Business plan proposal
The proposed business will be 10 years younger Hair and Beauty salon. It will be located at the Kenya Cinema Building in Nairobi city which is along Moi Avenue. The form of business will be sole proprietorship offering Hair and Beauty only and hence will use simple and appropriate technology to deliver service to its customers. The entrepreneur found it appropriate because its in the heart of the city and customers can access it is in the Central Bussiness area. The business will create job opportunities as it expands as well as opening other branches in different parts of Nairobi.
The owner of the business is John. E. Onyango currently pursuing a diploma course in co-operative management. 1. 2 MARKETING PLAN Ten years younger salon has key elements of a marketing plan of how how to identify customers and their expectations. The potential customers of the business will be the upper and the middle class women in Nairobi. The business share at its inception will be 20% with main competitor being Urembo, Jawambu and Rio Hair and Beauty Salon.
The competitor’s greatest advantage over 10 years Hair salon is their longlices in business thus established customers and financial base but the business intends to curve a niche for itself and capitalize on the fact they lack qualified personnel and their equipment are a bit archaic. The price of services will be based majorly on the cost of production but also much attention will be paid to current prices offered by competitors. The business nwill also offer credit facilities to its trusted and regular customers.
To create awareness of the business posters will be fixed at strategic places and at the business premise. A large colourfully decorated poster will be fixed outside the business premises for potential customers to see. Local media, leaflets and personal selling will also be used to advertise the business. The business will sell services directly to customers. 1. 3 ORGANIZATION AND MANAGEMENT PLAN Ten Years younger Hair and beauty Salon will comprise as of owner as the manager.
It will employ the following people; Office administrator, Hairdressers, Beauticians, Shampoo, cleaner girl and the messenger. All the workers will be paid a total salary of 86,000 per month for the first year. Successful candidates for every position will be selected after interview has been conducted. Workers will be motivated through giving recommendation letters, informing them of the business progress, promotion and financial incentives. The manager will be responsible for training employees depending on their respective areas of working.
The trade license will be required each year in order for the business to progress with its activities. The business will also enlist the services of a lawyer who will also be the legal advisor of the business. 1. 4 OPERATION/PRODUCTION PLAN The business production facilities comprise of driers blow-driers, steamers, nail files, ultra cholesterol hair treatment, hair relaxers, super and regular shampoo, hair conditioner, apricot facial scrubs, massage lotions, hair braids among others. These facilities will be purchased before the business goes into operation.
Production strategies will be designed and developed while the production process will be based on the customer needs. The manager will be devoted to combating both internal and external factors that are likely to affect the business to ensure smooth operations. The business will adhere to all government rules and regulations to maintain peace in the course of running the business. 1. 5 FINANCIAL PLAN The business shall require Kshs. 700,000 which shall be obtained from a bank loan of Kshs. 350,000, my personal savings of Kshs. 200,000 and Kshs. 150,000 family contribution.
The bank loan shall be paid from the first year’s operation. The pre-operational cost of 425,800, working capital of cash 274,200 that is estimated after determining the difference between the current assets and the current liabilities. The project cash flow which show the net profit to be made at the end of the business year in December, income statements that shows the profit and loss made by business that particular financial year. It also shows the profoma balance sheet which shows the capital, assets and liabilities of the business liquidity position.
It also shows the business profitability ratios, desired financing running consists of the pre operational cost of Kshs. 425,000 and cash Kshs. 274,200 working capital as well as the proposed capitalization amount to 700,000. CHAPTER TWO 2. 0 BUSINESS DECRIPTION 2. 1 BUSINESS NAME The name of the proposed business will be10 years younger hair and beauty salon. The name suggests that whoever enters the salon shall leaks it looking attractive and one could be forgiven for thinking that she is 10 years younger than her real age.
It is a business enterprise which will be owned and operated by Mr . John E. Onyango as the general manager. He is twenty four years old and resides in Nairobi city. The proprietor attended Butula boys primary school for his primary education as from 1990 wishes he sat for his Kenya certificate of primary education. He later joined Butula boys high school in 2003 for his PO level education where he sat for his Kenya certificate of secondary education wishes he attained a mean grade of c+ (plus) in 2006.
