HAIR BEAUTY SALON

ADDRESS OF THE BUSINESS:

LECTURER:

PREPARED BY:
DATE OF SUBMISSION:
28 September 2010

SECTION 1

INTRODUCTION

SECTION 2

PURPOSES

SECTION 3

BUSINESS BACKGROUND

SECTION 4

OWNERS BACKGROUND

SECTION 5

ADMINISTRATION PLAN

SECTION 6

MARKETING PLAN

SECTION 7

OPERATIONAL PLAN

SECTION 8

FINANCIAL PLAN

APPENDICES

1.0

Introduction

1.1

Name of the company

Hair Beauty Salon

No. 48, Jalan Plumbum V 7/V,
Seksyen 7, 40000 Shah Alam,

Selangor Darul Ehsan.

1.2

Nature of the business

Our company, Hair Beauty Salon have provide hair care services in order to fulfil the needs
and wants of community especially students.

1.3

Industry profile

Hair Beauty Salon is a partnership company that focuses in providing hair care services at
affordable and reasonable price to our target market.

1.4

Location of the business

Based on the research, we have found a strategic area at Shah Alam was the marketable
place for us to commence the business. It is located at No. 48, Jalan Plumbum V 7/V,
Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan. Furthermore, customer easy to get
parking around this area and the building are situated near the main road.

1.5

Date of business commencement

Our business will be started on 1 January 2011.

1.6

Factors in selecting the proposed business

Based on the observation and survey, we have decided to operate the Hair Beauty Salon
because it is a profitable business and easy to manage. Because of our target market are
students, we did a research among the UiTM students and we have find out a great demand
from them. Besides that, it can create a healthy competition among the other salon.

1.7

Future prospect of the business

For the future of the business, we have discussed to open up new branches especially
nearest to the high education institution. In addition, the business can create job opportunity
to the professional workers and also helps to develop the economy for our country.

2.0

Purposes of the Business Plan

Among the main purposes for our business preparing a business plan are:

To evaluate the project viability and growth potential

To act as guideline for the management of the proposed business

To allocate business resources effectively

A detailed description of our new business, including the company's product and
services, marketing plan, financial statements and projections and management
principles.

Its list a company's expected course of action for a specified period usually includes
a detailed listing and analysis of risks and uncertainties.

For our business, it should examine the proposed products and services, the market,
the industry, the management policies, the marketing policies, production needs and
financial needs.

3.0

BUSINESS BACKGROUND

Name of Company

: Hair Beauty Salon

Company Address

Telephone/Fax Number

: 03-55664323

E-mail

: hairbeautysalon@hotmail.com

Form of Business

: Partnership

Main Activity

: Provide hair care services such as blow-drying, cutting,

colouring
and hair treatment

Date of Registration

: 18 November 2010

Number of Registration

: 516656

Date of Commencement

: 1 January 2011

Initial Capital

: Partners capital - RM 60 000

Name of Bank

: Bank Islam Malaysia Bhd. (BIMB)

Bank Account No.

: 12142040025522

4.0

PARTNERS BACKGROUND

Name

Identity card no

Permanent address

Correspondence address

Telephone no

Date of birth

Age

Skills

Experiences

Present occupation

Previous business experiences

Capital contribution

: RM

5.0

Administration Plan

5.1 Introduction

Hair Beauty Salon is a partnership business form to carry out the business that provides
services for hair care. Hair Beauty Salon will provides the best hair care services for the
target market. Administration is the management of public or business affair. Administration
is one of the important departments or parts of a business in order to control and administer
all the related work in the company. This department is controlled the partners which has
experiences and knowledge about this field. Besides that, there is also commitment from the
others to ensure the objective can be achieved by the company.

5.2

Vision

Hair Beauty Salon is set up to provide good quality hair care and treatment services

at a reasonable price for customers.

This company also wants to expand the business outside of Shah Alam by opening
new branches within 10 years after commencement.

5.3

Mission

5.4

Objective

5.5

To make profit and increase the profit year by year.

To increase the number of customer day by day.

We want to be known and famous among the target market.

