Business Report: Analyzing a Beauty Salon's Growth and Strategy

This business report examines the potential of a new beauty salon venture in the UK, focusing on its market analysis, business objectives, and growth strategies. The report includes a SWOT analysis, Porter's Five Forces model, and an evaluation of innovation and entrepreneurial focus. It outlines the salon's business model, promotional and marketing plans, and projected financial statements, including cash flow, profit and loss, and balance sheet forecasts. The report also emphasizes the importance of internet marketing, customer relationship management, and targeting the youth demographic. The analysis covers opportunity recognition in the beauty industry, the clarity of business objectives, and a market penetration strategy. This report provides a detailed overview of the salon's operations, financial planning, and strategic direction.

Small Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Justification of chosen sector and opportunity recognition.............................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................3
1.3................................................................................................................................................3
Analysation of sector and business plan..........................................................................................4
2.1 Clarity of business objectives and growth strategy for medium term...................................4
2.2 Business model......................................................................................................................4
2.3 Promotional and marketing planning....................................................................................5
2.4 Financial forecasts and justification of costing.....................................................................5
2.5 Proof of innovation and entrepreneurial focus......................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Number of small business organisations are continuously increasing in UK. These firms
face various kind of issues at the time of starting a new business because of various reasons like
inexperience, lack of information about different stakeholders etc. “Beauty salon” is a new
venture who is going to use online promotional tools and latest technology for achieving medium
term grow in highly competitive market (Colombo and et. al., 2012). Beauty parlour is a industry
which have seen remarkable growth in past few years. This business report will cover significant
content related like SWOT analysis, porter's five force etc. Justification about recognized
opportunity will also become part of this file. Business model, growth strategy and
entrepreneurial focus is the key content which will be included in this assignment. At the end,
financial recognition will be explained (Business Plans, 2018).
Justification of chosen sector and opportunity recognition
1.1
Nowadays there is a tremendous scope in beauty industry in UK. Beauty Salon wants to
construct its empire in cities of UK. They main focus is on youth of a nation through providing
them products and service at affordable rates at neighbourhood place.
SWOT Analysis :
 Their strength belongs to their leaders,they are of excellent leadership as well as
communication skills which came from experience. Their main professionals are fully
experiences and trained person.
 There might be a weakness in field of customers perception towards newly opened salon .
 There are huge opportunities in market because now youth generation are more
concerned about fashion and beauty.
 Threats may arise is if this organisation will not focus on youth as well as market
demands.
External factors :
 There are so many factors like political, environmental, economical, social,technological
and legal arises during the constructions of new empire of Beauty Salon throughout UK.
These all factors will helps an organisation in monitoring and tracking all business
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environments in which they wants to operate their products and services (Schermerhorn
and et. al., 2014).
 Before starting a new business in UK, Beauty Salon has to examine all government
taxation system, legal laws and regulations carefully and applied as well as follow in
appropriate manner for better future.
 They have to adopt and implement latest technology gadgets and equipments within their
organisation with their experienced professionals. This saves lot of time and money of
company as well as it saves huge time of customers which impact positively on customer
perception.
Porter's Five Force Model:
Porter's Five force Model must implement within Beauty Salon to understand competition in
business environment which helps in future to enhance its empire as well as in maintaining
customers satisfy (Alegre, Sengupta and Lapiedra, 2013).
 For competing with existing rivals, organisation has to attract customers by providing
them best quality services and products with some demo or free trails at initial level as
well as advertising through social media platform. Through these small initiatives,
customers will attract and it might helps in competing with existing rivals.
 Organisation must focus on selecting criteria of suppliers or distributors because they are
the backbone of a company. Through suppliers company is able to connect with
customers which are fare from main outlets.
 Company must focus on their quality with rates of their products and services. Because
customers easily switch from one company products or service to another organisation
products or services.
 Company must adopt new methodologies regularly or update their products and services
as per market and customer demand after certain time period. This helps in long term
benefit in field of economic growth as well as customer satisfaction (Goffee and Scase,
2015).
 In future new threats might arises because of entry of new company with innovative
methods and products or services. So They must take care about this factor also in future
and adopt new methodology as well as technology for improve their business in future.
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1.2
Innovation and Entrepreneurial :
For attain sustainable development throughout life time, Beauty Salon has to adopt new
innovative methodologies and techniques in their products and services specially in this
competitive environment. Company must collaborate with new entrepreneurs for adopt their new
techniques and approaches which helps them in saving lot of time and money.
