Final N & S Business Plan

7/27/2019 Final N & S Business Plan

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N & S HAIRDRESSING SALON

Business Plan

Ben Jones StreetGrenville,

St. Andrew, Grenada1473-533-8232

May 24th, 2013

Developed with the assistance of: Grenada Industrial Development CorporationFrequente Industrial Estate, Frequente St. George's

Tel: (473) 444-1035-1040Fax: (473) 444-4828

Email: [email protected]

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mailto:[email protected]

mailto:[email protected]




Contents

Contents.............................................................................................................................2

Disclaimer .........................................................................................................................2

1.0 Executive Summary ..................................................................................................3

2.1 Objectives..................................................................................................................42.2 Mission......................................................................................................................42.3 Keys to Success.........................................................................................................4

4.0 Start-Up Summary.....................................................................................................5

5.0 Market/Industry Analysis..........................................................................................6

5.1 Competitive Analysis & Competitive edge ..............................................................66.5 Marketing Strategy....................................................................................................76.6 Sales Strategy.............................................................................................................76.7 Pricing Strategy.........................................................................................................86.8 Distribution Strategy..................................................................................................8

6.9 Sales Forecast............................................................................................................86.10 SWOT Analysis.......................................................................................................96.10.1 Strengths...............................................................................................................96.10.2 Weakness..............................................................................................................9Inexperience in the hairdressing business........................................................................9Lack of management skills..............................................................................................96.10.3 Opportunities .......................................................................................................9

7.0 Management Summary............................................................................................10

8.0 Financial Plan...........................................................................................................12

8.2 Projected Profit & Loss ..........................................................................................15

8.3 Projected Cash Flow................................................................................................17

Disclaimer

This business plan represents the ideas and intentions of the owner of the business; it is based on projections and the current state of the economy including buyer trends,

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patterns, an analysis of the industry and other uncertainties. Although such projections are believed to be realistic, no declaration can be made as to their accuracy and attainability.This business plan does not guarantee the receipt of any loan or grant neither does itconstitute an offer to sell, nor a solicitation of an offer to buy securities. In this regard, theGIDC shall not be held liable for business plans that are not approved by financial

institutions or grant agencies.

N & S Hairdressing Salon will be operated as a high quality salon in the town of Grenville. The business will be specialised in quality services to all customers at areasonable price. Its founders are two energetic young ladies who are highly motivatedwith a desire to succeed and expand in the future.

The business is aimed to provide customers with a wider choice of obtaining the productsand services offered by N & S Salon but at the same time

Business Plan Highlights

2013 (6 months) 2014 2015

Total Income 17,700.00 48,868.00 62,365.00

Growth in Income (%) 176% 27.6%

Total Expenditure

Growth in expenditure (%)

Anticipated Profit/(Loss)

Profit as a % of Total Income

Total Assets

Growth in Assets (%)

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1.0 Executive Summary




2.1 Objectives

• To be able to have at least ten percent (10%) of the market share by the end of

year three

• To be able to reach forty thousand dollars ($40,000) income (sales and services)

in the first year and an increase of ten per cent (10%) each year following• To be able to earn a profit of fifteen thousand dollars ($15,000) in the first year

and an increase of 10% each year following

2.2 Mission

To provide a unique experience to all customers by offering excellent hair services at anaffordable price in a relaxing environment.

2.3 Keys to Success

1. A comfortable, pleasant and refreshing environment where clients would berelaxed.

2. A clientele that would ensure profitability and guarantee success3. Providing a reliable and efficient service at a competitive price

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N & S Hairdressing Salon

Business Start Up Budget

% Equity % Loan

12.96% 87.04%

Items Total Cost Equity Loan

Expense:

Water 400.00 200.00 200.00

Electricity 400.00 200.00 200.00

Rent 1,000.00 500.00 500.00

Business registration 60.00 60.00

Advertisements (Flyers) 400.00 400.00

Subtotal 2,260.00 1,360.00 900.00

Current Assets:

Hair Accessories 9,024.00 1,000.00 8,024.00

Direct Materials 1,500.00 1,500.00

Total Current Cost of

Goods

10,524.00 2,500.00 8,024.00

Long Term Assets Total Costs Equity Loan

Television 1,000.00 1,000.00

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4.0 Start-Up Summary




Refrigerator 1,900.00 1,900.00

Radio 100.00 100.00

Hair Dryer 1,000.00 1,000.00

Equipment 7,000.00 7,000.00

Sink 800.00 800.00

Shelves 1,500.00 1,500.00

Large Mirror 700.00 700.00

Furniture 3,000.00 3,000.00

Total long term assets 17,000.00 0.00 17,000.00

Total Start up costs 29,784.00 3,860.00 25,924.00

N & S Hairdressing Salon will focus on ladies between the ages of fifteen to seventy inthe parish of St. Andrew.

