A mock business plan for a hairdressing salon Gill Burton

hairstyling Cream

Gill Burton 2

Contents Page

1 Background to the mock business ……………….. . 3

2 Analysis of market, trends and opportunities ……………….. . 5

Trends relating to the UK hairdressing businesses ……………….. . 5

Unique selling points ……………….. . 5

PESTLE analysis including innovative and sustainable opportunities ……………….. . 6

SWOT analysis including innovative and sustainable opportunities ……………….. . 9

3 Vision ……………….. 13

Aims ……………….. 13

Motto ……………….. 13

Mission statement ……………….. 14

4 Needs ……………….. 15

Financial data showing funds needed ……………….. 15

Sources of money ……………….. 15

Expenditure for first year ……………….. 16

Expenditure for second year ……………….. 17

Resources and people requirements – planning growth ……………….. 19

5 Sources of support ……………….. 20

6 Marketing Strategy ……………….. 21

Customer profile and their needs ……………….. 21

The four Ps! ……………….. 22

Branding ……………….. 27

7 Summary of key actions and how to take the plan forward ………………...28

Gill Burton 3

1, Background to the mock business. In 1993 I wanted to open a hairdressing salon in Shirehampton (this is a small town near Bristol) so I went to the bank for a business loan but they turned me down. To make my position stronger I decided to set up a freelance hairdressing business instead and once my books and accounts looked healthy, I would return to the bank in the hope that my finances would put me in a better position to set up the salon I had always wanted. However in 1996, having been in business for three years, circumstances changed as my husband and I were about to start a family and move completely away from the area. The successful business that I had built up over three years was sold to another freelance hairdresser. For this business plan I am going to pretend that my freelance hairdressing business was started three years ago, 2008, and before that I had my salon and teaching experience. It is now July 2011 and I am going back to the bank with this business plan to ask for a £10,000 loan. I feel my bank loan request will be more successful this time due to two factors:

There has been bereavement in the family and inheritance has been received so personal funds are available now.

The freelance hairdressing business that has been built up over the last three years is successful; I have three hundred clients on the books.

The position this year is also much stronger because I have got to know the market in and around Shirehampton, I know the current trends and demands from clients. I have used their views as a means of developing the business to being more lucrative to the general public. The salon that I wish to own is on the high street near free parking. It has been a hairdressing salon for over thirty years so it is a well established salon even though ownership has changed over the years. The current manageress is retiring from ownership and her daughter, who worked with her, is going to work on the cruise liners around the world. This opportunity is a perfect scenario as there will be clients who are used to visiting the salon regularly and as long as the taking over is performed smoothly and professionally we should gain more clients on top of my current clientele. The salon is going to be called:

Cream The reasoning behind the name is that I wanted a simple easy to remember name that represented the best, the elite etc. I also wanted it to mean luxury and indulgence. This logo fits the business requirements perfectly, we can be:

hairstyling

Gill Burton 4

“Cream of the Crop!” (Sorry I know it’s corny, I couldn’t resist) There will be a need for a second stylist, who I have already organized; it took time to find the right person as experience was vital and I wanted her to be from the local area. This stylist will help me in creating a professional friendly hairdressing salon, I did not want to gamble by employing a newly trained stylist as clients will not feel as confident in their skills and I want clients to feel they can trust whoever does their hair. In the future, when the business is more stable, I will employ a local apprentice and another stylist.

Cream hairstyling will offer all the usual services hairdressers offer in Shirehampton but

we will also offer hair extensions. We will devise and develop a pamper day scheme that will be out in time for people to purchase as a gift for their friends and loved ones before Christmas. It will allow female customers a chance to be pampered for a day in their own town. They will be introduced to possibly new services and businesses in the area. The cost of the pamper day would be less than if they attended a Spa. This scheme would help other local businesses as well as we would choose three other venues to supply: a manicure or pedicure,

body massage and a lunch time meal. Cream hairstyling would supply a conditioning treatment and blow dry or set. This scheme would also put the salon into the public eye. Hopefully the local newspaper will see how we are trying to help the local economy and write an article about the scheme.

Cream hairstyling will also offer courses to the general public. The first programme will be

open to people who would like to learn how to cut different fringes and style hair through plaiting, braiding and twisting. The second will be open to students in year 10 and 11 at school, it will be an introductory course giving them a taste of what hairdressing is all about. Students will have a go at reception work, shampooing, blow drying, setting etc. By the end of the programme students will have more of an idea if hairdressing is a career for them. On both

courses kits will be available to buy. Cream hairstyling also hopes to expand in this area and introduce refresher courses to trained hairdressers next year once the salon reputation starts to build up.

Gill Burton 5

2, Analysis of market, trends and opportunities. Trends relating to the hairdressing business in the United Kingdom. HABIA (the Hair and Beauty Industry Authority) are recognized by the government for their expertise and knowledge in hair and beauty industry. They are consulted by awarding bodies for recommended content of hair and beauty qualifications as well as being used by salon businesses for latest up dates in law, they offer information, educational materials and other related news. HABIA state that: "Hairdressing is a huge industry and one of the most widespread types of businesses in the UK. The market is highly competitive, there are over 35,000 hair salons operating across the country." It is really important therefore that salons are competitive with each other because as you can see there are a lot of hairdressers for clients to choose from these days. Also salons have to try to offer something different from their rivals whether it is pricing or opening hours. Where ever you go there are different types and styles of hairdressing shops, some are the traditional barber type, some are; modern, old fashioned, basic, high tech etc. The important factor is that the style and design of the salon must fit the area and the clientele you wish to attract. Get it wrong and customers may feel too intimidated to enter or revisit. First impressions are vital, even if the stylists are welcoming and friendly, so if the environment is uncomfortable, drab and dirty clients will not want to pay for that experience. Due to the freelance business that I have had my knowledge of customer trends and service demands is already apparent through working around their needs. My evenings during the week were the most sought after so that leads me to the decision that the salon should be open later to allow working clients who do not want to use some of their weekend up getting their hair done. New businesses need to research this area carefully if they don‟t they are jeopardizing their future. These days the internet makes it easier to get feedback on ideas. Market research is vital.

