Business Plan Project: The Shades Hair and Beauty Salon

This comprehensive business plan, developed for "The Shades" hair and beauty salon, meticulously details the key elements required for a successful venture in London. The plan commences with an introduction to the beauty industry, highlighting the increasing demand for such services and the opportunities available for entrepreneurs. It outlines the salon's mission, vision, and target market, focusing on upper-middle-class urban individuals. The plan includes detailed market research, assessing market segmentation, and identifying service offerings. A thorough industry analysis utilizes Porter's Five Forces and product life cycle assessments to determine the competitive landscape. Financial feasibility is evaluated through sales, cash flow, and profit projections, along with break-even analysis and risk assessment. Strategic analysis is conducted using value chain and SWOT analyses, identifying competitive advantages and sustainability. The business model is presented through the Business Model Canvas. The plan concludes with an overall assessment, addressing legal, financial, and risk issues, along with a proposed action plan and discussion of critical success factors. Appendices include detailed financial statements and forecasts.

The Shades – Hair and Beauty Salon
Business Plan

TABLE OF CONTENT
Chapter 1 Introduction.....................................................................................................................6
1.1 Background ...........................................................................................................................6
1.2 Scenario chosen ....................................................................................................................6
1.3 The Business Opportunity ....................................................................................................7
Rational behind the business idea ......................................................................................7
Significance of the research ...............................................................................................7
Target market, customer and accessibility .........................................................................8
Business Model ..................................................................................................................8
1.4 Timescale ..............................................................................................................................8
1.5 Structure of Work .................................................................................................................9
CHAPTER 2- – Business Opportunity and Concept ....................................................................11
Business idea .............................................................................................................................11
Mission.......................................................................................................................................11
Vision.........................................................................................................................................11
Analysis of mission and vision statement .................................................................................11
Products and services.................................................................................................................12
Positioning.................................................................................................................................12
Scale and growth anticipation....................................................................................................13
Business model..........................................................................................................................13
Chapter 3: Feasibility.....................................................................................................................14
3.1 Research Methodology............................................................................................................14
3.1.1 Define Research problem..................................................................................................14
3.1.2 Design for Market Research.............................................................................................14
3.1.3 Information types and sources that are required...............................................................15

3.1.4 Proposed Methods of Data Analysis.................................................................................15
3.1.5 Formulation of Findings...................................................................................................16
3.2 Market research and product services......................................................................................16
Type of research design.............................................................................................................16
Market segmentation..................................................................................................................16
Identification of product and service.........................................................................................17
Gap in the market.......................................................................................................................17
3.3 Industry/market analysis..........................................................................................................17
3.3.1 Porter’s five forces............................................................................................................17
3.3.2 Product life cycle of Beauty Salon...................................................................................18
3.4 Organization feasibility............................................................................................................19
3.5 Financial Feasibility.................................................................................................................21
3.5.2 Project funding..................................................................................................................21
3.5.3 Sales forecast....................................................................................................................22
3.5.3 Cash flow projections.......................................................................................................22
3.5.4 Profit and loss projections.................................................................................................22
3.5.5 Break even analysis..........................................................................................................23
3.5.6 Risk Evaluation.................................................................................................................23
3.6 Resource requirement evaluation.............................................................................................23
CHAPTER 4..................................................................................................................................25
STRATEGIC ANALYSIS AND BUSINESS MODELS .............................................................25
4.1 Strategic analysis of business idea...........................................................................................25
Value chain analysis..................................................................................................................25
SWOT analysis..........................................................................................................................25
4.2 Sources of competitive advantage and sustainability..............................................................27

SWOT Analysis.........................................................................................................................27
VRIO evaluation of sustainability of competitive advantage....................................................28
4.3 Concepts in strategy.................................................................................................................29
Ansoff matrix.............................................................................................................................29
Mc Kinsey 7S framework..........................................................................................................29
Porter’s Generic Strategies........................................................................................................31
4.4 Business model........................................................................................................................32
Business Canvas Model.............................................................................................................32
CHPATER 5 ................................................................................................................................34
BUSINESS PLAN REVIEW.........................................................................................................34
5.1 Overall assessment of business plan........................................................................................34
5.1.2 Legal issues.......................................................................................................................34
5.1.3 Financial Requirement......................................................................................................35
Project funding...........................................................................................................................35
Sales forecast.............................................................................................................................36
Income Statement......................................................................................................................36
Cash flow statement...................................................................................................................36
Break Even Analysis..................................................................................................................37
5.1.4 Risk issues.........................................................................................................................38
5.1.5 Marketing matters.............................................................................................................39
5.1.6 Organisation feasibility.....................................................................................................39
5.1.7 Overall resources sufficiency............................................................................................40
5.2 Proposed plan of action............................................................................................................41
5.3 Discussion on critical success and failure factors....................................................................42
REFLECTION PART ...................................................................................................................44

REFERENCES..............................................................................................................................52
APPENDIX....................................................................................................................................54
Total fund required....................................................................................................................54
Sales forecast.............................................................................................................................54
Income Statement......................................................................................................................54
Cash flow statement...................................................................................................................54
Break Even Analysis..................................................................................................................55

