How does the company deliver that value at the right cost? All of those questions add up to creating a profitable business model. Tammy Taylor Nails has set aside some time to write a full-fledged business model formally. It’s the first and most crucial business milestone that their business must reach. 2: FIRST REPEAT CLIENT Their next business milestone involves the exchange of currency. Landing their first repeat client (sometimes called an anchor client) will give them the confidence in their business and the motivation they’ll need to keep going. The key word here is “repeat.” They may earn that first repeat client through personal recommendations, an existing contact or cold calling. Landing their second repeat client will take understanding precisely who they are and where they spend their time – both online and off. 3: REALISTIC MARKETING STRATEGY Marketing is the lifeblood of our business. Owners sitting around waiting for clients to call are destined to fail. Smart marketing can actively bring in new business instead of reacting. Our partnerships with Brand Cartel & others like our naming rights sponsorship for Mrs SA together with our firmly growing social media following gives us a great marketing edge 4: TRAINING & RECRUITMENT Our Recruitment Program ensures that you the franchisee does not face the hassle of sourcing, training & recruiting staff. The Company sources unemployed young South African men & women & invest heavily in their education in the art of sculpting. We also give them Operations & Sales Training together with Customer Service training to ensure they perform at their level best. This exciting milestone will grow their business by leaps and bounds. Instead of stumbling through it, and possibly wasting their time, energy and money with the wrong people, this will enable to set up the company’s employees for success 5: GAIN INDUSTRY AUTHORITY At this point, you’re making money, and have a great team in place. Your next milestone is to become an authority in the industry in your area / location. As an owner, it is your job to grow your business & manage your staff correctly daily. Our client does not take flyers, so we always suggest as an owner that you go out with gift cards for a FREE French Fade & go out & hand pick your first 50 clients. This will grow your business faster than flyers & also give your nail technicians an opportunity to gain clients. 50 free sets will be more affordable than printing a few thousand flyers. If these first 50 clients are treated like queens, they will inevitably return, remain loyal & bring at least 5 of their friends / family with them. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 6 . S WO T A N A LY S I S 6.1 STRENGTHS These are positive, internal factors that affect how your business performs. Although they may be difficult to change, they should be within management’s control: • • • • • • • Strong, established relationships with suppliers, advisors, and customers Having local knowledge of the target markets’ behavioural trends and requirements Industry and cultural insight based on practical experience Complacent competitors will give Tammy Taylor Nails the advantage of gaining market share A clear vision of the market need Lower operating costs and more control over the business through owner operated company Ability to implement sound quality control procedures and internal management procedures and risk mitigation policies 6.2 WEAKNESSES These are negative, internal factors that affect how the business performs. Although they may be difficult to change, they should be within management’s control: • Rapid growth may present operational challenges, like growing too fast too quickly • Salons not owner run tend to be weaker performers. This can be resolved by recruiting an experienced family member or manager you trust and incentivise well • The need for substantial external funding, thereby increasing the company’s debt and risk 6.3 OPPORTUNITIES These are external factors that could positively affect the business. They may be mostly out of management’s control, but can be leveraged: • Growing market • Boost businesses public image • New Technology 6.4 THREATS These are external factors that could negatively affect the business. They may be mostly out of management’s control, but can be managed by creating a contingency plan to minimise the damage: • • • • Local and international economy Political effects Legislative effects Challenges that prevents South Africa from remaining competitive that includes factors such as high overhead costs, skills shortages, poor labour relations, political- and economic unrest. B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 7 . SA L E S & M A R K E T I N G S T R AT E G Y 7.1 SALES & OPERATIONS The