Business Plan for Style n’ Smile Beauty Salon

Style n’ Smile is a beauty salon that offers a wide range of beauty services and products. The salon's mission is to provide quality services in a friendly environment at affordable prices. The competitive edge of the salon is its wider range of products and services. The marketing strategy is based on word of mouth and special offers. The personnel plan includes a receptionist, barber, hair stylists, facialist, nail technician, and massage therapist. The financial plan includes assumptions of revenue increase and important assumptions.

Running Head: BUSINESS PLAN 0
Business Plan

BUSINESS PLAN 1
Executive Summary
Style n’ smile is a beauty salon that provides all the salon services by satisfying its customer
through quality services, friendly environment in lower prices. In addition to this, it will also
establish a fair, friendly, as well as innovative environment by keeping in mind the ideas, hard
work and diversity.
The mission of the salon is to supply those products and services that will help in relaxing the
mind of customer’s as well physical appearance at the same time. Besides this, the motive of
salon is to provide the trending services. After taking the time of six month, salon is able to find
the good location. After finding this, it is right time to start the new venture. The dream of owner
to start the salon in future by serving as high profession has h the dream true by opening this
salon.
Mohamed, who is co-owner with Ahmed worked in a well-known and renowned salon which is
on larger scale in Dubai, UAE. Due to working for last two year, Mohamed has good contact
with various clients. It is also known for the dedication and hard work. Mohamed as well as hard
working team of beauticians has made the venture successful. In future, the salon is expecting
the growth by connecting with new clients as well as by getting the support of beauticians.
Therefore, in order to achieve this objective, salon is going the seek the loan for financing.
Further, the loan will be paid through cash flows of the business backed by the experience,
characters as well as guarantees.

BUSINESS PLAN 2
1.1 key of success
The reasons of success of business is as follows-
1. Environment- ensuring the customers great service with relaxing and positive
environment at salon. It also ensures the professional service to its customers.
2. Location- Salon is located at the easy accessible location for the customers.
3. Reputation- Due to its best services by the staff and reputation of owner, it is achieving
great success.
4. Wide variety of products and services- Offering the customers wide range of services in
affordable prices.
Company Summary
Style n’ Smiles offers the wide range of products as well as services related to beauty. It also
provides the nail and skin services, improvement in hair quality besides proving the best beauty
products. Style n’ smile believes that its commitment in providing wider range of services at best
location is the reason that keeps it apart from the competitors. The salon will be located in Dubai
mall which will include the 1,540 square feet of space. It has chosen the best location in the
Dubai which is one of the busiest mall. In addition to this, it is accessible across almost part of
town.

BUSINESS PLAN 3
2.1 Start-up summary
After the research of too many months for purchasing of salon, owner decided to initiate the idea
of salon in ground. For this, start-up capital will be used in improving the condition, purchasing
the equipment of salon as well as for design. The leasehold improvement was estimated
approximately AED119, 06000, and the cost for equipment will cost approximately AED99, 360.
In addition, the owner will also invest the cash of AED840 at starting.

BUSINESS PLAN 4
Start-up Expenses
Rent deposit AED 6,687
Other AED 0
TOTAL START-UP EXPENSES AED 6,687
Start-up Assets
Cash Required AED 1,840
Other Current Assets AED 2,208
Long-term Assets AED 218,960
TOTAL ASSETS AED 223,008
Total Requirements AED 229,695
START-UP FUNDING
Start-up Expenses to Fund AED 6,687
Start-up Assets to Fund AED 223,008
TOTAL FUNDING REQUIRED AED 229,695
Assets
Non-cash Assets from Start-up AED 221,168
Cash Requirements from Start-up AED 1,840
Additional Cash Raised AED 0
Cash Balance on Starting Date AED 1,840
TOTAL ASSETS AED 223,008
Liabilities and Capital
Liabilities
Current Borrowing AED 0
Long-term Liabilities AED 227,854
Accounts Payable (Outstanding Bills) AED 0
Other Current Liabilities (interest-free) AED 0
TOTAL LIABILITIES AED 227,854
Capital
Planned Investment
Owner AED 1,840

