Glamorous Hair Salon
Hair Salon
Business Plan
Natasha Chou
Fin 3360
Fall 2012
1
Glamorous Hair Salon
Glamorous Hair Salon
Business Plan
6343 Campbell Rd.
Richardson, TX 75080
TELEPHONE: (972) 8328736
CONTACT: Vivian Kim, MANAGER
The information, data, and charts embodied in this business plan are strictly confidential and are
supplied on the understanding that they will be held confidentially and not disclosed to third
parties without the prior written consent of Glamorous Hair Salon.
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Glamorous Hair Salon
Table of contents
1.
Executive Summary .................................................................................................... 4
1.1. Objectives ........................................................................................................... 4
1.2. Mission................................................................................................................ 4
1.3. Keys to Success .................................................................................................. 5
2.
Company Summary .................................................................................................... 5
2.1. Company Ownership .......................................................................................... 5
3.
Services and Pricings .................................................................................................. 5
4.
Market Analysis Summary ......................................................................................... 6
4.1. Market Segmentation .......................................................................................... 6
4.2. Target Market Segment Strategy ........................................................................ 6
4.3. The Competitors ................................................................................................. 6
5.
Mangagment Summary ............................................................................................... 6
5.1. Personnal Plan..................................................................................................... 7
6.
Major Risks ................................................................................................................. 7
7.
Financial Projection .................................................................................................... 7
8.
Amounts of Capital to be raised……………………………………………………………..10
9.
Type of capital to be raised…………………………………………………………..10
10. Exit Strategy………………………………………………………………………….10
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Glamorous Hair Salon
1. Executive Summary
Glamorous Hair Salon is located in Richardson TX near University of Texas at Dallas.
Glamorous Hair Salon provides a great service for women, men and children. The salon
is mainly focus on the latest hairstyle, professional services and great hair products for
customers. Also, customers who are currently enrolled at University of Texas at Dallas
would get 20% off from coloring, perming, styling and cutting their hair.
The Market
The hair salon industry is very competitive. There are many chain stores that can only
provide minimum services and upscale salons that are more expensive and have
appointment requirements. Glamorous hair salon differentiated itself with other hair
salons by providing maximum flexibility service with lower costs and always put
customers in priority.
Services and Products
Glamorous provides hair styling for women, men and kids. This includes haircuts for
women, men and kids; special occasion hair styling, hair coloring and permanents for
men and women. Glamorous also offers students an opportunity to get a cheaper hair
styling near campus. Students usually aren’t willing to spend money on haircuts so
Glamorous will be the first hair salon who provides special deal for all the UTD students
and it will also be a free advertising for the salon. Shampoo will be provided for all
services but cutting and styling will be addition costs. Glamorous will also be selling its
hair products to customers which it forecasted to generate 20% of sales. The hair
products will include shampoo, hair conditioner, hair spray, hair wax, comb, hair brushes
and other professional hair styling products.
Management Team
The Management team of Glamorous Hair Salon is comprised hairstylists who have
strong passion in this industry and well-experienced individuals. Glamorous is owed by
Vivian Kim and Nancy Do.
1.1 Objectives
Glamorous Hair Salon objectives for the first three years of operations include:
 To develop successful start-up hair salon
 To increase sales at least 20% a year
 To focus on what customers want and need
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Glamorous Hair Salon
1.2 Mission
Glamorous Hair Salon’s mission is to provide great service with reasonable prices
and maintain long-term relationships with customers.
1.3 Keys to Success
The keys to the success for Glamorous Hair Salon are:





Attract any ages of people
Attract UTD students by giving out discounts
Provide walk-in and appointments service
Good service guaranteed
Increase hair product sales
2. Company Summary
Glamorous Hair Salon will be located in Richardson Texas and near University of Texas
at Dallas. Glamorous Hair Salon offers reasonable price and convenient hair styling. Its
location automatically gives it competitive advantage.
2.1 Company Ownership
Glamorous Hair Salon is entirely owned by Vivian Kim and Nancy Do.
3. Services and Pricings
Glamorous Hair Salon provides hair styling for women, men and kids. This includes
haircuts for women, men and kids; special occasion hair styling, hair coloring and
permanents for men and women. Glamorous also offers students an opportunity to get a
cheaper hair styling near campus. Students usually aren’t willing to spend money on
haircuts so Glamorous will be the first hair salon who provides special deal for all the
UTD students and it will also be a free advertising for the salon. Shampoo will be
provided for all services but cutting and styling will be addition costs.