Secondary Research:
Beauty Salon has adopt secondary research method which contains data through large
scale surveys as well as data is collected as a part of personal research or investigation. While
secondary data is the data which is available already and collected by third party from different
platforms like data through government agencies or from their websites about minimum wage,
legal laws and regulations, previous years records of other corporate companies and many more
other records or data which are requires as well as collected for research work or studies in order
to deal with different reasons or purpose which are fruitful for their organisation. This research
approach will provide details information about market demand and customer needs as well as it
provide complete market analysis about future of this sector is viable or not (Smallbone and et.
al., 2012).
There are various advantages and disadvantages of this research methodology formerly
known as secondary data research or analysis which are used or applied in various studies of
research or investigation. Secondary data research is cost and time effective as well as feasibility
of both longitudinal and international comparative studies whereas there is an fresh concern
regarding data confidentiality and security.
1.3
Opportunity recognition
Theirs is an huge opportunities at those locations which Beauty Salon had identifies for
construct their empire. Because at these places, there is lot of youth generation and working
women are living. And Beauty Salon provide them facility as per their demands like book their
appointment from their home as per their suitable time as well as provide them best quality of
service at affordable prices at their neighbourhood location (Bracci and Vagnoni, 2011).
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Analysation of sector and business plan
2.1 Clarity of business objectives and growth strategy for medium term
“Beauty Salon” is a new started firm and in present scenario, attaining significant amount
of market share is their main priority. Below of the SMART objective which is set by this
company:
 To reach the sales turnover of 20000 pounds in three year.
 To spend 2500 pounds on marketing and promotion activities.
Getting desired number of customer at initial stage is a big challenge for every firm. Setting an
objective of having aggressive sales turnover will play crucial role in attaining financial stability
(Storey, 2016). “Beauty Salon” is a start up so they have to spend decent amount of money on
promotional activities. This is important for showing their presence in the market.
Growth strategy
This company is growing to focus on two areas for assuring growth of business, first is
increase market share and second is reduction in cost of business operations. Market penetration
strategy will be chosen for attaining set target. If company will achieve yearly targets and
offering their products and services at low price then they can attain their set targets. Aggressive
marketing and promotional strategy will be used for enhancing market share and for reducing
cost, focus on increasing efficiency of employees will be considered.
2.2 Business model
“Beauty Salon” will mainly focus on providing quality services at low price. Their main
aim is to target young generation because they invest more money on their looks and buy latest
and new healthcare products (Hatten, 2012). Some popular healthcare brands like L'oreal will be
made partner so because it is a popular brand and people customer would not feel that salon is
using cheap or unsuccessful product at the time of providing services.
Key activities – Hair dressing, manicures, body massage, make up etc. will be main revenue
generating activities for this salon.
Customer relationship – Permanent customer of the firm will get special offers on non
prime days like from Monday to Thursday. This will result in more sales in off days.
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Customer segment – Women and young generation will be main target of this salon.
Make up for wedding parties will also be given high importance. Upper middle class people will
be targeted for maintaining stability in the business.
Their are various resources which will be required by management and operational team.
This salon is going to use latest tools and techniques for working. They are also going to hire
experienced people because they have more efficiency compared to inexperienced worker.
2.3 Promotional and marketing planning
Internet marketing will be carry by “beauty salon”. Firm will promote its products and
beauty services online. One of the main advantage of this type of promotion is that it provide
opportunity to firm to serve large number of customers (Schaper and et. al., 2014). Firm will
promote its services online, as today large number of individuals use internet so this will help
firm to inform large number of individuals about its offerings. This type of promotion is both
time and cost saving. Further, this will help firm in generate more profits. In this way company
can serve large number of customers.
In order to success any type of business it is important for company to use marketing
promotional tools in order to increase market sales and profitability (Sampaio, Thomas and Font,
2012). Therefore, marketing department has to planned in appropriate manner which type of
strategies work for awareing the target audience regarding the availability of beauty products.
Following factors described below in context of beauty salon:-
Free sample:- If the company want to increase the sale then they need to supply their product to
target audiences without charging price (Hatten, 2012). For example in order to increase the sale
of any beauty saloon they need to sale their beauty product at free price.