Unique Selling Points (USP)

• Cream hairstyling is the only salon that offers a hair extension service in the area. Cream hairdressing will fill a gap in the local market by offering this service. I have already gained some clientele with my freelance business. It takes longer to build a clientele in hair extensions as not all clients are able to have the service done but once clients are established they rarely leave you as it is a very skilled treatment, a lot of damage can be done if the stylist is not experienced. Other salons may look into this service but they do not

Gill Burton 6

have my current experience or training. Market research has shown me that there is a percentage of clients in the current financial climate who would move to another salon if the cost of the hair extensions were less (as long as the same product and quality of expertise was used). Hair extensions do not have to be a full head service, partial applications can be used to add flashes of colour or used to thicken areas of the client's hairstyle. The service is versatile.

• For additional revenue Cream hairdressing can offer night school courses. Due to my qualifications and teaching experience I have the confidence and knowledge on how to offer specific types of courses to suit different needs in the community:

• A short course in how to cut different types of fringes, plait, braid and twist hair. • Introductory courses for students in year 10 and 11 at school to see if hairdressing is a

career for them. • Refresher courses for qualified hairdressers who need to be updated on their skills and or

confidence. This will be introduced next year when the business has built more of a reputation.

I will be able to run these courses using the facilities at the salon. These courses will enable the business to sell kits to the participants thus increasing revenue further. Links with local colleges could be made and potential assistant staff could be employed.

• Cream will be the first business in the area to promote a pamper day scheme, this will be a new service for the area and it will place the business involved into the forefront of others. The best local businesses will be chosen to unite with, we will promote a high quality service that local competitors will struggle to compete with. This strategy will also promote the community and draw in new trade.

• The opening hours of Cream are different to the local salons. It will be open six days a week with three late nights, the other salons offer appointments five days a week with one or two late nights. Market research shows that evenings are a popular time for customers to have their hair done because a lot of clients like to keep their weekends free or they can get child cover more easily when their partner comes home. My salon is open on a Sunday and Monday none of the other salons are open at all. This would provide extra opportunities for clients to fit their appointments in. A lot of big salons are beginning to open on a Sunday now

so Cream is following the trend.

PESTLE Analysis Political

I will have an accountant so I will rely on her/him to be on top of any changes in accountancy.

A lot of areas are under going changes to support environmental laws, for instance disposal of waste. We will recycle where possible. We will be notified of any changes to the rubbish disposal in our area.

Gill Burton 7

HABIA are the hair and beauty authority, they are recognized by the government, their web site would have up to date information on law changes that effect the hair and beauty industry.

The hairdressers journal also gives up to date information Economics We are living through a recession at the moment, "Credit Crunch" so to open a new business sounds foolish but to help get the economy back on it's feet small businesses have to plan differently to accommodate this possible barrier. The government have schemes to help small businesses start up even if the bank refuses to give a loan, this information is available through we sites and places like the Citizens Advice Bureau. My salon will offer all the usual services plus hair extensions which no one else in the area does. My proposal is to join forces with three other good quality businesses in the area to promote a pamper day experience which can be sold as a gift before Christmas. The recipients of the gift will be able to book their day after Christmas. The businesses concerned;

nail bar, beautician, restaurant/cafe and Cream will then have customers at a time when they are usually very quiet. Due to the clients experiencing the pampering they will possibly visit new businesses that they have not been to before and as long as the service is positive and memorable they will more likely come back. Also when the clients attend they may purchase products as someone else has paid for the treatments and lunch time meal so they can spoil themselves further. The pamper day option is a cheaper variation to a Spa day. This venture will be promoted in a way that locals can also help support their local traders. It may draw in people from further a

field as it will be advertised on the Cream website. The following information was found on a web site forum discussing Spa days: “they are popular but due to the typical expensive costs they are not open to everyone …….. quite often people feel intimidated as they come across too "stiff" or "posh"….. clients feel self conscious walking around in a swimming costume all day. One client wore a dressing gown over her costume but felt awkward in-between her treatments as men were around, she had nothing against them but she usually wore a dressing gown at home in private not in public and what made it worse she had no make up on.” Sociological People in this country suffer with stress which can transgress into various medical ailments. The pamper Day will be a way of promoting the importance of relaxation in a busy lifestyle. People need to de-stress, slow down and take time to enjoy themselves especially if friends decide to join in with the pamper experience. We all too often rely on the two week holiday we take once a year to get the relaxation we need. Here are some facts taken from the International Stress Management Association uk ISMA uk website address http://www.isma.org.uk/about-stress/facts-about-stress.html This information was correct on day of investigation, 5th August 2011

Gill Burton 8

"Stress is: The adverse reaction people have to excessive pressures or other types of demand placed on them. Those pressures may come from many differing sources and when their combined effect is overwhelming, stress occurs. This means that stress is not good for you. Stress is an unhealthy state of body or mind or both." "According to self reports, consistently stress is the second most commonly reported work related illness" - Labour Force Survey. "In 2009/10, 435,000 experienced stress caused or aggravated by their work" -Labour Force Survey "According to self-reports, estimated 237 000 people, who worked in 2008, first became aware of work-related stress, depression or anxiety giving an annual incidence rate of 780 cases per 100 000 worker." - Labour Force Survey Technological

The salon Cream will have two pieces of new up to date equipment. The other salons do not have these. They will help in the efficiency of colour and bleach development and make conditioning treatments more effective.