The business ‘main target group will be young ladies who are keener to keep themselves

beautiful. These will be teen girls who will soon be leaving school in the next year or two; young working ladies and older women who are willing to maintain their hair evenat their age.

5.1 Competitive Analysis & Competitive edge

The main competitors of N & S hairdressing Salon will be the well-established salons inthe areas of Grenville. These salons are operated by well experienced and competenthairdressers.

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5.0 Market/Industry Analysis




N & S Hairdressing Salon will concentrate on quality, reliability and flexibility. Theowners intend to ensure that they learn and keep up to date with new styles andinformation in the cosmetology area. The internet will be a good source of free educationwhere a number of styles are taught on YouTube. Every effort will be made to educate

ourselves further whenever training opportunities are available.

The Salon’s opening hours will be very flexible and a shift system will be organised toaccommodate customers who may visit late in the evening for our services.

6.5 Marketing Strategy

N & S Hairdressing Salon will promote its business by the use of flyers for the opening.The opening will include special price for the first week of operation. Schools will be

targeted during the months of July. Each young lady graduating from secondary schoolsin St. Andrews will be given a ten dollar ($10) coupon for which she will receive a tendollar ($10) discount on any hairstyle before the end of July. It is anticipated that most of the young ladies will make use of the discount for their graduation ceremony.

The targeted number of persons will be as follows:

Table 3

Schools Number of young ladies graduatingSt. Joseph’s Convent 58

Grenville Secondary 31

St. Andrew’s Secondary School 29

Total 118

Business places with high percentage of ladies will also be visited and given discountcoupons.Flyers will be stuck on buildings and on lamp poles throughout Grenville.

6.6 Sales Strategy

The business will be opened six days per week from 9:00 a.m. to 6:00 p.m. A shiftsystem will be used by the two operators in order to accommodate late customers and to be more flexible. Later appointments for hair styles can be made and these customers will be accommodated as well.Persons who use the services of the salon would get all products at a 10% discount whilecustomers who only make purchases will pay the full price.

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6.7 Pricing Strategy

The price of the hair dressing services will be very competitive with those of other hairdressers in the parish. The ten dollar ($10) coupons will be distributed to secondary

school graduates on the day of their graduation. This strategy will be used to introducethe clients to the salon. During that that we will concentrate on quality services andensuring that customers are satisfied.

Hair and beauty products will be priced by using a 25% mark up. N& S Hairdressingsalon would purchase most of the hair products from Trinidad and Tobago where theitems are much cheaper than in Grenada. This will allow us to sell at a lower price thanour competitors in order to build up our market share.

6.8 Distribution Strategy

All products will be sold at the salon on Ben Jones Street, Grenville.All hair services will be done at the hair salon also.

6.9 Sales Forecast

The selling price of all hair accessories are shown in the table below. It is estimated thathalf of the starting inventory will be sold in 2013.

Items Selling Price

Braids $5.00Weavon (synthetic) $50.00

Weavon (human) $80.00

Hair extensions $50.00

Manekene $150.00

Hair pins $5.00

Hair clips $5.00

Weaveon thread $5.00

Weaveon needles $3.00

Weaveon glue $5.00

Nail remover $8.00

Eye lashes $5.00Acrylic $20.00

Nail polish $5.00

Hair dye $5.00

Combs $5.00

Hair brush $10.00

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Table 5: Income

It is assumed that half of the inventory of hair accessories will be sold in 2013. Since thisis for half of the year the amounts in 2014 is doubled plus an increase of 10%. This 10%increase continues in 2015.

Hair services are estimated to be ten (10) persons per service per month in 2013. Also, itis anticipated that there will be fifteen (15) persons per month in 2014 and twenty (20) persons per service per month in 2015.

6.10 SWOT Analysis

N&S is a new business and based on the fact that it is entering an existing market it willface opportunities and threats.The resources and competencies that are present at N&S Hairdressing Salon would allow

it to have a number of strengths.The strengths of the business would be used to exploit the opportunities existing andreducing the threats it faces.