In the beginning of 2007, he started offering hair services like shaving free of charge to friends and meager income corners class residents of the state wishes he used to stay in Kangemi as well as those not in better passion to pay for Kinyozi services due to high prices . this helped him perfect his skill since he had a passion for the work and opted to start working in hair pride Kinyozi and salon located in Kangeni where was paid on commission. He later joined KAM School of hair dressing and beauty in Nairobi where he trained for 5 months thus a holder of certificate in hair dressing.
In 2008, he joined the Kenya school of professional students where he obtained a diploma in business management, he therefore possesses business management skills acquired through his training currently the proprietor is a student at Kabete technical training institute undertaking a diplomacourse in cooperative management. This sevices as an added advantage since he is quite optistic that upon coplesion of the three course he will be in better position to establish and run successfully his own business. 2. 2 BUSINESS LOCATION AND ADDRESS
10 year younger hair and beauty salon is tobe located in Nairobi city Kenya Cinema building on second floor along moi avenue street in Nairobi. A feasibility study carried out by the proprietor of 10 years younger salom revelealed that the demand for hair and beauty services is high among the young girls. Middle aged as well as elderly laides residing in BNairobi due to the burning desire to always stay young beautiful and elegant. This is as a result of the fact tha Nairobi is a fast growing city in population which constitute to more rising need of hair and beauty care among the Nairobi residents.
Studies carried out by the proprietor unearthed that there is high poten fial for growth and expansion of the business provided by its good will brought about by fast growing Nairobi city. The proprietor found out that the existing infrastructure in the city such as good roads, water, electricity and proper means of communication, the post office and banking facilities provide an enabling environment for the business to efficiently and effectively offers services to the Nairobi recedents.
The study also revealed that the possibility of potential customers is high since Kenya cinema building is at the heart of town and customers can easily reach it. It as well houses other business e. g. Kenya cinema hall for showing movies , restaurants and pubs, salon , cyber cafe, clothing boutique, chemist, computers training college among other and two beauty shops at the ground floor. The availability of raw materials therefore justifies its location of the business since there are beauty shops in its name premise for easy access.
This brings about convenience in satisfaction of customers needs since one won’t go for in research for urgently needed raw materials. there shall be labour availability since the business will source its employees from pissot point international school of hair dressing and beauty which is within its city. The name of business and address will be 10 YEARS YOUNGER HAIR AND BEAUTY SALON P. O BOX 3042 NAIROBE (KENYA) Tele: 558590 – 559006 CELL: 0729929732 KENYA CINEMA HOUSE (2ND FLOOR) MOI AVENUE STREET 2. 3 FORM OF OWNERSHIP
Ten years younger hair and beauty salon is a sole proprietorship form of business owned and managed by Miss Elizabeth Onyange she is a graduate of KSPS and a holder of diploma in business and office management. She has relevant experience in management skills from her professional training as well as working experience and wall therefore be running and managing its business. 2. 3. 1 WHY SHE OPTED FOR SOLE PROPRIETORSHIP She opted for this ownership because making decision will be fast and independent hence no time will be wasted on taking the decisions.
She also opted for this kind of ownership because she will enjoy all the profit by herself and have direct contact with customers more closely and control situations if need be. She also opted for sole proprietorship because there is job security in that she will be the boss. The employer and self reliant the business will be registered on 20th January 20101 and start as operations on 5th February 2010. 2. 4 TYPE OF BUSINESS 10 years younger hair and beauty salon is going to be a hair and beauty care provider itus A sensible type of business.
It will offer services to all kinds of people. This cases the old middle aged young as well as children. The business target diratified customers from the existing kind of services offered by existing salon this intends to offer quality services at affordable prices to customers satisfaction. 2. 5 PRODUCTS/SERVICES 10 years younger hair and beauty being a hair and beauty care provider it will provide the following products/services to its customers, perm, curl kit, togging pedicure, manicure, facial scrobs braiding, leaving and marrage. 2. 5. 1 PERM
This involves trialing a customer hair by applying hair relaxer to straighten the hair and make it firm. First apply some oil or a little powder onto the seals to avoid aiming since some skins are sensitive. Prouder then to apply the relaxer and let it stcujon for about 15 to 20 minutes. It sometimes might go up to 30 minutes depending on the texture of the hair and strength of the relaxer thorough using hair shampoo and some condition to soften at and prevent the hair from breaking rinse the hair properly and dry it up by rolling it round some roller.