BUSINESS PLAN 5
Investor AED 0
Additional Investment Requirement AED 0
TOTAL PLANNED INVESTMENT AED 1,840
Loss at Start-up (Start-up Expenses) (AED 6,687)
TOTAL CAPITAL (AED 4,846)
TOTAL CAPITAL AND LIABILITIES AED 223,008
Total Funding AED 229,695
Products and Services
Style n’ smiles offers the wide arrange of products and services that includes the:
 Hair- In this, it will provide the cutting, colors, perms, shampoo, relaxer, conditioning,
reconstructing, curling as well as waving.
 Nails-in this, it includes polish, pedicure, manicures and sculptured mails.
 Skin care- it includes the Body waxing, European facials as well as massage.

BUSINESS PLAN 6

BUSINESS PLAN 7
Strategy and implementation summary
Innovative services, better customer service and friendly environment at salon is
necessary for implementing the business plan.
4.1 Competitive edge
In order to set the salon apart from other salons who only offers some of the products and
services, it has decided to offer the wider range of products and services. Due to the experience
of Mohamed in other salon, it interpreted that clients remain frustrated due to availing of one
service from other and other service from another. They have to go to one salon for nail and
other salon for hair. Therefore, Style n’ smiles has decided to offer all the services at one place
so that customer feel delighted.
There are several other salons like our salon but they are situated in high income areas of Dubai.
We are not aiming to compete with those. The desire is only to offer those services to customers
who cannot afford to avail those luxury service. For fulfilling’s this aim, our environment of
salon will be so much relaxing. In addition to this, soft drinks will be offered to the clients.
Televisions will also be there in the salon in the waiting area.
4.2 Marketing strategy
Style n’ smiles salon marketing mix is too simple. It is just satisfying the customers by using best
marketing tools. It is simple whenever any client will leave the business by satisfaction, it will
definitely recommend it to everyone by our quality. Most of the clients are the referrals from our
current clients.
There is no such advertising campaign. We have done lot of research and it is founded that word
of mouth is the best method to so publicity of the business. However, we will offer some special
offers in a week. In addition, we will also give the discount to those clients who will approach
clients. A lottery system is also planned in which we will offer a trip. For getting lottery, client
will offer a client and we will put a card in a box in the name of each client person will bring. In
this way, there will be more chances of lottery if they will bring more clients.

BUSINESS PLAN 8
4.3 Sales forecasting
The charts and tables that are presented below will show our projected sales. We are expecting to
increase the flow of income in the upcoming three years due to its quality services. Some
revenues are also expected in the second year. We do not list any direct cost for services. As the
service cost are already tracked in the regular monthly expenses.

BUSINESS PLAN 9
SALES FORECAST
YEAR 1 YEAR 2 YEAR 3
Sales
Owner AED 182,528 AED 209,907 AED 241,761
Stylist #1 AED 182,528 AED 209,907 AED 241,761
Barber #1 AED 61,824 AED 71,097 AED 81,762
Stylist #2 AED 83,904 AED 94,288 AED 108,431
Stylist #3 AED 0 AED 80,960 AED 88,320
Nails and massage AED 66,240 AED 73,600 AED 80,960
Product sales AED 35,328 AED 36,800 AED 40,480
TOTAL SALES AED 612,352 AED 776,560 AED 883,108
Direct Cost of Sales Year 1 Year 2 Year 3
Product Costs AED 15,897 AED 15,824 AED 16,192
Other AED 0 AED 0 AED 0
Subtotal Direct Cost of Sales AED 15,897 AED 15,824 AED 16,192
4.4 Milestones
Charts and tables of milestones show the specific detail regarding all the program activities that
will take place in the whole year. Each activity has its starting date, manager, ending date as well
as allocated budget. After the completion of the activity, proper check will be done regarding the
completion of work.