6.10.1 Strengths

• Young, energetic and adventurous young entrepreneurs who are willing to

succeed in the hairdressing business.

• Competitive prices of hair styles and hair products

• Comfortable and relaxing atmosphere with emphasis on quality services

• Flexible working hours

6.10.2 Weakness

• Inexperience in the hairdressing business

• Lack of management skills

6.10.3 Opportunities

• To expand the clientele to neighbouring parishes

• To expand the services provided to the clients

2013 2014 2015

Sale of Accessories 5,440.00 11,968.00 13,165.00

Hair Braiding 3,600.00 10,800.00 14,400.00

Hair Weaving 3,600.00 10,800.00 14,400.00Hair Relaxing 3,000.00 9,000.00 12,000.00

Hair Treatment 2,100.00 6,300.00 8,400.00

Total 17,700.00 48,868.00 62,365.00

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• To further the educational level of the hairdressers by using the internet and

attending training courses whenever they are available

• To develop management knowledge and skills through the use of the internet and

local training opportunities available

6.10.4 Threats• Competitors who are already established and who have an established clientele

• The state of the economy where the unemployment level is high

• The demand by clients for credit rather than paying cash

N & S Hair Salon will be operated by two persons. Ms. Nazinga Charles will be theHairdresser and Manager while Ms Shinnelle Mc Intosh will be the Sales Clerk. Miss McIntosh will also serve as the cleaner.

Manager (Ms. Nazinga Charles)

Cleaner/Sales Clerk (Ms. Shinnelle Mc Intosh)

7.1 Job Descriptions

Manager

• Preparation of all financial records

• Ensure all payments due to suppliers and all outstanding bills are paid on a timely

basis

• Ensure the collection and recording of all income

• Preparation of all stock records

Sales Clerk/Cleaner

• Sell products to clients and other members of the public

• Inform the Manager of the demand for certain products

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7.0 Management Summary




• Assist the Hairdresser in areas that are not technically difficult

• Have the salon in a neat state that is comfortable for the customers

7.2 Personnel Background

Miss Nazinga has a Diploma in Cosmetology and has business knowledge from her studies of Principles of Business at the CXC level. Both Ms. Charles and Ms. Mc Intosh,have completed a 3 month training Programme at GIDC under the Caribbean YouthEmpowerment Program, where they attained adequate entrepreneurial training which willassist them in managing and running the business.

7.3 Personnel Plan

During the first three year of operation N&S Hairdressing Salon would be staffed by justtwo person. Miss Nazinga Charles who will serve as Manager and Hairdresser and Miss

Shinelle Mc Intosh will serve as Sales Clerk and Cleaner. Other staff members would beconsidered based on the growth and success of the business.

Table 5: Personnel:

Year 1 Year 2 Year 3

Manager/Hairdresser – Nazinga Charles 6,000.00 14,400.00 16,800.00

Sales Clerk/Cleaner – Shinelle Mc Intosh 4,200.00 10,800.00 13,200.00

Total Persons 2 2 2

Total Payroll $10,200.00 $25,200.00 $30,000.00

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8.1 Important Assumptions (This section contains a sample of assumptions)

General

• All monetary figures in this assumption section are quoted in Eastern Caribbean

Currency (EC currency);

• All services and sales are for cash. No credit was provided for

• The business financial year begins January and ends in December;

• It is assumed that products will be sold locally on an on-going basis directly to

major retail customers.

• No increases in the cost of services are projected in the first three years.

Revenue

Service income is based on the assumption that N&S Hairdressing Salon would have ten(10) clients per month for each different type of service offered. This will be increased tofifteen persons per service in 2014 and twenty persons per month in 2015.

Table 4: Service Price

Service Price

Braiding $60

Weaving $60

Relaxing $50

Treatment $35

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8.0 Financial Plan




Expenses

• NIS Contribution for employees is calculated at four per cent (4%) of their

respective salaries and five (5%) per cent from the employer

• Depreciation is calculated at 10% on all furniture, equipment and other fixed

assets.

• The straight line depreciation method is used.

