Business Startup Costs and Funding

The assignment provides a detailed breakdown of a hypothetical business's startup costs, categorized as fixed and variable expenses. It includes specific figures for marketing, postage, repairs, salaries, and more. Additionally, the document outlines the sources of funding for this business venture, including owner contributions and bank loans, with total start-up assets also being presented.

Running head: BUSINESS PLAN
Business Plan
Name of the Student
Name of the University
Authors Note
Course ID

1BUSINESS PLAN
Executive Summary:
Venus Beauty Saloon will be offering a wide range of hairdressing, spa service and cosmetics
services and products. Venus Beauty Saloon beauty salon will be rendering high quality of
customer satisfaction by offering excellent service, quality products and furnishing enjoyable
atmosphere for its customers at a very reasonable price. The mission of the Venus Beauty
Saloon is to provide the supply of products and service that would help in enhancing the
physical appearance of the customers with diversified ideas and hard work.

2BUSINESS PLAN
Table of Contents
Section One:...............................................................................................................................4
Description of the business:.......................................................................................................4
Products and service:..................................................................................................................4
Market Analysis:........................................................................................................................4
Marketing Plan:..........................................................................................................................5
SWOT Analysis:........................................................................................................................6
Pricing strategy:.........................................................................................................................7
Location:....................................................................................................................................7
Competition:...............................................................................................................................7
Management and operations:.....................................................................................................8
Personnel Plan:...........................................................................................................................9
Application and Effect of Loan or Investment:........................................................................10
Section Two: Financial Data....................................................................................................10
A. Projected Financial Statement:......................................................................................10
Income Statements...................................................................................................................10
Cash Flow Statements:.............................................................................................................11
Balance Sheets:........................................................................................................................12
Assumptions to projected financial statements........................................................................13
B. Break Even Analysis...........................................................................................................14
Section Three:..........................................................................................................................16

3BUSINESS PLAN

4BUSINESS PLAN
Section One:
Description of the business:
The company Venus Beauty Saloon would be in the form of partnership business that
will be providing services by commencing its operations of selling wide range of beauty
salon products. The business will be offering its customers with quality hair nail and skin
service together with the top line beauty products. Additionally it will also provide spa and
sun bathing service to its customers. The company will be under the partnership with 50%
percent shares for each of the two partners.
Products and service:
Venus Beauty Saloon understands that greater customer service comprises of
complete service under one roof. The services of Venus Beauty Saloon consists of
hairdressing, body cosmetics, nail styling, spa and sunbed will be meeting the needs of high
standard anticipations.
The main services comprises of the following;
 Hair; Cuts, colours, curling, conditioning, reconstructing, waving.
 Nails: Manicures, pedicure, polish, sculptured nails.
 Skin care: Facial, waxing of body, massage and facial masks.
 Sunbed: Spa
Market Analysis:
There are large number of saloons in the regions of Jordan and in the past decade, the
beauty salon industry has experienced an unparalleled growth. An important consideration to
note in this context is that the number of beauty salons has increased by an average of 20 per
cent yearly over the last ten years. The number of spa locations has also gained significantly

5BUSINESS PLAN
since the year 2001. It is worth mentioning that growth in new facilities has increased
recently from the year 2006 when the amount of such beauty salons increased by 20.96%.
There are around 12,000 beauty salon in Jordan and according to the statistical reports 6 out
of 10 are day saloon. In the modern age, the revenue generated from the beauty salon industry
stands around $12 billion yearly with a growth of 25% yearly.
In the recent years, salon haves constantly offered the customers with the value even
though their prices have increased at the rates identical to the overall inflation rate. As per the
Bureau of Labour Statistics, the consumer price of index for haircuts and other forms of
personal care service have peaked at the rate of 4% every year in the last ten years. As per the
industry experts in 2007 prices for haircuts and other kinds of personal care have outclassed
the inflation rate.
Marketing Plan:
The marketing strategy for the company will be primarily based on the target market,
as the ultimate motto of Venus Beauty Saloon will be satisfying the clients with best
marketing tools. The target market will be students that are in the university along with
outside participants such as pre-teens would also be making the small percentage of the
market. Venus Beauty Saloon would be employing advertising campaigns as the research has
represented that advertising forms the best forms of sales promotion for promoting the
marketing campaign.
The marketing plan of Venus Beauty Saloon would be also asking its clients for
referrals and would reward them with discounted or free service by relying on the number of
clients they bring. Venus Beauty Saloon will also provide discounts to the new clienteles that
been referred to the new clients. The marketing plan will also comprise of building