Allow the customer to sit in drier for 30 minutes then remove the rollers, the hair is then oiled and combed out to suit the customer’s choice of style and the end product is perm having the hair straight and firm 2. 5. 2 CURL KIT The customers hair is applied some curl kit relaxer that strengthens the hair but in early manner. It is then washed off after its elapse of some time as per the instruction on the relaxer container and rinsed thoroughly. The customer sits in a drier to allow the hair dry up for 20 – 30 minutes the hair is then oiled with curt kit get, combined out and stled according to the customers tade.
The straight curl hair is the end product which we call curl kit. 2. 5. 3 TONGING This is where the hair, after being relaxed, it is washed off the relaxer and rinsed thoroughly. The hair is rolled around rollers and the customer sits in a drier for 30 minutes. The hair is then tonged using hot tongs usually heated in an electric machine to certain temperature tolerable to the hair texture. After complete tonging, the hair is then styled up to fit the clients taste. This leaves the hair curled firm and in an organized manner thus tonging. 2. 5. 4 PEDICURE
This is where the clients legs are brushed/rubbed, toe nails are washed, filed and cuticles removed to put them into good shape. They are then washed again with warm water, rinsed and dried with a towel, oiled and massaged. The toe nails are then polished leaving them clean and pleasant to look at. 2. 5. 5 FACIAL SCRUB AND STEAM This involves steaming clients face by use of an electric face steamer. The client bows down with her face inside the steamer for about 15 minutes. When the heat/steam gets in to contact with the skin, it opens up its pores thus letting out water and oil under the skin.
The blackheads are then removed from the skin/pores using a cleaner which shall be determined by the skin type. The facial scrub is then applied on the face and gently massaged by a beautician evenly in a circular movement using a finger. The scrub is then washed off, rinsed and followed by a toner which cleanses the skin thoroughly, and then a moistener applied to give a pleasant facial look. The process removes the dead skin and blackheads revealing a new, fresh, smooth, soft and gentle beautiful skin pleasant to the to touch. 2. 5. 6 BRAIDING
The hair is plaited by adding artificial hair on the natural hair. They are either uniform or in lines or small portions of hair plaited either short or long depending on the size of the clients taste or size of the additional artificial hair being used. The hair dresser may make thick or thin braids depending on how much money the client intends to spend on the braids because the smaller the size of the braids the more money you pay. After fixing the whole hair taking a specific style either in lines or small portions or hair braided, the end result is braids. 2. 5. 7 WEAVING
The customer’s natural hair is added on artificial hair inform of a weave. The weave replaces the customer hair enabling it to relax, grow and strengthen leaving the customer satisfied with the artificial weave for a particular period of time. In addition to the above, clients coming for braiding shall benefit since they will be charged according to size unlike the salon around which has a fixed price for braiding no matter the size. Products/services like pedicure will be accompanied by free nail art for the finger nails which other salons in the region don’t offer.
For weaving, clients will enjoy the right of coming back for any changes they would like be made provided they come back before the elapse of one month. This makes the products/services more unique compared to those offered by other salons. 2. 6 JUSTIFICATION OF ORPOTUNITY Since the business is located at a convenient place and it gives services in a special way compared to other businesses in the same industry and same locality, there is an opportunity of giving the salon more popularity which will facilitate faster growth.
Nairobi has grown over the years in population and the business world and this has made it easier for businessmen to invest more of their properties into the business that it had been in the part for few years. The business venture will also be a success because it intends to satisfy customer’s special needs effectively since it will only hire qualified beauticians and hair dressers from Pivot Point International of beauty and hairdressing in order to emphasize on quality and professional services which will be an advantage over others according to the feasibility study carried out by the proprietors.
She also found out that most of businesses in the same services are not keen on the qualifications of whom they employ as long as they can give the service asked for by the customer. 10 years younger Hair and beauty salon will also have a code of dressing for its staff where by the proprietor will have uniforms for them. Uniform of skirt suits and trouser suits will have a logo of the business on them. This will make it special and different from others since it will earn more credibility for its professional manner of dressing thus giving customers some confidence that they are being attended to by a decent staff.
