BULE HORA UNIVERSITY

COLLEGE OF
BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

BUSINESS PLAN FOR BEAUTY SALON

GROUP MEMBER ID NO

1. HUSEN GEMECHU................................. 1265/09

2. OBSE ALAMEYO......................................2633

3. NARDOS DABEBE.......................................3535

4.HAPTAM GETA. .........................................

5.JEMAL SHERO............................................

6.

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TABLE OF CONTENTS
CONTENT PAGES

Introduction ……………….…………………………………………..
……………….......................................2

PART ONE

1. Executive summary…………………………………………………….
………………………….............3
1.1 Business Objective ……………………………………………………………..….
……...............3
1.1.1 General Objective …………………………………………………..
…………...............3

1.1.2 Specific Objective ………………………….

………………………………................4

1.2 Bsiness location…………………………………………………………………………...

….......................5

1.3Business Infrastructure ………….………………………………………………...

……………...............5

PART TWO

2. Market analysis…………………………………………………………………..….
…….....................7

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 2.2 Business Management ………………………………………………………….
………...........8

PART THREE

Financial
Analysis…………………………………………………………………………………..................
.....10

PART FOUR

4. BusinessEvaluation
…………………………………………………………………………….....................18

4.1 Environmental Feasibility……………………………………………………….

……….................20

PART FIVE

5.1 Business implementation…………………………………………………………………..

……............20

PART SIX

6.1 appendix..................................................................................................................21

INTRODUCTION

Bilisumma beauty salon is general partnership venture the will be located in Bule Hora
University around student service in the previous shopes of partners.It is established as
partnership were each of six partners contributes and equal amount of 20,000 thousand
birr each and equivalent share percent. The venture will provide service freely that
means raw material cost will be covered by the venture while the margin (profit) after
selling the cosmetics product will be divide between the students who produce it and the
venture. This venture expected to fill shortage of service provision in the compound that
we are our business is standing even after the startup of this the project the demand will

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exceed the supply, but we will strive to fill the hole in the service to satisfy the demand.
In general, the salon is expected to give service like sale of cosmetic products and other
beauty salon services like water curl, tax freeze, piasters, irony and washing of hair .This
is intended to be provided only for female students of BHU

NAME AND ADDRESS OF PARTNERS

1. Awel Umer.............................. kebale 05

2. Yerosan Dinka......................... kebale 03

3. Baisa Badasa.......................... Kebale 02

4. Ayana denko............................ kebale 04

5. Belaynan Sherbo...................... kebale 02

6.Oliyad Daba................................kebale 01

PART ONE

1. EXECUTIVE SUMMERY

Beauty salon or beauty porous is an establishment providing women with service of

improve their beauty such as hair dressing manicuring facial treatment and massage
beauty salon is shop where a hair dressers and beauty clones work beauty salon/ beauty
shop is an establishment dealing with cosmetic treatment for men and women other
variation of their type of business includes hair salon and though many small business do
offer both set of treatment beauty salon provide more generalized service related to skin
heath facial aesthetic foot care nail manicures a sum a therapy even medication oxygen
therapy, mud bath and mom other service.

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Beauty is a characteristic of a person, animal place object or idea that provider a
perceptual experience of pleasure of satisfaction the experience of pleasure or satisfaction
the experience of beauty often / involves an interpretation of some entry a being in
balance and harmony with nature which may lead to feeing of attraction and emotional –
well- being, because this can be subjective experience it is often said that “beauty is in
the eyes of the beholder” Gary martin 2007.

This Business named bilisimma beauty salon located in Bule hora university around
student clinic Near to bule hora student caffe.

The business owners are five people they contribute 300,000 birr for the business

1.1 Business objective

1.1.1 General objective

- The project has the overall objective of generating income for the busier group and
reduce the problem of beauty salon in Bule Hora for female student.

1.1.2 Specific objective

- To create a service based business whore goal is to exceed customer expectation.