6BUSINESS PLAN
community relationships with the help of quality service, friendly and caring atmosphere to
make sure that complete dependability of the customer’s service is maintained.
The marketing plan will also encompass sales strategy with the activities of reaching
clients, inexpensive variances and resources available. Marketing plan would also involve
regular selling, prospecting, and sales process and follow up.
SWOT Analysis:
Strength
a. The location of the building will be
result in good amount of high
footfall
b. Large variety of service will be
offered to customers
c. Excellent experience for the
customers
d. Extended hours of opening
e. Experts with strong knowledge in
beauty courses
Weakness
a. The weakness lies in the inflexible
working hours of the staff
b. Not having sufficient amount of
internet market promotion
experience
c. No facilities of booking an
appointment with the help of online
facilities
Opportunities
a. There is an opportunity for strong
market growth
b. Large stock of organic products
c. Development of packages for female
barbering and grooming
Threat
a. The business faces threats from the
home visit stylists and beauticians
b. Discounting provided by the
competitors outside the university
building
c. Higher cost of having best stylists

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and technicians
Pricing strategy:
Venus beauty salon will be price its hair and beauty products in the range of 50.00 to
125.00 Jordanian Denier. This cost will generally not vary much from the other competing
beauty salon since there is a standard price which salon might charge for its beauty products.
The make up products and service offered by the Venus beauty salon will be ranging from
65.00 to 225.00 Jordanian Denier. It can be stated that the standard pricing is in comparison
to the competing salons. The service will average 50.00 to 130.00 Jordanian Denier for a hair
trim to beauty make-ups. The prices are set lower than the competitors prices.
Unique Selling Proposition:
The unique selling proposition of Beauty Salon are as follows
a. Premium and deluxe hair smoothening and make service
b. Reasonable prices with wide variety of hair cuts and large amount of home made
treatment
c. Friendly customer environment and quality service
Location:
The saloon will be located in the urban districts of Jordan and the salon will be
making use of the 1,540 square feet area to operate. The location of the salon is strategically
situated in the location of the university to make an ideal use of the location and to generate
profit. It is worth mentioning that the location of the salon will help in gaining access to the
customers from all the parts of the city.

8BUSINESS PLAN
Competition:
Venus Beauty Saloon would be looking forward to set its self apart from other kinds
of beauty salons that may offer only one or two forms of service. The business of salon
requires high kind of specific training and skills and it is market that is dominated by skills
and training. Apart from this, a search of nail business in Jordan have revealed that there are
some salon that located in inconvenient remote areas. Among the other complaints, there
were poor service, inaccessibility, insufficient facilities of parking and disproportionately
charging of higher price for the quality of service that is rendered. Success in this kind of
business is largely dependent on the quality of service provided to the customers with
comfort and cleanliness of the premises.
Beauty salons normally restrict their business of nail care to manicure or polish
applications and usually fails to provide nail care service that is often demanded by the
public. It is evident that women does not hesitate to pay for the quality service and Venus
Beauty Saloon holds the intention of providing such kind of service to this market at the very
competitive price. Venus Beauty Saloon looks forward to establish a competitive edge in the
newly target market by expanding the level of contact with the customers and service which
other competing firms often fails to deliver. Venus Beauty Saloon competitive edge would be
viewed as the combination of service that are unique and outstanding from the other beauty
salon service providers.
Venus Beauty Saloon possess the required skills to generate the high quality products
and service that are required to operate in this market. The establishment of the work
procedure will make sure that greater customer’s service will help in strengthening the
contacts that would promote the marketing and promotion strategy of Venus Beauty Salon.

9BUSINESS PLAN
Management and operations:
The management and operational plans for Venus Beauty Saloon will be hiring a
manager and three employees to execute its operational activities. All the employees together
with the manager will possess the skills and expertise in beauty course. An important
consideration to denote for the management and operational plan is that the company will be
hiring additional employees only when the volume of customers increases.
To execute the operational activities of Venus Beauty Saloon all the main supplies
such as hair care products, towels, capes etc. would be purchased from the hair warehouse,
which is conveniently located in the central market of Jordan. Following the commencement
of the operations for the first three months a credit ratings will created for all the items and it
will be paid based on the cash on delivery process. Upon the creation of the credit rating an
account will be established through which all the payments will be made in a span of every
thirty days. Items that cannot be purchased from the hair were house the same will be
purchased from the Tranquiller Lots, which is located in the 296 Main Street in Jordan. The
supplies that are purchased from the Tranquiller Lots will be paid in the form of cash on
deliver.
Personnel Plan:
The ultimate objective of the personal plan is to increase the productivity and reduce
the burden of labour on the operating expenditure of the Venus Beauty Salon. With the
growth of the business the Venus Beauty Saloon looks forward to match the size of personal
with the increasing sales. The personnel plan of the Venus Beauty Saloon forms the base on
the respect of the each of the fellow employees, respect for every customers and individual
responsibility. Venus Beauty Saloon personnel plan will comprises of owner, general
manager and if found necessary the company will employing assistant manager (Johnson

