CENTRE FOR ENTREPRENEURSHIP ANDGENERAL STUDIES

NATIONAL OPEN UNIVERSITY OF NIGERIA

University Village, Plot 91, Cadastral Zone, Nnamdi Azikiwe Express Way Jabi - Abuja

Students’ Business Plan Proposal on Beauty Salon Palace

A. Student’s Personal Details

Date: May 1, 2019. .

Semester: 2019_1

Name: Igbe Joy Derick

Matric. No: NOU160165217

E:mail Address: emekenwaoboli@gmail.com

Phone Number: 08157538336

Sex: Female

Disability: None

Current Profession: Student

Programme of Study: B.NSc Nursing (New)

Faculty: Health Sciences

Study Centre: Benin Study Center

Zone: South-South

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B. The Plan
1.0 Executive Summary
Ebony Salon and Beauty Palace (ESBP) is a full-service unisex beauty salon dedicated
to consistently providing high customer satisfaction by rendering excellent service, quality
products, and furnishing an enjoyable atmosphere at an acceptable price/value relationship.
ESBP would be established before June 2019 at No. 68, Adolor Street, Off-Ekewan Road, Benin
City.
A group of 10 National Open University of Nigeria students as a partnership venture would form
ESBP in 2019 when they saw the dire need for a saloon in their locality. We will also maintain a
friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.
ESBP focuses efforts in two service areas: supplying services and products and enhancing
physical appearance of clients. ESBP strives to foster and maintain solid relationships with its
clients with its services. Due to its small size, ESBP has the unique ability to act quickly and
easily meets its deadlines. ESBP plans to expand personnel over the next three years to meet a
balance.
We believe that the above statement will make our Company remain focused and committed
towards attainment of its goals and objectives to make our services available to everybody.
1.1 Business Objectives
The primary objectives of ESBP are:
1 Provide excellent service with outstanding customer service–, which enhances its
customer’s efficiency and secures long relationships with clients.
2 Grow company in staffing to accommodate the growing need for services by offering a
dynamic work environment with flexible hours, a commitment to ongoing education, and
offer bonuses to commensurate with performance and earnings.
3 Focus on efficient and timely service delivery.
1.2 Vision
Our vision is to be a unique enterprise that adds value and class to peoples’ life, and be a
first class unisex saloon in Nigeria of international repute.
1.3 Mission Statement
Our mission is to supply services and products that enhance our clients' physical
appearance and mental relaxation. Our Motto: "Redefining Beauty and Class!"

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 1.4 Keys to Success
ESBP considers the following factors to be the primary contributors of business success:
 Location: providing an easily accessible location for customers.
 Environment: providing an environment conducive to giving relaxing and professional
service.
 Convenience: offering clients a wide range of services in one setting, and extended
business hours.
2.0 Company Summary
Ebony Saloon and Beauty Palace will, upon commencement of operations, sell a wide range of
beauty services and products. We will provide quality hair services, along with lines of beauty
products. What will set ESBP apart is our commitment to providing all of these services in one
convenient location.
1.5 Ownership/Legal Form
ESBS is a partnership business, owned by a group of eight individuals who bears the profit and
loss and contributes capital for operations.
Location
The salon will be located at No. 68, Adolor Street, Off-Ekewan Road, Benin City. The salon will
utilize a lock-up shop on the ground floor in the complex. The location is strategically situated
on one of the busiest streets in the axis. It is a high profile area, with easy access from all parts of
town.
1.6 Start-Up Plan
The start-up capital will be used for the design, rent, and equipment of the salon. The
founders/owners of the company will contribute the sum of Eighty Thousand (N80,000.00) Naira
in the same proportion. This will be the start up capital for the first year and as the business
boom, it will increase.
1.6.1 Table: Start-up

Start-up Amount

Requirements

Start-up Expenses

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 Rent deposit N96,000
Other 4,000
Total Start-up Expenses N100,000

Start-up Assets
Cash Required N150,000
Other Current Assets N50,000
Long-term Assets N200,000
Total Assets N400,000

Total Requirements N500,000

Organizational Structure
The ownership structure of the company who are the founders also constitutes the board. The
Company is segmented into two sections, viz; Male Salon/Female salon which is headed by a
general manager based on consensus.
3.0 Products and Services
Ebony Saloon and Beauty Palace is considered an upscale full-service unisex beauty salon. We
will offer a wide range of services that include:
1.6.2 Hair
 Cuts/trimming
 Relaxers
 Perms
 Colors
 Shampoo
 Conditioning
 Curling
 Reconstructing
 Weaving
 Shaving
 Waving.

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1.6.3 Nails
 Manicures
 Pedicures
 Polish
 Sculptured nails
1.6.4 Skin Care
 facial Make-ups
 Body waxing
 Massage

2.0 Market Analysis

Skill at what we do, good customer service, and creating a pleasant environment for our
customers will be important to implementing our business plan.
2.1 Market Segmentation
Ebony Saloon and Beauty Palace wants to set itself apart from other salons that may offer only
one or two types of services. Having seen the need for a unisex saloon in a student environment,
the owners have realized, from talking with their co-students and friends that they desire all of
the services that we are proposing. Although the focus of ESBP is hair services, we wish to offer
our clients the convenience of these other services in one location.
There are a number of salons like ours, but they are mainly in the very high-income parts of
Benin-City and surrounding areas. We do not intend to compete with these so-called "Day Spas."
We wish to offer a middle ground for those clients who cannot quite afford those high-end
luxury salons.
Our business atmosphere will be a relaxing one where clients can kick back and be pampered.
Soft drinks will be offered to clients as they enter for service. Televisions will be located in the
waiting and hair-drying area.
2.2 Marketing Strategy
Our marketing strategy is a simple one: satisfied clients are our best marketing tool. When a
client leaves our business with a new look, he or she is broadcasting our name and quality to the
public. Most of our clients will be referrals from existing clients.

