Initiating New Herbal Beauty Salon Business: A London Case Study

This report presents a business proposal for a new herbal beauty salon, "Classic Salon," in London, UK. The proposal focuses on the use of herbal products to attract health-conscious customers. It includes an overview of the beauty industry, its sensitivity to economic conditions, and the rationale for the new business venture. The report outlines the aims and objectives, which are to identify factors influencing consumer buying behavior and determine strategies for profit and sales maximization. The literature review explores factors related to demand, profit, and sales, examining relevant journals and articles. The research methodology includes the research type, approach, philosophy, data collection, and analysis methods. The findings and discussions cover factors driving demand and strategies for sales and profit maximization. The conclusion and recommendations provide insights for the salon's success. The report also analyzes internal and external factors affecting the business, including market trends, consumer preferences, and competitive strategies. Overall, the report aims to provide a comprehensive plan for establishing a successful herbal beauty salon.

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TABLE OF CONTENTS
CHAPTER 1: PROPOSAL..............................................................................................................4
Background..................................................................................................................................4
Aims and objectives.....................................................................................................................4
Rationale......................................................................................................................................4
Theory overview..........................................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................8
2.0 Introduction............................................................................................................................8
2.1: General factors relating to demand and profit & sales maximization..................................8
2.2: Factors in relation to the demand.........................................................................................9
2.3: Possible factors regarding profit and revenue maximization.............................................10
2.4: Review of journal and article towards demand, sales & profit maximization...................11
2.5 Conclusion...........................................................................................................................12
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................13
Research type-...........................................................................................................................13
Research approach.....................................................................................................................13
Research philosophy..................................................................................................................14
Data collection...........................................................................................................................14
Data Analysis.............................................................................................................................16
CHAPTER 4: FINDINGS & DISCUSSIONS..............................................................................17
Theme 1: Factors that drives the demand for the present herbal beauty and the salon product 17

Theme 2: Factors for sales and profit maximization.................................................................18
CHAPTER 5: CONCLUSION & RECOMMENDATIONS........................................................20
Conclusion.................................................................................................................................20
Recommendations......................................................................................................................22
REFERENCES..............................................................................................................................23

CHAPTER 1: PROPOSAL
Title- To initiate the new business of Herbal beauty Salon in London : A study on Classic
Salon
Background
The present report is based on Classic Salon, a herbal beauty salon business in London,
UK. The new idea relates to providing quality services to the people with the use of herbal
products which in turn helps in attracting larger customers as each and every people is seen as
conscious with regards to skincare products. In the current trend, Demand for the beauty and the
hairdressing treatments is counted as sensitive to an economic conditions (Van Buren III, Syed
and Mir, 2019). Prosperous economic condition results in higher demand for highly valuable
services of an industry like hair drying or the highlights. In similar sense, demand for the other
types of discretionary treatments and the products like nail art therapies likely to seen as
reducing at times of declining the disposable income and lower confidence of the customers.
Furthermore, the study throws a deeper insights towards the rationale and a significance in
relation to a particular research problem. Moreover, it also presents the review of the business
based on the objectives framed along with appropriate employment of the research methodology
for making the study more reliable and valid.
Aims and objectives
Aim
To start an innovative and new business of Salon with Herbal beauty products and
services in London: Case study on Classic Salon
Objective
 To identify the factors that influence the buying behaviour of consumers.
 To determine the factors that results to profits and sales maximization
Rationale
The major reason behind preparing for this research study is to start up for a business that
brings innovation and creativity for the people in the line of Salon business. With increase in
competition, it is becoming more and more crucial for an entrepreneur to come up with the