Internet marketing:- It is another way through which varieties of products are sale by designing
official website in internet which enhance their sale.
2.4 Financial forecasts and justification of costing
Projected cash flow
Projected Cash Flow Statement
2018
(£)
2019
(£)
2020
(£)
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Cash from operating activities
Net loss -1500 -500 -100
Rent received 150 150 150
Rent paid -200 -200 -200
Net cash used in operating activities -1550 -550 -150
Cash from Investing Activities
Property purchased -3500
Net cash used in Investing activities -3500 0 0
Cash from financing activities
Loan Borrowed 2000
Net cash from financing activities 2000 0
Net decrease in cash and cash
equivalents -3050 -550 -150
Opening Cash & Cash Equivalents 4820 5284 5684
Closing Cash & Cash Equivalents 7870 5834 5834
Projected Profit and loss
Projected Income Statement (2018)
2018 (£) 2019 2020(£)
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(£)
Sales revenue 12000 15000 20000
Less: COGS
Purchases -6000 -6500 -7000
Less: Stock 250 550 750
Gross Profit 5750 7950 12250
Less: Selling & Distribution expenses
Advertisement -800 -600 -600
Salary -1000 -1000 -1000
interests paid -250 -250 -250
Add: Income received
Rent received 200 200 200
Net loss/ profit 3500 5900 10200
Projected Balance sheet
Projected Balance Sheet (2018)
2018
(£)
2019
(£)
2020
(£)
Fixed Assets
Intangible assets 1200 1250 1500
Tangible assets 3000 3250 3500
4200 4500 5000
Current Assets
Stocks 500 700 750
Debtors 1325 1400 1325
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Cash at bank 3489 3642 3767
Total Assets 9514 10242 10842
P&L account 3500 5900 10200
Total Equity 2514 742 50
Fixed Liabilities
Bank loan 3000 3000 0
Current Liabilities
Creditors 500 600 592
Total Liabilities 9514 10242 10842
Above financial projection shows that “Beauty Salon” will earn more and more profit
every year. They have to take bank loan for buying necessary resources. Spending decent amount
of money on marketing and promotional activities is crucial for attaining constant growth,
specially for medium term (Sampaio, Thomas and Font, 2012).
2.5 Proof of innovation and entrepreneurial focus
Most of the Beauty Parlours either focus on using latest tools or hire experienced
employees so they can provide better service to the customer. But, this salon will provide some
training so experienced employees who do not know the right methods of using latest tool and
techniques. This will result in increasing efficiency of the worker (Schaper and et. al., 2014).
''Beauty Salon'' understand that people do not want to wait so they have developed a model
where customer can get appoint in advance and they do not have to wait for a single minute for
availing quality services.
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REFERENCES
Books and journals
Alegre, J., Sengupta, K. and Lapiedra, R., 2013. Knowledge management and innovation
performance in a high-tech SMEs industry. International Small Business Journal.31(4).
pp.454-470.
Bracci, E. and Vagnoni, E., 2011. Understanding small family business succession in a
knowledge management perspective. IUP Journal of Knowledge Management. 9(1).
p.7.
Colombo, M.G. and et. al., 2012. Introduction: Small business and networked innovation:
Organizational and managerial challenges. Journal of Small Business Management.
50(2). pp.181-190.
Goffee, R. and Scase, R., 2015. The Real World of the Small Business Owner (Routledge
Revivals). Routledge.
Hatten, T.S., 2012. Small business management: Entrepreneurship and beyond. Cengage
Learning.
Sampaio, A.R., Thomas, R. and F(Schaper and et. al., 2014) (Sampaio, Thomas and Font, 2012)
(Hatten, 2012) (Storey, 2016)ont, X., 2012. Small business management and
environmental engagement. Journal of Sustainable Tourism. 20(2). pp.179-193.
Schaper, M.T. and et. al., 2014. Entrepreneurship and small business.
Schermerhorn, J. and et. al., 2014. Management: Foundations and Applications (2nd Asia-
Pacific Edition). John Wiley & Sons.
Smallbone, D. and et. al., 2012. Small business responses to a major economic downturn:
Empirical perspectives from New Zealand and the United Kingdom. International
Small Business Journal. 30(7). pp.754-777.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Online
Business Plans. 2018. [Online] Available through:
<https://www.bplans.com/sample_business_plans.php>./
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