It will also identify in the market since staff members will be associated with this business wherever they will be thus promoting awareness to potential customers. The salon will also provide services like accepting visa cards for payment services which is not common with many businesses in the same market according to the study named out by the proprietor. This will attract more customers because of the extension of credit facilities but in a wise manner since it will only be on condition that the client’s bank accepts to debit their accounts.
This will not lose money as much as the credit facilities which are only built and dependent on the customer to come and honor their bills. 2. 7 INDUSTRY 10 years younger Hair and Beauty salon falls under cosmetology industry and is where it will operate. It is a growing industry compared to other industries and has bigger share in the market. The salon will adopt modern technology and will employ few employees whose number will increase as the business expands. The industry is getting bigger as well as experiences sales maximization due to the advertisement it airs on T.
V through various programs on hair care. 2. 7. 1THE HAIR AND BEAUTY CARE INVENTION Hair dressing is the art of arranging the hair or otherwise modifying its natural state. It has been an important part of the dress for both men and women since antiquity like dress serves a number of functions. Almost all societies have found it necessary tom cut or confine the hair in order to keep it out of the way. They further arranged their hair to fulfill a man’s basic desire for adornment which may vary inform from the ornately curled, blond wigs to sleek shin glad heads of flappers in the 1920’s.
One extremely important function of hair styling especially in traditional pre-industrial societies is to indicate statues primitive men for instance fastened bones, fitness and other objects in their hair to impress the lowly and frighten the enemy with their rank and progress. Noble rank among the ancient was indicated by long hair. The religious significance of hair is seen in the shaved hair is seen in the shaved hair of Christians. Hair arrangement could also proclaim age and marital status e. g. boys in the ancient Greece cut their hair and Hindu boys shaved their hair when they reached adolescence.
In Europe maidens wore uncovered flowing hairstyle while matrons bound theirs under the veils. From late middle ages, hairstyles in the west have been greatly influenced by changing fashion. 2. 8 BUSINESS GOALS Ten years younger hair and Beauty salon is going to be a profit making enterprise and whose aim will be looking into customer interests and cater for them in order to retain them. This will be achieved through utilization of the skills acquired to provide quality services to customers at fair and affordable prices.
The business will also see to it that employee’s needs are taken care of by giving them the most competitive remuneration as well as conducting fair dealings with customers. The business long term goal is expanding it after reaping a precise amount of profit and establishing own school of hair dressing and beauty therapy. This will be much better we will be employing employees from own college directly into the salon. 2. 9 ENTRY AND GROWTH STRATEGY The business will easily gain acceptance in the market area since it intends superior and quality services which is an advantage over the existing business.
To popularize the enterprise, intensive advertisement through posters, signposts and billboards will be used. The owner will also ensure that the business premise is colourful and brightly painted to attract the potential customer attention. The owner intends to retain customers through ensuring efficiency in service delivery as well as identifying customer’s preferences in order to maintain them all. The business will also offer services on credit to its most trusted customers as well as entertaining and ensuring that customers not bored while being attended thus will provide magazines for reading.
The growth of business shall be known or depicted by such indicators like the increasing number of customers and employees, inadequate equipment and increased number of customers and employees, inadequate equipment and increased overdrawing duties that can necessitate such changes as expansion of the operation rite and employing of new workers. Growth may also require introduction of new products and services which will result to simultaneous sales to match the operation rate and order placement by customers. CHAPTER THREE 3. 0 MARKETING PLAN 3. 1 POTENTIAL CUSTOMERS
10 years younger Hair and Beauty salon’s target customers will be upper class women basically because our prices and services will be desirable and affordable to individuals in these classes. These will be people working mostly in offices ranging from 22 years of age with monthly salary of about Kshs. 20,000 and Kshs. 50,000. There shall be also be a considerable percentage of low class earners with various occupations including those below the above mentioned age group provided they can back up the services by paying. The customers will be served on cash on delivery basis and the services will be available throughout the week.
The salon will therefore be open as from 8. 00 AM – 9. 00PM or beyond depending on the number of customers and workload. It shall however be in operation starting from 6. 30 AM during weekends since most parents take their children to have their hair done on Saturdays as well as those who want to furnish up their look when a new week begins. The salon is therefore likely to be busy all the time since every single day people go for different beauty services. Cleanliness and neatness will be mandatory to all customers since most of them work in offices where it is carefully observed.