management will explore new and innovative ways to increase online exposure by advertising on partner websites, search engines, business directories and online newsletters. The company will use some relationships to promote the business. The company’s product and service portfolio are carefully positioned. The key message that the company wishes to convey to its target market is that as a company, it is focused on understanding its customers’ unique needs and meeting those needs through setting the correct expectations. Systems are critical to being able to provide such a product and service and attract ongoing clientele. The staff needs to be accustomed to these systems and receive continuous training. This means that the entire process will be managed more efficiently, and more consistent results will be produced. Y E A R 1 SALESR2 121 600 Cost of Sales R857 232 GROSS PROFIT Gross Margin % R1 264 368 59.6% 7.2 MARKETING PLAN The marketing materials are used to promote the business to current and prospective customers. Among others, they include the website, print brochures, business cards, and catalogues. The promotions are one of the most important sections of the marketing plan and about the details how to reach new customers. There are numerous promotional tactics, such as ads, trade show marketing, press releases, online advertising, and event marketing to be chosen from. You will find attached our current marketing strategy from Brand Cartel to give you an idea of how we plan to penetrate the market. These days most customers will search online to find and review new products and services to purchase. As such, having the right online marketing strategy can help to secure new customers and gain competitive advantage. The four key components to your online marketing strategy are as follows: 1. Keyword Strategy: identify what keywords are relevant to optimize your website / social media pages 2. Search Engine Optimization Strategy: document updates to make the website shows up more prominently for the top keywords 3. Paid Online Advertising Strategy: LinkedIn, Google and Facebook adverts 4. Social Media Strategy: document how to use social media websites to attract customers B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D a compelling marketing programme w i t h t h e a i m o f e s ta b l i s h i n g a T R U S T WO R T H Y and customer-oriented Brand 7.3 MARKETING STRATEGY The company’s strategy has been successfully implemented through leveraging its key stakeholder relationships and strategic alliances to penetrate the target market. The company will be able to build a compelling marketing programme with the aim of establishing a trustworthy and customeroriented brand. It will achieve this by drawing on its knowledge of the ‘Ideal Customer’ profile, its local presence and product knowledge. Tammy Taylor Nails will employ the following strategies to gain both market share and a competitive advantage: • Use social media channels like Facebook, Twitter, Instagram and LinkedIn, conventional advertising channels, public relations initiatives, targeted, periodic marketing programmes, and information about business and industry developments to create a word-of-mouth ‘buzz • Advertise in local media, online directories and publications. Ensure that all marketing programmes are strictly monitored to determine the return on marketing, investment, average marketing spend, market research and other cost-benefit measures • Keep up-to-date with the customer needs, habits and general consumer behaviour with the aim of developing new offerings and value-added services • Understand the target market and ensure that the correct product and service mix is available to meet their needs • Periodically review the company’s pricing strategy with a strong focus on the reduction of variable costs • Implement a formal accounting, quality control and customer relationship management system • Conduct customer surveys to ensure an accurate understand the ‘true needs’, changing behaviours and criticism/feedback from the customers B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D S t r at e gy M A R K E T I N G Tammy Taylor Nails will employ the following strategies to gain both market share and a competitive advantage: • Use social media channels like Facebook, Twitter, Instagram and LinkedIn, conventional advertising channels, public relations initiatives, targeted, periodic marketing programmes, and information about business and industry developments to create a word-of-mouth ‘buzz • Advertise in local media, online directories and publications. Ensure that all marketing programmes are strictly monitored to determine the return on marketing, investment, average marketing spend, market research and other cost-benefit measures • Keep