Pre-Feasibility Study Prime Minister's Small Business Loan Scheme

Pre-Feasibility Study
Prime Ministers Small Business Loan

Scheme
(Beauty Parlor Business)
Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan e Iqbal, Egerton Road,
Lahore
Tel 92 42 111 111 456, Fax 92 42 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
KPK
REGIONAL OFFICE
BALOCHISTAN
3rd Floor, Building No. 3,

Aiwan e Iqbal, Egerton Road
Lahore,
Tel: (042) 111-111-456
Fax: (042)6304926-7
helpdesk.punjab@smeda.org.pk
5TH Floor, Bahria

Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A

Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk
September 2013
Pre-feasibility Study
Beauty Parlor
TABLE OF CONTENTS
1 DISCLAIMER ..............................................................................................................2
2 PURPOSE OF THE DOCUMENT ................................................................................ 3
3 INTRODUCTION TO SMEDA...................................................................................... 3
4 INTRODUCTION TO SCHEME ................................................................................... 4
5 EXECUTIVE SUMMARY ............................................................................................. 4
6 BRIEF DESCRITION OF THE PROJECT & PRODUCT ............................................. 4
7 CRITICAL FACTORS .................................................................................................. 5
8 INSTALLED & OPERATIONAL CAPACITIES ............................................................ 5
9 POTENTIAL TARGET MARKET / CITIES .................................................................. 5
10 PROJECT COST SUMMARY .................................................................................... 5
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
PROJECT ECONOMICS .......................................................................................5

PROJECT FINANCING .........................................................................................7
PROJECT COST .................................................................................................7
SPACE REQUIREMENT .......................................................................................8
MACHINERY AND EQUIPMENT REQUIREMENT....................................................... 9
FURNITURE, FIXTURES AND INTERIOR DECORATION ........................................... 10
OFFICE EQUIPMENT ......................................................................................... 11
RAW MATERIAL REQUIREMENTS ....................................................................... 11
HUMAN RESOURCE REQUIREMENT ................................................................... 12
REVENUE GENERATION.................................................................................... 13
OTHER COSTS ................................................................................................ 13
11 ANNEXURE ............................................................................................................. 14
11.1
11.2
11.3
11.4
11.5
INCOME STATEMENT ........................................................................................ 14

BALANCE SHEET.............................................................................................. 15
CASH FLOW STATEMENT .................................................................................. 16
USEFUL PROJECT MANAGEMENT TIPS .............................................................. 17
USEFUL LINKS ................................................................................................. 17
12 KEY ASSUMPTIONS ............................................................................................... 19
Beauty Parlor
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said matter. Although, the material included
in this document is based on data/information gathered from various reliable
sources; however, it is based upon certain assumptions which may differ from
case to case. The information has been provided on as is where is basis without
any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been taken to compile this document, the
contained information may vary due to any change in any of the concerned
factors, and the actual results may differ substantially from the presented
information. SMEDA, its employees or agents do not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to
carry out additional diligence and gather any information which is necessary for
making an informed decision, including taking professional advice from a
qualified consultant/technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
Beauty Parlor
2 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document/study covers various aspects of project concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Beauty Parlor
by providing them with a general understanding of the business with the intention
of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.
3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs" , SMEDA has carried out
sectoral research to identify policy, access to finance, business development
services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
Beauty Parlor
4 INTRODUCTION TO SCHEME
Prime Ministers Small Business Loans Scheme, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially through
National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL).
Small business loans with tenure upto 7 years, and a debt : equity of 90 : 10 will
be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh,
Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and
Federally Administered Tribal Areas (FATA).
5 EXECUTIVE SUMMARY
This particular Pre-feasibility is for establishing a Beauty Parlor. Demographics
and increasing fashion awareness create an opportunity, particularly for women
entrepreneurs, to start this venture.
The important aspects that should be taken into account while making
investment decision are efficient marketing, induction of qualified beauticians and
provision of quality services at reasonable prices.
The total project cost is Rs. 2.17 million out of which Rs. 1.61 million is the capital
cost and Rs. 0.56 million for working capital. The debt and equity ratio is 90%
and 10%. The project NPV is around Rs. 6.23 million, with an IRR of 64%, and
payback period of 2.28 years.
The project is proposed to be set up in suitable locality of any of the urban
centers of Pakistan. It will provide employment to 08 individuals directly. The total
capacity of the parlor will be to handle 8,400 customers per annum. The services
to be extended by the beauty parlor include facial, waxing and threading, makeups, manicure/pedicures and hairdressing.
The proposed potential location for the project is in urban cities such as Lahore,
Karachi, Islamabad, Quetta and Peshawar etc.
6 BRIEF DESCRITION OF THE PROJECT & PRODUCT