- To develop sustainable stand up business contributing of increased employment of
beauticians
- To increasing income source of the owner
- To create job opportunity for beauty salon professional/beauticians)
- To provide alternative source of income to shareholder of the project.

Vision

 By satisfying customer internet to attracting new customer and to be popular

beauty salon in BHU.

Mission
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  Facilitating beauty and attractive service to the female
 Compete enough to other beauty salonsalonre to their maxim everything else will
fall in to place our service will exceed the expatiation of our customer.

Considered in selecting the business

 The main factor in selecting the business are

 There is no enough beauty salons around the compound
 The business hold few raw material and mom power for establishment
 The business will develop to upgrade and the alternative of revenue generation.

1.2 Business Location

The business will be located in BHU around clinic area at the previous partners shope.
The location selected with the consideration of:

1. Availability of demand
2. Because it’s the center for students
3. Because of the availability of infrastructure
Share Holders investment

Awel Umar 20,000 Birr

Yerosan dink 20,000Birr
Baisa barasa 20,000Birr
Ayana denko 20,000Birr \
Belaynah sherbo 20000
Oliyad daba 20,000Birr
total 120000

1.3 Business Infrastructure

The whole business area of beauty salon will be opened with attractive materials like
magazines, newspapers and use different pictures like model beauties with attractive
haring stale inside and outside of the salons wall
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 No Item Size Quantity Purpose
1 Piasters - 20 For reshipping of hair
2 Bingo dine 30 To curl hair
3 Shampoo 200 Wasting hair of the customer
(conditioner )
4 TV /radio 29 inch 1 Watching of different programs
for customers
5 Alcohol 60 liter For burning of match
6 Cackes 8 To drain the hair after washing
7 Mirror 4 For looking their work that
beauticians do
8 Aspirate 100 For the safety of hair after
finishing
9 Water Washing hair of customer
10 Soap 200 Washing hair of customers
11 Magazines For reading when the customers
are in the time hair dressing
12 Chair 15 For sitting customers

PART TWO

2.1 Market analyses

- This business is planned to serve the female students that found in BHU. the market
objectivities around the business location should their no adequate or short age of
beauty salon and there is no enough private beauty salons because of this reason we
prefer to this place .
- The source of revenue mainly comes from the service provided to the student of
BHU and by selling different cosmetics products.

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 No Item (types of Description (month x customer x Total
service) unit price ) revenue
1 Piasters 300x30x12 month 108000
2 Iron /Kawya 250x25x12 month 75000
3 Tax freeze 100x18x12 month 21600
4 Water curl 100 x20x12 month 24000
Sub – total 228600
business revenue from sale of cosmetics
Item x unit price x month (12)
60 Cosmetics 600 x average unit price (40) x 12 96000
month
Total revenue birr 324600

2.2 Business management

This beauty salon business will have a consolidated management system headed by the
owners. It will hire very excellent qualified beauticians.

Organizational structure

Salon owner

Salon manager

The rapists and

technicians

Receptionist
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 Salon assistant

Major duties and responsibilities

The manager will be responsible for the service provision activity which is going to be
rendered and also check the overall life of the project having a full authority to supervise
control and decide on the matter of the project. The manger is also responsible to look for
the employs about whether there is enough materials or not the salon. The employees will
be responsible for the customer and to the general manager lower of the project)

With beauty salon facing an increasing pressure to improve the service that the project
will give the duties and responsible of the general manager expanded further to include
the responsibly for leading beauty salon reform that would increase the customers
satisfaction often depend on the manager ability to create is shared decision – making.

General Manager and employs are also responsible for facilitating their beauty salon
interaction will female’s student and other in the university community that will allow
them to identify their weakness and strength. And also the general manager will be
responsible for the management of their beauty salon these responsibilities will include: -
insuring that facilities/equipment are safe and in good working order.

The development of overall salon’s discipline and the enforcement of those disciplines
(like being on time, that customer properly, to be honesty)

Competitors Analysis
Salon in BHU Service
Hewn - Tax freeze
- Piasters

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 - Water cure
- Irons (kawya)
- Washing of hairs
Currently have on - Tax freeze
name - Piasters
- Water cure
- Irons (kawa)

PART THREE

3. Financial Analysis

- The business will start the operation with birr of 200,000 financed by the owner and
birr 120000, loan arrangement to be paid within five year among these 67% of the
total investment is finance is generated /contributed) by the owner with the remain
33% will be financed through short – term loan.
- The investment arrangement and expenditure expected is presented on the following
consecutive table either their respective category

Fixed capital expenditure

S/N Description Quantity Unit price Total price

1 Curtains 3 720 2160
2 Carpet 4 200 800
3 LCD TV 2g 1 12000 12000
4 Chairs 10 100 1000
5 Piasters 6 1200 7200
6 Bingodin 6 100 600

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 7 Cakes 8 5000 40000
8 Aspic 7 150 1050
9 Kawya 8 800 6400
10 Comedian 1 2000 2000
11 Mirror 4 200 800
Total 74010

Supplies
S/N Description Quantity Unit price Total price
1 Magazines 3 720 2160
2 Alcohols 4 200 800
3 Match 1 12000 12000
4 Soap 10 100 1000
5 Conditioner 6 1200 7200
6 Shampoo 6 100 600
7 Miscellaneous 8 5000 40,000
Total 63,760

Initial investment cost

Office equipment = 67250
Supplies =63760
Office furniture = 3000

Total = 134010

Book value = office furniture book value 500

Depreciation expense = 3000 – 500
10 year
= 2500

Supply expense

S /N Description Unit Quantity Up Total

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 measurement price
1 Match Pkt 40 16 640
2 Fota - 20 50 1000
3 Rent expense One year - 2000 24000
4 Wire Pkt 50 10 500
5 Alcohol Bottle 20 100 2000
6 Soap Pkt 500 14 7000
7 Shampoo Bottle 90 45 4050
8 Conditioner Bottle 100 50 5000
Total 44190

Man power analysis

S /N Description Qualification Quantity Salary/mont Total price

h
1 General manger BA degree 1 2000 24000
2 Beauticians Diploma in 20 800 96000
beauty salon
3 Janitors Grade 8th 1 500 6000
Total 126000

Utility expense
No Description Conception month Year cost
1 Electric 200 2400
2 Telephone 300 3600
3 Water 150 1800
Total 7800

Annual expenses
Supplier expense………………………………… 44190
Salary expense ……………………………………126000
Utility expense ……………………………………..7800
Rent expense ………………………………………24000
Interest expense …………………………………….7500
Total ……….……… …………209490
Estimated revenue

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 Assumptions
- Of all, average about one machine not working all days in year
- Inflation by 5% rent expense
- Increase in revenue 10%
- No price discrimination
- Salary of employer increased by 10%
- Utility expense is expected to increase by 3%
Bilisumma beauty salon
Income statement
For the year ended June 2008 – 2012

Description 2008 2009 2010 2011 2012

Revenue 324000 357060 392766 432043 475247
Expense
Salary expense 126000 138600 152460 167706 184476
Rent expense 24000 25200 26460 27783 29172
Utility expense 7800 8034 8275 8523 8778
Interest expense 7000 6000 4500 3000 1500
Supplies expense 44190 5000 55000 57000 60000
Depreciation
expense
Office furniture 500 500 500 500 500
Office equipment 6225 6225 6225 6225 6225
Operating expense 216215 234559 253420 270734 290651
Operating income 1088385 122501 139346 16139 184596
Tax 30% 32515 36750 40804 48393 55379
Net income 75870 85751 97542 112916 129217

Bilisumma beauty salon

Expected Balance sheet

July 1, 2008

Asset:

Cash ………………………………………………..160660

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Investment for supply ………………………………19090

Investment for formation ……………………………3000

Investment for equipment ……………………………67250

Investment for other cost…………………………….. 5000

Total asset 300,000

Liability and ownerequity:

Account payable……………………………………….100.000
capital

Owner equity …………………………………………..200,000

Total liability & Owners equity………………………… 300,000

Bilisumma beauty salon

Statement of owner equity

July 1 2008

Balance July 1,2008 paid in capital…………………………………200.000

Add Net income year Hamle2008……………………………………….75870
Balance………………………………………………………….275870

Beauty salon

Actual Balance sheet

June 30, 2008

Asset

- Cash

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 - Investment for supply…………………………………….. 190990
- Investment for other cost ……………………………………..50000
- Investment for formation ……………………………………..3000
- Less Acc depreciation……………………………………… (500)2500
- Investment in equipment……………………………… 67250
Total asset ……………………….(6225)
41025
Bilisumma Beauty salon
Expected Cash flow statement for/2008-2012/

Source of cash 2008 2009 2010 2011 2012

Profit before tax with 155885 128501 143846 164309 186096
Interest added back
Depreciation office 6225 6225 6225 6225 6225
equipment
Depreciation office 500 500 500 500 500
furniture
Total source of cash 122610 13526 150571 171034 192821
Use of cash
Payment of interest 7500 6000 4000 3000 1500
Payment of tax 32515 36750 41804 48393 55379
Payment of long term debt 20000 2000 2000 2000 2000
Total use of cash 60015 62750 66304 71393 76879
Surplus/defition 62595 72476 84267 99641 115942
Opening balance - 62595 72476 84267 99641
Cash ending balance 62595 135071 156743 183908 215583

PART FOUR

4. Business Evaluation /break-even analysis

Payback period (PBP)

Year Cash inflow Cumulative cash

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 inflow
2008 62590 62595
2009 135071 197666
2010 156743 354409
2011 183908 538317
2012 215583 751900

PBP = year before + Unrecovered Cost

full recovery cash flow during next period

2 + 397390
156743
2 + 0.25 1 year = month

= 2.25 years 0.25year = ?

12 month x 0.25 year
year

2 year with 3 month

Net present value

Year Cash in flow Pu of cash flow at 12%

2008 62595 62595 x 0.892857 55888
2009 135071 135071 x 0.79719387 107678
2010 156743 156743x 0.71177923 111566
2011 185908 183908x0.635525898 116878
2012 215583 215583x0.56743384 122329
Total Pv cash inflows 514339
Less Pv of cash 300,000
Out flow 214339
NPU

Therefore this business is feasible because above break-even point /NPU >01

BCR = (Benefit cost ratio)

BCR = PV of cash inflow

P v of cash out flow

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= 514339
300,000
= 1.7145

4.1 Environmental feasibility

environmental Assessment is an important element while designing the business. The
impact of the business on the environment and the environment impact on the project
should on the environment and the environment impact on the business should be clearly
examined.

Our business is concentrated on beauty salon why?

Because is the aggregate of all the process by means of which persons develop ability
attitude and other former of behavior of positive value in the student in which they lives it
has no negative impact to the environment rather they lives, it has no negative impact to
the environment rather it helps the student to solve their time and money for searching of
different beauty salons outside the compound of the university.

PART FIVE

5.Business Implementation

Like other business implementation phase business implementation phase of our

business required with the scope of consulates the place where the consul work) and
supervisor of beauty salon.

As we know beauty salon is a continuous processing of any sociality and it have its own
content our project analyzing the essential conditionsof the business and reached in to
concussion we follows.

1. Contents of other beauty salon

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2. Order of input how to be placed
3. Contract to signed with employees and other personnel
4. Selection of beauty salon material
5. Procuring important equipment and supply

We use different techniques that we are going to use for our business implementation.
We expect to face some challenges during this stage, the problem may arise from:-

- Shortage of repair and maintenance material

- Variability of actual time

PART SIX

6.1 appendix

The total area we provide for bilisumma beauty salon is 20x20(400 square meters).

The total beauty salon area of our business is 400 square meters including the area of different
materials storage.

REFERENCE.

The Information are collected from both primary and secondary source. Primary data includes
oral question and open ended interview the secondary data can be collected from the
organization proposal, documents and history books of the organizations.

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