BUSINESS PLAN 10
MILESTONES
Milestone Start Date End Date Budget Manager Department
Sample Milestones 1/4/2018 1/4/2018 AED 0 AHMED Department
Finish Business Plan 8/20/2018 9/19/2018 AED 368 MONA Boss
Acquire Financing 8/30/2018 10/19/2018 AED 736 ZAHRAA Legumes
Ah HA! Event 9/9/2019 9/14/2018 AED 220 MARYAIM Bosses
Ah Merde Alors!
Event
10/9/2018 10/14/2018 AED 920 MARYA Marketer
Grande Opening 10/19/2018 10/24/2018 AED 1840 MOHAMED Nobs
Marketing Program
Starts
9/19/2018 10/14/2018 AED 3680 GAWAHER Marketers
Plan vs. Actual
Review
2/14/2019 2/21/2019 AED 0 VALLERY Planner
First Break-even
Month
6/18/2019 7/18/2019 AED 0 ALLAN Sales
Hire Employees 5/17/2019 6/16/2019 AED 552 ASHRAF HRM
Upgrade Business
Plan Pro
8/5/2019 8/7/2019 AED 368 AMONA Bossies
Totals AED 8,685

BUSINESS PLAN 11
Management summary
Style n’ Smiles salon will be managed and systematized in very innovative as well as creative
way in order to maximize the customer’s satisfaction. In addition, it uses innovative fashion to
creative such working climate which also economically satisfy the employees.
Training is also an important element in the salon. Various training programs are conducted to
improve the skills of employees on regular basis. When the business grows, company will offer
the various benefits and packages of vacations and health for each one.
5.1 Personnel Plan
It includes the receptionist who will politely handle the customers as well as take the payment of
services and products they avail. There will be one barber, five to six stylists for hair, one
facialist, one nail technician, and one or two massage therapist. Among all, receptionist work
will be to contact the customers and it is something commission based work based on the
revenue that salon will get. The future plan is to hire the shampoo technician whenever the
business will grow.
In the initial year, assumptions are of a barber, three hair stylist, part time facial, nail and
massage technician till the business get a high reputation for attracting others to work in salon.
PERSONNEL PLAN
YEAR 1 YEAR 2 YEAR 3
Owner (Stylist) AED 88,320 AED 92,000 AED 95,680
Receptionist AED 52,992 AED 55,642 AED 58,424
Shampoo Tech AED 29,440 AED 45,632 AED 47,840
TOTAL PEOPLE 3 3 3
Total Payroll AED 170,752 AED 193,274 AED 201,944
Financial plan

BUSINESS PLAN 12
In the first month, our salon objective is to earn some profit. The important thing is that salon is
not required to wait for long since the stylist already has some clients in their list. For assuring
the financial stability of owner, financial statement is surrounded which includes the dividend
income as well income from investments (AED 10,451), commission income (AED 55,200), and
salary (AED 109, 141).
6.1 Important assumptions
All the financials enclosed have various assumptions:
Revenue is estimated to increase 15% annually by increment of 20% in November as well as
December due to jump in revenue in this year. We are also anticipating the increase to continue
grow through the coming years due to increase in the new clients at salon. The estimation for
growth and revenue are decided intentionally low whereas estimated expenses are inflated high
in order to show the worst case.
We do not use the “cost of goods sold” in doing the calculation of net service sales. However, it
will include the frequent expenses like supplies, payroll in the area of operating expenses (profit
and loss table).
Sales of product are at minimal in our market. Salon is not sure regarding the money that will be
receive from products so we have took estimation of low ball approach by estimating the sales of
AED2,944 per month. In the projected sales table, Services reading massage and nail are
included. We are also not sure regarding the revenue that this revenue will generate. Therefore,
the estimation of revenue from these services are estimated at AED 5,520 per month in the initial
year.
GENERAL ASSUMPTIONS
YEAR 1 YEAR 2 YEAR 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

BUSINESS PLAN 13
6.2 Projected cash flow
Our salon is expecting the management of cash flow In the next three by growing the cash flow
of business. The salon business will generate the enough cash flow that covers the expenses.
PRO FORMA CASH FLOW
YEAR 1 YEAR 2 YEAR 3
Cash Received
Cash from Operations
Cash Sales AED 612,352 AED 776,560 AED 883,108
SUBTOTAL CASH FROM
OPERATIONS
AED 612,352 AED 776,560 AED 883,108
Additional Cash Received
Sales Tax, VAT, HST/GST Received AED 0 AED 0 AED 0
New Current Borrowing AED 0 AED 0 AED 0
New Other Liabilities (interest-free) AED 0 AED 0 AED 0
New Long-term Liabilities AED 0 AED 0 AED 0
Sales of Other Current Assets AED 0 AED 0 AED 0
Sales of Long-term Assets AED 0 AED 0 AED 0

