Laotong Salon: Detailed Business Plan Report, Cambridge, UK

This report details the business plan for Laotong Salon, a proposed skin and hair salon in Cambridge, UK, offering treatments based on ancient Chinese and Mandarin methodologies. The plan includes an executive summary, mission statement, company and management structure (sole proprietorship), competitive landscape analysis, strategic objectives, and core values. Task 2 presents a comprehensive business plan, encompassing market analysis (customer needs, target market), industry analysis (competitor identification), operational details (location, transport), SWOT analysis (strengths, weaknesses, opportunities, and threats), and financial requirements (start-up costs). The report emphasizes the salon's unique selling proposition of natural treatments and a customer-centric approach, positioning Laotong as a leader in innovative skin and hair care within the competitive UK market.

Project 2 Individual
report
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Business Idea Development:............................................................................................................3
Executive Summary:............................................................................................................3
A. Mission Statement:............................................................................................................3
B. Company and Management:..............................................................................................4
C. Competitive Landscape:....................................................................................................4
D. Strategic Objectives:..........................................................................................................4
E. Values:...............................................................................................................................4
TASK 2............................................................................................................................................5
Business Plan:..................................................................................................................................5
1. Market Analysis:................................................................................................................5
2. Industry Analysis:...............................................................................................................6
3. Operational Details:............................................................................................................7
4. SWOT Analysis:.................................................................................................................7
5. Financial Requirements:.....................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In order to create a thriving business that can pull off against the competition, a detailed
business plan is required for battle before entering in the market. Business plan guides the
managers to endure the rocky road faced during management an emerging business. This report
lays down the thoughtful business plan for the business idea of a skin and hair salon under the
brand name of 'Laotong Salon'. The business plan developed here include a detail analysis of
factor having influence on a business under dimensions such as: market analysis, industry
analysis, SWOT analysis and the financial decision making.
MAIN BODY
TASK 1
Business Idea Development:
Executive Summary:
This business idea is proposed on development of a hair salon in Cambridge, UK. The
salon is planned to run under brand name of Laotong salon providing salon treatments
incorporating ancient Chinese and Mandarin methodologies in skin and hair care (Green, 2019).
Opened near The Seven Stars on the NewMarket Rd, it has an excellent placement in terms of
customers approachability. This will turn out to be one of the success points for the business as
there are no competitors firm in the area offering similar services which utilises use of natural
remedies.
A. Mission Statement:
The mission statement defines the value a company wants to create, key characteristics that
describe the business and how business will affect the community. The personal values of
owners have a shadow on the firms vision and mission (Hisrich and Ramadani, 2018). Some
values to use as an inspiration are: honesty, consistency, commitment, good doing and creativity.
The mission of Laotong is to create a successful customer base with repetitive customers seeking
natural procedures. The business will develop USP under two dimensions: first offering an
experience to customers like no other competitor can offer in the same price point, and second is

reducing the turnaround and waiting time for the salon services. Thus, the idea is to develop a
goodwill in the market as a salon, providing consistent results at competitive pricing.
B. Company and Management:
The business legal structure of Laotong is a sole proprietorship firm type of structure. It is single
handedly managed by the owner taking strategical and daily operational decisions. A sufficient
number of staff members qualified in their field of work are appointed to perform different
treatments on their customers. To build a trust among the customers the salon must run
professionally, and to achieve this the owner is to be qualified at NVQ level 4. Further the
business has obtained the licence required to operate a salon under regulations of UK
government (Lima, 2021).
C. Competitive Landscape:
The identification of direct and indirect competitors for the salon business who can hamper the
revenues is fundamental and one of the core attribute to look out for when developing business
plan. In the context of Laotong, the competition is not only with existing skin and hair salon, but
with other salon providing all types of services such as nail salon.
D. Strategic Objectives:
To be a leader in natural skin and hair treatments. To be a leader in innovation in skin and hair
treatments and procedures and training individuals to be highly professional stylist (Pine, 2020).
To establish and maintain high quality infrastructure supporting clients and staff. To be well led,
high performing, profitable and accountable. And finally, to develop our people and resources
E. Values:
The core values underpinning Laotong activities would be:
 Sustain excellence in staffing and training & assessment.
 Promote innovation across all of our business operations.
 Be a collaborative and caring community.
 Embrace difference and diversity.
 Demonstrate integrity and equality of opportunity in all activities.
 Operate with openness and accountability.