Cream will also have it's very own web site dedicated to promoting: services, staff, promotions, products, price list and special offers. The other salons in the area are also small businesses but they do not have a web site. This day in age people want information at their finger tips. The salon will come across more professional for having one. Legal The salon needs to be more easily accessible to the less abled to support: "The Equality Act 2010 which provides important rights not to be discriminated against or harassed:

• in accessing everyday goods and services like shops, cafes, banks, cinemas and places of worship

• in buying or renting land or property • in accessing or becoming a member of a larger private club (25 or more members) • in accessing the functions of public bodies" The above information was taken from www.direct.gov

Gill Burton 9

The salon is accessed by a set of stairs so this is a barrier to customers that have difficulty in walking. The lease is due to be renewed in six years time anyway so it will be wise to look out

for a downstairs shop opportunities any way so that Cream can be more easily accessed by all (thus supporting the law further) and more visible to the general public.

Cream must also conform to the following:

COSHH (Control of Substances Hazardous to Health) we must store, handle, use, dispose of chemicals correctly. Staff will be trained and reminded.

PPE (Personal Protective Equipment) must be provided free of charge to all staff. We will need gloves, aprons, goggles and masks for our industry.

For Health and Safety at work Act we need a fire assembly point, a trained First Aider and an accident book. All staff are in charge of removing hazards and risks. If there is a problem they must report it to the manageress eg broken floor tile. We must display a health and Safety poster for staff to see.

RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences) all staff must record accidents in the accident book. The employer must refer major accidents or dangerous occurrences e.g ceiling falling down to the correct authority.

Fire Precautions Act the salon must comply with the correct fire extinguishers and management of checks.

For the Electricity at Work Act all electricals must be checked once a year by a qualified electrician (PAT). All staff must be trained in how to use the electrical equipment correctly and safely.

Manual Handling Operations- staff must be trained in how to lift and carry stock correctly without straining themselves or their back.

Environmental The salon will follow current by-laws in disposing the waste following their specification. However everyone is aware of the environment now so cardboard waste will be collected separately and taken to a recycling centre by the owner until the by-laws change and they dispose of it. Chemicals will be disposed of according to COSHH, diluted with water and mixed together before tipping down the drain. Chemical waste however will be avoided as much as possible because that is money going down the drain.

Information about what we do as a salon will be posted on the Cream web site. There are some greener products on the market so it would be interesting to conduct a survey using the web site to find out if clients would be prepared to pay the extra cost in having greener hair products used on their hair. This could be a way to go forward if interest was high.

SWOT Analysis Strengths

Gill Burton 10

• Management skills • Twenty seven years of experience in hairdressing • Teaching qualifications and experience in teaching different ages and abilities • Experience in managing a freelance hairdressing business so therefore know the current

market in the local area but have the accessibility to gaining client opinion to ideas that I propose to make real.

• The hours of opening are different to the other salons in the area. A lot of my career/workers/mothers prefer to have their hair done in the evening rather than interrupt their Saturday. The salon will also be open on a Sunday as this is beginning to be a trend.

• Plenty of parking available at a small cost or without.

• The Cream website - other salons in the area are not on the web. The site will promote the professionalism of the salon. Clients can learn more about what my salon has to offer. During the year there will be different offers, course information, articles about services old and new and product information to promote sales etc.

• The Pamper Day scheme – this strategy will help promote my new business into a close nit community and help it gain new custom. The scheme will also help the local economy in three other businesses that choose to join in with the venture.

Weaknesses

• There will only be two members of staff in the first year so if the business starts to get busier than anticipated customer care could suffer.

• If a member of staff is ill it would be difficult to cover their column of clients if the other stylist is already busy. Clients may be disappointed or not impressed if they receive a phone call cancelling and rearranging their appointment. In this incidence clients would have to be given a discount on their service to help compensate them for the inconvenience (hopefully though this discount will encourage the clients to attend the new appointment but it would mean the salon will loose a percentage of business profit).

• I have decided not to employ a stylist assistant to start with due to the added cost, so in busy times the staff will work under more pressure.

• The salon is above a cafe so it is reached by a set of stairs off to the side, therefore prospective clients can not see into the shop floor and seek reassurance of what it is like.

• The salon will exclude certain members of the public due to the stairs, this would be people with physical disabilities. This does not help with the need to support recent legislation.

• I will loose at least 25% of my clientele that I bring in from my freelance business as they will not want to pay more for a salon visit. They also prefer to be at home having their hair done.

Opportunities

The salon will introduce two new services to the women in and around the area:

• Pamper day scheme - to help elevate the stresses and strains of everyday life for women. Clients can enjoy a gift received at Christmas to use in the New Year. They can have a manicure or pedicure, a back massage, a nice lunch and a relaxing conditioning treatment with a blow dry or set. The clients can

Gill Burton 11

enjoy what their town can offer and know they are supporting their local shops and community. Market research on an internet chat room confirmed that Spa days were of current interest to people, but the cost and style of service was not to everyone's liking. Research performed on stress levels shows that I have a good selling point to make.

• Hair extensions - this is a service that could be used to thicken a clients head of hair, it can make hair longer or it can be used for partial colouring effects where clients would like to experiment with flashes of colour for a special occasion or as long as they want without damaging their own natural hair. This is a trend that is highlighted by the rich and famous and in the glossy magazines that people buy.

Both of these services can be explored and expanded depending on their initial success. Client feedback from questionnaires will determine how these services evolve. All businesses concerned would reflect on their performance during the pamper days and try to make the client experience as special as possible, they will know the scheme helps them to gain new clientele and improve their turnover. During this difficult economic time this collaboration could help make a difference to all concerned.

In the future I would like to include a manicure service to offer to my clientele as an added pamper treatment within the salon. This would fit in easily with clients who are having their hair done and promote more sales and profit for the business. This would not effect the pamper day scheme as the client could receive a pedicure at the nail bar instead of the manicure. The client would then really have a top to toe pampering day especially if I can get interest from other local shops (chemist, florist etc) to give discount vouchers on their merchandise as well.

The salon will have two new pieces of electrical equipment which other local salons do not have. These are a steamer and an accelerator. Both pieces of equipment can be used to reduce colour development time thus meaning client appointments are quicker and stylists can book extra customers in. The clients‟ appointment experience is also shorter and know from experience and customer feedback that clients are busy and they have a lot to do these days. The salon will look more modern.