business with a new idea and as per the changing trends or preferences of the customers in order
to attain competitive advantage in an overall market. In today's dynamic environment, need for
an innovative business is rising as people expect for trying new things and also becoming more
and more conscious in relation to using of their skin products and availing quality services.
The research study would help the other scholars, professors and the the students who are
looking for conducting the report on this research problem. Moreover, through this study, other
investigator could be able to generate critical findings relating to the factors that must be taken
care off at the time of starting up for the new venture. It also enables the researcher in developing
an understanding regarding the methods that results in making the study more useful and
meaningful.
Theory overview
It has been represented on the basis of the objectives that by identifying the current trend
with respect to the salon business in an overall UK, it would be helpful for an entrepreneur to
start up the business in accordance to preferences and need of the customers in the market. This
helps in analysing the growth of the business in the future and in making the feasibility study in
relation to the sales and profitability of the business (Badre, 2020). It helps in understanding the
performance of an overall beauty industry and helps the new business in making effective
strategies relating to develop an efficiency in the business of Salon. Analysis of the current trend
enables in determining areas where the business needs changes or modifications for making its
performance better in the market. It also helps in identifying the areas of the business where its
seems as under -performing and over-performing. It assist in providing an evidence to the new
venture in to focus on the areas in which an existing salon business are facing problems (Perry,
Rahim and Davis, 2018). This in turn helps in making suitable decisions and in facilitating such
services that are not been provided by the competitors. Assessing the current trends and the
development of salon business in UK market, new entrant can develop an adequate policies in
order to gain a leading position or competitive edge in the market by coming up with the lower
price so that more and more customers gets attract towards the services and the products of the
new salon business.
The other objective reflects an analysis of the micro and macro environmental factors
which depicts that each and every business is been affected by the myriad of the factors. On the
other side, an enterprise could never work in a smooth way if it does not assess an influence of

its external and internal factors (Bommaraju and et.al., 2019). Through making an internal or the
external analysis, company could be able to manage its operations strategically. Internal analysis
helps the firm in understanding its strengths, weaknesses, opportunities and threats which in turn
helps the firm the firm in reaching to a leading position in and entire market. It also helps in
attaining a growing success because through this company could be able use its strengths for
overcoming its weaknesses and taking opportunity in order to overcome its threats.
It is crucial to make an internal analysis prior to launch or introduce a new business
because it reveals and creates an understanding regarding the way in which the resources might
be used within the company (De Mooij, 2019). It reflects the capabilities of the company in
producing for superior and the quality products, managing the supply chain and accessing to an
input. It assist an organisation in determining its competencies that could be utilised in an
effective way for exploiting an opportunities and in responding to the threats has been posed by
an environment. It also helps in develop better understanding that contributes to the costs,
profits, sales, market share and the relationship between such characteristics and the features.
In internal analysis helps the firm in making an evaluation of the financial health as it
identifies the areas where there present a lack of fund and the resources and also helps in
determining that optimum allocation of the funds & resources is made by the firm or not. Internal
assessment enables in identifying short comings within the skills and the resources of an
organisation (Nisar and et.al., 2016). It assist in exploiting strengths of an enterprise in order to
achieve its goals and the objectives. By making an internal analysis company could emphasize
on the opportunities that are profit making within a business environment and in identifying the
threats. This analysis provides a deeper insights to the firm in assessing the areas that are strong
that may be exploited wholly and within which some of the defensive planning may be needed in
preventing an entity from facing downfall.
On other hand, external analysis enables the business in staying on the top of the trends
and an events within an industry that might affect the company but is counted as uncontrollable.
It includes an analysis of the political, economical, social, technological, legal and environmental
influences on the firm (Hidayati and Satmaka, 2018). These factors involves assessing the
political and social influences that reflects government intervention and its stability along with
currency exchange & disposable income of the people. Moreover, technological advancement
and changes in the legal framework also poses a huge impact on the working of the firm.

External analysis enables in examining an industry environment with an inclusion of the
competitive structure, position, history and the dynamics. It provides for a simple and an easy
analysis regarding the buying behaviour of the consumers and also facilitates a framework in
reducing an effect of the potential threats to the company. It aids in development of the strategic
thinking at the workplace and provides a platform where an organisation can exploit newer
opportunities. Thus external analysis helps in accessing an implication relating to entering into
the new markets globally as well as nationally (Mullins, 2017). It acts as the generic tool which
helps an entity in assessing its product line and position in market. This helps the firm in making
competitive strategies for responding to the variations in an environment effectively and
efficiently. There are various other factors which influences the buying decisions of customers
that includes purchasing power, price, quality, economic condition, personal needs and
preferences etc.