TASK 2
Business Plan:
1. Market Analysis:
The market analysis fosters to the need of salon business by classifying the populous into
different segments, thus helping the business determine the niche clientele it wants to serve. The
market analysis is also the foundation of the marketing and sales plan and strategies (Potts,
2018). Being a qualitative and quantitative assessment of market it broadly considers market
potential both in terms of volume and value for Laotong. The analysis further determines the
customer’s segments, their buying patterns and the economic environment in terms of barrier to
entry. The market analysis for the prospective business is done addressing three factors:
 Identifying the customer needs: The segmentation analysis done by Laotong has two
focus points: they must supply what customer wants to buy and they must survive
competition. In order to attain superior performance and competitive advantage the firm
must have distinctive competencies. The customers above 40 years in age are leaning
more towards the services having a foreign culture impact. The service offered in
Laotong having an essence of Asian culture is perfect for such segment. Hence, Laotong
needs to focus on these customers as their services address the problems of such
customers.
 Identifying target market and characteristic: The process to determine the target
customers who are willing to purchase what you have to offer at a price the business
wants to charge (Razuri and Zöttl, 2020). The target market for Laotong are customers
who wants a unique experience over and above the salon treatments by professionally
trained people. As per the market trends the taste of people are changing and the
customers wants to explore the new kind of experiences rather than just sticking to the
old. Further the Laotong targets customers include the immigrants from Asian countries,
giving them the culture rich experience. The characteristic of the target customers for
Laotong can be laid down under following points:
 The majority customers are between the age range of 25-60 years.
 The customers are mostly salaried personal with sufficient spending capacity.

 The customers consider visiting a salon as a recreational experience rather than a
routine work.
The salon and spa industry is a vibrant and growing component of UK economy with more than
45,000 salons in the country. The demand for new forms of treatments never goes down and the
industry is experiencing a consistent expansion on yearly basis. The current market of
hairdressing & beauty treatment industry is clocking a revenue of £2.8bn in 2022.
2. Industry Analysis:
The industry analysis is the section of the business plan that demonstrates the general
characteristic of the industry in which the firm operates. The industry analysis helps in
determining the major competitors in the sector as well as the firms which does not pose
competitive threat for the firm. It is important to identify such firms and understand their market
share and success factors. An industry might not yield high profits just because the industry is
large or growing. The five forces suggested by porter play's an important role in determining the
profit potential of the firms in an industry (Reynolds, 2018). In the context of Laotong, the
industry analysis will prove to be beneficial and three purpose as under:
 Firstly, researching the skin and hair salon industry will educate Laotong and helps to
understand the market in which they are operating.
 Secondly, the market research would improve the Laotong strategy particularly if the
research helps in identifying the market trends. As per the trend analysis the market is
diversified and a large portion of this is adopting ancient skin and hair care which is the
major offering of Laotong. Thus, the industry analysis helped the firm to enter this
segment.
 Thirdly, such analysis will help identify the major supplying firm. The analysis helps in
identification and selection of target supplying firm to cater to its material needs.
As per the industry analysis of Laotong it has direct competitions with brands such as: The Salon
Morris & Bowling, TONI&GUY, Adam hair and beauty, Reeds hair, Morresi hairstylist, etc.
These brands target the same customer base and in order to thrive, Laotong has to capture their
market share. These competitors offer services which are interchangeable with Laotong. The
visible difference is the kind of products used and the method of treatments (Xu, 2020).

3. Operational Details:
The details with reference to geographical and other external considerations are mentioned
below:
 Location: The salon is located on NewMarket Rd near The Seven Stars restaurant.
 Transport links: It is located at a walking distance from River Lane bus station which
provides a direct commute medium to people.
 General Site Information: There is an open space behind the bus station providing seating
and walking space.
 External Considerations: Further there is a Starbucks outlet located on the opposite side
of the road providing a parking facility.
4. SWOT Analysis:
Every business has its own strengths and weaknesses. It is good for the business to clearly
understand and document both of these to have a clear picture of the situation. Similarly,
opportunities to the business and potential risks to the business can be documented by the
Laotong in the form of opportunities and threats. In a way, SWOT analysis is nothing but a way
of documenting strengths, weaknesses, opportunities and threats at one place in a concise
manner. While Strengths and Weaknesses are internal to the Laotong, Opportunities and Threats
deal with its external environment (Shtrikov and Shtrikova, 2020). The brief on SWOT analysis
for Laotong is as under:
 Strength: The strength as well as the unique selling point about Laotong is the use of
ancient beauty secrets from a culture totally new to the people of Cambridge. The
Laotong took ancient procedures and adjusted them to be sold as a packaged service. The
skin care service is a step by step procedure and before start customers are provided with
a herbal drink to boost antioxidant levels which is a unique feature not practised by
competitors.
 Weaknesses: A large section of customers are not fond of change; thus they would not be
curious about the offerings of Laotong. They prefer the regular skin and hair salon which
incorporates modern procedures and products having fast results which is sufficient to
satisfy their needs. Similarly, a group of customers will find the offering by Laotong a bit
pricy over their competitors.