Due to my teaching experience I can teach informal fun evening sessions. In the beginning I propose to have two courses planned:

• A short course for parent/ carers/general public to learn how to cut fringes; side sweeping, con caved and square. They will also learn how to keep hair healthy and how to plait, corn row and twist hair. The participants will be offered to buy a small professional kit including scissors, comb, section clips and special hair bands for corn rows and flat twists. Clients can bring models eg their daughters or sons to work on.

• An introduction course for teenagers in year 10 and 11 at school to see if hairdressing is a career they would like to pursue. The course would involve a taste of shampooing, blow drying, setting wet and dry, long hair up, plaiting and twisting. The students would have to buy a small kit including:

Gill Burton 12

comb, tail comb, section clips, denman, two sizes of round brushes. Students would use the equipment in the salon e.g hairdryers, hood dryers, rollers etc. Students would bring models to practice on.

Both of these teaching sessions would be advertised on the salon website in plenty of time and depending on how successful they are they will be explored and evolved. These sessions will also encourage new people to come and see the salon and meet the staff. During the introductory course there will be the opportunity for me to find a potential apprentice. Next year I would like to introduce refresher courses for trained stylists that need an up date in their skills. None of the other salons in the area offer these training events.

The salon has it's own dedicated web site. The spectrum to advertise courses, products, services, staff experiences and qualifications is endless. The salon will attract interest and draw clients in from a wider area than would normally be possible. It can be developed to show feedback from clients who have had hairdressing services, pamper day experiences or attended courses.

Threats

• The lease for the salon is up in six years time, the owners may decide to sell their property. Due to the business being accessed by clients via the stairs anyway, I need to look for a more appropriate site in the area that we can move to. The next property needs to be bigger and on the ground floor, this will help give future options of expansion, e.g rent out a beauty room.

• Current staff member could leave and take their clients with them. It is vital that I keep my staff happy and offer opportunities for them to earn more and develop their skills. My management and leader ship skills must be used to full advantage. Appraisals and meetings will help keep on top of staff and their contentment in their employment.

• Other businesses may copy the Pamper day scheme. That is why it is important to choose the best partners and create the best value for money package in the beginning. Our pamper day is about quality and good value.

• I will loose a percentage of the clients who already attend the salon, the current owner is bound to do some hairdressing from home. She may be retiring but clients will easily be able to contact her and ask for appointments.

Innovative and sustainable opportunities have been mentioned in the previous tasks.

Gill Burton 13

3, Vision, aims and objectives Vision

The vision for this business is not small. Cream hairdressing wants to make a positive impact on the local community and offer a wider range of services for everyone including opportunities for people to attend different courses and learn more about hairdressing as a

hobby or as a career. Cream is passionate about helping the local business community survive the current economic climate, it wants to engineer a pamper day scheme with three other service providers to help customers de-stress, relax and enjoy what Shirehampton has to offer and, hopefully at the same time, encourage more future trade. If the town suffers and businesses close then the area will be less appealing to visit.

Aims:

• To employ staff from the local area, this will promote the salons ethos of supporting the community.

• To expand on the partnerships made with the pamper day scheme to make it an even better package for customers.

• To offer courses for: stylists who wish to update/refresh their skills, teenagers who wish to find out if hairdressing is a career for them and to offer more informal courses for people who wish to pick up some skills in cutting fringes, plaiting and braiding hair.

• To give the clients the selection of services they require at hours that are more suitable to their demanding lifestyles.

• To use the salon web site to show the public what we have to offer so that they will

see that h Cream hairdressing is very professional and, compared to the more expensive inner city salons, we are serious contenders for their custom.

• To expand in years to come into a bigger more suitable premises on the ground floor so that accessibility is easier for all our customers.

Our motto is:

"To create more than just great hair"

Gill Burton 14

Mission statement: To offer more than just great hair styling. We want to:

• Make an impact on promoting our clients well being as well as physical appearance. • Provide an opportunity for local businesses to increase their income and success. • Offer training courses to give opportunities to those that wish to explore hairdressing and

possibly make a career from it.

Gill Burton 15

4, Needs The following charts show the financial information about the business

Money needed for the first year Salon: Lease – deposit 4500.00

Rent 2200.00

Goodwill 2000.00 Bank loan repayment with interest 3666.96

Accountant 300.00

Business rates 1440.00

Decoration and cleaning 400.00

Design of logo 300.00

Shop signage 1500.00

Phone – business line 450.00

Salon supplies 2200.00

Marketing materials 250.00

Early advertising 360.00

Insurance: Employers Liability

Business

Property

Total: 300.00

Radio licences: Public Performance 80.00

Performing Rights Society 80.00

Staff wages 27000.00

Internet web site 700.00

Predicted cost of electric 1200.00

Predicted cost of water 1200.00

PAT for electrics 60.00

Fire extinguisher check 60.00

Total cost of money needed: £50,246.96

This cost was estimated from the previous owner‟s bills

Sources of money

Start up money 48,000.00

Bank loan 10,000.00

Total of money raised: £58,000.00

Gill Burton 16

Expenditure explained for the first year:

Salon:

In total this will come to £8700.00 this includes a lease deposit, rent and the goodwill which includes fixtures and fittings as well as salon chairs, hood dryers, trolleys, perm rods, setting rollers and electrical till.

Bank loan:

Ten thousand pounds will be loaned from the bank there will be monthly payments of £305.58 taking into account the 10% interest charge.

Accountant:

There will need to an accountant who will be paid at the end of the year, £300.