Title - The Shades – Hair and Beauty Salon Business Plan
Chapter 1 Introduction
1.1 Background
Before going out somewhere, people have the tendency to get into personalized
beautification ritual. It makes their appearance beautiful and shining in front of others. By seeing
this tendency into consideration, the demand for beauty and care services have increased
significantly. The beauty industry has been expanding over decades in dramatic manner. It also
offers wide range of opportunities for many new entrepreneurs. The opportunities are open
because people are always concerned about their looks within the society. They want their
physical appearance to be reflected in good manner. Hence starting a hair and beauty salon in the
present scenario can be a feasible option. This business development proposal is about opening a
beauty salon named the Shades. It will be a full time service business positioned in London. The
mission will be to provide high quality services which enhances the physical appearance and
mental relaxation of the people. Hair, nails and skincare will be the main area of services. It has
been noticed that beauty industry has been favourable to several entrepreneurs. Consumes are
showing their more willingness to shop around in order to avail the best treatment deals. It is
expected that the Shades will be able to live up to the beauty expectations of the consumers.
1.2 Scenario chosen
In order to develop a business development proposal, author has the option to selection
difference scenarios. These are as follows:
 a new company start up as an entrepreneur
 Your own company as an existing company owner
 Your current employing organization
 A commercial or not-for-profit organization
From the above available scenarios, “A New Company Start-Up as an Entrepreneur” has
been selected for the development of this project. Selection this scenario is always a difficult
process for the researchers because everything is initiated from the zero level. However the
process is quite intellectual and informative. It requires collection of information regarding the
industry under which the proposed project has been set. It will help in utilizing the knowledge
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and assist in understanding the market situation of the desired business. The proposed business
has the potential to achieve the expected goals and objectives of the new venture.
About the venture
The Shades is a full service hair and beauty salon, offering excellent service, quality
products and a great atmosphere for males and females. The salon is positioned in London. The
mission of the business is to supply high quality services which enhances the physical
appearance and mental relaxation of the people. The Shades will offer its clients a very pleasant
and intriguing environment. Focus will be on gaining the customer loyalty so that people can
come to the door of the Shades again and again. There will be no compromise with the quality of
the cosmetics that will be used. Hair, nails and skincare will be the main area of services.
Telephone and online booking facility will be given to the customers for their convenience. It is
expected that the Shades will be able to achieve its goals and objectives.
1.3 The Business Opportunity
Rational behind the business idea
Every business concept is backed up with a suitable rationale. Having an MBA degree, it
was always the author’s dream to have his own venture. However before taking this step, he has
worked in the cosmetics industry for 5 years. He is quite familiar with the beauty and salon
industry as he was dealing with these kind of products only. At the starting there was no plan to
start a new venture like this but gradually the things started developing. He increased his
thinking and knowledge in these areas. After performing a high level of research, he came to a
conclusion that he will be opening a beauty salon for the customers. It is evident from the fact
that number of salons and beauty shops are increasing day by day. The customers are always
ready to invest on their physical appearance. The demand for these services is also increasing
day by day. The proposed business idea sound a viable opportunity for the entrepreneur.
Relevant goals and objectives have been established with regard to the Shades. It is expected that
the new venture will be able to establish its remarkable presence in the hair and beauty industry.
Significance of the research
Every research is performed with an appropriate significance. The following is a business
development proposal about opening a hair and beauty salon in the Barbican Centre of London.
The significance of this study is that it will be an inspirational work for several entrepreneurs.
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The readers will be able to avail vast amount of strategic knowledge and information. Several
critical business areas will be scanned which are crucial from investigation point of view. The
hair and beauty industry of UK will be scanned in appropriate manner. Various opportunities
available in the market will be identified. Further it can be an inspirational work for other
researchers who desires to perform research about the following subject. Various strategic
models will be applied to see whether the business idea is feasible or not.
Target market, customer and accessibility
It is important to access the target market. The Shades is positioned in Barbican Centre of
London. The target market will be the upper middle class urban people who are really concerned
about their physical appearance. Hair, nails and skincare will be the main area of services. It
includes students, college goings, urban professionals etc. Services will be available for both
males as well as females. The beauty salon will be placed in the middle of the town and will have
high level of accessibility. It will serve customers from nearby residential areas. The target
market is feasible and it is expected that it will help in achieving the desired goals and objectives.
Business Model
The Shades will be operating on the basis of brick and mortar model. However online and
telephone portals are also available for bookings. It will be a high class hair and beauty salon
giving excellent services, quality products and a great atmosphere. The clients will be offered a
very pleasant and intriguing environment. There will be a use of high quality cosmetics. The
salon will open at 9 am in the morning and will closed at 9 pm in the evening.
1.4 Timescale
ACTIVITY/WEEK 1 2 3 4 5 6 7 8 9 10 11 12
 Identified the problem
 Systematic analysis to choose
the topic for the study
 Chose the research
 Conduct strategic review for
secondary data collection
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 Set the objectives
 Primary data collected from
customers
 Identified research approach
 Design research methodology
 Preparation of structured
questionnaire
 Make Fill up the questionnaire
