Businees Plan_final( Saloon Company)

EXECUTIVE SUMMARYThe world as we know is changing rapidly. The world around us is getting more innovative and more competitive day by day. In this project, we tried to build up an innovative idea of mobile hair salon; we tried to prove that in the context of Bangladesh such an idea can actually work. I Hair You is about an innovative approach towards the business. Who dont want to increase his beauty by a nice hair cut and regular facial cleaning? But sometimes time can be a major hindrance. May be you are working in office and suddenly you have a presentation to give, what will you do? Will you go and find a saloon for a haircut or shaving?? Or will you call them up? You may be surprised to see the result. A car consist all facilities of an aristocratic saloon, a bunch of efficient barber with all type of new and modern equipment waiting for your call. Not only this but also several such a saloon car will move around all over the city based on a fixed time and schedule. So now no one have waste ones valuable time by going to a traditional saloon and waiting for hours and hours, our car will come close to your destination and serve you accordingly as you desire to get. Thats what we can give you.

There has been lot of works we had to do. We had to make a survey on the saloon. We gathered the survey information and made the industry analysis. We also made marketing analysis, 4Ps, PEST analysis, SWOT analysis, life cycle, porters five and none but not the least the financial statement. We also made operation management and tried to justify our business.

To do this project we had to work on it really hard. The financial statement alone was enough hard for us. But we tried and made our project in this way. We want to thank our honorable faculty for giving us a guideline, and helping us all the way through the semester. His guidance was a tremendous help for us. Now we are looking forward to see how everyone thinks of the business and how they react with the new idea of mobile saloon.

Introduction:

World is moving fast, we are running over time. Thousands of businesses have launched to save the peoples time, to make the peoples life easier and comfortable. Today Entrepreneurs are much more creative and innovative in term of opening business. Everyone is trying to do something new, something extraordinary, something close to peoples desire. We have already heard and acquainted with various on call home service business like on call food service, grocery service and so on. All of those businesses are introduced for saving peoples time, removing peoples harassment and provide the best comfortable service. But have we ever heard about any on call saloon service in Bangladesh? Obviously not!! But now its the time to introduce you with such an on call saloon service in Dhaka city. Hair and face is the most important part of human beauty. Who dont want to increase his beauty by a nice hair cut and regular facial cleaning but time create an impediments for many people. Sometimes its really tough to pull out time for a busy person for hair cut. So with a view to remove the barriers of time, solve the mens grooming problem and serve the people according to their desire, wherever they are, a aristocratic portable on call hair salon is ready to serve people even in anyone homes or office parking. A car consist all facilities of an aristocratic saloon, a bunch of efficient barber with all type of new and modern equipment waiting for your call. Not only this but also several such a saloon car will move around all over the city based on a fixed time and schedule. So now no one have waste ones valuable time by going to a traditional saloon and waiting for hours and hours, our car will come close to your destination and serve you accordingly as you desire to get. So there will be basically two types of service by this mobile hair salon, one is on call service and other is schedule based different place service. The business is totally a new service providing business in the salon industry which is designed to hear peoples urge for increasing their beauty near to their destination and thus the name of the business is I Hair You.

Mission, Vision, & Culture: Business Slogan: Close to Your Desire

Mission: The mission of I Hair You is to provide the mens hair grooming services close to their destination means the salon car will reach wherever the customer wants to within Dhaka city. Some other salon cars will move around the city based on different time schedule and will stay for couple of hours in every location thats why people can get their service from there. It also ensures the high quality hair cut and all other mens saloon services inside a car in a best possible way. Though our business car is moving towards the customer destination that why the mission statement is An ultimate hair solution beside your destination

Vision: our vision is becoming a leading brand of hairstyle and hair solutions in Bangladesh. We want to achieve this goal by providing quality services to the customer. We want to provide our customers the best hair cut they ever get!!!

Within the five year we also wanted to do something more with this mobile hair salon. Those are:1. Expanding our service to every major city of Bangladesh.2. Launching services for women as well in the same manner.3. Ensuring hygienic environment.4. Quality and updated services. Culture: I hair you doesnt only believed in plan based approach. It will also ready to face every realistic upcoming problem and completion in near future. There is a pool of young, energetic employees to overcome the business competition and provide the latest hair solution in a best way. On the other hand I hair you believes in team based approach where no individual but the team will take the decision of operation management. Though it is a small business so no hierarchy is needed here, all the employees and owner will work hand in hand to take the business in highest peak. A warm and friendly relation among the employees and owners is always appreciated by I hair you.

I hair you is also socially and environmentally responsible organization. Though the business will operated through several car so there could a problem came in term of the placement of those pickup and also in term of waste management. So to keep I hair you above every anti-social affairs it will select the most suitable place for the car placement where no social disputes could be happened.I hair you is committed to keep the city fresh and clean. So in term of waste management I hair you always keep the best possible dumping solution according to Dhaka city corporation waste management rule.

Legal structure:

I Hair you is partnership type organization. There are five partners started the I Hair You with the initial capital of BDT 25, 00,000 taking as a loan from an angel investor. All the partners have equal share on all type of profit and liabilities. Angel investor will take the interest annually 100000tk and as loan repayment 250000tk. as a total 350000 tk. annually. In legal partnership all individuals are liable for business liabilities. Limited partners are liable for amount of capital contribution. Here all the partners are equally liable for business and the angel investor will not have any interfering authority to the business, he will just take the interest. I Hair you will be registered as partnership firm from the municipal office with a detail partnership document describing the responsibilities and benefits of each partner. Trade license will be issued from municipal office. Operational permission will be taken from Dhaka City Corporation and Dhaka metropolitan police.