up-to-date with the customer needs, habits and general consumer behaviour with the aim of developing new offerings and value-added services • Understand the target market and ensure that the correct product and service mix is available to meet their needs • Periodically review the company’s pricing strategy with a strong focus on the reduction of variable costs • Implement a formal accounting, quality control and customer relationship management system • Conduct customer surveys to ensure an accurate understand the ‘true needs’, changing behaviours and criticism/feedback from the customers The company’s marketing and sales programmes will include, but will not be limited to: • Contacting and article submissions to newspapers, magazines, trade publications and house publications of large companies on industry issues to provide them with new and fresh content through the featuring of regional information, industry information, product/service information, etc. Such published articles may then be included in the pre-defined communications to provide third-party endorsements and boost credibility. Contact information and call-to-action links will then ensure that such enquirers’ contact details are captured for inclusion in the sales campaigns • The featuring of client’s testimonial display page on the website and in the other advertising mediums to showcase customer experiences and provide third-party endorsements for the products and services • Selective advertisements placed in magazines, industry publications and industry portals will offer incentives requiring a call to action that will drive traffic either telephonically, to the website or even simply to contact details capturing form B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 7.4 INCREASE SALES Tammy Taylor Nails will use the following methods and channels to increase sales and improve the company’s overall performance: I N C R E A S E L E A D G E N E R AT I O N It is the process of identifying and cultivating potential customers to the business’s products/services. The company plans to do this through the following channels: 1. Trade Journal Advertising 2. Newsletter 3. Brochures (electronic and print) 4. Webpage/internet (as mentioned above) 5. Building signage 6. Business cards 7. Networking 8. Strategic alliances 9. Network marketing 10.Distributors/agents I N C R E A S E C O N V E R S I O N R AT E The business will increase the average % of visitors to take a desired action that will be an advantage to the business. The company can increase this with: 1. Written guarantee (technical contracts) 2. Define uniqueness 3. Increase range/variety 4. Quality brochures 5. Info sheets/booklets 6. Product/pricelist 7. Team member profiles 8. Write company story 9. Display awards and certificates 10.Account applications 11. Daily/weekly costs 12.Flowchart sales process 13.Measure conversion rates Increase the number of transactions The company will increase number of times their clients purchase or use their service/ product by: 1. Better services that will make customers feel special 2. Under promise, over deliver 3. Streamline the company’s service 4. Deliver consistently and reliably 5. Keeping in regular contact with clients 6. Inform clients of entire range of services B U S I N E S S 7. Increase the company’s range 8. Offer service contracts 9. Store client’s vital information 10.Sending out of newsletters 11. Establishing and maintaining an organised database 12.Keep good data on clients 13.Build and maintain relationships 14.Know client’s names I N C R E A S E T H E AV E R A G E R A N D SA L E The company will increase their income by: 1. Price increases 2. Create package deals 3. Upsell diamond nail inserts 4. Create bulk buy deals 5. Make sure clients know full product list and services 6. Set an average RRR sale goal 7. Measure the average RRR sale 8. Increase perceived value 9. Educate on value, not price INCREASE PROFIT MARGINS The company will increase the amount of revenue that exceeds sales by: 1. Increasing margins/prices 2. Increasing the sales of larger margin tests 3. No discounting 4. Keeping accurate database 5. Striving to be efficient and productive, as well as focusing on time management 6. Reducing duplication 7. Know the actual costs 8. Work costs as % of sales 9. Set monthly expenditure budgets 10.Only allow authorised POs 11. Reduce costs by 10% 12.Decrease range 13.Lower RR tied up in inventory 14.Buy direct 15.Charge for finance facility 16.Invest in technology 17. Systemise the routine, humanise the exception 18.Automate as much as possible 19.Sell obsolete equipment and machinery 20.Only buy what the company needs 21.Use a company credit card for points and interest free period 22.Keep overheads to a minimum 23.Measure