Business rates:

There is a possibility that I will not have to pay for the first 6 months (government scheme) but I will allow for it just in case. The rates are paid monthly £120.00

Decoration and cleaning:

The salon needs to be painted to match the new colour scheme for “Cream hairdressing” some of the upholstery will be changed and all surfaces need to be cleaned. £400.00 the work will carried out by ourselves

Design of logo:

This will be done by a professional designer: £300.00

Shop signage:

This is an expensive shop sign but the message to the public is to show we are professional:1500.00

Business phone:

The line is already in place I just have to register my business with them. The phone calls will be mostly incoming the total will be:£450.00

Salon supplies:

This includes towels, shampoo and conditioners, new electrical equipment: steamer and accelerator. There will also be enough styling finishing products to last the first six weeks and permanent colours, bleaches, hydrogen peroxides and foils to start up with. There will also be enough crazy coloured hair extensions to display and promote this service. £2200.00. Stock will need to be bought as and when needed during the year.

Marketing materials:

Flyers for posting through letter boxes, price lists for the salon and appointment cards. £250.00

Gill Burton 17

Early advertising:

This will done through the local newspaper £360.00

Insurance:

Three types are required, employers liability, business and property insurance. The first will protect employees and clients. The salon is also covered in case of damage. The business is protected in case of closure due to illness or building repairs. £300.00

Radio Licences:

These must be paid if more than two people are listening to the radio in a public place. My salon requires back ground noise £120.00

Fire extinguishers:

The salon already has these but they must be checked by law once a year. They will be due during my first year. £60.00

PAT for electrics:

The Electricity at Work Act requires that all electrical equipment is checked by a qualified electrician once a year PAT (Portable Appliance Testing)

Staff wages:

The owner will receive £15,000.00 for the first year (£1250.00 weekly), the second stylist will earn £12,000.00 (£1000.00 weekly)

Internet web site:

This is an important part of the business the cost includes paying for the name, renting the space from a provider and designing the website. This will be designed so that I can update pages regularly through the year. £700.00

Electric:

This bill has been estimated using data from the previous owner. £1200.00

Water mains and sewerage:

This bill has been estimated using data from the previous owner. £1200.00

Total cost in the first year: £50,246.96. There will also be a tax bill on top of this figure so extra money will need to be set aside from the business to pay for this. The accountant would be able to advise you.

Expenditure for second year:

Salon:

For the second year this will be the rent only: £2200.00, this will be paid in monthly instalments.

Bank loan:

The ten thousand pound loan from the bank will be paid monthly at £305.58 taking into account the 10% interest charge.

Gill Burton 18

Accountant: There will need to an accountant who will be paid at the end of the year, £300.

Business rates:

The rates are paid monthly £120.00

Decoration and cleaning:

The salon will need decoration maintenance £150.00

Business phone:

The phone calls will be mostly incoming the total will be:£450.00

Salon supplies:

Stock will need to be bought as and when needed during the year. It will be mainly product and the odd small electrical e.g hairdryer that would be needed £1000.00

Marketing materials:

Price lists for the salon and appointment cards. £150.00

Ongoing advertising:

This will done through the local newspaper £360.00

Insurance:

Three types are required, employers liability, business and property insurance. The first will protect employees and clients. The salon is also covered in case of damage. The business is protected in case of closure due to illness or building repairs. £300.00

Radio Licences:

My salon requires back ground noise £120.00

Fire extinguishers:

The salon already has these but they must be checked by law once a year. They will be due during my first year. £60.00

PAT for electrics:

The Electricity at Work Act requires that all electrical equipment is checked by a qualified electrician once a year PAT (Portable Appliance Testing)

Staff wages:

The owner will receive £15,000.00 for the first year (£1250.00 weekly), the second stylist will earn £12,000.00 (£1000.00 weekly)

Internet web site:

This will cost £80.00. the web site will be updated in house.

Electric:

This bill has been estimated using data from the previous owner. £1200.00

Water mains and sewerage:

This bill has been estimated using data from the previous owner. £1200.00

Gill Burton 19

Total approximate cost for the second year: £38136.96

Resource and people requirements - planning growth As mentioned before I will need to employ another experienced stylist as well as myself and, depending on how the first year progresses, I may need to employ an assistant to help support the stylists with their services. The crucial factor is to recognize when extra help is needed as clients may suffer if there is not someone to help make the drinks, shampoo etc. An assistant can help with the efficiency of the salon so there may come a point where a decision has to be made. Hopefully I will be able to employ someone from the introductory courses that I will be running in the first year. This way I will know more about the suitability of the person I choose to employ. During the second year, if my predicted first year profit is correct, I will need to employ a third stylist, perhaps someone with a different set of skills so that we can offer something else to our customers. The salon will need to move premises in the future, the lease runs out in six years time and the owner may need to sell, especially if he/she is struggling during this economic crisis. As the salon is reached by a set of stairs anyway it would be more ideal to find a property on the ground floor thus allowing all customers an easier access. The salon web site will need to be continually up dated and may be redesigned if technology has moved on further, I feel it is important to stay on top of the web market as this is a very important aspect of the business.

Gill Burton 20

5, Sources of support The internet gives a big opportunity for support, here are a few: If you have difficulty in writing a business plan you can purchase a template of one through: www.bplans.co.uk you can choose the expense of the soft wear to purchase but they have templates designed for all types of businesses ranging from agriculture to clothing and fashion. Citizen‟s advice bureau is another very good source for information you can arrange a meeting to discuss your needs and they can advise you or you can look through their web site at www.citizensadvice.org.uk/bureau The internet gives a big opportunity for support, here are a few:

www.bristol.gov.uk this web site was useful as it introduced me to a wealth of information. It gave details on a current business rates relief scheme, where all or some of the cost was not needed to be paid for a year as long as you fitted into their criteria..

www.natwest.com/business

www.businesslink.co.uk can provide information about grants and support. This web site also offered an overview of support on innovation and development and information on how UK businesses could work with UK universities and colleges to make the business more competitive.

Government web sites offer small loans to encourage small businesses

www.startups.co.uk to help you build a better business. Other organisations found on the first web address mentioned:

Co-operative and Community Finance provides loan finance to the co-operative and social enterprise sector

Bristol Enterprise Development Fund offers start up and expansion loans for small businesses

The Prince‟s Trust offers loans of up to £5,000 to young people aged 18-30who are unemployed or underemployed

There is also a bi monthly magazine called “Better Business “which helps to keep you informed. We should also not forget the value of friends, family and staff they all have a role n helping to support the business in a positive way. They can help with posting flyers, spreading the news through their connections about the business. Negativity from people around you will make the job a lot harder and make you less likely to take necessary risks and fully succeed. If times get hard they may be able to offer support in carrying out minor tasks to help you with the work load.