CHAPTER 2: LITERATURE REVIEW
2.0 Introduction
Literature review may be served as a research method which lays emphasis on the
evaluation of books, journals and scholarly articles related to the issue being addressed. In this,
chapter will shed light on the factors which in turn associated with demand factor, profit as well
as sales maximization.
2.1: General factors relating to demand and profit & sales maximization
In view of Guchhait and et.al. (2017), it has been stated that the demand influences with
result of changes in the prices and the others factors remain as constant. There are several other
factors that influences or affects the demand of the services that includes price, perceived quality,
taste and preferences of the customers, income, advertising and confidence of the consumers.
Arias and et.al. (2018), viewed that changes in the taste and the preferences act as an
important or crucial factor that determines demand for services or the product. If the taste and
preferences for particular good or the services is high or greater, demand for such services or the
product is seen as high. However, if the particular product or the services are not preferred by the
customers due to changes in fashion then the demand for that specific product resulted as
decreasing or declining.
Mata-López and Tobón (2019) identified that advertisement expenses made by company
in order to promote sales of its goods or the services is considered as a significant factor which
determines the demand for services (Key Factors to Maximizing Profit, 2020). The main purpose
or objective of advertisement is inducing he consumers in buying the product or availing services
of the company. When the advertisement resulted as successful, it causes a rise in the demand of
the product or the services. However, in case an advertisement is not found as effective then it
causes decrease in the demand.
Moreover, Alizadeh and Sriramula (2018) represented that there are various factor that
affects or influences profits and sales of the business involves level of competition, market
contestability & competition, Economic state, fashion, substitutes, success of advertising, cost

etc. degree of the competition is an important factor that determines the profit and helps in
increasing the profits and revenue by rising the price of the product. On other state, government
regulations might prevent the monopolies in abusing their respective power. Further, in terms of
the competition in market, if in case the market is very much competitive then profit would be
low as consumer would be buying from cheapest organizations.
Similarly, Khan (2017) viewed that successful advertising leads to rising demand that in
turn maximize revenue of the company and also the profits with higher market share and
demand. In case there are many substitutes and price of substitute is high then there will be
higher demand for company’s product and services. This results to higher profitability and sales
for the corporation and this in turn indicates success of the firm.
2.2: Factors in relation to the demand
In the view point of Marchuk and Fabiianska (2017) there are several factors other than
price that impact or induce the consumer’s demand for a beauty salon service. The consumers
make store-choice decisions by evaluating different criteria established in their mind and then
comparing it with the store’s features. It helps them in differentiating stores and deciding
whether they are acceptable or not. It has also been stated, location is an important factor in
influencing the demand of salon service because it is a well-known fact that if the geographical
location of salon is far away from the customers, then there will be a reduction in demand as
compared to its customers (Important Factors That Influence the Demand of Goods, 2018).
Hence, it is necessary for every business to perform adequate research before selecting the
location as it plays a huge role in ensuring the growth and success of an organization. It is
important to keep in mind the availability of labor, raw materials and target customers before
selecting the location.
However, Yusuf and et.al. (2019) states that salon design, its interior and overall
architecture also contributes towards the increasing demand because it is important to have an
atmosphere that makes customers feel comfortable and they get attracted to it. Adding music,
lighting and attractive colors in the salon can help the business in achieving an edge over other
players in the market. Salon design plays a psychological impact in the minds of the consumers
as if the atmosphere is calm and relaxing, the consumers will visit again but if the interior is

poorly decorated with loud atmosphere it can have adverse effects on the growth of the salon
store.
Darmawan, Wong and Thorstenson (2018) has explained the importance of advertising
and sales promotion in increasing the demand for the salon service because it helps in providing
information to the customers in relation to new store opening, displaying the attributes of the
service and also to build a certain image in the minds of consumers so that they get influenced by
the product or service. Sales promotion can also be done through offering various discounts,
exciting offers and providing rebates to customers. Brand loyalty is also an important aspect that
must be considered while increasing the demand for Salon Company. The business must win the
trust of its customers by offering good quality services and must satisfy their needs and wants as
it will not only help in retaining old customers but will also help in attracting new customers.
However, Geary (2017) argues that the employees of an organization play the most
important role when it comes to promoting and advertising the company. The employees have
the power to influence the store’s image by providing good quality services to its customers and
also by being friendly, respectful and helpful. If the employees are not well trained or well
mannered then the demand for the salon can fall abruptly. It is also stated that employee attitude
and behavior is the reason that 70% customers re visit the stores. Another crucial factor in the
opinion of Singh and Okoro (2017) is that it is the duty of every business to do proper research
and identify the latest trends in the industry; it can help them in increasing their demand and also
help the organization in achieving its desired goals and objectives effectively and efficiently.
2.3: Possible factors regarding profit and revenue maximization
It is mandatory for every business to earn profit, not only to survive but also for its
growth, according to author, there are various factors that can help in increasing the sales and
overall profitability of the salon store but the most important is networking. It is important for
salon store to increase their client network as they directly contribute towards the growth of the
business. It is the duty of employees to not only build new client business through
communication but also retain the existing base with the help of brand loyalty. In the view point
of author, the salon company must also focus on selling more products and services per customer
visit so that the business can earn maximum revenue from single individual and not have to
worry about constantly adding new customers to increase profits. It can be done through good