everything P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 8 . R I S K & R I S K M I T I G AT I O N The company identified four main categories that will be monitored. These include: 1. Economic: financial loss 2. Psychological: poor company image 3. Performance: poor service delivery, poor management performance 4. Physical: staff, equipment problems Some of the causes of loss would be poor planning, poor controls, inadequate management, individual error or the domino effect. The company will be able to identify and address any weaknesses and find viable solutions. A key gage would be from customers, assessment and rectifying problem areas. The process would entail–interviews (i.e. rate our products and service follow ups), collection of information, staff assessments, examination of information, analyse the data and from there draw up a risk analysis report and follow through on implementation areas. Risk mitigation implementations will be executed to mitigation actions and would include progress monitoring, tracking identified risks, identifying new risks, and evaluating risk process effectiveness. Solutions B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 8.1 PEOPLE & RISK Prudent financial strategy will enable management to make best use of limited time and resources by concentrating on areas that will provide the most benefit and make the greatest impact on business. The following shall be observed: • A successful trade-off between risk and return • Creating sustainable competitive advantage as the business grows • Taking a holistic approach to assessing the profitability levels of customers and products via category management approach • Recognising that strategic emphasis, management styles and critical success factors will change as the business grows and matures • Managing one’s investment expectations to prevent unpleasant surprises • Analysing of the failure of many information systems to support business needs • Use all their sources effectively • Always being informed about the financial position of the business • Keeping a check on sales, creditors age analysis should it apply • Being capable of making informed decisions • Easily identifying problem areas 8.2 MANAGING THE MONEY Accounting for the flow of money in the business is of utmost importance and the company therefore realises this forms the core of the management information system. Franchisees must have accounting programs installed / plugged into our App/POS to keep accurate tabs on: • Always being informed about the financial position of the business • Keeping a check on sales & staff performance • Being capable of making informed decisions • Easily identifying problem areas • Determining and controlling fluctuations use all their SOURCES E f f e c t i v e ly B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 9. MANAGEMENT SUMMARY FRANCHISEE OR SALON MANAGER Technicians x 2 9.2 1 x Soak-Off Technician/ 1x Receptionist(Host) / 1x Tea Lady MANAGEMENT The company is owned by Melany Juanita Viljoen, who has years of experience in this industry. The management consist of Melany Juanita Viljoen, she is the operations manager focussed on business and people efficiency and people skills development and motivation. The shareholder of Tammy Taylor Nails and the management will be responsible for: • Provide oversight and direction to the employees in the operating unit in accordance with the organization’s policies and procedures • Coach, mentor and develop staff, including overseeing new employee and providing career development planning and opportunities • Empower employees to take responsibility for their jobs and goals. Delegate responsibility and expect accountability and regular feedback • Foster a spirit of teamwork and unity among department members that allows for disagreement over ideas, conflict and expeditious conflict resolution, and the appreciation of diversity as well as cohesiveness, supportiveness, and working effectively together to enable each employee and the department to succeed • Consciously create a workplace culture that is consistent with the overall organisations and that emphasizes the identified mission, vision, guiding principles, and values of the organization • Lead employees using a performance management and development process that provides an overall context and framework to encourage employee contribution and includes goal setting, feedback, and performance development planning • Lead employees to meet the organization’s expectations for productivity, quality, and goal accomplishment • Provide effective performance feedback through employee recognition, rewards, and disciplinary action, with the assistance of Recruitment, when necessary • Maintain transparent communication. Appropriately communicate