Gill Burton 21

6, Marketing Strategy

My customers profile and their needs. The salon that I am renting has been a hairdressing business for over thirty years. Cream hairdressing will gain a percentage of the previous owners clientele so it is important for these clients to feel welcome and be made fully aware of the services on offer and what the new opening hours are. The customers that will use the salon will be of a mixed age group, next to each I will list their profile and needs:

• Young children aged 1- 12 - these children usually need toys/books/colouring pens/paper to help entertain them if they are having a haircut or waiting for their parent/carer to have their hair done. Their haircuts are usually basic and easy to maintain, they need to done quickly and effectively. Stylist needs to communicate in a child friendly way. A child seat is also required. A selection of squash and biscuits to be available.

• Teenagers - require options in trendy hair cuts and sometimes colour. Style books help to save time and help them explain what they want as they usually find it difficult to accurately portray what they mean. Some teenage students have proms to go to so hair up will be an option for them at the salon. Partial hair extensions e.g flashes of colour placed in sides or sweeping fringe during holidays. The salon needs to look trendy. A selection of tea, coffee, magasines and biscuits to be available.

• Career/working women of any age - these clients could require a wider range of services: regular cut and blow dries either 3-6 or 6-8 week intervals, full head colours and then regrowth touch ups every 4-6 weeks or woven highlights every 4-6 weeks, conditioning treatments especially if they have colour and they have been in the sun and used straighteners frequently(this helps to promote the hair shine that is in vogue). A percentage of these clients would demand hair extensions, partial or full head for those that wish to thicken their hair or give the appearance of being a lot longer. These clients usually have to go into a much bigger town to have this done, it is time consuming so by offering this service in our salon the cost will be less and their parking fee will be much cheeper. These clients also require hair up for special parties and bridal occasions. Through word of mouth and the salon website I would like to encourage clients to come into the smaller town for hair extensions rather than into bigger towns. We are in a recession so the offer of having the same quality of service for a cheeper price should entice them gradually. I will ask my current customers who have hair extensions to post feedback on my web site, face book and twitter. These clients in particular are also usually busy people that demand an efficient service so this must be considered. A trendy looking salon that was comfortable and was open in the evenings. A selection of tea, coffee, magasines and biscuits to be available.

• Mothers of any age - some mothers require easy to maintain hairstyles and only have the funds to treat themselves to that. Other mothers quite often request the services mentioned above with the career/working women. Some mothers are also working full time or part time so a salon that is open in the evening and all weekend could be very useful to them in their

Gill Burton 22

busy lives. A trendy looking salon that was comfortable. A selection of tea, coffee, magasines and biscuits to be available.

• Retired women sixty plus - quite often a small percentage like to have their hair done weekly either a blow dry or set and then have their hair cuts every six weeks, a perm every 3-4 months, some may also have colour. Other clients like to come in for a cut and set or blow dry only and have perms and or just colour. These clients find the salon is more of a social visit where they can relax and enjoy the company of others. For some clients the salon visit is there only social contact so organising an OAP day not only gives them a slight discount it also means they can meet new or regular acquaintances. The salon needs to be comfortable but not so trendy they feel uncomfortable. A selection of tea, coffee, magasines and biscuits to be available.

For all the clients needs the staff need to look smart; black trousers, black shoes and any colour top (not low cut or with baggy sleeves). They also need to have a smiley disposition with a professional manner. They need to work as a team and create a friendly welcoming atmosphere for all clients to enjoy and relax in.

Marketing Strategy – the 4 Ps!

My product offer is:

• To offer all hairdressing services that my four competitors are advertising that they do and to promote hair extensions which are not available in Shirehampton in a salon or a mobile service. Clients have to go into the big city of Bristol and pay top bills. I will use the same quality product and perform the service to a high standard and charge a more reasonable price as it is easier for me to keep the costs down as my over heads are less. I will only buy in the hair needed to use for the extensions so there is no money wasted in unused stock. The popular vibrant colours would be stocked and displayed as they are eye catching and easier to sell in the holiday season. I already have the experience in hair extensions and have a few clients so I know the popular trends.

• I would also like to train my fellow stylist in hair extensions as this would be a new valuable skill to gain and she will also be able to boost sales with her clients performing this service.

• To have a website dedicated to the business.It would include information about;

The staff e.g their qualifications/experience (no other salon displays this). I feel this is important because most clients dread being booked in with a stylist who has just been qualified so new customers would feel they could trust the stylists.

A full list of services would be displayed with the prices.

Each month there would be a page to show special offers, recommendations for hair products for different hair types to help promote sales.

Gill Burton 23

There would also be features about the services we do e.g hair extensions: how they are done, maintained and what effects can be achieved.

• Another type of product I would like to offer customers is a pamper day package for Shirehampton. This is a new idea to Shirehampton and one that could promote my new salon very quickly in other businesses.

This would be organised in time for Christmas so that it can be bought as a gift. I will choose three other reputable businesses in Shirehampton that perform one of each of the following services: manicuring or pedicuring, body massage and somewhere for a great lunch, I would provide the last service a conditioning treatment and blow dry or set. My proposal is to join forces with these businesses for this venture and advertise it via my website, the businesses involved will also advertise it. We will also take out an add in the local newspaper explaining the pampering experience. It will be explained that clients can choose the day they wish to use for their pamper experience.

Pamper days are very expensive in Spas but it is an area of interest for clients. This scheme would promote the businesses for Shirehampton, encourage residents to use their local salons or eateries. New custom would be generated as all businesses concerned would promote selling the scheme to their current clients who may not have used any or only some of the other partners involved.