This is evidenced from the modernized residential estates where majority live. Therefore an average number of 6000 customers at the inception of the business is expected which will rise up as the business grows and gets well established. 3. 2 MARKET SHARE The salon intends to cater for Nairobi residents and its environs for its services. With considerable average population of 50,000, it intends to capture 20% (6000 people) of the potential customers which is about 10,000 of the total population in Nairobi city thus averaging to 6000 people for entrepreneurs targeted customers.
The nature of competition will be direct with Jawabu beauty and Barbershop, Rio hair and Beauty salon and Urembo Beauty salon as main competitors. However, with the introduction of special care unit, special customers with special needs will get special attention, modernized technology and efficiency in service delivery will put me in a much position to outdo my competitors thus secure a greater percentage to outdo market share in two years i. e. from 20% to 60%. The market will be distributed as follows Jawabu hair salon5900 x 100=19. 7% 30,000 Urembo hair salon9500 x 100=31%
30,000 10 years younger6000 x 100=20% 30000 To present this on a pie chart this will show the competitors and the amount of quantity in the market in percentages. Jawabu hair salon19. 7 x 360=70. 9 100 Urembo hair salon31. 7 x 360=114. 1 100 10 years younger20 x 360=20% 100 A pie chart showing the market share. 3. 3. 2 COMPETITORS These are a number of competitors in the same locations during the same kind of business but the products but the products and services they offer are not satisfactory to customer’s expectations according to the study carried out by the proprietor.
These include Jawabu hair and beauty salon and barbershop, Urembo hair and beauty salon, And Rio hair salon. The salon shall be located on the second floor of Kenya Cinema Building as compared to others located on the third and fourth. This is an added advantage since customers find it tedious and tiring to climb up the stairs because of lack of elevator to lift them up. Below are the competitors’ strength and weaknesses 3. 3. 1 JAWABU HAIR AND BEAUTY SALON
It is already established over the last three years. Due to its long life in business, it has an establishment capital base and has been able to expand and open another branch in Yaya centre, the presence at the barbershop within the same shelter also attract more customers since ladies who accompany male customers for a shave may opt for the service or the other it has loyal customers. Weaknesses Its employees charge different prices for the same hair styles under different occasions.
Thus they do not share a common price list which puts off customers since they are able to afford the service at a time and unable to attend to buy different staff, because the price is either lower or higher from what they were charged the previous time. The salon doesn’t hire strictly professional hair dressers and beauticians but just employ as long as they can provide service without paying much attention to quality. 3. 3. 2 RIO HAIR AND BEAUTY SALON Rio beauty Salon is a branch of Jawabu located at Yaya at Chaka place.
Strengths Is already an established salon and has been in existence for the last one year and a half. It’s location enables it to attract the high profile clientele since it is in one of Nairobi’s suburb areas. It therefore has an established capital base hence has been able to curve a niche for itself and has existing customers. Weakness Its location does not favor it much because not all clients would drive to Yaya after long day at work to have their hair done or get pedicure or even massage.
The hair packaging is inconvenient to ordinary customers since payment for retouch is not inclusive for hair styling. 10 years younger salon intends to package products differently to make them attractive and be able to justify its pricing 3. 3. 3 UREMBO HAIR AND BEATY SALON Strengths Has been in operation for six years now, has vast knowledge services being headed by a professional and qualified hair and beauty therapist situated at Barclay’s plaza where there is secure parking and the right ambience and atmosphere.
The proprietor is a well known figure with political acquaintances as well as top executive in the country and benefits from having a beauty school qualified personnel. Weakness Lack of niche curving hence the privacy of high profile clientele is not achieved as many would want thus with time the prestige come with the word Urembo will no longer exist. It’s gradually wading away because the standards have been maintained. Every other ordinary Kenyan can visit the hair parlor. 3. 4 PRICING STRATEGY
The proprietor intends to adopt a cost based pricing method, several factors shall therefore put into consideration when setting price for the service the cost involved in obtaining products that will be based in the business as well as promotional costs incurred and then adding enough to cover direct expenses and overheads plus the profit. This will ensure that the proprietor breaks even and guard against losses since all costs will be covered. The selling price will therefore be calculated as selling price= cost of materials = other expenses (transport, promotion and advertisement+ profit).