10BUSINESS PLAN
2014). Venus Beauty Saloon will be hiring crucial “people persons” that are keen to not only
to meet the needs of the customers but also anticipates to exceed the customer expectations.
The personnel plans for Venus Beauty Saloon calls for hiring two hairdressers with
one certified cosmetician along with a receptionist who will be responsible for greeting the
customers, receiving the payments that is made by the customers and taking care of the
sunbed customers. The above-mentioned individuals will be working as the sole trader that
will be providing full time service.
PERSONNEL PLAN
YEAR 1 YEAR 2 YEAR 3
Hairdresser 20200 22220 24442
Beautician 9600 10560 11616
Receptionist 9800 10780 11858
Salon Manager 24500 26950 29645
Nail Technicians 25000 27500 30250
TOTAL PEOPLE 7 14 20
Total Payroll $89100 $98010 $107811
Application and Effect of Loan or Investment:
Venus Beauty Saloon will be requiring a total fund of $200,000. The cost will be
funded with the help of long-term loans and personal investment from the owners. The
starting funds will be mainly consisting of the supplies, equipment and fixtures. The owners
are looking forward to invest a sum of $100,000 in cash to the business and bank would be
contributing a sum of $100,000 so that Venus Beauty Saloon can cover the cost of the
working capital for the first three years of operations along with the purchase of two pedicure
spas. There will be further lease improvements cost of carpeting, fixtures and plumbing in
order to accommodate the service of pedicure.

11BUSINESS PLAN
Section Two: Financial Data
A. Projected Financial Statement:
Income Statements
(4) PROFIT AND LOSS FORECAST
Preop
Year 0 1 2 3
Revenue 0 4,25,000 4,67,500 5,14,250
Cost of sales 0 62,000 71,300 81,995
Gross profit 0 3,63,000 3,96,200 4,32,255
Gross Margin 3,08,807 3,29,888 3,64,567
Expenses/overheads
Business Insurance 11,500 11,500 11,500
Wages and salaries 89,100 98,010 1,07,811
General expenses 18,500 20,350 22,385
Accountant Fees 18,500 20,350 22,385
Payroll Tax 8,910 9,801 10,781
Utilities 15,500 17,050 18,755
Sales and Marketing 14,500 15,950 17,545
Postage & Telephone 1,550 1,705 1,876
Repairs and Maintenance 2,200 2,420 2,662
Preliminary expenses 2,250 2,475 2,723
Capital Improvement Cost 14,500 15,950 17,545
Total expenses/overheads 1,97,010 1,99,611 2,18,422
Profit before tax 1,65,990 1,96,589 2,13,833
Tax @ 30% 49,797 58,977 64,150
Before tax net margin 39% 42% 42%
Profit after tax 1,16,193 1,37,612 1,49,683
Transfer to reserves 1,65,990 1,96,589 2,13,833
ROC 116% 138% 150%
Cash Flow Statements:
(2) CASHFLOW FORECAST
Preop

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Year 0 1 2 3
CASH INFLOWS
Cash from Sales 4,25,000 4,67,500 5,14,250
Directors loans 1,00,000 1,00,000 1,00,000 1,00,000
Capital Employed 1,00,000 1,00,000 1,00,000 1,00,000
Other cash inflows
TOTAL CASH INFLOW 2,00,000 6,25,000 6,67,500 7,14,250
CASH OUTFLOWS
Payments for materials 62,000 71,300 81,995
operating expenses ( ) 0
Business Insurance 0 11,500 11,500 11,500
Salaries 0 89,100 98,010 1,07,811
Accountant Fees 0 18,500 20,350 22,385
Payroll Tax 0 8,910 9,801 10,781
Supplier contracts 0 15,500 17,050 18,755
Sales and Marketing 14,500 15,950 17,545
Postage & Telephone 1,550 1,705 1,876
Broachers 2,200 2,420 2,662
Logo Designs 2,350 2,585 2,844
Interest on loan 10% 10,000 11,000 12,100
General and Admin Expenses 1,750 1,925 2,118
Preliminary expenses 2,250 2,475 2,723
Capital Improvement Cost 14,500 15,950 17,545
Total operating Expenses 1,92,610 2,10,721 2,30,643
Corporation Tax 49,797 58,977 64,150
Loan repayments 10,000 10,000
TOTAL CASH OUTFLOWS 0 4,97,017 5,61,719 6,17,431
Cash flow summary
NET CASHFLOW FOR PERIOD 2,00,000 1,27,983 1,05,781 96,819
OPENING CASH BALANCE 0 2,00,000 3,27,983 4,33,764
CLOSING CASH BALANCE 2,00,000 3,27,983 4,33,764 5,30,583
Balance Sheets:
Balance Sheet