Lastly I will offer hairdressing courses during the evening to a mixed variety of people seeking different needs:

A short course in how to cut different types of fringes, perform plaits, braids and twists. This would be open to parent/carers or adults interested in hairdressing.

Introductory courses for students in year 10 and 11 at school to see if hairdressing is a career for them.

Refresher courses for qualified hairdressers who need to be updated on their skills and or given confidence.

I will be able to run these courses using the facilities at the salon. These courses will enable the business to sell kits to the participants thus increasing revenue further.

• The product offer of hairdressing services will also be available to clients at different times and days compared to other businesses:

Monday 9.00 - 8.00

Tuesday Closed

Wednesday OAP day 9.00 - 3.00 Thursday 9.00 - 8.00 Friday 9.00 - 8.00 Saturday 9.00 - 5.30 Sunday 10.00 - 4.00

Wednesday will also be used for night school courses, 6.00 - 8.00pm

Gill Burton 24

My pricing strategy is:

• My current clientele of three hundred that I have built up over the last three years and more, will receive a 10% discount for the first year as they are used to paying 20% less than the prices I will charge in the salon. I predict that I will loose 25% of clients anyway due to clients not wanting to follow into the salon environment.

• The salon prices will be just above the middle range of what the current salons in Shirehampton charge. Price lists have been obtained from all other salons to make sure this is correct..

Cream hairstyling price list

Blow dry £12.00 OAP day £10.80 Cut and blow dry £24.00 OAP day £21.60 Wet cut £12.00 Shampoo and set £12.00 OAP day £10.80 Cut shampoo and set £20.00 OAP day £18.00 Perm with S/S £60.00 OAP day £54.00 Full head colour £35.00* Regrowth colour £30.00* OAP day £27.00 Foil highlights £40.00* Hair extensions £280.00* Partial weaves by quote, on average* £35 .00 Long hair up from £15.00 Conditioning treatment* £4.00 **Children's cutting from £2.00 **Children aged from 13 will be charged adult prices. *services with this sign do not include a cut or blow dry

• Hair extensions are a new service but they will be naturally cheaper than the big towns as my overheads are less. This is an important selling point as I want to advertise the same service for the same quality, if not better, for a reasonable price. This will help bring in custom from a wider field, maybe draw clients in from bigger cities as well as locally.

• Old age pensioners will have a discount on Wednesday's, 10%. As I have mentioned before Shirehampton has a great community and this would encourage a type of coffee morning atmosphere for these people to get together and socialize as well as getting their hair done. There is plenty of seating areas for ladies to arrive early for their appointments and chat.

• Costs for the Pamper Day scheme would be discussed and agreed with all businesses concerned as the idea is to give at least a pound reduction on each service so that it is a great deal for someone to purchase as a gift for their friend or loved one at Christmas. For example £50.00 to include a basic manicure, a body massage, lunch that includes a beverage and then a relaxing conditioning treatment with a blow dry or set to finish.

Gill Burton 25

• The recession requires business's to think of ways of keeping afloat, my plan will mean we will help each other and promote the survival of the local shops. Shirehampton has a strong community and the local clientele will not only be supporting their shops they will also be gaining a valuable relaxing pampering experience at half the cost of a Spa.

• The courses that will run during the evening will each run for different lengths of time depending on the nature of the course. The sessions will be two hours each so they must cover the hourly rate for use of electric, water and wage for a tutor. A profit margin will be decided for each depending on the level of expertise being taught eg refresher courses will be more expensive than fringe cutting and braiding courses. The participants will be able to buy a suitable kit, there will naturally be a profit margin here too. The participants will also be asked to bring models to work on so there will be no costs involved in the salon supplying them.

My promotional strategy is:

The Cream hairstyling web site will help promote the business to a wider audience. It would include information about;

• The staff e.g their qualifications/experience (no other salon displays this). I feel this is important because most clients dread being booked in with a stylist who has just been qualified so new customers would feel they could trust the stylists.

• A full list of services showing the prices and opening hours. • Each month there would be a page to show special offers, recommendations for hair

products for different hair types to help promote sales. • There would also be features about the services we do e.g hair extensions how they

are done how they are looked after, what effects can be achieved etc. • A list of current courses available to the general public and qualified hairdressers. • Information about the Pamper day scheme available as vouchers to buy in time for

Christmas gifts.

• I will advertise the salon in the local newspaper leading up to the opening and during, it will show it's opening hours as these are different to the other salons in the area. I will also mention the salon web site where people can get more information about what we offer.

• Leading up to the opening of the salon I will do leaflet drops in the area and on the outskirts. The leaflet will promote the salon, it's aims and objectives, price list, qualifications of staff, contact details and web address for further information.

• Outside the salon there will be an A board advertising the salon and it's special offers when they are on.

• Clients will return to the business because of the customer care and professionalism of the staff.

• When the Pamper Day Scheme is being promoted all the businesses involved will have leaflet/flyers to hand out to their customers. This will promote all businesses involved even if they do not wish to use it. Also client word of mouth will help spread the scheme.

Gill Burton 26

Regarding the pamper day local dentists and doctors will be asked to have some flyers for patients to pick up in their waiting rooms.

• The local newspaper should be interested in writing an article on how the new pamper day

scheme, designed by Cream hairstyling, can help the survival of the local shops during the current economic crisis. This will help encourage wider knowledge of the Pamper Day gift voucher available to buy at Christmas. (Perhaps a photo of the staff involved in the scheme could be used with it). This article will promote all businesses concerned and show how we unite as a community in a difficult time.

• Lastly the greatest advertisement is by word of mouth; in hairdressing this can be very powerful tool as it generates business with no effort.

My strategy for „place‟ is:

• To create a relaxing, not too trendy an environment, so that all age groups can feel welcome and comfortable. There will be a colour scheme used to tie in with the logo and the website so the business will have a colour identity as well making it seem more professional.