To give full satisfaction to customer with excellent services.
To give an adequate return on investment to partners.

Business Address

No. 48,
Jalan Plumbum V 7/V,

Section 7, 40000 Shah Alam,

Selangor Darul Ehsan.

5.6

Organization Chart

General Manager

Marketing Manager

Administration
Manager

Operations Manager

Hairdresser

5.7

List of Administration Personnel

Position

No. of Personnel

General manager/Hairdresser
Administration manager/Hairdresser

1
1

Marketing manager/Hair dresser

Operations manager/Hair dresser

5.8

1
1

Schedule of Tasks and Responsibilities

Position

Task and Responsibilities

General manager
-

Oversees all areas of the facility on day

to day operations

Schedules all staff

Make sure all staff is keeping their area

operating as required

Try to solve all concerns by members

and staff

Promote health and wellness, educate

members and recruit new members

Other duties as assigned

Carrying out the administrative duties,

Administration manager

using system and relevant processes to

the organization
-

Design

and

implement

staff

communication programs
-

Manage and order supplies within the

budget guidelines

Prepare and review operational reports

and schedules to ensure the accuracy
and efficiency

Plan, administer and control budgets for

contracts, equipment

Monitor the facility to ensure that it

remains

safe,

secure,

and

well-

maintained
-

Oversee the maintenance and repair of

machinery, equipment and mechanical
systems

Marketing manager
-

Responsible for the design of marketing

strategies for the firm

Pinpoint potential markets that the firm

can target

Come

up

strategies

with
that

will

effective
lead

pricing
to

more

profitability for the company and help in

the consolidation of market share
-

Marketing managers track trends in the

market and come up with products and
services that will satisfy new demands

To advertise and promote our services

and

make

them

famous

in

the

marketing by using different techniques

Operational manager
-

Direct

and

coordinate

activities

of

businesses or departments concerned

with the production, pricing and sales
-

Review financial statements, sales and

activity reports, and other performance
data to measure productivity and goal
achievement and to determine areas
needing cost reduction and program

improvement
-

Manage staff, preparing work schedules

and assigning specific duties

Determine staffing requirements, and

interview, hire and train new employees,
or oversee those personnel processes

Plan and direct activities such as sales

promotions,

coordinating

with

other

department heads as required.

Hairdresser
-

Hairdressers cut, style and colour hair

Provide permanent wave, straightening

and bleaching treatments

Advise

clients

conditions,

on

proper

problem
hair

hair

care

and

wig

and

maintenance.
-

Provide

hair

extension,

restorative services
-

Responsible for keeping their work area

clean

and

meeting
standards

their

state

equipment
health

and

sterile,
safety

5.9

SCHEDULE OF REMUNERATION

MONTHLY
POSITION

GENERAL

NO.

SALARY
(RM)

EPF
(12%)

SOCSO
(2% OR
2.5%)

TOTAL
(RM)

1400

168

35

1603

1200

144

30

1374

1200

144

30

1374

MARKETING
MANAGER

1200

144

30

1374

TOTAL

5000

600

125

5752

MANAGER
OPERATIONAL
MANAGER
FINANCIAL
MANAGER

Allowances:
It is additional benefits paid to workers. They are considered incentives to motivates and
encourages workers to perform their work better.

5.10

List of office equipment and supplies

Types

Quantity

Price/unit (RM)

Total (RM)

Styling Chair

200

600

Styling Station

1876

7504

Utility Tray

100

300

Portable Washing

300

600

Total

9004

Office Furnitures
Types

Quantity

Price/unit (RM)

Total (RM)

Sofa

1000

1000

Table

350

350

Total

1350

Other Expenses
Types

Quantity

Price/unit (RM)

Total (RM)

900

1800

Magazines

10

15

150

Dustbin

20

40

Air-conditioner

Total

1990

5.11

Administration budget

ADMINISTRATIVE BUDGET

Particulars

Monthly
Exp.

F.Assets

Others

Total

Fixed Assets
Office Furniture

1,350

1,350

Working Capital
Salaries, EPF, SOCSO

2,977

2,977

Miscellaneous

500

500

Pre-Operations & Other Expenditure

Other Expenditure
Total

1,350

3,477

5,836

5,836

5,836

10,663

6.0

Marketing Plan

6.1

Introduction

Marketing is a process that is vital in a company to create values for customers and
build relationships in order to attract customers to go for the services provided. It is also the
process of planning, executing the concept, pricing, promotion and distribution of ideas,
products or services to create exchange that can satisfy individuals and organizational
objectives. It is a very important element to manage a company. As a started of a new
business, the market condition and customers demands have been analysed. An analysis
from the marketing point of view is very important in order to make the business can reach
the sales target and profit as well.
The status of marketing encompasses the entire business. The business identifies
the needs and wants of the market for marketing plan. Marketing plan involves the activities
that are carries out systematically to encourage and increase the sales of products or
services as long as the activities are in line with ethical and religious practices. Therefore,
Hair Beauty Salon has developed some plans and strategies in order to introduce and inform
about the services provided to our target market.

6.2

Marketing Objective

The marketing concept rests on the philosophy that all activity must satisfy the needs
and wants of customer and to achieve the targeted profit. Based on this concept, the
objective of company can be satisfied. The marketing objective that needs to be achieved
are stated as follows :

Quality of services

We are aiming to provide quality services through well trained workers and as
well as the product that we used for hair care and treatment.

Customer satisfaction

We are trying to identify the customers needs and wants based on the analysis
made. It can be successfully fulfilled by giving full commitment when doing our
job.

To encourage and improve our services

This can be achieved by preparing the effective promotion and as well as the
good business environment.

To ensure our salon is well known

All information needed regarding to our salon will be spreader through

promotions and advertisement.

To maximize profit

As all the objectives stated above are obtained, our targeted profit can be
reached at its maximum point.

6.3

Service Description

Hair Beauty Salon is a service type of business which provides hair care and
treatment to customer. We are providing hair care services that are beneficial to customer.
This is due to our good quality services at the affordable price.

We are using hair care product that is formulated by using the natural ingredients
such as traditional herbs and plants extracts These not only the uniqueness of our services
but it is also safe to use and halal for Muslims. Therefore, we can easily attract the potential
customer use our services.

Besides that, after we did some research, we have identified a strategic location to
open the business. We have decided to open the business at Section 7, Shah Alam which is
near to the Universiti Teknologi Mara (UiTM) and residential area. . We will open the
business 6 days per week. The business will be closed on Friday and Public Holiday.

6.4

Target Market

Hair Beauty Salon has identified the target market based on the market segmentation
which are the students from Universiti Teknologi Mara (UiTM) Shah Alam, residents from the
near residential area include the other potential buyer that is 7 kilometres diameter from our
business premise. We have chosen these target market because nowadays, people are
more sensitive towards the quality of services and the price level due to the economics
problems.

6.5

Market size

Market size is referring to the total potential purchases of the target market. This is included
the purchases of competitors product or services within the same market. Normally, it stated
in terms of unit or ringgit. The market size can be calculated by daily, weekly, monthly or
yearly.
Target market in Section 7, Shah Alam
=200 000 people

Market size
Target market of people going to salon
Target market
Student
Resident
Total

People going to salon

80 000 (15%)
120 000 (10%)

Total (people)
12 000
12 000
24 000

Estimated money spend per year for hair care services per person
= RM 80 x 24 000
= RM 1,920,000

6.6

Market potential

6.6.1 Types of customers

Customers
Students
Residents

Market size
12 000
12 000

Purchasing power
RM80 x12 000
RM80 x12 000

Total (RM)
960 000
960 000

Total

24 000

1,920,000

Teenagers and youngsters who describe student will be dominating our types of customers.
However, not forgotten by us another target group is working person because our business
is the area of industrial zone.

6.7

Competition

Competitor refers to other business that offer similar products, substitute or alternatives
products or services to the same target market. Two businesses may involve in the same
industry or may offer the same products or services but are not considered competitors if
they do not reach out to the same target market.

We had identified a few competitors to our company:

Name of the
company

Strengths

Weaknesses

Duration in
market

La Hair

Offer

scrup
Offer

body

Open 4 days

per week
More

reflexology

Glamour and
Beautiful

Located near

the main city

Offer
their
own

1 year

expensive

Their

are small
Less

hair

shop

More than 1
years

convenient

treatment
product

Shine Hair

Offer

nail

manicure

Their

target

market
for

only

working

people
Services are
less
convenient

More than 1
years

Market share refers to the portion of the market that the business can control after taking into
consideration market size and the competitors position in the same market. Market share is
often quoted in terms of percentage of total market size.

Market share before entry of Hair Beauty Salon:

Name of the company

Percentage

Total (people)

La Hair

30%

7 200

Glamour and beautiful

50%

12 000

Shine Hair

20%

4 800

Total

100%

24 000

After analysing the competitors strength and weaknesses, Hair Beauty Saloon is confident it
can control 14% of the market. This will mean that the existing competitors will lose some of
their market after the entry of Hair Beauty Saloon.

Adjusted market share after the entry of Hair Beauty Salon:

Name of the company

Percentage

Total (people)

La Hair

24%

5 760

Glamour and Beautiful

46%

11 040

Shine Hair

17%

3 840

Hair Beauty Salon

14%

3 360

Total

100%

24 000

6.6 Forecasting Sales

The sales forecast is done on a monthly basis for the first year of business and can be used
for extended to cover sales for the second and third year. This section will offer a financial
overview of Hair Beauty Salon included the break-even analysis and sales forecast.

Sales forecasts
The first month will be used to set up the equipments that need in the saloon and hire and
train the employees properly. The instalment of the equipments will be officially done in the
second month.

Month

Sales
Units (people)

RM

January

237

18 960

February

272

21 760

March

306

24 480

April

305

24 400

May

275

22 000

June

249

19 920

July

279

22 320

August

307

24 560

September

313

25 040

October

298

23 840

November

273

21 840

December

246

19 680

Year 1 total sales

3360

268 800

6.7

MARKETING STRATEGY

Developing marketing strategy is to enable business to plan in order to achieve stated

marketing objectives. The key idea of our business is to deliver customer satisfaction yet
provide business with a competitive advantage. Marketing strategy includes product, pricing,
place or distribution and promotion strategy.

6.7.1 Product strategy (service)

Our product strategy is referring to customer service. All of salons employees have been
trained in exceptional customer service. We are offering the best quality and up to date
services due to customer satisfaction. Our services include shampoo treatment, rebonding,
trim and cut and also colour and bleach.

6.7.2 Distribution strategy

The saloon is located at No. 48, Jalan Plumbum V7/V, Seksyen 7, 40000 Shah Alam,
Selangor Darul Ehsan where it is the strategic place because it is near the main road and
located at the industrial area. The type of distribution channel that we used is called direct
marketing channel consists of the business selling directly to the customers.

6.7.3 Pricing strategy

The price of the service is the amount of money charged to the customer for a particular
purchase. We have decided to use competition based pricing strategy.
6.7.3.1 Competition Based Pricing
Going Rate Pricing
We based our service price largely on the competitors prices. The assumption is that
customer judges a products value on the prices competitors charge for their product.

6.7.4 Promotion strategy

Promotion strategy is used to disseminate information about our companys services with the
purpose of attracting the target market. The promotion tools that we have decided to use is
advertising by banner, pamphlet, and brochures.

6.8

Marketing budget

MARKETING BUDGET

Particulars

Monthly
Exp.

F.Assets

Others

Total

Fixed Assets
Signboard

1,500

1,500

Working Capital
Salary

1,200

1,200

EPF/SOCSO

174

174

Pre-Operations & Other

Expenditure
Other Expenditure
Total

1,500

1,603

7,727

7,727

7,727

10,601

7.0 OPERATIONAL PLAN

7.1

Activity chart for hair treatment services

7.2

Layout

7.3

Material planning

Material planning is important to determine the type and amount of materials need for
services. Below is the list of materials required from the producer that will be used in our hair
care service.

No.

Name of Inventory

Quantity
required per
month (unit)
15

Price per unit

(RM)

Total Amount
(RM)

15

225

Shampoo

Conditioner

15

18

270

Hairspray

15

16

240

Root Lifter Spray Gel

10

20

200

Curls Scrunching Mousse

10

20

200

Styling Cream

20

18

360

Sculpting Gel

10

20

200

Hair Dye Cream

-various colours
TOTAL

15

25

375

7.3.1

7.4

List of material required in the operation process

Machine and equipment planning

2070

Types

Quantity

Price/unit (RM)

Total (RM)

Hair dryer

150

450

Hair Steamer

500

1000

Total

7.5

1450

Location plan

We choose to commence our business at section 7, Shah Alam because of several factors.
One of the factors is the distance from market or customers. The distance from customer will
influence sales revenue. Increase in revenue will contribute in increase in profit. Based on
our research, some of the people that live at section 7 in the flat let are consists of non
resident students from UiTM that are our target market.

JAKEL

KFC AND PIZZA HUT

Key :
Hair Beauty Salon

7.6

Business and operation hours

UITM SHAH
ALAM

Days

Period

Monday Thursday

10 am 7 pm

Weekends

10 am 11 pm

Friday

Closed

Public Holidays

Closed

7.7

Operation Budget

OPERATIONS BUDGET

Particulars

F.Assets

Monthly
Exp.

Others

Total

Fixed Assets
Hair dryer

4
50
1,0
00

450

Hair steamer

1000

Equipment Operation

9004

9,004
-

Working Capital
2,0
70
1,3
74

Raw Materials
Salaries, EPF & SOCSO
Rental

2,0
70
1,3
74

1,000

Utilities

1,000

700

700

Pre-Operations & Other Expenditure

Other Expenditure

11,373

Deposit (rent, utilities, etc.)

Business Registration & Licences
Other Pre-Operations Expenditure
Total

10,
454

5,1
44

11,373

1,700

1,700

70

70

13,143

28,741

8.0

Financial Plan

8.1

Projected Expenditure

ADMINISTRATIVE EXPENDITURE

Fixed Assets

RM

Land & Building

Office Furniture

1,350

Working Capital
Salary, Epf, SOCSO

2,977

Miscellaneous

500

Other Expenditure
Other Administrative Expenditure
TOTAL ADMINISTRATIVE EXPENDITURE

5,836
10,663

MARKETING EXPENDITURE

Fixed Assets

RM

Signboard

1,500

Working Capital
Salary
EPF/SOCSO

Other Expenditure

1,200
174

Other Marketing Expenditure

7,727

TOTAL MARKETING EXPENDITURE

10,601

OPERATIONS EXPENDITURE

Fixed Assets
Hair Dryer
Hair Steamer
Equipment

RM
450
1,000
9,004

Working Capital
Raw Materials
Carriage Inward & Duty
Salaries, EPF & SOCSO
Rental
Utilities Bills
Other Expenditure
Other Operations Expenditure
Pre-Operations
Deposit (rent, utilities, etc.)
Business Registration & Licences
TOTAL OPERATIONS EXPENDITURE

2,070
1,374
1,000
700

11,373
1,700
70
28,741

8.2

Projected Sales And Purchases

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Total Year 1
ToTal Year 2
Total Year 3

SALES PROJECTION
18,960
21,760
24,480
24,400
22,000
19,920
22,320
24,560
25,040
23,840
21,840
19,680
268,800
295,680
325,248

PURCHASE PROJECTION
Month 1
2,070
Month 2
1,614
Month 3
1,614
Month 4
2,070
Month 5
1,614
Month 6
1,614
Month 7
2,070
Month 8
1,614
Month 9
1,614
Month 10
2,070
Month 11
1,614
Month 12
1,614
Total Year 1
21,192
ToTal Year 2
22,888
Total Year 3
24,719

Hair Beauty saloon

PROJECT IMPLEMENTATION COST & SOURCES OF FINANCE

Project Implementation Cost

Sources of Finance

Requirements
Fixed Assets
Land & Building
Office Furniture

1,350

1,350

Signboard

1,500

1,500

Hair Dryer
Hair Steamer
Equipment

450
1,000
9,004

450
1,000
9,004

6,954
2,748
10,288

6,954
2,748
10,288

26,706

26,706

60,000

60,000

Working Capital
2 months
Administrative
Marketing
Operations
Pre-Operations & Other
Expenditure
Contingencies
TOTAL

8.3

Cost

Loan

Hire-Purchase

Projected Implementation Cost & Source Of Finance

Own Contribution
Cash
Existing F. Assets

8.4

Office Furniture Depreciation Schedule

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Annual
Year
Depreciation
1
169
2
169
3
169
4
169
5
169
6
169
7
169
8
169

Office Furniture
1,350
Straight Line
8
Accumulated
Depreciation
169
338
506
675
844
1,013
1,181
1,350

Book Value
1,350
1,181
1,013
844
675
506
338
169
-

Signboard Depreciation Schedule

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Annual
Year
Depreciation
1
2
3
4
5
6
7
8

188
188
188
188
188
188
188
188

Signboard
1,500
Straight Line
8
Accumulated
Depreciation
188
375
563
750
938
1,125
1,313
1,500

Book Value
1,500
1,313
1,125
938
750
563
375
188
-

Hair Dryer Depreciation Schedule

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Annual
Year
Depreciation
1
2
3
4
5
6
7
8

Hair Dryer
450
Straight Line
8
Accumulated
Depreciation
56
56
56
56
56
56
56
56

Book Value
56
113
169
225
281
338
394
450

450
394
338
281
225
169
113
56
-

Hair Steamer Depreciation Schedule

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Annual
Year
Depreciation
1
125
2
125
3
125
4
125
5
125
6
125
7
125
8
125

Hair Steamer
1,000
Straight Line
8
Accumulated
Depreciation
125
250
375
500
625
750
875
1,000

Book Value
1,000
875
750
625
500
375
250
125
-

8.5

PROFORMA CASHFLOW
STATEMENT

8.6

Proforma income statement

Hair Beauty saloon
PRO-FORMA INCOME STATEMENT

Sales
Less: Cost of Sales
Opening stock
Purchases
Less: Ending Stock
Carriage Inward & Duty

Year 1
268,800

Year 2
295,680

Year 3
325,248

21,192

22,888

24,719

41,724

41,724

41,724

16,488
24,936

16,488
24,936

16,488
24,936

1,663

1,663

1,663

36,888
142,961
125,839
0
125,839
125,839

36,888
144,587
151,093
0
151,093
276,932

36,888
146,418
178,830
0
178,830
455,762

Gross Profit
Less: Enpenditure
Administrative
Expenditure
Marketing Expenditure
Other Expenditure
Business Registration &
Licences
Insurance & Road Tax
for Motor Vehicle
Other Pre-Operations
Expenditure
Interest on HirePurchase
Interest on Loan
Depreciation of Fixed
Assets
Operations Expenditure
Total Expenditure
Net Profit Before Tax
Tax
Net Profit After Tax
Accumulated Net Profit

70

8.7

Proforma Balance Sheet

Hair Beauty saloon
PRO-FORMA BALANCE SHEET

Year 1

Year 2

Year 3

ASSETS
Non-Current Assets
(Book Value)
Land & Building
Office Furniture

1,181

1,013

844

Signboard

1,313

1,125

938

Hair Dryer
Hair Steamer
Equipment

394
875
7,879

338
750
6,753

281
625
5,628

Other Assets
Deposit

1,700

1,700

1,700

13,341

11,678

10,015

0
0

0
0

0
0

172,498
172,498

325,254
325,254

505,747
505,747

185,839

336,932

515,762

60,000
125,839
185,839

60,000
276,932
336,932

60,000
455,762
515,762

185,839

336,932

515,762

Current Assets
Stock of Raw Materials
Stock of Finished Goods
Accounts Receivable
Cash Balance

TOTAL ASSETS
Owners' Equity
Capital
Accumulated Profit
Long-Term Liabilities
Loan Balance
Hire-Purchase Balance
Current Liabilities
Accounts Payable
TOTAL EQUITY &
LIABILITIES