 Opportunities: The opportunities for Laotong is the uprise in cultural adoption among
people. With a new socially connected world and awareness among one individual self,
people are leaning more towards sustainable living close to nature and using products
which are derived naturally. This provides opportunity to Laotong to cater to such
customer needs, further, sell them natural products which will grow its turnover and
profitability.
 Threat: The skin and hair salon business has low entry barriers and investment needs.
With the success of Laotong, other firms would imitate the Laotongs business model of
skin and hair care using ancient or natural techniques. These potential business firms with
new offering and products would drive away Laotong customers, thus reducing its market
percentage. Further the current threat includes low price competitors, failing to satisfy
clients demands by Laotong, etc.
5. Financial Requirements:
Start-up Cost: It is not easy to open salon using only savings. There is likely need to raise some
capital at initial stage of the business which can be paid off in the coming years when the
business is running well. The costs of opening a salon, which tend to range anywhere from
£15,000 to £35,000 depending on how much the property needs revamping (Anglin and Pidduck,
2022). A detailed breakdown of the financial requirements is as under:
Particulars Amount (Approx.
per year)
Start-up Cost:
Loan and Financing (The cost of interest rates
business should expect will vary depending on
how the loan provider sees the risk profile so it’s
not possible to give you an exact cost)
1.25% - 10.00%
Salon Insurance £3,000.00
Salon Software and Point of Sale system (Vagaro
Software) £360.00 - £1080.00
Salon rent (100-400 sq. ft of space) £2900.00 - £3600.00

Salon Branding and Design £2,000.00
Legal and Consulting fees £3000.00 - £5000.00
Salon Equipment and Furniture cost £8000.00 - £12000.00
The salon business will offer individual skin and hair services as well as packaged deals to
the customers. A typical skin treatment utilising rice water and related procedures would cost
customer £120.
CONCLUSION
The business plan is the written statement that is prepared by the owners and managers
willing to start the business. In such written document the complete analysis is carried out
regarding plan, industry analysis, market analysis including trends and the start-up cost included
in the project. In the above report the business plan has been prepared for skin and hair salon
named as Laotong which deals in providing salon services using ancient methodologies. Thus
their speciality is providing salon services incorporating more natural ways which are different
from their competitors. The report puts light on the various cost required for successfully
incorporating a new salon business.

REFERENCES
Books and Journals
Anglin, A.H. and Pidduck, R.J., 2022. Choose your words carefully: Harnessing the language of
crowdfunding for success. Business Horizons, 65(1), pp.43-58.
Green, M., 2019. Innovative leader. Professional Beauty, (May/Jun 2019), pp.100-101.
Hisrich, R.D. and Ramadani, V., 2018. The entrepreneurial marketing plan. In Entrepreneurial
Marketing (pp. 177-194). Edward Elgar Publishing.
Lima, M., 2021. Entrepreneurship and innovation education: Frameworks and tools. John Wiley
& Sons.
Pine, C., 2020. What women want. Instyle, (May/Jun 2020), pp.22-25.
Potts, J., 2018. Strategies to sustain small retail business more than 5 years (Doctoral
dissertation, Walden University).
Razuri, D.A.P. and Zöttl, A., 2020. Consulting Report–Bigmond SAC Outplacement Service
Business Plan (Doctoral dissertation, Pontificia Universidad Catolica del Peru-
CENTRUM Catolica (Peru)).
Reynolds, P.D., 2018. Business creation: Ten factors for entrepreneurial success. Edward Elgar
Publishing.
Shtrikov, A.B. and Shtrikova, D.B., 2020, May. Evaluation of the Effectiveness of Personnel
Adaptation Process in Small Business. In International Scientific and Practical
Conference (pp. 593-605). Springer, Cham.
Xu, X., 2020. Introduction to Entrepreneurship: Methodologies and Practices. Springer Nature.