• Assumptions are made on variable cost which is taken to be the average variablecost of producing and selling pork and chicken. Selling price is also assumed as

an average of all products and services provided by the business

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• Inventory Turnover: Since this is a product based business primarily engaged in

purchasing animals for meat production minimum inventory is expected to be on

hand at the end of each month. For example, for a farm the main inventory will be

the animals maintained for breeding which will yield greater inventory growth

over the long run

Additional Notes and Assumptions:

Cost of Goods

• NIS is calculated at 9% for all employees

• Inventory is calculated based on the assumption that 50% of the start up inventory

will be sold by the end of 2013. The opening stock for 2014 will therefore be 50%

of the start up inventory.

8.2 Break-even Analysis

Break-even is the point at which your revenues cover your fixed and variable costs and isnow contributing to profits. The list of costs considered as fixed are as follows:

Fixed Costs Monthly Amount

Salaries 1,700.00

NIS Contributions 153.00

Rent 500.00

Loan Repayment 563.65

Cable 57.50

Total Fixed Costs 2,974.15

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Average Per cent variable cost: 60%

Breakeven amount = 2974.15/35% = $8,497.57.

This indicates that N&S Salon would have to generate $8,497.57 before it can start togenerate profits.

8.2 Projected Profit & Loss

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N&S Hairdressing Salon

Pro forma Profit & Loss

Income: FY 2013 FY 2014 FY 2015

Sale of Hair Accessories 5,400.00 11,968.00 13,165.00

Braiding 3,600.00 10,800.00 14,400.00

Weaving 3,600.00 10,800.00 14,400.00

Relaxing 3,000.00 9,000.00 12,000.00Treatment 2,100.00 6,300.00 8,400.00

Total Income 17,700.00 48,868.00 62,365.00

Expenses:

Water 1,000.00 1,100.00 1,210.00

Electricity 1,300.00 1,980.00 2,178.00

Flow (Cable) 690.00 1,380.00 1,380.00

Rent 3,000.00 6,000.00 6,000.00

Salaries 10,200 25,200.00 30,000.00

NIS contribution 918.00 2,268.00 2,700.00

Miscellaneous expenses 200.00 200.00 200.00

Business registration 60.00 0.00 0.00Advertisements 400.00 0.00 100.00

Depreciation 850.00 1,700.00 1,700.00

Direct Material purchase 1,500.00 1,200.00 1,400.00

Total Expenses 20,118.00 40,848.00 46,868.0

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Profit/(Loss) before interest and taxes (2,418.00)

8,020.00 15,497.00

Interest expense (loans) 1,158.02 2,456.13 1,957.65

Net Profit/(Loss) (3,576.02)

5,563.87 13,539.35

Net profit as a % of income -23.03% 11.39% 21.71%

Retained Earnings - (3,576.02) 4,443.98

Add Net Income/Loss (3,576.02)

8,020.00 13,539.35

Less Dividends 0.00 0.00 0.00

Ending Retained Earnings (3,576.02)

4,443.98 17,983.33

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8.3 Projected Cash Flow

N&S Hairdressing Salon

Pro forma Cash Flow

2013 2014 2015

Cash Inflows

Cash Sales & Service Income 17,700.00 48,868.00 62,365.00

Subtotal from cash from operations 17,700.00 48,868.00 62,365.00

Additional Cash Received

Long Term borrowings 25,924.00

Equity 3,860.00

Subtotal Cash Held 47,484.00 48,868.00 62,365.00

Expenditures

Principal repayments on loans

Loan payments 3,381.90 6,763.80 6,763.80

Total financing cash outflows 3,381.90 6763.80 6763.80

Operating cash flows

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Water 1,000.00 1,100.00 1,200.00