Other factors like the competitors price shall also play a role in arriving at the final price for services as well as the demand for services. They will be charged affordably compound to competitors i. e. Kshs. 30. 00 difference less than or more than depending on the type of the services being offered. The proprietor shall consider 25% for himself and at times after discounts especially during special holidays like valentines, Easter, Christmas and other public holidays. Government policies shall also determine pricing to an extent e. g.
heavy duty imposition on the higher price charged, most trusted and with established customers shall be offered credit facilities to be paid for after one month expectation but no interest shall be charged. 3. 5 SALE TACTICS The salons services will be provided directly to customers from one centre. This means that all clients shall be met served in the business which will provide a perfect opportunity to relate with the client. The business shall not at any time involve any distribution or agent in delivering services and potential customers will be coming at the business premises by themselves.
Receipts will be processed for the clients or control purpose and for easy documentations of the day’s returns. Due to the future of the proprietors clients work. The proprietor will require that appointment be made earlier for better planning and service delivery. 3. 6 METHOD OF PROMOTION AND ADVERTISING Since the business will be new in the market, the proprietor shall use several forms of advertising and promotion to make it known to a vast population to create a great deal of publicity and awareness. This will help increase sales. 3. 6. 1 ADVERTISING
To inform the customer of the new business and the services available the proprietor will use the following. Posters Larger posters with colourfull decorations will be printed and strategically placed on several walls of premises, trees to capture the attention and potential customers. The posters will enable them to learn of the new salon to be opened. They shall welcome all the esteemed customers to a grand opening of the new salon. The method is much cheaper and effective since it will only require printing on a sheet of paper, which it will only about 500 copies with an estimated cost of kshs.
5,000. Signposts There shall be one large sign post outside the business premises with bright colourful and legible writing on it informing of others. Sign posts shall be made at convenient places indicating the location of business for customers to easily trace it. The products and services to be offered shall also included in the signpost thus an estimated cost of kshs. 1,500. 3. 6. 2 PROMOTION Regular promotion campaigns and sale promotion will be organized at least twice every four months more so during mid month when customer caring has dwindled.
This will include giving discount of 10% of the charged. Selling price which is 100% (100% – 10%) reducing to 90% which is affordable by customers at such time of the month. Free services like cutex application shall also be offered during the time of promotion thus an estimated cost of kshs. 3500 thus amounting to the total cost of kshs. 10,000 for the advertising and promotion. 3. 7 DISTRIBUTION STRATEGY The flow of services will be directly from produce to customer; this implies that the producer who is the proprietor and staff will be delivering services directly to the customers.
This shall help in building and cultivating good relationships with customers and personal contact with them. Service consumer This channel will as well ensure flow of information on what the customers feel should be done to improve the quality of services when necessary. As for transportation a material/products an estimate of about Kshs. 5000 will be required to cater for transport coast from the supplier that so located far from the business premises and their within Nairobi city which shall require little cost. CHAPTER FOUR 4.
0 ORGANISATION AND MANAGEMENT PLAN The chart below shows an organizational structure of various levels of personnel. GENERAL MANAGER OFFICE ADMINSTRATOR HAIR DRESSERSBEAUTICIANS SHMPOO GIRLSCLEANER/MESSENGER 4. 1 BUSINESS MANAGEMENT AND QUALIFICATION 10 Years younger hair and beauty salon is to be managed and solely run by John E. Onyango as the general manager with the assistance of an office administrator. He will be accountable for all business transactions or a daily business having undergone a six month training hence process a certificate in hair dressing.
He has also gained considerable business management knowledge having studied entrepreneurship education in his currently pursued course. Duties Setting goals, policies and other objectives for business. Staff recruitment and firing. Making and approving decisions and overseeing the overall and the daily running of the business. Approval of supplies as well as suppliers. Making payments to creditors and staff salaries. Arranging for business finance with banks and other financial institutions. He will also have other responsibilities like ensuring business success, proper and effective communication. 4. 2 PERSONAL NUMBER AND D