• The name of the salon " Cream hairstyling " is chosen because it means the best, rich, indulgent, so when the client hears the name it will seam unusual for a hairdressing salon but the name is short (easy to remember) and it means indulgence. "Cream of the Crop!" the best.

• The salon will have two pieces of modern equipment which the other salons do not have, they will help reduce development times for colour processing thus meaning the client is out more efficiently and we can fit more clients in.

• The telephone will be answered in a professional manner, an answer machine service will also be in place incase staff are busy. In the long term a receptionist may be employed if the business can afford to.

• All customers will be offered a free beverage and magazines to read.

• Staff will wear a uniform, black trousers and shoes with any coloured top. Their hair must always look styled with the colour maintained possibly being changed at least twice a year to show off staff skills.

• The staff will also be local as Shirehampton is a community and the experience from my current clientele is they like down to earth people who can have a jest and a laugh with each other. They do not want to feel intimidated. The staff are more mature than some of the salon competitors so clients will feel in capable hands. The web site will high light this through images of clients and staff smiling while services are being performed.

Gill Burton 27

Branding Branding is vital for any product or business. It says everything about who and what you are, it will even target a specific audience and it will say if your business/ product is modern, old fashioned, contemporary, expensive, cheap etc. As much as I may have ideas about the name of my salon it is very important to seek help from professional people who do this for a living, they know the market trends. They can take a brief from you about your business: what market you are trying to attract, are you modern, trendy etc and they can come up with a selection names for you to choose from. They can then give you logo designs to look at with the chosen names. It is important to spend time on making the right decision, use friends and family to see if they like them. The logo you choose is your brand and for my salon that branding will be across the front of my shop, on all flyers/leaflets, on the web page, on the newspaper adds etc. It is expensive seeking professional help but without it you are taking a risk. For my salon I wanted a name that signified luxury and good quality I did not want a typical hairdressing name like: A Cut Above the Rest, or Curl Up and Dye (yes that is a real one). I wanted a name that was easy to remember, I purposely did not want to use my full name

either as a lot of hairdressers do that too. When " Cream hairstyling " was suggested I felt it was perfect and I believed it would work for this salon. So a shop sign with a de-saturated purple back ground and the word cream printed in a modern font in a cream colour going through it. This would certainly stand out from the competition and look different.

Gill Burton 28

7, Summary of key actions and how I would plan to take them forward

Once the loan is organised, whether through the bank or a government scheme, then I can contact the salon owner to arrange a discussion over the purchase of the salons goodwill this includes the clientele that already visit the salon (I will need a close look at the appointment book to make sure there is enough clientele to warrant the cost that is being charged for them) and the tools equipment and fittings which need to be checked for their condition and function. The price quoted for the business plan might be more than the actual end figure if the goodwill does not meet the specification, there may be some negotiating. Once agreement has been reached with the salon owner and lease owner a date needs to be set for the take over, about four to six weeks. In this time there is a lot of work that needs to be done:

A decision needs to be made as to when the business will open. We must take into account the need for the salon to close at least the first two days so that redecoration, cleaning and signage can be put up. The longer the salon is closed the more likely the current clientele that go there will decide to try a different hairdressers.

Staff informed of open day

All printing of flyers leaflets need to be organised as well as shop signage and posters

As soon as flyers are ready they need to be posted through letter boxes

Adverts in local newspapers need to go in to advertise when the salon will be taken over and re-launched.

Website to be fully completed and posted onto the internet at the latest two weeks before the open day with all relevant information needed. Course information and detail to be added later along with the pamper day scheme.

Licences and insurances need to be organised

Make sure all legal requirements will be met e.g health and safety information poster, fire assembly point, fire extinguishers are still present.

Approach three local businesses which have the best reputation for quality of service and discuss the proposed pamper day scheme with their owners. Several meetings and discussions will need to take place to organise the whole package. Costs of printing and advertising the scheme will be shared. All this must be organised and ready to launch by November at the latest so that maximum selling potential can be reached before Christmas as it is being sold as a gift. Once detail is confirmed then it can be advertised on the salon website.

Wages need to correctly organised following necessary procedures with national insurance and tax etc.

Stock and electrical equipment can be bought leading up to the take over day of the salon.

Set up a system for staff procedures. Have them accessible in the staff room. Have documents that include the appraisal system, holiday procedure, disciplinary procedure, rules and regulations. A lot of this information will be part of their contract which will need to be drawn up by a solicitor. There will need to be a clause that mentions the minimum radius they are allowed to work from the salon should they leave, this is usually 1- 5 miles.

Plan and organise when courses could run allowing for plenty of time for them to be advertised maximising the full potential for success.

Gill Burton 29

Organise a big open day invite friends and family to encourage a crowd out side the door so that people in the high street will be aware of something happening, perhaps invite the local paper over to interview and write an article with photogragh included.

Once the salon is up and running regular stock checks will need to be taken so that only necessary stock is bought.

An accountant will need to be organised for the end of the first financial year so that tax can be paid. Money must be kept aside to allow for this payment. This was not predicted in the financial forecast.

During the first year and onwards regular reviews of salon performance need to take place to make sure we are not underperforming. Checking with the business plan that all that was planned has been actioned.

Always keep abreast of what is new and up and coming in the industry, train staff.

Keep yourself informed of legal requirements, HABIA are the best source of information for hair and beauty but business web sites would be helpful here too. By doing this you will also become aware of any plans that are designed to help small businesses like the rate relief scheme that was mentioned at www.bristol.gov.uk

If necessary review and rewrite the business plan, find new innovative ways to help the salon overcome future developing problems.

Keep aware of property that would be more suitable for a downstairs salon.

Keep positive and focused.

Keep staff motivated and happy, give rewards for targets that are set individually for takings.

Organise a contingency plan for how to dissolve the business should the salon not be viable any more. Finances need to be in order for redundancy money if necessary. If the business looses too much you could be bankrupt and black listed, this should be avoided.

Lastly keep driving the dream forward take risks if you have to but learn from any mistakes that you make, listen to advice and take opportunities when they come your way.