Electricity 1,300.00 1,980.00 2,178.00

Cable 690.00 1,380.00 1,380.00

Rent 3,000.00 6,000.00 6,000.00

Salaries (Sales Clerk) 4,200.00 10,800.00 13,200.00

NIS Contributions 918.00 2,268.00 2,700.00

Miscellaneous expenses 200.00 200.00 200.00

Business registration 60.00

Advertisements 400.00 100.00

Total Cash Operating outflow 11,768.00 23,728.00 26,958.00

Cost of Products and Purchases

Direct labour (Hairdresser’s salary) 6,000.00 14,400.00 16,800.00

Direct materials purchase 1,500.00 1,200.00 1,400.00

7,500.00 15,600.00 18,200.00

Subtotal cash spent 22,649.90 46,091.80 51,921.8

Net Cash flow 24,834.10 2,776.20 10,443.20

Opening Balance - 24,834.10 27,610.30

Closing cash Balance 24,834.10 27,610.30 38,053.50

Projected Balance Sheet N & S Hairdressing Salon

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Pro Forma Balance Sheet

ASSETS 2013 2014 2015

Current Assets

Cash 24,834.10 27,610.30 38,053.50

Inventory

Total Current Assets

Long Term Assets

Refrigerator (cost less depreciation) 1,805.00 1,615.00 1,425.00

Equipment (cost less depreciation) 6,650.00 5,950.00 5,250.00

Furniture (cost less depreciation) 2,850.00 2,550.00 2,250.00

Television (cost less depreciation) 950.00 850.00 750.00

Radio (cost less depreciation) 95.00 85.00 75.00

Hair Dryer (cost less depreciation) 950.00 850.00 750.00

Shelves (cost less depreciation) 1,425.00 1,275.00 1,125.00

Sink (cost less depreciation) 760.00 680.00 600.00

Mirror (cost less depreciation) 665.00 595.00 525.00

Total Long Term Assets 16,150.00 14,450.00 12,750.00

Total Assets

LIABILITIES & EQUITY

Current Liabilities

Long Term Liabilities:

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Long Term Loan 24,263.77 19,956.09 15,149.94

Owner’s Equity

Capital 3,675.00

Retained Earnings (4,076.02) 4,443.98 17,983.33

Total Capital

Total Liabilities & Capital

APPENDIX

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an Payments

Loan Amount 18,353.70$ Scheduled Payment 600.88$

Annual Interest Rate 11.00 % Scheduled Number of Payments 36

Loan Period in Years 3 Actual Number of Payments 36

Number of Payments Per Year 12 Total Early Payments -$Start Date of Loan 1/1/2013 Total Interest 3,277.86$

Optional Extra Payments -$

Lender Name:

Payment Date Beginning Balance

Scheduled

Payment Extra Payment Total Payment Principal Interest Ending Balance

C

2/1/2013 18,353.70$ 600.88$ -$ 600.88$ 432.63$ 168.24$ 17,921.07$ $

3/1/2013 17,921.07 600.88 - 600.88 436.60 164.28 17,484.47

4/1/2013 17,484.47 600.88 - 600.88 440.60 160.27 17,043.86

5/1/2013 17,043.86 600.88 - 600.88 444.64 156.24 16,599.22

6/1/2013 16,599.22 600.88 - 600.88 448.72 152.16 16,150.50

7/1/2013 16,150.50 600.88 - 600.88 452.83 148.05 15,697.67

8/1/2013 15,697.67 600.88 - 600.88 456.98 143.90 15,240.69

9/1/2013 15,240.69 600.88 - 600.88 461.17 139.71 14,779.52

10/1/2013 14,779.52 600.88 - 600.88 465.40 135.48 14,314.13

11/1/2013 14,314.13 600.88 - 600.88 469.66 131.21 13,844.46

12/1/2013 13,844.46 600.88 - 600.88 473.97 126.91 13,370.49

1/1/2014 13,370.49 600.88 - 600.88 478.31 122.56 12,892.18

2/1/2014 12,892.18 600.88 - 600.88 482.70 118.18 12,409.48

3/1/2014 12,409.48 600.88 - 600.88 487.12 113.75 11,922.36

4/1/2014 11,922.36 600.88 - 600.88 491.59 109.29 11,430.77

5/1/2014 11,430.77 600.88 - 600.88 496.09 104.78 10,934.67

6/1/2014 10,934.67 600.88 - 600.88 500.64 100.23 10,434.03

7/1/2014 10,434.03 600.88 - 600.88 505.23 95.65 9,928.80

8/1/2014 9,928.80 600.88 - 600.88 509.86 91.01 9,418.94

9/1/2014 9,418.94 600.88 - 600.88 514.54 86.34 8,904.40

10/1/2014 8,904.40 600.88 - 600.88 519.25 81.62 8,385.15

11/1/2014 8,385.15 600.88 - 600.88 524.01 76.86 7,861.14

12/1/2014 7,861.14 600.88 - 600.88 528.82 72.06 7,332.32

1/1/2015 7,332.32 600.88 - 600.88 533.66 67.21 6,798.66

2/1/2015 6,798.66 600.88 - 600.88 538.56 62.32 6,260.10

3/1/2015 626010 60088 - 60088 54349 5738 571661

Enter Values Loan Summary

Final N & S Business Plan

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