This specific project pertains to setting up a beauty parlor as there is an
increasing demand for beauty care services. The parlor will be established in a
rented premise having a covered area of 3,000 sqft.
Beauty Parlor
Party and bridal makeup, facial, body treatment and hairdressing are the major
service categories. The parlor will have 8 employees including the owner
manager. The beauty parlor is proposed to operate as a Sole Proprietorship.
7 CRITICAL FACTORS
The entrepreneur should have basic knowledge and experience in the

requisite field.
Efficient sourcing of quality inputs/materials to maintain price and quality

relationship.
Induction of qualified beauticians and support staff and their regular training.
Effective marketing would be the key element in the initial and proceeding
success of a beauty parlor.
Location of the business addressing accessibility considerations of the target

market.
8 INSTALLED & OPERATIONAL CAPACITIES

The project will engage 08 permanent staff including owner manager and 04
trainee beauticians providing beauty care services. The parlor will function 8
hours daily and the total capacity of the beauty parlor will be to entertain 8,400
customers annually. In first year, the parlor will operate at 35% capacity by
handling 2,940 clients.
9 POTENTIAL TARGET MARKET / CITIES

The said project can be started in any suitable area of urban centres because of
the changing lifestyle of people across Pakistan.
10 PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial
viability of the project under the Prime Ministers Small Business Loan Scheme.
Various cost and revenue related assumptions along with results of the analysis
are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as annexure.
10.1 Project Economics
All the figures in this financial model have been calculated for a target of 28
clients per day (i.e. 8,400 clients per year), however, it is assumed that during
5
Beauty Parlor
first year of the operations the project will cater around 2,940 clients (i.e. 35% of
overall client service facility) of various service categories. The service details of
first year clients are as follows:
Table 1: Category Wise Service Capacity in Year 1
Sr. No Description
No of Clients Year 1
Facial
441
Waxing and Threading
441
Bridal Make Ups
147
Party Make Ups
294
Manicure / Pedicure
235
Body Treatments (Body Scrubs, Body Mask and

Massaging)
206
Hair Cuts
441
Hair Dying
441
Hair Styling (Straightening, Rebounding, Curling

and etc)
294
Total
2,940
The following table shows internal rates of return and payback period.
Table 2: Project Economics
Description
Details
Internal Rate of Return (IRR)
64%
Payback Period (Years)
2.28
NPV (Rs.)
6,237,459
Returns on the scheme are based on the services rendered to the clients and
estimated margin on consumed raw materials.
Beauty Parlor
10.2 Project Financing

Following table provides details of the equity required and variables related to
bank loan;
Table 3: Project Finance
Description
Details
Total Equity (10%)
Rs. 217,150
Bank Loan (90%.)
Rs. 1,954,349
Markup to the Borrower (%age/annum)
8%
Tenure of the Loan (Years)
10.3 Project Cost

Following requirements have been identified for operations of the proposed
business.
Table 4: Capital Invetsment for the Project
Capital Investment
Amount Rs.
Machinery and Equipment
204,000
Furniture, Fixtures and Interior Decoration
1,167,400
Office Equipment
34,500
Pre-operating costs
204,000
Total Capital Costs
1,609,900
Working Capital
Amount Rs.
Equipment Spare Part Inventory
5,470
Raw Material Inventory
164,089
Upfront Building Rent*
240,000
Cash
150,000
Total Working Capital
561,598
Total Investment
2,171,498
*3 months security and 1 months advance rent @ Rs. 60,000 per month
Beauty Parlor
10.4 Space Requirement