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Assets FY-1 FY-2 FY-3
Current Assets
Cash $1,33,580 $1,65,788 $1,62,107
Accounts receivable $4,25,000 $4,67,500 $5,14,250
Total current assets $5,58,580 $6,33,288 $6,76,357
Fixed (Long-Term) Assets
Sunbed Spa Beds $55,000 $28,000 $24,500
Equipment’s $35,000 $35,200 $28,160
(Less accumulated depreciation) $14,500 $12,300 $10,540
Total fixed assets $75,500 $50,900 $42,120
Total Assets $6,34,080 $6,84,188 $7,18,477
Liabilities and Owner's Equity
Current Liabilities
Bank Charges Payable $3,000 $3,000 $3,000
Short-term loans $10,000 $10,000 $10,000
Income taxes payable $49,797 $58,977 $64,150
Accrued salaries and wages $89,100 $98,010 $1,07,811
Total current liabilities $1,51,897 $1,69,987 $1,84,961
Long-Term Liabilities
Long-term debt $1,00,000 $90,000 $80,000
Less: Loan Repayment $10,000 $10,000
Total long-term liabilities $1,00,000 $80,000 $70,000
Owner's Equity
Owner's investment $1,00,000 $1,00,000 $1,00,000
Net Profits $1,16,193 $1,37,612 $1,49,683
Reserve and Surplus $1,65,990 $1,96,589 $2,13,833
Total owner's equity $3,82,183 $4,34,201 $4,63,516
Total Liabilities and Owner's Equity $6,34,080 $6,84,188 $7,18,477
Assumptions to projected financial statements
The tables above summarizes the important financial assumptions. All the sales are
entirely on the cash basis and services are paid for when rendered. Expenditures are paid on
net for a thirty-day time basis. All the inventories in the form of nail polishes and foot scrubs
will be paid on the cash basis and hence there will be no form of accounts payable for the
company. Additionally, during the year 50% of the capacity is projected to be utilized by the
company. This will be increased to 60% and 70% capacity in the subsequent years.

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Wages and salaries for the first year is assumed for seven person. Depreciation of the
equipment’s would be computed based on the written down value of the method. Interest on
term loans would be computed based on the yearly rate of 10% each year. Income tax will be
provided at a rate of 30% on the taxable income generated by the business. In addition to this,
the company is anticipating to maintain the gross profit margin however looks forwards to
increase the net profit margin in the subsequent three years of operations. The most vital
factor is improving the economies of scale relating to the general and administrative
expenditure.
B. Break Even Analysis
The breakeven analysis is based on the average amount of revenue generated from the
figures of the total sales by values and by the operating expenditure. The breakeven is
presented in terms of the revenue as per unit revenue, cost of per unit and fixed cost. The
assumptions made represents more accurate estimate of real risk.
Revenue Contribution Fixed Cost Profit
425000 212500 123008.62 89491.38
467500 233750 123008.62 110741.4
307521.55 153760.78 123008.62 30752.16
369025.86 184512.93 123008.62 61504.31
Breakeven Analysis
Breakeven Sales Value =
average fixed cost/%
contribution

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250000 300000 350000 400000 450000 500000
0
50000
100000
150000
200000
250000
89491.38
110741.38
30752.155
61504.31
123008.62123008.62123008.62 123008.62
212500
233750
153760.775
184512.93
Contribution
Fixed Cost
Profit
Figure 1: Figure illustrating Break-Even Analysis
B. Sources and Uses of Funds
Start-up Requirements
Start-up Expenses
Fixed Costs Particulars Amount
($)
Premises (RENT & RATES) $11,500
Salaries $89,100
Interest on loan 10% $10,000
Accountant Fees $18,500
Payroll Tax $8,910
Retainer contracts $15,500
Sales and Marketing $14,500
Postage & Telephone $1,550
Broachers $2,200
Logo Designs $2,350
Market survey $1,750
Preliminary expenses $2,250
Capital Improvements
Expense $14,500
Total Fixed Costs $1,92,61
0
Average Monthly Costs
Rent $958
Capital Improvements $1,208

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Expense
Interest on loan 10% $833
Postage & Telephone $129
Repairs and Maintenance $183
Salaries / Wages $7,425
Total Average Monthly
Costs $10,738
x Number of Months: 12
Total Monthly Costs $1,28,85
0
Total Startup Expenses $3,21,46
0
Start-up Assets
Owner Funding
Owners Fund $1,00,00
0
Total Owner Funding $1,00,00
0
Loans
Bank Loan $1,00,00
0
Other
Total Loans $1,00,00
0
Total Start up Funds $2,00,00
0
Assets
Equipment’s $35,000
Sunbed Spa Beds $55,000
Total Fixed Assets $90,000
Total Start-up Assets $2,90,00
0

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Section Three: