Contents

Executive Summary 3
Project Description 3
WBS 3
Cost Estimate 5
Advanced Estimating Technique 7
Cost Assumptions 7
Financial Analysis 8
Schedule 8


Executive Summary

Our intention is to open an all-inclusive beauty salon in Athens, OH. Athens, OH is
located 1 hour away from Columbus, OH. Its largest employer is Ohio University
although it is home to Wal-Mart, Lowes, and many other smaller businesses. Currently
there is a lack of professional services related to beauty. For the most part if these
services are needed, clients are forced to drive 1 hour to take advantage of them.
Our idea is to open an all-inclusive beauty salon which caters to all ethnic groups within
six months. We also plan to sell various salon and personal care products. We have
decided to purchase a franchise from John C. Williams Services. This Beauty service
supplier is well known all over the United States and we as though it will bring us instant
brand recognition. There is a local Cosmetology college within Athens and there is
multiple in Columbus, OH. We believe the proximity will help us to further build our
reputation and grow our market.
As you can see from our Financial Analysis, we do lose money in the first year
($24,031). This is mainly due to our initial investment costs including the $40,000
franchising fee. Our analysis shows that we will make a profit every year after that. Our
Net present value is &68,451.14 using the 2013 discount rate of -1.4%. We will be the
first of its kind in this area and we believe if you invest with us now, we will bring profits
well into the future.
Project Description
The project that I am interested in starting is a hair salon that provides a one stop shop
for all of your beauty needs. We will provide advanced hair stylists, nail technicians,
makeup artists and a barber. As it stands now, this area is lacking a type of business
such as this and currently out target consumers are driving an hour away to take
advantage of these basic necessities.
Not only will this business provide a place to work for the local beauty school students,
but it will also help us to attract a more diverse clientele to the area. We hope to offer
service to a broad consumer base, more specifically the African American population in
this area. Currently, there is nowhere in this area that provides these services to them
and upon graduation from the local university, they often leave to find an area that is
more welcoming to their culture.
We hope to benefit the local beauty school by opening a pipeline for a diverse student
population to apply to the school and provide employment after graduation. We feel
that we will be very successful due to the need for a business such as this. We have
virtually no competition right now so the doors for success are wide open.
WBS
1 John C. Williams Beauty Services
1.1 Market Research
1.1.1 Market Research on Area Economy
1.1.2 Identify Target Market
1.1.3 Interview Target Market
1.1.4 Interview local Beauty School Representatives
1.1.5 Research John C. Beauty Services Financials
1.1.6 Interview John C. Beauty Services Representative
1.2 Franchising
1.2.1 Obtain Lawyer
1.2.2 Apply for License
1.2.3 Sign off and Approve all franchising document
1.2.4
1.3 Business Plan
1.3.1 Visit Small Business Association
1.3.2 Set up meeting with local University Business Professors to discuss plan
1.3.3 Secure 5 year Business Plan
1.4 Secure Financing
1.4.1Set up meeting with local Banks about Loans
1.4.2 Review all financing options with SBA
1.4.3 Review all Financing Options with local University Professors
1.4.4 Sign off on loan
1.5 Secure Building
1.5.1 Meet with local realtor/leasing agents
1.5.2 Evaluate location
1.5.3 Review costs
1.5.4 Sign lease
1.6 Buy Equipment
1.6.1 Research Salon/Barber Equipment Prices
1.6.2 Buy Equipment (chairs, sinks, dryers, etc.)
1.6.3 Research Nail Equipment Prices
1.6.4 Buy Nail Equipment
1.7 Marketing
1.7.1 Adds in University Newspaper
1.7.2 Signage
1.7.3 Email Spam
1.7.4 Pass out Flyer
1.7.5 Send Out Coupons in mail via USPS
1.8 Staffing
1.8.1 Interview local beauty students
1.8.2 Interview beauty students outside of locality
1.8.3 Advertise help wanted ads
1.8.4 Offer Internships to University Business students
1.9 Opening Prep
1.9.1 Buy TV
1.9.2 Magazine Subscriptions
1.9.3 Chairs
1.9.4 Turn on Utilities




Cost Estimate
COST ESTIMATE
Task Name Cost
Market Research on Area Economy $0.00
Identify Target Market $0.00
Interview Target Market $0.00
Interview local Beauty School Representatives $0.00
Research John C. Beauty Services Financials $0.00
Interview John C. Beauty Services Representative $0.00
Franchising
Obtain Lawyer $5,000.00
Apply for License $0.00
Pay Franchising fee $40,000.00
Sign off and Approve all franchising document $1,000.00
Business Plan
Visit Small Business Association $0.00
Set up meeting with local University Business Professors to discuss plan $0.00
Secure 5 year Business Plan $0.00
Secure Financing
Set up meeting with local Banks about Loans $0.00
Review all financing
options with SBA $0.00
Review all Financing Options with local University Professors $0.00
Sign off on loan $0.00
Secure Building
Meet with local realtor/leasing agents $0.00
Evaluate location $0.00
Review costs $0.00
Sign lease $0.00
Buy Equipment
Research Salon/Barber Equipment Prices $0.00
Buy Equipment (chairs, sinks, dryers, etc.) $10,000.00
Research Nail Equipment Prices $0.00
Buy Nail Equipment $2,500.00
Marketing
Adds in University Newspaper $20.00
Signage $20.00
Email Spam $0.00
Pass out Flyer $15.00
Send Out Coupons in mail via USPS $80.00
Staffing
Interview local beauty students $0.00
Interview beauty students outside of locality $300.00
Advertise help wanted ads $60.00
Interview Salon Managers $0.00
Hire Stylists, Nail Tech & Barber $0.00
Hire Salon Manager $0.00
Offer Internships to University Business students $0.00
Opening Prep
Buy TV $1,000.00
Magazine Subscriptions $250.00
Chairs $200.00
Turn on Utilities $0.00
TOTAL $59,995.00

Advanced Estimating Technique
Cost Assumptions
When figuring the cost assumptions I figured that all the owners would be doing the prep work free
of charge since it is their investment. I figured the going rate for
a lawyer to review the franchising documents and approve the signoff was fair at $6000 total. Salon
equipment can be bought fairly cheap through cosmetologist stores that specifically sale to licensed
cosmetologists. I figure well need 5 stylist chairs, 1 barber chair, and 1 chair for the nail tech and
makeup artist respectively. Three dryer chairs, sinks and sink chairs shall suffice. Along with
mirrors and products, I think its a pretty fait estimate that to open and start business we will likely be
out of $10,000.
As a personal note, my mother opened her beauty salon in 1988 and paid about $5200 for all of this
equipment. Considering the inflation rate from 1988 to 2012, the current buying power of $5200 in
1988 is now $10092 in 2012. So roughly $10000.
Financial Analysis
Inflows Outflows
Year 1 $228,095.00 $252,126.00 $(24,031.00)
Year 2 $250,905.00 $236,000.00 $14,905.00
Year 3 $288,540.00 $260,000.00 $28,540.00
Year 4 $331,821.00 $285,800.00 $46,021.00

Discount rate 2013 -1.4

NPV= $68,451.14

As you can see from the NPV calculation, although we will lose money in the first year, we will make
a profit every year after that by increasing our sales at an estimated 15% a year.

Schedule
Please see Microsoft Project File.