Approximately 3,000 square feet covered area is required for the proposed
Beauty Parlor. The covered area requirement mainly splits into following main
sections:
Main Sections
Hair Dressing Area
Beauty Area (Facial Beds etc.)
Manicure/Pedicure Area
Makeup Room
Waiting Area
Reception
Store
Office
Wash Rooms
It is recommended to take a 10 Marla double storey house on rent to start this
project. Starting the beauty parlor in a rented building would significantly reduce
the initial capital cost of the project. The estimate rent of a 10 Marla double story
house in an upper middle class locality of large cities is assumed at Rs. 60,000
per month.
Comparatively, if land is purchased, and a new building is constructed, it would
cost approximately 15 million rupees. This makes a huge difference in project
cost.
Beauty Parlor
10.5 Machinery and Equipment Requirement

Following table provides the list of machinery and equipment required for the
proposed services of beauty parlor.
Table 5: List of Machinery and Equipment
Sr. No
Description
Quantity
Unit Cost
(Rs.)
Total Cost
(Rs.)
Electric Facial Unit
45,000
45,000
Steamer for Hair
15,000
30,000
Steamer for Facial
15,000
30,000
Pedicure Machine
8,000
16,000
Back Wash for Washing Hair
20,000
20,000
Warmer for hot Wax/Cold Wax
5,000
10,000
Magnifying Glass
3,000
3,000
Hair Dryer
5,000
20,000
Hair Straighter
2,500
5,000
10
Accessories
25,000
25,000
Total
204,000
Beauty Parlor
10.6 Furniture, Fixtures and Interior Decoration

The major expenses of beauty parlor mainly comprised of the furniture, fixtures
and interior decoration. The details of furniture, fixtures and interior decoration
requirement for the proposed venture are as follows:
Table 6: Furniture, Fixtures and Interior Decorations
Quantity/
Area
Sr. No Description
Cost/Rate
(Rs.)
Total
Amount
(Rs.)
Facial Beds
20,000
60,000
Hair Dressing (Chair & Mirror)
25,000
100,000
Make-up Chair & Mirrors
30,000
90,000
Waiting Area Chairs
3,000
24,000
Waiting Area Sofa set
35,000
35,000
Carpeting (Sq. ft)
400
30
12,000
Back Rack (Sq. ft)
100
750
75,000
Reception & Cash counter
25,000
25,000
Display Counter
10,000
30,000
10
Wood Flooring (Sq. ft)
760
150
114,000
11
Main Door Sign Board
15,000
15,000
12
Parlor Faade (Sq. ft)
160
90
14,400
13
Counter Chair
5,000
10,000
14
False Ceiling (Sq. ft)
50
38,000
15
Lighting
30,000
30,000
16
Air Conditioners
45,000
135,000
17
UPS and Batteries
17,500
35,000
18
Generator
200,000
200,000
19
LCD TV
35,000
70,000
20
Fans
2,500
20,000
21
Back Mirrors
5,000
10,000
22
Miscellaneous
25,000
25,000
2
760
Total
1,167,400
10
Beauty Parlor
10.7 Office Equipment

Following table provide the list of office equipment required for the proposed
project:
Table 7: Office Equipment
Sr. No Description
Quantity Unit Cost (Rs.)
Total (Rs.)
Computer
20,000
20,000
Printer (s)
10,000
10,000
Telephone Sets
1,500
4,500
34,500
10.8 Raw Material Requirements

As mentioned above the proposed venture mainly provides the beauty and hair
treatment services to the women clients. A large number of cosmetics and other
beauty products are used in a beauty parlor. A brief list of these products is
provided in the table below. For this project it is assumed that cost of beauty
products will be the 25% of the sales value.
Table 8: Raw Materials (Beauty Products)
Beauty Products
Used In
Foundation, eye shadows, face

powders, lipsticks, lip pencils,
blushers and etc.
Makeup bridal and party
Scrubs, Massage Creams
Manicure/pedicure, facial and body

scrubs
Toners and Cleaners
Facial
Moisturizers
Manicure/pedicure, facial, masks

and massaging
Face masks
Facial and masks
Bleach cream
Bleaching
Hot wax and Cold Wax
Waxing
Hair color and hair developers
Hair coloring and streaking
11
Beauty Parlor
10.9 Human Resource Requirement

The required HR for successfully operating the proposed project mainly includes:
Table 9: Human Resource Requirement
Sr.
No
No of
Persons
Description
Salary per
Month
Owner Manager
40,000
Beauticians (Hair Dressers and

Make-up)
16,000
Support Staff Girls
10,000
Guard
10,000
Trainee Beautician*
*Trainee beauticians will be hired on three months tenure as a part of "Beautician