organization information through department meetings, one-on-one meetings, and appropriate email, IM, and regular interpersonal communication MANAGEMENT STYLE: By adopting the following principles, the organisation will learn to deploy and improve its culture in a manner that will increase the odds of financial and operational success. • Work with and within your current cultural situations • Change behaviours, and mind-sets will follow • Focus on a critical few behaviours • Deploy your authentic informal leaders • Don’t let your formal leaders off the hook • Link behaviours to business objectives • Demonstrate impact quickly • Use cross-organisational methods to go viral • Align programmatic efforts with behaviours B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 10. M O N T H LY I N C O M E P R O J E C T I O N S These projections are based on the 2 Nail Technician, 1 Soak-Off Girl CONSERVATIVELY NA I L T R E AT M E N T S O N LY Average Number WorkingDays Per Month Employee Position Average Number of treatments PerDay Average Price of Nail Treatments Nail Tech 1 4 R450.00 26 R46,800.00 Nail Tech 2 4 R450.00 26 R46,800.00 Soak-Off Girl 4 R100.00 26 R10,400.00 T O TA L T U R N O V E R O N NA I L S O N LY P E R M O N T H Total Sales Per Month Per Tech R104,000 T O TA L T U R N O V E R O N NA I L S O N LY P E R M O N T H Retail Sales Daily Target Based on 4 Employees selling for 26 Days Per Month 4 x R500 per day = R2000 Projected Monthly Turnover on Dermalogica and Optiphi Retail if targets are driven & met R52,000.00 per month Tammy Taylor Retail Items Daily Target = R800.00 PROJECTED MONTHLY TURNOVER ON CORE SERVICES, ADDITIONAL SERVICES & RETAIL B U S I N E S S R20,800.00 per month R176 800.00 P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D 11. M O N T H LY E X P E N S E P R O J E C T I O N S EXPENSE PROJECTED COST RENT & UTILITIES R16,000 BASIC SALARIES R22,000 COMMISSIONS R7,360 STOCK R10,000 SOCIAL MEDIA MARKETING BUDGET R3,000 REFRESHMENTS R3,000 INSURANCE R1,400 BANK CHARGES R600 TELEPHONE & WIFI R1,200 DESCRIPTION BASED ON AN AVERAGE SIZE STORE OF 40SQM 2 NAIL TECHNICIANS/1 SOAK-OFF GIRL/ 1 RECEPTIONIST/1 TEA GIRL BASED ON A 10% COMMISSION ON SALES STRUCTURE. THIS CAN DIFFER MONTHLY STOCK ORDER FORNAILS, WAXING, LASHES,SPRAY TANNING & HOLLYWOOD FACIALS BASED ON CURRENT AVERAGE EFFECTIVE SPEND CHAMPAGNE, JUICE, SMALL TREATS(IT IS THE EXPERIENCE YOU ARE SELLING SO THIS EXPENSE IS VITAL) BASED ON THE CURRENT AVERAGESPEND PER SALON BASED ON AN AVERAGE – MAY VARY DEPENDING ON WHO YOU BANKWITH BASED ON CURRENT AVERAGE SPEND PER SALON R500 BASIC OFFICE EXPENSES. THIS AMOUNT IS EXAGGERATED. WE SUGGEST YOU KEEP THIS EXPENSE MONITORED R2,000 EDUCATION IS KEY WITH OUR BRAND. PLEASE ENSURE YOUR STAFF TRAINING IS ALWAYS UP TO DATE. THIS IS PROVISION ROYALTIES @ 7% R12,376 MONTHLY TTN ROYALTIES TOTAL MONTHLY EXPENSES R71 436 OFFICE EXPENSES STAFF MONTHLY TRAINING PROVISION PROJECTED MONTHLY TURNOVER PROJECTED MONTHLY EXPENSES PROJECTED MONTHLY PROFIT R176 800 R79 436 R97 364 B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D FRANCHISE LICENCE FEE LOCATION SOURCING & LEASE NEGOTIATION SERVICE R300 000.00 R25 000.00 DESIGN TEAM, SHOPFITTING, RENDITIONS AND 3D DESIGN DETAIL LAYOUTS DESIGN COUNCIL SUBMISSIONS BASED ON 50SQM R400 000.00 TO R849 000.00 PLEASE NOTE THIS COST MAY CHANGE BASED ON THE SIZE OF THE SHOP AS WELL AS FITTINGS AND FURNITURE CHOSEN PROJECT MANAGEMENT R75 000.00 UNIFORMS (5 EMPLOYEES) & BRANDED TOWELS R10 000.00 STOCK & EQUIPMENT OPENING ORDER BASED ON 2 MANI AND 1 PEDI STATIONS (ALL PRIZMA COLOURS, MAJORITY GEL COLOURS, LIMITED EDITION COLOURS & EQUIPMENT & TOOLS R150 000.00 TRAINING & RECRUITMENT (3 TECHS & 1 SOAK-OFF GIRL) – OWNER IS TRAINED AT NO CHARGE R70 000.00 OPTIPHI DERMALOGICA AND TAMMY TAYLOR & RETAIL OPENING ORDER R75 000.00 TOTA L A MO U N T R E Q U IR E D FOR STA RT U P (E XC L . VAT ): R1 105 000.00 12. DISCLAIMER Information, data and drawings embodied in this business plan are strictly confidential and are supplied on the understanding that they will be held confidentially and not be disclosed to third parties without the prior written consent of Tammy Taylor Nails. Tammy Taylor SA or any of its agents, contractors, member companies, assignees or employees, do not accept liability of any nature whatsoever for any loss sustained by any person which makes use of the information contained herein and anyone who uses it, does so entirely at his or her own risk. FOCUSSED ON B USINESS, PEOPLE EFFICIENCY PEOPLE SKILLS DEVELOPMENT AND M o t i vat i o n B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D B E T H E Q U E E N EMAIL ADDRESS: FRANCHISING@TAMMYTAYLORNAILS.CO.ZA PHONE: 010 591 1034 B U S I N E S S P L A N TA M M Y TAY L O R N A I L S S A F R A N C H I S I N G P T Y LT D