Haircut (men& women): $15~$25
Haircut (kids): $10
Shampoo: $5
Perm: $40~$70
Single process color: $35 and up
Highlight: $30 and up
Blow dry: $20 and up
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Glamorous Hair Salon

Styling (shampoo and blow dry included) : $25 and up
4. Market Analysis Summary
Glamorous Hair Salon will be targeting four different groups which include male, female,
kids and students. Targeting at more than one group can benefit Salon by lowering its risk
4.1 Market Segmentation
Glamorous Hair Salon will target four different market segments:




Male
Female
Kids
Students
4.2 Target Market Segment Strategy
Glamorous Hair Salon will target four groups distinctly. Glamorous will offer male a
quicker service with less expensive than women’s haircut. Males usually have shorter
hair and it takes less time for barber to style it. The salon will be open on the
weekends for those business men that do not have time to get haircuts during the
week.
Majority of the female customers tend to go to upscale hair salons but not everyone
can afford it so Glamorous Hair Salon will provide the equal service with less
expensive prices. Glamorous Hair Salon will emphasize on the latest hair style and
hair colors especially for female because female are more sensitive about fashionable
things.
Glamorous Hair Salon will also target kids by offering special chairs for younger kids
because some kids might be too short for the barber chairs. There will also have
indoor children playground and toys for the kids.
In addition, Glamorous Hair Salon is offering UTD students 20% discount every time
they come. However, students need to show their comet card in order to get a
discount. Moreover, coloring and perming are not included.
4.3 Competitors
 High class salons: It usually requires appointment but customers who are
richer are more likely to go to upscale salons to get better service. The
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Glamorous Hair Salon