from customers
 Organize collected data in
excel sheets
 Apply suitable technique to
analysis data
 Interpretation of the data
 Evaluation and finding of the
research
 Recommendation and
suggestions for further study
 Outline the findings chapter
 Create report in a presentable
manner
 Submission to instructor and
awaiting for feedback
 Revising the final draft
 Submit report
 Present report to the audience
1.5 Structure of Work
There is a need to follow an appropriate structure for the report. The rest of the project is
organized in the following manner:
Chapter 2 – Business Opportunity and Concept
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This chapter will talk about the opportunity available to the new venture. The whole
concept will be described. It will contain the mission, vision and the proposed products &
services. The justification behind all the choosing scenarios will be made.
Chapter 3 – Feasibility Analysis
This chapter reviews the feasibility of the proposed business concept. It will include
sections such as research methodology, market research, industry analysis, organizational
feasibility, financial feasibility etc. The feasibility analysis is very important from success point
of view. It will help in realizing whether the proposal is beneficial for the investment or not.
Chapter 4 – Strategic Analysis and Business Model
This chapter will do the strategy analysis of the business idea and also explains the
development model. Sources of competitive advantage and sustainability will be find out. The
strategies will be framed for the purpose of success. Use of different strategic models will also be
reflected with regard to the selected subject.
Chapter – 5 Business Plan
The last chapter indicates the picture of the overall business proposal. It will include
sections such as marketing plan, organizational plan, operational plan and financial plan. It is
expected that the development proposal will assist in achieving the business goals and objectives.
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CHAPTER 2- – Business Opportunity and Concept
Business idea
Business plan is prepared about the hair and beauty salon. It has been observed in the
UK that people are paying due attention on their skin colour and face beauty. Along with this,
people are caring more about their nails. It is observed that people often like to to take hair and
beauty services when they are going ton join specific ceremony like weeding or award
distribution etc (Quach and et.al., 2012). Hence, demand for such kind of services is growing
rapidly in the UK. Business idea is to open such a salon in the London in order to tap available
opportunity in the market. This business idea is selected for opening a business because beauty
industry is growing at a rate of 16% in the UK and in time of recession also it manage to grow in
UK at same pace. Hence, this industry have good growth potential. This is the reason due to
which it is planned to open hair and beauty salon in London.
Mission
To grow business at CAGR or compounded annual growth rate at 16% on year on year
basis in 5 years. Business firm wants to expand business in London by opening multiple chain of
the Shade in mentioned city.
Vision
Our business main vision is to make available quality service on time to the people by
using well known beauty products and professionals.
Analysis of mission and vision statement
Both mission and vision statement always remain correlated to each other. Mission
indicate long term objectives of the firm. Whereas, vision indicate short term objective of the
firm. Mission of the firm is to grow business at CAGR or compounded annual growth rate of
16%. This growth rate is determined because beauty industry is growing at same pace (Cohen,
2010). Hence, it means that firm can maximum increase its business at a growth rate at which
industry is growing currently. Hence, mission of firm is to increase business at 16%. Mission of
firm is concise and in first five years it is focusing on growing its business only in London.
Strategy behind same is to enhance business in London and to cover its maximum area in
upcoming five years. In order to achieve mission it is necessary to determine some objectives.
These objectives are determined under vision statement. In this statement it can be seen that firm
main objective is to make available quality service to the customers and on time. In this regard
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firm is planning to employ professionals that are master in providing service that firm wants to
provide to its customers. By doing so firm will create its good image among the customers and
will capture large market share in London. In this way firm will complete its objective to achieve
growth rate of 16% in next five years.
Products and services Hair- Firm will provide hair related services and under this hair cut services will be
provided to the customers. Professionals will be able to provide every type of hair style
services to the customers. Along with this hair colour services will also be provided to the
customers in the salon (Wu, Yeh and Woodside, 2014). Different type of colour will be
available to customers in order to prevent showing whiteness of hair. Nails- Under nail service services like manicures and pedicures will be provided to the
customers at salon. Cleaning and filling of nails will also be done at salon. Along with
this nails will also be decorated with coloured varnish etc. By using airbrush designs will
also be painted on nails. Hence, varied services related to nails will be provided in firm
salon.
 Skincare- Various skin care services will be provided at salon. Under this services like
removing unwanted hairs, making skin fair, advising customer on proper skin care and
service regarding evaluating customer skin health will be provided to the customers.
Hence, these are the products and services that firm will provide to its guests in the salon.
Positioning
It is a marketing technique under which firm create its special image among the
customers on the basis of its USP. Full form of USP is unique selling proposition which indicate
strong points of the firm (Eckstein and Nguyen, 2011). Shades salon will employ high level of
professionals in its premises for providing services to the customers. It will act as USP for the
firm because if there will be professionals in salon then surely quality of service relieved will
also high. Hence, firm can do institutional advertising and can position its product on the basis of
its service quality. Firm can also provide its service at reasonable price instead of premium price.
By doing so firm can create its specific image among the customers that if “ quality service at
reasonable price”. This strategy will also create good image of the firm among the customers and
firm will in this way position its product among the customers.
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