Learning Course" without any fee or remunerations. After successful completions
of the course trainees would be awarded beautician certificates, however their
permanent hiring will depend on need basis. The "Beautician Learning Course"
will be a regular activity of the proposed business venture.
The table above provides details of human resource required for successful
operationalization of such project. The Owner/Manager shall formulate the
policies and take strategic decisions. Above HR team shall be engaged in order
to manage the operational affairs of this project under the supervision of
Manager Operations. The appropriate experience along with high level of skill set
would be required for the key professionals.
12
Beauty Parlor
10.10 Revenue Generation

Table 10: Sales Revenue for Proposed (1st Year)
Sr.
No
Category of Services
Facial
Waxing and Threading
Average
Price
No of
Clients
Sales
Revenue
1,000
441
441,000
750
441
330,750
Bridal Make Ups
20,000
147
2,940,000
Party Make Ups
3,500
294
1,029,000
Manicure / Pedicure
1,000
235
235,200
Body Treatments (Body Scrubs,

Body Mask and Massaging)
1,000
206
205,800
Hair Cuts
800
441
352,800
Hair Dying
1,000
441
441,000
Hair Styling (Straighting,

Rebounding, Curling and etc)
2,000
294
588,000
2940
6,563,550
Total
The profitability of the project is highly dependent on quality of services and

extensive marketing and promotion of the project to attract the clients as per the
calculated estimates. In addition to that retention of clients will have a high
impact on profitability.
10.11 Other Costs
The service oriented project require heavy marketing and promotion activities, for
this purpose approximately 15% of total sales revenue (i.e. Rs. 985,000) will be
consumed on marketing and promotion expenses annually with 10% increase.
Similarly, electricity expenses are estimated to be around 30,000 per month with
an annual increase of 10%. Moreover, expenses on fuel of generator and
miscellaneous will also be the part of other related costs.
13
Beauty Parlor
11 ANNEXURE
11.1 Income Statement
Income Statement
Year 1
6,563,550
Year 2
8,270,073
Year 3
10,130,839
Year 4
12,157,007
Year 5
14,360,465
Year 6
16,753,876
Year 7
19,350,726
Year 8
22,165,378
Year 9
24,936,050
Year 10
26,182,852
1,969,065
1,008,000
65,636
360,000
18,000
6,000
3,426,701
3,136,850
2,481,022
1,159,200
95,106
396,000
19,800
6,600
4,157,728
4,112,345
3,039,252
1,333,080
133,980
435,600
21,780
7,260
4,970,952
5,159,887
3,647,102
1,533,042
184,893
479,160
23,958
7,986
5,876,141
6,280,866
4,308,139
1,762,998
251,165
527,076
26,354
8,785
6,884,518
7,475,947
5,026,163
2,027,448
336,980
579,784
28,989
9,663
8,009,027
8,744,849
5,805,218
2,331,565
447,594
637,762
31,888
10,629
9,264,657
10,086,070
6,649,613
2,681,300
589,603
701,538
35,077
11,692
10,668,824
11,496,553
7,480,815
3,083,495
762,799
771,692
38,585
12,862
12,150,248
12,785,802
7,854,856
3,546,019
921,080
848,861
42,443
14,148
13,227,407
12,955,445
600,000
90,000
720,000
30,000
60,000
984,533
2,040
65,636
144,040
20,400
2,716,648
420,202
690,000
103,500
792,000
34,500
69,000
1,240,511
1,836
82,701
144,040
20,400
3,178,488
933,858
793,500
119,025
871,200
39,675
79,350
1,519,626
1,632
101,308
144,040
20,400
3,689,756
1,470,131
912,525
136,879
958,320
45,626
91,253
1,823,551
1,428
121,570
144,040
20,400
4,255,592
2,025,275
1,049,404
157,411
1,054,152
52,470
104,940
2,154,070
1,224
143,605
144,040
20,400
4,881,715
2,594,232
1,206,814
181,022
1,159,567
60,341
120,681
2,513,081
1,020
167,539
145,946
20,400
5,576,412
3,168,437
1,387,836
208,175
1,275,524
69,392
138,784
2,902,609
816
193,507
145,946
20,400
6,342,990
3,743,080
1,596,012
239,402
1,403,076
79,801
159,601
3,324,807
612
221,654
145,946
20,400
7,191,311
4,305,243
1,835,414
275,312
1,543,384
91,771
183,541
3,740,407
408
249,360
145,946
20,400
8,085,944
4,699,858
2,110,726
316,609
1,697,722
105,536
211,073
3,927,428
204
261,829
145,946
20,400
8,797,473
4,157,972
Earnings Before Interest & Taxes
420,202
933,858
1,470,131
2,025,275
2,608,032
3,168,437
3,743,080
4,305,243
4,699,858
4,157,972
Interest expense on long term debt (Project Loan)