marketing skills; the employees must offer add on services and offer retail assortments by
adequately communicating with the customers.
However, according to McKay, Brown and Skalberg (2016) it is not always essential to
offer additional services to customers as it can sometimes hamper the image of the salon
therefore in order to increase the revenue, the business must also focus on reducing their
operational costs which can be done through continuously monitoring the expenses and making
sure to cut them if they are not creating any value for the organization. Also, the salon business
must ensure different ways to make profits like selling beauty and herbal products, providing
SPA services and also offering door to door beauty services. The salon can also shift their
services online and even start teaching different skills to the audience; it can be a good way to
increase their revenue. Also, it can sell their products on Amazon and other E-commerce
websites to increase profits.
In Chen and et.al. (2017) opinion, the salon must establish a brand name for itself by
providing good quality services at affordable rates to its customers. It can help them in increasing
their customer base and also mouth publicity will create a brand name for the salon company
thus after some time the brand can expand their services in different geographical locations
which will help them in increasing their profit margin. It is essential for the salon manager to
measure the key performance indicators of the business-like number of clients, frequency on
arrival, products and services sold during single visit, profit margin of salon and total product
sales. These factors must be tracked on a monthly basis and comparisons must be made
systematically. It is the duty of the employer to sharpen the skills of its employees by providing
them adequate training and making them learn new skills and equipment so that the salon can
attract wider audience and increase its sales margin
2.4: Review of journal and article towards demand, sales & profit maximization
Dey and et.al. (2019) has concluded that the major factors that contribute towards
increase in demand are location, design of the store, advertising and sales promotion and
employee skills. With the increase in price of goods and services its demand will reduce and with
decrease in prices, the demand will increase. It is known as law of demand and it is very
important for a business to know because if the salon company wishes to attract a large number
of customers, then it must reduce its prices but at the same time if the salon wishes to maintain a

certain standard and attract a certain customer base then it must not reduce its prices (Factors
with regards to sales and profit maximization, 2020). However, another factor that plays a major
role in increasing the demand of salon service is the profile of customers. It has been known that
the attitude of customers, their taste and preference also play an important role in influencing the
demand for the company’s products and services. It is imperative for Salon Company to not only
identify the taste and preference of its target customers but also to perform market surveys so
that the organization can identify latest trends and therefore adopt them systematically. Another
important factor is to build a brand name for the salon company so that the demand for the goods
and services increases constantly.
In the view point of Bouche and Crotty (2018), both demand and profit maximization are
positively related to each other because an increase in demand would lead to increase in sales
which will further increase the profits of the company. Some other ways to maximize profits are
by increasing the number of physical stores or expanding business online so that it can attract a
new customer base. Moreover, the importance of retaining old customers should not be under
estimated and the salon company must provide them good services. New products and services
can also be launched to increase the revenue of the firm effectively. It can be stated that both
demand and profit are positively related to each other which means that if the demand increases,
profit will also increase. A salon company must perform market research to identify its target
customers and it should identify their needs and wants and provide services accordingly. It will
ensure maximum consumer satisfaction which is beneficial for both profit maximization and
image building of the company.
2.5 Conclusion
By summing up this LT it can be concluded that demand factor can be enhanced by
emphasizing on design, interior and overall architectural aspects. Further, in the context of salon
by making focus on promotional and quality aspects both sales and profitability can be
maximized to a great extent.