BUSINESS PLAN 14
New Investment Received AED 0 AED 0 AED 0
SUBTOTAL CASH RECEIVED AED 612,352 AED 776,560 AED 883,108
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending AED 170,752 AED 193,273 AED 201,943
Bill Payments AED 366,307 AED 473,726 AED 542,008
SUBTOTAL SPENT ON OPERATIONS AED 537,059 AED 667,000 AED 743,952
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out AED 0 AED 0 AED 0
Principal Repayment of Current
Borrowing
AED 0 AED 0 AED 0
Other Liabilities Principal Repayment AED 0 AED 0 AED 0
Long-term Liabilities Principal
Repayment
AED 44,160 AED 44,160 AED 44,160
Purchase Other Current Assets AED 0 AED 0 AED 0
Purchase Long-term Assets AED 0 AED 0 AED 0
Dividends AED 0 AED 0 AED 0
SUBTOTAL CASH SPENT AED 581,219 AED 711,160 AED 788,112
Net Cash Flow AED 31,132 AED 65,400 AED 94,995
Cash Balance AED 32,972 AED 98,377 AED 193,372
6.3 Break even analysis
The break-even analysis depicts that Style N’ Smiles has enough balance of fixed costs as well as
well good sales in order to grow. This calculation focuses on the service sales as well as excludes
cost related to the sales of products. Our salon has forecasted that the salon will pass the
breakeven analysis in the initial year but we are expecting the actual sales a bit higher.

BUSINESS PLAN 15
BREAK-EVEN ANALYSIS
Monthly Revenue Break-even AED 47,821
Assumptions:
Average Percent Variable Cost 3%
Estimated Monthly Fixed Cost AED 46,577
6.4 Projected Profit and Loss
The table showed below shows the profit and loss for the coming three years. Therefore, table
includes all the payment for contracted stylist independent, supply expenses recurring regularly,
as well as expenses of technicians.

BUSINESS PLAN 16

BUSINESS PLAN 17

BUSINESS PLAN 18
PRO FORMA PROFIT AND LOSS
YEAR 1 YEAR 2 YEAR 3
Sales AED 612,352 AED 776,560 AED 883,108
Direct Cost of Sales AED 15,897 AED 15,824 AED 16,192
Other Costs of Sales $0 $0 $0
TOTAL COST OF SALES AED 15,897 AED 15,824 AED 16,192
Gross Margin AED 596,454 AED 760,736 AED 866,916
Gross Margin % 97.40% 97.96% 98.17%
Expenses
Payroll AED 170,752 AED 193,273 AED 201,943
Marketing/Promotion AED 83,904 AED 88,320 AED 95,680
Depreciation AED 29,977 AED 29,977 AED 29,977
Rent AED 83,904 AED 83,904 AED 83,904
Utilities AED 15,456 AED 15,456 AED 15,456
Insurance AED 4,416 AED 4,416 AED 4,416
Payroll Taxes AED 0 AED 0 AED 0
Independently contracted stylists AED 148,672 AED 202,400 AED 253,920