Liability of owners, cost of starting business, continuity of business & transferability of interest:I Hair you is initially launched with a 25,00.00 BDT cash from an angel investor. Its management an operational activities will be operated through 5 partner:

1. Golam Rabbani.2. Stanley Sourav rozario.3. Tasmia Ahmed.4. Sharmin Sultana5. Jumatul Islam.All of them will act as a active partner and will get the profit equally 20% each. The angel investor will get the profits 350000 annually whether it is profit or loss. These 5 partner will be liable of all liability and managerial activities .

Designing of the organization I Hair You is positioned in the industry as a small firm which will provide salon service by several moveable vehicles and will operate both on call and schedule basis from one place to another. At first I Hair you will rent the saloon pick up because of shortage of money. Then in future it will go with own pickup van. Though I Hair you is a service related company and also its service related with the beautification of a person to providing the quality service will be the main objective of the firm. For that I hair you will appoint a pool of qualified specialist hair shape maker. Besides this I Hair you always will try to maintain a good relationship with the customer to make them loyal and also to be sustainable in the market through customer satisfaction. Opportunity Analysis & Research:

Customer Survey analysis:

Though there are no such a mobile hair salon in our country so in order move on business operation we did a survey consist of 50 person from different goner like service holder, students, businessman etc. the survey questions are designed such a way that we can evaluate our business opportunity, profitability, sustainability as well as acceptability of the common citizen. The survey questions and the feedback of common people on different perspective are showed below in a percentage diagram:

1. How often would you like to have a new haircut?

From this survey we can get an idea that most of the person (about 46%) like to do their cut once in a month.

2. How much money do you typically spend for a haircut?

Here to know about the money spend on hair cut we find about 40% people spend 50-100 tk. on hair cut then the other 33% people spend 100-150 tk. 3. How much money are you willing to pay for a haircut?

Here when we try to find out the peoples willingless to spend on hair cut we find something different as we predict. In graph we can see that 47% stands on 100-150 tk. So we can find that if people get quality service they are ready to spend more.

4. If you are taking other combined services like massages, shaving and facials, how much would you like to spend?

In term of other services besides hair cut majority people (54%) willing to pay 200-300 tk.

5. Which of the following service would you prefer after cutting your hair?

About the preference of additional service after hair cut same percentage goes to facial and savings (40%). So it could be realized most of the people want save and facial service. After all are careful about face!!6. What other facilities would you prefer to have for the mobile salon?

To collect the suggestion about other facilities of the mobile saloon we get that 54% people want only back ground soft music, 33% people want news paper or magazine, decoration gets 13% but about food court no one was enough impressive its got straight 0%.

7. According to you, people of which discipline will be more benefitted by a mobile salon?

In this survey we can see that almost people of every discipline got the moreover same percentage. But most percentage (33%) goes to anyone. That means people any goner can be beneficed according to the survey.

8. What might be a convenient time for cutting hair?

From this question that when they go for a hair cut 54% people said for weekend, other 33% said for holidays. So weekend could a best time boom business opportunity.

9. If a mobile salon travels around the city which area will be more effective for this type of salon?

Here moreover every place got similar percentage, where as Motijeel got 27%.10. What might be some of the reasons why you might not use the mobile salon?

Now here ask about the reasos why any one could not be used to mobile salon. The results show availability of salon in specific zone could be main reason (36%), and also availability in specific time is also (28%), time consuming could be detrimental (29%). So in these questions we have to look after.

11. Do you think it has become important to have a mobile salon these days?

Last of all query about the necessity of mobile salon in these days we got 67% peoples positive signal. So it could be realized we can move on to the business without any confusion. Supply Factor and influence:Though in saloon business there is no material needed for which we could need any supplier. All of the materials and cosmetics needed for the business can be easily bought from retail market in market place. Though we will regularly buy the cosmetics so we will choose a suitable wholesale shop of cosmetics from where we will regularly buy cosmetics in discount.

Management & Operations

Operations management is the area concerned with the efficiency and effectiveness of the operation in support and development of the firm's strategic goals. Other areas of concern to operations management include the design and operations of systems to provide goods and services. While the term operations management conjures up views of manufacturing environments, many of these concepts have been applied in service settings, with some of them actually developed specifically for service organizations. In this saloon we want to create such a management to handle the operations of the business. Management Team:

Though I hair you is a partnership organization and also a new business so the management activities will be handled by the partners. Tasmia ahmed will work for marketing, Sharmin Sultana will work for human resource, all kinds of customer communication and telephone operation will be handled by Stanley and finance account part will be overlooked by Golam Rabbani And Jumatul.

The decisions of all management head will be applied to the hair specialist and the driver as well. They will be bound to do their work according to the guideline of the management team. Each car will also contain two cleaner boys. They will follow the direction of hair specialist.Employees will have to be hired to provide the different services. The employees will be assigned to different departments. The numbers of workers required are: 5 hair specialist - For this section skilled hair specialist are needed because our aim concern is providing the best hair styles to the customers, we want to provide them what they want. Experienced specialists will be preferred, but young talented specialists will be encouraged to join. Also they have to be able to work for most of the time of the day.