customers are not only looking for the haircut service, customers tend to
expect the upscale salon has better environment and atmosphere.
Traditional barbers: It usually doesn’t offer appointment but customers can
request any kind of the hairstyle they want from the barbers.
Quick salons: such as super cuts that they have many locations within a
district. Some customers would like to go to the same company because they
are expecting the same result.
5. Management Summary
5.1 Personnel Plan
Mrs. Kim was graduated from Regency Beauty Institute in 2002 and had 9 years
working experiences. She started her career at a local beauty salon with a title of hair
stylist and had won many hairstyle competitions in U.S. Ms. Do was graduated from
University of Texas in 2004 with an Accounting degree and Cosmetology Career
Institute in 2008 and had 3 years working experiences among many local hair salons
as well. Both of them will be in charge of daily business operations. Mrs. Kim will be
managing training and hiring new workers and to help them adapt the working
environment as well as improving their skills. Ms. Do has an accounting degree so
she will be handling the retail sales. Glamorous Hair Salon will also hire 5 part time
hairstylists so Ms. Do will also be in charge of scheduling these workers.
6. Major risks
 Losing customers
 Economy goes down everyone goes to quick salons
 Economy goes up everyone goes to upscale salons
 Bad reputation can put the salon in difficult financial situation
7. Financial Projection
Pro Forma Cash Flow
Year
cash received
cash from operations
cash sales
subtotal cash from operations
additional cash received
sales tax
new current borrowing
new other liabilities
1
2
3
4
5
270,000
270,000
0
0
0
0
500,000
500,000
0
0
0
0
550,000
550,000
0
0
0
0
600,000
600,000
0
0
0
0
750,000
750,000
0
0
0
0
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Glamorous Hair Salon
sales of other current assets
sales of long term assets
new investment received
subtotal cash received
expenditures
expenditures from operations
cash spending
bill payments
subtotal spend on operations
additional cash spent
sales tax
principal repayment of current
borrowing
other liabilities principal repayment
long- term liabilities principal
repayment
purchase other current assets
purchase long-term assets
dividends
subtotal cash spent
net cash flow
cash balance
Pro Forma Balance
Sheet
Year
Asset
Current asset
Cash
Other current asset
Total Current Asset
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Bank Loan
Other Current Liabilities
0
0
0
270,000
Year 1
0
0
0
500,000
Year 2
0
0
0
550,000
Year 3
0
0
0
600,000
Year 4
0
0
0
750,000
Year 5
256,000 270,000 277,000 250,000 240,000
110,000 124,000 102,000 160,000 130,000
366,000 394,000 379,000 410,000 370,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
366,000
-96,000
20,500
0
0
0
394,000
106,000
62,000
0
0
0
379,000
171,000
124,000
0
0
0
410,000
190,000
210,000
0
0
0
370,000
380,000
350,000
1
2
3
4
5
20,500
0
20,500
9,000
1,500
7,500
28,000
Year 1
62,000
0
62,000
9,000
3,000
6,000
68,000
Year 2
124,000
0
124,000
9,000
4,500
4,500
128,500
Year 3
210,000
0
210,000
9,000
6,000
3,000
213,000
Year 4
350,000
0
350,000
9,000
7,500
1,500
351,500
Year 5
10,200
2,000
0
12,220
2,000
0
13,500
2,000
0
15,000
2,000
0
16,700
2,000
0
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Glamorous Hair Salon
Subtotal Current
Liabilities
Long-term Liabilities
Total Liabilities
Paid- in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and
Capital
Net Worth
12,200
14,220
15,500
17,000
18,700
40,000
52,200
50,000
-1,000
-20,000
29,000
81,200
40,000
54,220
50,000
-35,000
50,000
65,000
119,220
40,000
55,500
50,000
-20,000
60,000
90,000
145,500
40,000
57,000
50,000
10,000
75,000
135,000
192,000
40,000
58,700
50,000
25,000
85,000
160,000
218,700
29,000
65,000
90,000
135,000 160,000
Income statement
Year
sales
cost of goods sold
gross margin
Expenses
payroll
marketing
depreciation
rent
utilities
insurance
payroll taxes
independently contracted stylists
supplies
total operating expenses
profit before interest and taxes
EBITDA
Interest expense
Taxes expense
Net profit
1
2
3
4
5
270,000 500,000 550,000 600,000 750,000
4,000
4,300
4,200
4,150
4,500
266,000 495,700 545,800 595,850 745,500
46,000
20,000
8,000
22,000
40,000
1,500
0
30,000
5,000
172,500
10,199
14,850
5,000
3,586
1,613
52,000
18,000
8,000
22,000
40,000
1,500
0
35,000
5,000
181,500
30,000
38,493
4,568
4,897
20,535
54,000
17,000
8,000
22,000
40,000
1,500
0
40,000
5,000
187,500
45,639
47,369
4,000
8,734
32,905
56,000
16,000
8,000
22,000
40,000
1,500
0
45,000
5,000
193,500
50,394
68,370
3,675
12,984
33,735
58,000
15,000
8,000
22,000
40,000
1,500
0
50,000
5,000
199,500
65,847
73,934
3,599
13,944
48,304
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Glamorous Hair Salon
8. Amount of capital to be raised
 Equipment: the equipment would include chairs, mirrors, hair dryers, sinks, desks
and supply area. The estimated amount is $20,000.
 Supplies: the supplies would include shampoo, conditioners and other hair
products barbers use, also including cost of goods sold (the products that the salon
sells individually to customers). The estimated amount is $15,000.
 Business start-up costs: the owner owns the salon so the rent is avoided. However,
they will still pay for insurance, water and utilities. The estimated amount is
$1,200 a month.
 The total: $36,200
9. Type of capital to be raised
Glamorous Hair Salon will be raising its capital by bank loan from Chase bank.
10. Exit Strategy
 Transfer the ownership to other person
 Seeking out for investors
 Sell the business to others
10