BUSINESS PLAN 19
Supplies AED 22,080 AED 22,080 AED 22,080
Other AED 0 AED 0 AED 0
Total Operating Expenses AED 558,940 AED 639,606 AED 707,156
Profit Before Interest and Taxes AED 37,513 AED 121,130 AED 159,759
EBITDA AED 67,491 AED 151,108 AED 189,737
Interest Expense AED 20,394 AED 16,162 AED 11,746
Taxes Incurred AED 5,137 AED 31,489 AED 44,402
Net Profit AED 11,985 AED 73,478 AED 103,610
Net Profit/Sales 1.96% 9.46% 11.73%
6.5 Projected Balance Sheet
As shown in the balance sheet, salon is expecting the healthy growth.
PRO FORMA BALANCE SHEET
YEAR 1 YEAR 2 YEAR 3
Assets
Current Assets
Cash AED 32,973 AED 98,377 AED 193,372
Other Current Assets AED 2,208 AED 2,208 AED 2,208
TOTAL CURRENT ASSETS AED 35,180 AED 100,585 AED 195,580
Long-term Assets
Long-term Assets AED 218,960 AED 218,960 AED 218,960
Accumulated Depreciation AED 29,977 AED 59,954 AED 89,931
TOTAL LONG-TERM ASSETS AED 188,983 AED 159,005 AED 129,028
TOTAL ASSETS AED 224,163 AED 259,591 AED 324,609
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable AED 33,330 AED 39,438 AED 45,006
Current Borrowing AED 0 AED 0 AED 0
Other Current Liabilities AED 0 AED 0 AED 0

BUSINESS PLAN 20
SUBTOTAL CURRENT LIABILITIES AED 33,330 AED 39,438 AED 45,006
Long-term Liabilities AED 183,694 AED 139,534 AED 95,374
TOTAL LIABILITIES AED 217,024 AED 178,973 AED 140,380
Paid-in Capital AED 1840 AED 1840 AED 1840
Retained Earnings AED 6,689 AED 5,299 AED 78,777
Earnings AED 11,986 AED 73,478 AED 103,610
TOTAL CAPITAL AED 7,139 AED 80,617 AED 184,228
TOTAL LIABILITIES AND CAPITAL AED 224,163 AED 259,591 AED 324,609
Net Worth AED 7,139 AED 80,618 AED 184,228
6.6 Business Ratios
All the business ratios are shown below. Profile ratios of industry based on the SIC that is
Standard Industrial Classification in Beauty shops and United Arab Emirates are shown below
for comparison.
RATIO ANALYSIS
YEAR 1 YEAR 2 YEAR 3 INDUSTRY
PROFILE
Sales Growth N/A 26.82% 13.72% 7.35%
Percent of Total Assets
Other Current Assets 0.98% 0.85% 0.68% 50.11%
Total Current Assets 15.69% 38.75% 60.25% 64.74%
Long-term Assets 84.31% 61.25% 39.75% 35.26%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.87% 15.19% 13.86% 21.71%
Long-term Liabilities 81.95% 53.75% 29.38% 25.39%
Total Liabilities 96.82% 68.94% 43.25% 47.10%
NET WORTH 3.18% 31.06% 56.75% 52.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 97.40% 97.96% 98.17% 100.00%

BUSINESS PLAN 21
Selling, General & Administrative
Expenses
95.45% 88.50% 86.43% 67.01%
Advertising Expenses 4.90% 3.86% 3.39% 2.18%
Profit Before Interest and Taxes 6.13% 15.60% 18.09% 4.59%
Main Ratios
Current 1.06 2.55 4.35 1.97
Quick 1.06 2.55 4.35 1.46
Total Debt to Total Assets 96.82% 68.94% 43.25% 53.38%
Pre-tax Return on Net Worth 239.86% 130.21% 80.34% 8.92%
Pre-tax Return on Assets 7.64% 40.44% 45.60% 19.14%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 1.96% 9.46% 11.73% N/A
Return on Equity 167.90% 91.15% 56.24% N/A
Activity Ratios
Accounts Payable Turnover 11.99 12.17 12.17 N/A
Payment Days 27 28 28 N/A
Total Asset Turnover 2.73 2.99 2.72 N/A
Debt Ratios
Debt to Net Worth 30.41 2.22 0.76 N/A
Current Liab. to Liab. 0.15 0.22 0.32 N/A
Liquidity Ratios
Net Working Capital $503 $16,616 $40,917 N/A
Interest Coverage 1.84 7.50 13.60 N/A
Additional Ratios
Assets to Sales 0.37 0.33 0.37 N/A
Current Debt/Total Assets 15% 15% 14% N/A
Acid Test 1.06 2.55 4.35 N/A
Sales/Net Worth 85.79 9.63 4.79 N/A
Dividend Payout 0.00 0.00 0.00 N/A

BUSINESS PLAN 22
Conclusion
References

BUSINESS PLAN 23
,