2 drivers we need 2 very good drivers with lots of experience, mainly the drivers who drove big lorries. Also the experience of driving in the traffic of dhaka city is important. 2 cleaner boy- we also need two cleaner to keep the car clean all the time. Their job will be to clean up the car after customer gets his hair done. Keeping tidy and clean place is very important for the car.

Employee RoleQualificationsCompensationContributionHiring policy

5 Hair specialists2 years or less experience of working in saloons8,500 taka per month, 5% of every 500 taka service provided will be added to the salaryProviding Haircuts, shave and saloon activitiesThrough known sources

2 Drivers5 years experience of driving heavy duty vans6,500 taka per monthDriving throughout the areaSame as before

2 CleanersNo experience required2,500 taka per monthCleaning the cars Same as before

All employees will go through a short training period after being hired, to ensure quality and efficiency in our services provided. We will also take a special test of them.Service Operations

We will start our day at 8:00am and our cars will be on the road by 9am to 10pm. The working hours for our employees are assigned as follows:

Hair specialists will work from 9am to 10pm, when our car will be open to customers and for on call services.

Drivers have to drive all day long, along with the hair stylists. It is their job. Also, the have to drive the car to pick gas as fuel and also at the end of the day they have to drive the car to the garage.

Cleaners have to keep the car clean; they also have to be around the car.

Now Dhaka has 7 different holidays for 7 different areas in a week. Since we have one big car to provide saloon services and one small car for on call services, we will employ our big car in those 7 different parts when those holidays are going on.

Our small car will be for the special services. We will give a time schedule when and where our car will be available for the service.

Operational Flow diagram:

Key policies towards employees

We will give the employees a 5% bonus of every 500 taka worth service they provide to a customer.

Any idea from the employees regarding the business will be appreciated. Research and development

In this research and development section we will try to find the latest fashions regarding haircuts, facials, and other services and will implement them in our service. We want to make sure that the best quality and service is provided to the customers. We will keep in pace with the world and provide the good for the trendy customers.

Physical Location:

Unlike other businesses we do not need a office as a physical location right now. We cn simply manage the business from home and being in the car. As we have to communicate with both the customer and the cars on the road, we have to be on telephones all the time. PEST Analysis: Political: All the political factors that would hamper the business such as political unrest/instability like Hartals or Curfew that could affect the performance of the service due to unavailability of the vehicle. In PEST Analysis,

'P' stands for Political

'E' stands for Economical

'S' stands for Sociological

'T' stands for Technological

PEST analysis is another way of doing external analysis through which the newly open company can understand the external political, economical, sociological and technological situations and on the long run by using their strengths and opportunities, I Hair You! can overcome the weaknesses and threats. The PEST analysis of I Hair You! is as follows.Also providing services to specific areas in future due to legal requirements of the government like in Cantonment could be a problem. Besides, due to the political factors, in some cases providing on request service can be difficult. Moreover, taxes change with every government and so does the VAT charged on every associated raw materials and items. So this could be another problem, meaning, changes in government payable taxes, business tax and income tax could also be deducted from the annual sales of I Hair You!Economical: All the economical factors that would impact on the business for example, seeing what is the economical state of Bangladesh and whether the people who are seeking our service (our customers) have the ability and capability to afford the requirements set by our firm. So focusing on these issues are very important in starting the business. Besides, the globalization of the internet has grown over time. So the economic impact of websites on any business is very high. Thus I Hair You! would plan to open a website through which people can visit it and get to know what the business is offering to the customers, provide online calls and reservations and they can give their suggestions or comments and feedback.Social: All the social factors that would affect the business performance, for example how the society sees these kinds of services, how well the society accepts it, the popularity if they got this sort of mobile services and so on. So keeping in mind- the society by not offending anyone-their thoughts and values are highly necessary to monitor and then act accordingly, as these factors will ultimately have a huge impact on the long-run of the business.

Technological: Factors such as the availability of technology through which well able to provide more effective and efficient haircuts with more services such as facial, foot and neck massage, hair treatment, steam batch etc that what kind of technology we need and whether they are exactly what we need etc and also looking at the expenses of using these high technological instruments and machines. Moreover, I Hair You! has decided to equip its employees with laptops with Internet and cell phones for better communication, doing R&D and to make decision making faster.

Industry Analysis

Inorder to analyze the external industry, Michael Porter's Five Forces Model is very much effective which provides more depth information than simple market trends analysis information. This model explains that there are five forces that influence what happens within an industry, such as:

i. Threat of New Entrants

ii. Threat of Substitutes

iii. Bargaining power of Buyers

iv. Bargaining power of Suppliers

v. Current Rivalry

i) Threat of New Entrants: As the event management has the scope of becoming an industry/because of its rapid growth, there will be lots of new companies entering into the business or to be industry. Moreover, the new entrants may offer multiple other services in every areas of Dhaka city or in the hot spots like Gulshan, Banani, Uttora, Dhanmondi etc Therefore, the threats of new entrants are high for I Hair You!.

ii) Threat of substitutes: There are other available substitutes, causing high threat for I Hair You!.There are couples of famous and repudiated hair salon like Face wash, Persona Adams, Razor etc in different main area like Gulshan 1 and 2, Banani, Uttora, Dhanmondi etc. These salons are a big threat for I Hair You! because target customers can choose to any kind of hair or salon related services from them .So customers could prefer them more than I Hair You!, meaning switching costs could be high and buyer loyalty could be low.iii) Bargaining power of Buyers: This would be high as there are a number of customers in the market who are interested in seeking this service. Besides, customers knowledge is very high on this- as in they know a lot of information already that are related to this business and most importantly, because of the several substitutes already existing, the buyers have a big, huge influence in the industry. Since their getting mobile service therefore they might argue to have services with fewer prices.

iv) Bargaining power of Suppliers: This would be low as the suppliers wouldnt be controlling the market that much, hence they wouldnt be able to influence the industry to a greater extent.

v) Current Rivalry: This is moderate because this concept is very new in Bangladesh but if the existing salon might act as a rivalry .Therefore I Hair You! should take proper steps to save themselves from the existing salons. External SWOT Analysis:

In external SWOT Analysis:

'S' stands for external Strengths

'W' stands for external Weaknesses

'O' stands for external Opportunities

'T' stands for external Threats

It is one of the important tools for external analysis which is used to identify and analyze the strengths, weaknesses, opportunities and threats involved for the newly open company. The SWOT analysis of I Hair You! is as follows.Table 1. External SWOT analysis of I Hair You!StrengthsWeaknesses

Well-trained employees with good hair cutting skills with a wide style repertoire, and

A wide range of services offered.

Competitive prices.

Its also got a good hand of suppliers

Proper social understanding

Proper market coverage plan via media

Low cost substitutes

As a new entrant to the market, head lacks brand equity

New entrance to the market

Lack of corporate contacts\ large costs associated with a start-up company.

OpportunitiesThreats

The ability to decrease marginal fixed costs as the customer base grows.

Increasing sales opportunities as more people from an individual family frequents Cranium.

Creating experience through viral marketing

Favorable economic condition

Availability of the state of the art infrastructure

Support from the local authorities

High competition

New entrants

Improper support from the suppliers

Negative response from the target customers

Discontinuing support from the local salons

Unavailability of materials and expertise

Unavailability of other stakeholders like massage or facial expertise

Product(Industry) Life Cycle

This life-cycle is genuinely for any industry. So this is applicable for I Hair You! also. These are the stages that I Hair You! will be facing over the period of time.

Ways to create competitive advantage:

For this I Hair You! would need to match up its resources with capabilities inorder to create a core competence or competitive advantage. A diagram of this relationship has been shown in the following page.

For example,

If I Hair You! is able to have:

SHAPE \* MERGEFORMAT

Then it can charge high cost, customers will value more, demand will be high, so more profit.

For example,

Internal SWOT Analysis The internal SWOT analysis of I Hair You! is as follows.

Table 2. Internal SWOT analysis of I Hair You!StrengthsWeaknesses

Well-trained employees with good hair cutting skills with a wide style

Quality of work and process/procedures

HR and Management/staff who are experienced

Location of business

New, innovative service offering

Business Culture

Well trained people

High motivating level

Excellent PR

Fresh resources

Social and financial trends

Lack of funding

Management

Low customer retention

Absence of important skills

Lack of competent vehicle

Undifferentiated service in relation to competitors

Vulnerable to vital staff being sick/leaving

OpportunitiesThreats

Changing customers preferences and demands Technological advances Changes in government politics Scope of business growth and success and creativeness New distribution channels Need to increase market share Expanding business all around Bangladesh So targeting more customers from all over the nation Expanding through joint venture, merger Competitors may be slow to adopt new technologies Local government encourages local businesses with work where possible (favorable economic condition). High competition

Unavailability of materials

Insufficient resources(Technological advances)

Changing customers preferences and demands

Tax increase and change in government politics for giving mobile services

Cost of technology investment

Larger competitors may get majority market share

Decreasing profit

Lose key staff

Lack of finance

Corporate Portfolio Analysis

At this stage, I Hair You! needs to plan and implement strategies that where it will actually place its business. In doing so, it can use the BCG Matrix also known as Growth-Share Matrix developed by the Boston Consulting Group. It is a strategic tool for portfolio planning and analysis. BCG Matrix is used for current portfolio analysis,portfolio planning and development, and new strategy development - developing and positioning new businesses and repositioning the current ones.

BCG Matrix ModelAn SBU Model for I Hair You!

SHAPE \* MERGEFORMAT

Formulating Strategies

Strategic formulation means formulating strategies to execute the business activities. Strategy formulation for I Hair You! Mainly includes developing:-

Vision and Mission (The target of the business)

Strength and weakness (Strong points of business and also weaknesses)

Opportunities and threats (These are related with external environment for the business)

But besides, I Hair You! should focus on, setting long term goals and objectives, generating alternative strategies to achieve that long term goals and choosing particular strategy to pursue. Implementing StrategiesStrategy implementation is often called the action stage of strategic management. Moreover, in strategy implementation I Hair You! needs to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. Strategy implementation includes developing a strategy supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance. Evaluating Strategies

There are three fundamental strategy evaluation activities that I Hair You! needs to consider:

Reviewing external and internal factors that are the bases for current strategies.

Measuring performance.

Taking corrective actions

Management of I Hair You! needs to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. Each implemented strategy is evaluated to determine the outcomes, if the outcomes are meeting the expectation it means strategy is successfully otherwise corrective actionis required. Target MarketA target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy. The target market and the marketing mix variables of product, place(distribution), promotion and price are the two elements of a marketing mix strategy that determine the success of a product in the market place. Once these distinct customers have been defined, a marketing mix strategy of product, distribution, promotion and price can be built by the business to satisfy the target market. Our target market for the time being is the men of Dhaka city. It includes: - the students, service holders and also the top class business executives. We have selected them as our target market because thesedays, people have become very busy there is not a single minute that can be wasted. Time is money in other words today, hence we thought coming up with such a kind of service would be very profitable not only for us the service provider but also the men of our city. They will be able to call over a salon at their door without having to go to salons situated further from their workplaces or houses.

Target markets are groups of people separated by distinguishable and noticeable aspects. Our target markets can be separated into:

Geographic segmentations (Dhaka city for us!)

demographic/socio-economic segmentation (gender, age, income & occupation)

Psychographic segmentation (similar attitudes, values, and lifestyles)

Behavioral segmentation (occasions, degree of loyalty)

We will be reaching our target market through direct marketing. By buying consumer database based on the segmentation profiles we have defined. These databases usually come with consumer contacts (e.g. email, mobile no., home no., etc). Caution will be taken when undertaking direct marketing efforts - checking the targeted country's direct marketing laws. A principal concept in target marketing is that those who are targeted show a strong brand loyalty to that particular brand. Target Marketing will allow us to customize our message to the targeted group of consumers in a more focused manner.

4Ps of Marketing

Marketing decisions generally fall into the following four controllable categories:

i) Product ii) Price iii) Place (distribution) iv) Promotion

The Marketing Mix

The four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Since our business plan is based on the opening of a mens mobile salon, hence it is service oriented and we will be describing it based on service.

The name that we have chosen for our salon is I hair you, which is short, simple and catchy. A name that the consumers will find very interesting and most importantly will easily remember. Finding a name that: - suits our target market, is attention-grabbing and will be easily remembered were the things that we kept in mind when selecting the name I hair you for our salon. Which can also be used as The Brand name" for our service?

We will be providing all the services that other salons are providing to the men. Starting from Haircuts till facial, every single service will be provided, maintaining a perfectly hygienic, safe and soothing environment at the same time. Even though it is mobile, the customers will not feel uncomfortable or that they would have got better services in other salons. Providing the best quality service to our customers has been the main concern when designing the entire plan for our business. Excellence is what all the customers seek for and that is exactly what we will try providing them. The products that we will be using for facial purposes ,and other skin related services will be 100% safe and will in no way cause bad effects to our customers.

Not only the ingredients but also the machineries that we will be using will be of very good quality and imported from abroad. Hence it is pretty much understandable that we will in no way sacrifice in quality.

Price Decisions

The price of the services being offered at the vehicle that will stay at a constant place in a location will not be at all expensive but the same, and reasonable price that are being charged by other salons. Just a little bit more price could be either added or excluded, depending on the way in which the customer is getting their service done.

The vehicle we will have, that will be available only On call! will be a little more expensive than getting a service from the vehicle that we will be having which will stay in uniform place. This is very much logical since, the transport is arriving on the will of a person to a place; it is to be little highly priced compared to other types.

The very first fifty customers of our salon will be getting a 10% discount card, and if he is a student, he will be getting a 15% discount in total, upon showing his identity card along with the discount card, on getting services done by the salon costing over 100 tk.We will be providing special discounts as well on special occasions like religious festivals, new year, valentines day, etc.Discount will run for a week during the time of the occasion. Volume discounts of 5% will be provided to a person getting services done which costs over 2000 tk.

We are focusing on Skim pricing because it attempts to "skim the cream" off the top of the market by setting a high price and selling to those customers who are less price sensitive. Since our target market is the men which include the male students and also the service holders along with both the top business people of our country, they will be less price sensitive because, they are usually busy and does not have enough time to go to a salon and their hair cut, hence it will be highly advantageous for them to have something like mobile salon, that we are planning to set up.

Skimming is most appropriate because:

Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.

Large cost savings are not expected at high volumes.

Our company does not have the resources to finance the large capital expenditures necessary for high volume production with initially low profit margins.

As the product lifecycle progresses, there likely will be changes in the demand curve and costs. As such, the pricing policy should be reevaluated over time.

Pricing Methods

To set the specific price level that achieves their pricing objectives, managers may make use of several pricing methods. The pricing methods we will be using are:-

Cost-plus pricing - set the price at the production cost plus a certain profit margin.

Target return pricing - set the price to achieve a target return-on-investment.

Value-based pricing - base the price on the effective value to the customer relative to alternative products.

Psychological pricing - base the price on factors such as signals of product quality, popular price points, and what the consumer perceives to be fair.

Distribution (Place) Decisions

Distribution is about getting the products to the customer. We will be following selective coverage as our channel strategy for the first 3 months, this is because, we are very much new into this market and hence it is wiser to start from small in order to achieve big and best results gradually. Anyhow we use selective coverage because, it limits the availability of the services to certain outlets it is called selective coverage, one of our vehicle will be in a place at a specific date for a specific time Certain places will be selected considering they comply with a certain pre-set criteria, depending on the demand for our service. The other vehicle we will have will arrive on call of customers. Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response.

We will be using a pull selling strategy, which requires high spending on advertising and consumer promotion to build up consumer demand for a product. We will use this because we are very much new into the market and the service we will be providing is also new, there is no other mobile salon Bangladesh yet, hence we have to spend a lot in doing promotions for our service in order to make our service familiar to the market, and generate consumer demand.

The major advertising tool we will be using is word-of-mouth which is a form of buzz marketing or viral marketing. It will be very, in fact most helpful in order to promote our service. Brochures, fliers, internet (social networking sites like facebook, email etc) will also be used in order to promote our service.

We will not be advertising on televisions, newspapers or even radio this is because that would require huge amount of capital, and apparently we are freshers into this business are we are focusing on starting low in order to build big!

Research has shown that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Research has generally shown that target marketing strategies are constructed from consumer inferences of similarities between some aspects of the advertisement (e.g., source pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or desire of having the represented style). Consumers are persuaded by the characteristics in the advertisement and those of the consumer

Free services as sales promotion will be done in the first week of our very starting, and occasionally we might repeat this if required.

Marketing communications budget is another issue that has to be looked upon.

Positioning

This is creating a distinct picture in the consumers mind, and by providing quality and hygiene maintained services we can very much capture the consumers mind. We are already having the first movers advantage which will as well help us in positioning ourselves, this is because this idea is extremely new into this market and has not been explored ever in our country. Providing best quality services maintaining good environment at the sometime will add up greatly to that. We will be very prompt in delivering our services as well and the customers will not have to wait, and even if they have to they will be provided with additional services during that time like free consultations, etc.

Process type

The different process types are: - job shop, batch, repetitive, and continuous. The process suitable for our organization is Job Shop. Job shop- It is a type of manufacturing process in which small batches of a variety of custom products are made. In the job shop process flow, most of the products produced require a unique set-up and sequencing of process steps. Job shops are usually businesses that perform custom parts manufacturing for other businesses. These businesses deal in customization and relatively small production runs, not volume and standardization.

How I Hair You! Relates to Job Shop?

Routing:-When an order will arrive in our salon, the part being worked on travels throughout the various areas according to a sequence of operations. Not all service will use every machine in the salon. Jobs often travel in a jumbled routing and may return to the same machine for processing several times.

Employees- employees at I Hair You! will be typically highly skilled craft employees who will be able to operate several different classes of machinery. These workers will be paid higher wages for their skill levels. Due to their high skill level, the employees will need less supervision. Workers will be paid at a standard hourly wage or by an incentive system. The role of management will be to bid on services and to establish prices for customer orders. The key activity at I Hair You! will be processing information.

Information it will be the most critical aspect of a job shop like I hair you! Information is needed to quote a price, bid on a service, route an order through the salon, and specify the exact work to be done. Information begins with quoting, and then a job sheet and blueprint are prepared before the job is released to the floor. Once on the service floor, employees complete job sheets and time cards for labor cost calculations and to update records for quoting future jobs when variances are present. We will provide specialty, custom services, it will compete on quality and customer service and not on price. It will have work-in-process inventory while jobs are being completed, but typically the customers will be waiting on the order and expect prompt delivery, so there will be no finished goods inventory in this make-to-order environment.

Scheduling: - A job is characterized by its route, its processing requirements, and its priority. At I hair you! The mix of products is a key issue in deciding how and when to schedule jobs. Tasks may not be completed based on their arrival pattern in order to minimize costly machine set-ups and change-over. Work may also be scheduled based on processing time, from shortest to longest.

Capacity: - capacity is difficult to measure in the job shop and depends on lot sizes, the complexity of jobs, the mix of jobs already scheduled, the ability to schedule work well, the number of machines and their condition, the quantity and quality of labor input, and any process improvements. Financial Plan:I Hair You will start its operation by BDT 2500000 cash from an angel investor. The angel investor will be repaid the money within 10 years by an installment of 250000 tk. per year with an interest of 100,000 tk, thats means total 350,000 tk. There are only 955,000 tk. needed for initial set up cost and remaining 1,545,000 tk. will be remain as a working capital and used for next two years lacking of Cash payment. The projected initial set up items with its projected cost are shown below table:

Set up CostBDT

Sources

Angel investor equity 2,500,000

Uses

Licensing cost 60,000

Computer and furniture 200,000

Saloon equipment & cosmetics 40,000

Air condition 120,000

Deposits 20,000

Startup marketing fees 25,000

Employee hiring cost 100,000

Decoration 250,000

car advances 50,000

generator 80,000

others 10,000

Total Uses 955,000

Working capital 1,545,000

Projected Income statement Analysis:I Hair You doesnt have that much of fixed assets. There are only some item like computer and furniture, air condition, generator etc are evaluated as a fixed assets which total value as projected is 4, 00,000 tk. so for these 24% depreciation is counted as a yearly base. Its may seem very extravagant with 24% annual depreciation but it is counted like this way because the fixed assets we are evaluated is moreover going to be finished within 5 years. So we want to recover the cost as soon as possible.

On the other hand employees are paid regular salary. The hair specialist got 8500 tk. Driver got 7500 tk. and the cleaner boy will get 2500 tk monthly. There is also a lunch allowance daily 50tk for everyone. In first year there is a huge loss on the business as projected, in the second year it reduces as the sales revenue goes up but still the business in a loss and the third year the business will got very minimum profit. As the years pass by the business will gain a lot of profit as well as the business will get strength because of reducing the loan burden and also for a good accumulation of the depreciated assets. There is a 10% COGS as projected. So after meeting all the expenses the profit margin graph of I Hair You seems like: Profit Margin Graph:

Here we can see that in the beginning profit was negative, in the second year it go a quiet up and in 3rd year it began to generate profit.

Sales revenue graph:

Though it is hoped that for good marketing strategy, customer relationship management and for well employee satisfactionary policy the sales revenues will go up gradually.

[Projected Income statement: APPENDIX -1] Projected Cash Flow Statement Analysis:As a new business I Hair you didnt such any financing and investing activities as well as no new equipment and inventories also not bought by the company. Though the business will be in a loss for beginning 2 years so the cash from the working capital management will be use to meet up the regular need.

So here in graph in the first two years there was negative cash flow as there was no profit in the business but in 3rd year it goes to positive.[Projected cash flow & balance sheet in APPENDIX 2&3]

Net profit Margin ratio:

In year 1 & 2 net profit margin is negative but in year 3 it will positive. Though there are huge amount of money outflow initially from the business so it will take some more time to came in a break even and in profit generation form. Break even Analysis:From the projected income statement and projected balance sheet we find that there is no profit in the 1st and 2nd year, in 3rd year there was an little profit. So in order to came in breakeven I hair you will take more than 2 years.

Here in the graph we can see that just after the 2nd year there are profit generation starts. So it will take 2 years one or two month to come in a breakeven. Though there is a highest interest payment and also a high amount of depreciation charged that why it will take a longer time to come in a break even. Exit strategy

We plan to stay in this business forever if we get enough response first, then we can grow our business and reach different cities of Bangladesh, and at some point we may even rule over the entire country if we can make our customers happy. Then our heirs can take care of our business in our absence. We will prepare them for looking after our business, by taking them to our business locations, making them thoroughly understand what? How? Where? it is happening ,who are our target customers, were the money is coming from, what we are planning for future and most importantly how to take care of the labors ,their interests, etc, for whos main effort we have reached the position we are in today!

Conclusion

First of all our business is a new kind of. It is one of those business ideas that can be a pioneer because of its uniqueness. So, primarily we are projecting some glitches in the first years. But through our management skills and hard work we think we can pull of and can grow to success. Even though the first two years were rough, from the third year we will do well. The net profit margin will increase in times which will good for us. The higher its value, the better able the firm is to fulfill its interest obligations. So, it will be gradually increase. The break even analysis shows that the firm will reach BEP at around 2nd year and from then it will be profiting. As we said, its uniqueness will be the key to our success. So, overall we can say that our business have a feasibility to continue in real world.

BIBLIOGRAPHY

"Target Market." Wikipedia, the Free Encyclopedia. Web. 01 Apr. 2011. .

"Pricing Strategy." NetMBA Business Knowledge Center. Web. 01 Apr. 2011. .OPPapers.com, Joining. "Market Coverage Decisions - College Essay - Kroontjie." Free Term Papers, Research Papers, Essays, Book Reports | OPPapers.com. Web. 01 Apr. 2011. ."Marketing - Promotion - Push and Pull Strategy." Tutor2u | Economics | Business Studies | Politics | Sociology | History | Law | Marketing | Accounting | Business Strategy. Web. 01 Apr. 2011. .

APPENDIX APPENDIX -1

Projected Income Statement

Year 1 Year 2 Year 3

Sales revenue 20,00,000 22,50,000 31,50,000

COGS 2,00,000 2,25,000 3,15,000

Gross profit 18,00,000 20,25,000 28,35,000

Operating and administrative expenses:

Salary 7,50,000 7,50,000 7,50,000

Advertisement 80,000 40,000 25,000

Registration and license fees 18,000 18,000 18,000

Generator & car gas 5,50,000 5,50,000 5,50,000

depriciation (24%) 96,000 96,000 96,000

Miantainance 60,000 60,000 60,000

Car rent 5,76,000 5,76,000 5,76,000

Lunch allowence 1,62,000 1,62,000 1,62,000

Others 72,000 50,000 30,000

Total Operating & admin. Expenses 23,64,000 23,02,000 22,67,000

EBIT (5,64,000) (2,77,000) 5,68,000

Interest expense 3,50,000 3,50,000 3,50,000

EBT (9,14,000) (6,27,000) 2,18,000

Tax - - 29,200

Net Profit/Loss (9,14,000) (6,27,000) 1,88,800

APPENDIX 2

Projected Cash Flow statement

year 1 year 2 year 3

Cash flow from operating activities

Net income (9,14,000) (6,27,000) 1,88,800

Add: Depreciation expenses 96,000 96,000 96,000

Cash paid to suppliers(cosmetics) -

Net cash generated from the op.act (8,18,000) (5,31,000) 2,84,800

Cash flow from investing activities - -

Cash flow from the financing activities - -

Net cash flow (8,18,000) (5,31,000) 2,84,800

Beginning Balance 15,45,000 7,27,000 1,96,000

Ending Balance 7,27,000 1,96,000 4,80,800

APPENDIX 3

Projected Balance Sheet

Year 1Year 2Year 3

Current assets

Cash727000196000480800

Accounts receivable000

Saloon equipment & cosmetics40000665000750000

Decoration250000250000250000

Deposits2000056000350000

Total current Asset103700011670001830800

Fixed assets

Furniture, generator, A/C400000304000208000

Less: depreciation (24%)960009600096000

Total fixed assets304000208000112000

Total assets134100013750001942800

Liabilities and owners equity

Current liabalities500020004000

Long term loan225000020000001750000

Net loss/ profit-914000-627000188800

Total owners equity and liabilities134100013750001942800

Ratio Analysis

Total assets turnover ratio1.491.631.58

Profit margin-45.70%-27.86%5.99%

Management

Customer Service

Tasmia Ahmed

Communication

Stanley

Tasmia Ahmed

Finance & Accounting

Anik & Jumatul

Hair Specialist

Driver

Cleaner

Hair Specialist

Cleaner

Human resource

Sharmin Sultana

Tank

Tank

Resource

Money

Equipment

Machine

Own Vehicle

H R

Communication Medium

Capabilities

Expertise

Knowledge

Technology

+

Create Core Competence/Competitive advantage by offering low cost, being unique/creative/differentiation.

Also, create core competitive advantage by:

Efficiency

Innovation

Quality

Customer Response

All of this would be done to create a Market position/distinctive position, inorder to stay ahead of competition.

High Efficiency

High Innovation

High Quality

High Customer Response

High Cost

Customer give value

Demand

Profit

Thus reach

Objective

Goal

Business Level

Functional Level

Operational Level

External Analysis:

Porters 5 Forces

PEST

Industry SWOT and other factors like legal, consumer, supplier, competition etc.

Internal Analysis:

Match Resource and capabilities for competitive advantage

2) SWOT

EMBED Excel.Chart.8 \s




_1363243166.xlsChart1

0.5333

0.3333

0.1333

Sales

Sheet1

Sales

200-300 tk53.33%

300-400 tk.33.33%

400-500 tk.13.33%

To resize chart data range, drag lower right corner of range.

_1363243170.xlsChart1

0.2666

0.4

0.3333

Sales

Sheet1

Sales

30-50 tk.26.66%

50-100 tk.40.00%

100-150 tk.33.33%


_1363243173.xlsChart1

0.461

0.133

0.333

0.0666

Sales

Sheet1

Sales

Once in a month46.10%

Once in a week13.30%

Once in three month33.30%

Any other6.66%


_1363243284.xlsChart1

15rabbani

15Stanly

15tasmia

15Rupa

15jumatul

25Angel investor

Sales

Column1

Profit Sharing

Sheet1

SalesColumn1

rabbani15

Stanly15

tasmia15

Rupa15

jumatul15

Angel investor25


_1363243168.xlsChart1

0.2

0.3333

0.4666

Column1

Sheet1

Column1

30-50 tk.20%

50-100 tk.33.33%

100-150 tk.46.66%


_1363243151.xlsChart1

0.1333

0.2

0.2

0.2666

0.2

Column1

Sheet1

Column1

Dhanmondi13.33%

Gulshan20%

Banani20.00%

Motijeel27%

Around the city20%


_1363243161.xlsChart1

0.5333

0.3333

0

0.1333

Column1

Sheet1

Column1

Music in background53.33%

News paper, Magazine33.33%

Small food court0%

Decoration13.33%


_1363243163.xlsChart1

0.4

0.2

0.4

Column1

Sheet1

Column1

Message40%

Shave20%

Facial40%


_1363243159.xlsChart1

0.1333

0.0666

0.2666

0.2

0.3333

Sales

Sheet1

Sales

Serviece holder13.33%

Students6.66%

Buainessman26.66%

Paitents20%

Anyone33.33%


_1363243156.xlsChart1

0

0.3333

0.5333

0.1333

Column1

Sheet1

Column1

During lunch break0%

Holidays33.33%

weekends53%

Any special times13.33%


_1363243141.xlsChart1

-914000-627000188800

Year 1

Year 2

Year 3

Sheet1

Year 1Year 2Year 3

Profit-914000-627000188800

profit Margin grapgh


_1363243149.xlsChart1

0.2666

0.3333

0.2666

0.0666

Sales

Sheet1

Sales

availability of serviece in specific time26.66%

Availabality of serviece in specific zone33.33%

Time consuming26.66%

any other reasos6.66%


_1363243146.xlsChart1

0.6666

0.3333

Sales

Sheet1

Sales

Yes66.66%

No33.33%


_1363243130.xlsChart1

-0.4507-0.27860.0599

Year1

Year 2

Year 3

Net Profit Margin

Sheet1

Year1Year 2Year 3

Category 1-45.07%-27.86%5.99%


_1363243133.xlsChart1

-818000-531000248800

Year 1

Year 2

Year 3

cash flow

Sheet1

Year 1Year 2Year 3

Category 1-818000-531000248800


_1363243138.xlsChart1

200000022500003150000

year 1

year 2

year 3

Sheet1

year 1year 2year 3

Sales200000022500003150000


_1363243127.xlsChart1

-914000Year 1

-627000Year 2

1880000year 3

Revenues

Marginal point

Break Even

Sheet1

RevenuesMarginal pointColumn2

Year 1-914000

Year 2-627000

year 31880000


Documents

Businees Plan_final( Saloon Company)