Subtotal
Earnings Before Tax
133,654
133,654
286,547
117,443
117,443
816,415
99,885
99,885
1,370,246
80,871
80,871
1,944,404
60,278
60,278
2,547,754
37,976
37,976
3,130,461
13,823
13,823
3,729,257
4,305,243
4,699,858
4,157,972
Tax
NET PROFIT/(LOSS) AFTER TAX
286,547
44,962
771,453
128,037
1,242,209
236,381
1,708,023
359,438
2,188,316
505,115
2,625,346
654,814
3,074,443
814,073
3,491,170
932,457
3,767,401
769,891
3,388,081
Balance brought forward

Total profit available for appropriation
Dividend
Balance carried forward
286,547
286,547
286,547
1,058,000
1,058,000
1,058,000
2,300,209
2,300,209
2,300,209
4,008,232
4,008,232
4,008,232
6,196,548
6,196,548
6,196,548
8,821,894
8,821,894
8,821,894
11,896,337
11,896,337
11,896,337
15,387,507
15,387,507
15,387,507
19,154,908
19,154,908
19,154,908
22,542,989
22,542,989
Revenue
Cost of sales
Cost of goods sold 1
Operation costs 1 (direct labor)
Cost of Beauty Parlour Maintenance
Operating Cost Electricity
Operating Expenses Water
Operating Expenses Gas
Total cost of sales
Gross Profit
General administration & selling expenses
Administration expense
Administration benefits expense
Building rental expense
Communications expense (phone, fax, mail, internet, etc
Office expenses (stationary, entertainment, janitorial se
Promotional expense
Insurance expense
Professional fees (legal, audit, consultants, etc.)
Depreciation expense
Amortization of pre-operating costs
Subtotal
Operating Income
30%
15%
1%
5%
52%
9%
1%
11%
0%
1%
15%
0%
1%
2%
0%
14
Beauty Parlor
11.2 Balance Sheet

Balance Sheet
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
134,565
5,470
164,089
60,000
2,040
366,164
351,646
8,322
237,765
66,000
1,836
665,568
1,025,720
12,309
334,951
72,600
1,632
1,447,212
2,205,447
17,836
462,232
79,860
1,428
2,766,804
3,901,073
25,441
627,914
87,846
1,224
4,643,498
6,129,313
35,840
842,451
96,631
1,020
7,105,254
8,855,971
49,985
1,118,985
106,294
816
10,132,050
12,076,057
69,136
1,474,009
116,923
612
13,736,737
16,106,084
93,917
1,906,999
128,615
408
18,236,023
20,566,104
119,075
2,302,701
141,477
204
23,129,561
27,417,644
27,417,644
Fixed assets
Machinery & equipment
Furniture & fixtures
Office equipment
Total Fixed Assets
204,000
1,167,400
34,500
1,405,900
183,600
1,050,660
27,600
1,261,860
163,200
933,920
20,700
1,117,820
142,800
817,180
13,800
973,780
122,400
700,440
6,900
829,740
102,000
583,700
44,032
729,732
81,600
466,960
35,225
583,785
61,200
350,220
26,419
437,839
40,800
233,480
17,613
291,893
20,400
116,740
8,806
145,946
Intangible assets
Pre-operation costs
Total Intangible Assets
TOTAL ASSETS
204,000
204,000
1,976,064
183,600
183,600
2,111,028
163,200
163,200
2,728,232
142,800
142,800
3,883,384
122,400
122,400
5,595,638
102,000
102,000
7,936,986
81,600
81,600
10,797,436
61,200
61,200
14,235,776
40,800
40,800
18,568,715
20,400
20,400
23,295,907
27,417,644
43,741
43,741
56,065
56,065
70,063
70,063
86,020
86,020
104,283
104,283
125,273
125,273
149,511
149,511
177,208
177,208
204,542
204,542
168,306
168,306
1,563,590
1,563,590
44,962
1,352,055
1,397,017
172,999
1,122,963
1,295,962
409,379
874,856
1,284,235
768,818
606,156
1,374,974
1,273,933
315,155
1,589,087
1,928,746
1,928,746
2,742,819
2,742,819
3,675,276
3,675,276
4,445,168
4,445,168
217,150
286,547
503,697
2,111,028
217,150
1,058,000
1,275,150
2,728,232
217,150
2,300,209
2,517,359
3,883,384
217,150
4,008,232
4,225,382
5,595,638
261,182
6,196,548
6,457,730
7,936,986
261,182
8,821,894
9,083,075
10,797,436
261,182
11,896,337
12,157,518
14,235,776
261,182
15,387,507
15,648,688
18,568,715
261,182
19,154,908
19,416,089
23,295,907
261,182
22,542,989
22,804,170
27,417,644
Assets
Current assets
Cash & Bank
Equipment spare part inventory
Raw material inventory
Pre-paid building rent
Pre-paid insurance
Total Current Assets
Liabilities & Shareholders' Equity

Current liabilities
Accounts payable
Total Current Liabilities
Other liabilities
Deferred tax
Long term debt (Project Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES
1,758,914
1,758,914
217,150
217,150
1,976,064
15
Beauty Parlor
11.3 Cash flow Statement

Cash Flow Statement
Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Deferred income tax
Equipment inventory
Raw material inventory
Pre-paid building rent
Advance insurance premium
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Purchase of (treasury) shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH
Cash balance brought forward
Cash available for appropriation
Dividend
Cash balance
Cash carried forward
September 2013
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 1
Year 2
286,547
144,040
20,400
(2,852)
(73,676)
(6,000)
204
43,741
412,404
771,453
144,040
20,400
44,962
(3,988)
(97,186)
(6,600)
204
12,324
885,609
1,242,209
144,040
20,400
128,037
(5,527)
(127,281)
(7,260)
204
13,998
1,408,820
1,708,023
144,040
20,400
236,381
(7,605)
(165,681)
(7,986)
204
15,957
1,943,733
2,188,316
144,040
20,400
359,438
(10,399)
(214,537)
(8,785)
204
18,262
2,496,940
2,625,346
145,946
20,400
505,115
(14,145)
(276,534)
(9,663)
204
20,991
3,017,659
3,074,443
145,946
20,400
654,814
(19,151)
(355,023)
(10,629)
204
24,238
3,535,241
1,758,914
217,150
(195,323)
-
(211,535)
-
(229,092)
-
(248,107)
-
(268,700)
44,032
(291,002)
-
(315,155)
-
1,976,064
(195,323)
(211,535)
(229,092)
(248,107)
(224,668)
(291,002)
(315,155)
(5,470)
(164,089)
(60,000)
(2,040)
(231,598)
3,491,170
145,946
20,400
814,073
(24,781)
(432,990)
(11,692)
204
27,697
4,030,026
3,767,401
145,946
20,400
932,457
(25,158)
(395,702)
(12,862)
204
27,334
4,460,020
3,388,081
145,946
20,400
769,891
119,075
2,302,701
141,477
204
(36,236)
6,851,539
(1,609,900)
(44,032)
(1,609,900)
(44,032)
134,565
134,565
134,565
134,565
217,081
674,074
1,179,727
1,695,626
2,228,240
2,726,658
3,220,087
4,030,026
4,460,020
6,851,539
134,565
351,646
351,646
351,646
351,646
1,025,720
1,025,720
1,025,720
1,025,720
2,205,447
2,205,447
2,205,447
2,205,447
3,901,073
3,901,073
3,901,073
3,901,073
6,129,313
6,129,313
6,129,313
6,129,313
8,855,971
8,855,971
8,855,971
8,855,971
12,076,057
12,076,057
12,076,057
12,076,057
16,106,084
16,106,084
16,106,084
16,106,084
20,566,104
20,566,104
20,566,104
20,566,104
27,417,644
27,417,644
27,417,644
16
Beauty Parlor
11.4 Useful Project Management Tips

Marketing
Product Development & Packaging:

Expert's help may be engaged for
product/service and packaging design & development
Ads & Point of Sales Promotion: Business promotion and dissemination

through banners and launch events is highly recommended. Product
broachers from good quality service providers
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should

never be allowed to compromise quality. Price during introductory phase may
be lower and used as promotional tool. Product cost estimates should be
carefully documented before price setting.
Human Resources
Adequacy & Competencies:

Skilled and
should be considered an asset for the business.
Performance Based Remuneration:

Attempt to manage human
resource cost should be focused through performance measurement and
performance based compensation.
Training & Skill Development:

Encouraging training and skill of self &
employees through experts and exposure of best practices is route to
success.
experienced
beautician
11.5 Useful Links

Prime Ministers Office, www.pmo.gov.pk
Small and Medium Enterprises Development Authority, www.smeda.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Education, Training & Standards in Higher Education,
http://moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
September 2013
17
Beauty Parlor
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk

Government of Azad Jamu Kashmir, www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Security Commission of Pakistan (SECP), www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
www.fpcci.com.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
Pakistan Institute of Fashion Design (PIFD), www.pifd.edu.pk
Pakistan Fashion Design Council (PFDC), www.pfdc.org
September 2013
18
Beauty Parlor
12 KEY ASSUMPTIONS
Equipment Assumptions
Equipments
Facial Beds
Hair Dressing Chairs
Make Up Chairs
Capacity Assumptions
Capacity Clients per day (In Numbers)
28
Production Capacity Utilization
35%
Maximum Capacity Utilization
90%
Operating Assumptions
Hours Operational per day
Days operational per year
300
Growth Rates
Production Capacity Utilization Growth Rate
7%
Sales Price Growth Rate
5%
Cost of Beauty Products (%age as of Total Sales)
September 2013
19
30%

Pre-Feasibility Study Prime Minister's Small Business Loan Scheme

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Pre-Feasibility Study Prime Minister's Small Business Loan Scheme

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Pre-Feasibility Study

Prime Ministers Small Business Loan

Small and Medium Enterprises Development Authority

3rd Floor, Building No. 3,

5TH Floor, Bahria

Bungalow No. 15-A

PROJECT ECONOMICS .......................................................................................5

INCOME STATEMENT ........................................................................................ 14

12 KEY ASSUMPTIONS ............................................................................................... 19

2 PURPOSE OF THE DOCUMENT

6 BRIEF DESCRITION OF THE PROJECT & PRODUCT

The entrepreneur should have basic knowledge and experience in the

Efficient sourcing of quality inputs/materials to maintain price and quality

Location of the business addressing accessibility considerations of the target

8 INSTALLED & OPERATIONAL CAPACITIES

9 POTENTIAL TARGET MARKET / CITIES

10 PROJECT COST SUMMARY

Waxing and Threading

Bridal Make Ups

Party Make Ups

Body Treatments (Body Scrubs, Body Mask and

Hair Styling (Straightening, Rebounding, Curling

Internal Rate of Return (IRR)

Payback Period (Years)

10.2 Project Financing

Total Equity (10%)

Bank Loan (90%.)

Markup to the Borrower (%age/annum)

Tenure of the Loan (Years)

10.3 Project Cost

Machinery and Equipment

Furniture, Fixtures and Interior Decoration

Total Capital Costs

Equipment Spare Part Inventory

Raw Material Inventory

Upfront Building Rent*

Total Working Capital

10.4 Space Requirement

10.5 Machinery and Equipment Requirement

Electric Facial Unit

Steamer for Hair

Steamer for Facial

Back Wash for Washing Hair

Warmer for hot Wax/Cold Wax

10.6 Furniture, Fixtures and Interior Decoration

Hair Dressing (Chair & Mirror)

Make-up Chair & Mirrors

Waiting Area Chairs

Waiting Area Sofa set

Carpeting (Sq. ft)

Back Rack (Sq. ft)

Reception & Cash counter

Wood Flooring (Sq. ft)

Main Door Sign Board

Parlor Faade (Sq. ft)

False Ceiling (Sq. ft)

UPS and Batteries

10.7 Office Equipment

Quantity Unit Cost (Rs.)

10.8 Raw Material Requirements

Foundation, eye shadows, face

Makeup bridal and party

Scrubs, Massage Creams