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No major advertising campaigns are anticipated. Our research has shown that word of mouth is
the best advertising for this type of business. We will also ask clients for referrals, and reward
them with discounted or free services depending on the number of clients they bring. We will
also offer discounts to the new clients who have been referred.
2.3 Sales Forecast
We anticipate the highest peak on the months of November and December in our sales forecast,
due to the holiday seasons. In November, there is festivity in the air. Then in December, we
anticipate more people coming into Lagos State; this explains the jumped of sales in these two
months of the year.
2.4 SWOT Analysis
2.4.1 Strengths
1. By utilizing its lean experienced staff, focusing on specific target markets and
providing excellent service delivery, ESBP provides high-end efficient services at
a reasonable price.
2 ESBP is flexible, able to ‘turn on a dime’ and meet / exceed deadlines and easily
adapts to changes as needed.
3 ESBP pursues a minimum of 20% of its revenues in the form of referrals – which
provide income stability.
2.4.2 Weaknesses
1. Product obsolescence and epileptic power supply.
2. Substitution – competitors – even worse, larger competitors, can mirror many of
the services ESBP provides although have longer turnaround times, may be able
to offer lower prices due to larger economies of scale.
3. Customer base is limited with a potential for concentration risk should one sector
become less than profitable.
2.4.3 Opportunities
1 ESBP has already attained student saloon status, making them attractive to
students and youths that resides in the locality.
2 New methods and innovation in facial makeup, beautification and skincare
amongst students and youths make the market a robust one for new start-ups.

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 2.4.4 Threats
1. Cash flow will be critical if payment from the client is delayed for any lengthy
time period.
2. Bigger competitors might be able to reduce their prices due to efficient in
economies of scale.
5.0 Financial Analysis
5.1. Capital Investment
The amount to be invested as start-up capital for the Salon will be Three Hundred and
Thousand (300,000.00) Naira only.
5.2 Desired Capital and Purpose
The start-up capital of N300, 000.00 is required for the business to take off. The amount
will be needed to pay for materials, equipment/operating costs while N50,000.00 will be
budgeted for other miscellaneous and unforeseen circumstances that might arise during
implementation of the project.
Source of Capital
ESBP Capital Source fund will come from personal savings, and family and friends
donations. It can also come from investors, financial institution and loan assistance.
Assumptions
Revenues will grow at an annual rate of 15%, increasing 20% in November and December due to
a historical jump in revenues at this time of year. We did not use cost of goods sold in our
calculations of net service sales, but included all related recurring expenses in the operating
expenses area of the profit and loss table. The only direct costs in the sales forecast are for
projected product sales.
Product sales are a minimal part of our market. We are not quite sure how much revenue will be
derived from products, so we took a low-ball approach and estimated sales of N3,000 a month.
We are certain that in time these services will be a large part of our revenue, but to err on the
conservative side, we estimate revenues from these services to be only N1,500 a month for the
first year.

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Cash Flow forecast
We expect to manage cash flow over the next three years simply by the growth of the cash flow
of the business. The business will generate more than enough cash flow to cover all of its
expenses.
Pro Forma Cash Flow
Items Amount
N
Hair Dryer - 35,000
Hand Dryer - 10,000 (2)
Hair washing tub - 13,000
Shampoo - 7,200 (4 packs)
Clipper - 21,000 (3)
Hair relaxers - 21,000 (4 packs)
Television - 40,000 (2)
DVD Player - 10,000 (2)
Water drum - 5,000
Iron bucket - 1,500 (5)
Generator - 25,000
Towels/Coverings - 1,500 (5)
Chairs - 3,800 (8)
Table/Drawer - 15,000 (2)
Wall Mirror - 4,000 (4)
Mop - 2,000 (4)
Jerry cans - 6,000 (25, 20, 10, 5, 2, 1 litres)

Cash Flow Forecast

Expenditure from operations
Yr 1 Yr 2 Yr 3
N N N
Cash spending 200,000 130,000 95,000
Bill payments 150,000 100,000 75,000
Subtotal 350,000 230,000 170,000

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Projected Profit and Loss Account
Two important assumptions with our projected profit and loss statement:
1. Our revenue is based on minimum estimated averages against highest expenses
expectations
2. Major expenses of rent and utilities is fixed for the next three (3) years
1. Projected Sales for Three (3) Years
YEAR 1 YEAR 2 YEAR 3
N250,000.00 N400,000.00 N650,000.00

2. Net Profit for Three (3) Years

YEAR 1 YEAR 2 YEAR 3
N80,000.00 N150,000.00 N300,000.00

3. Net cash flow projection for year 2018 closing at December is N300,000.00

Break even analysis

The break-even analysis shows that we have a good balance of fixed costs and sufficient
sales strength to remain healthy. This calculation is focused on service sales, and
excludes costs related to product sales. Our conservative forecast shows the salon just
passing the break-even point throughout most of the first year, but we expect actual sales
to be higher.

Conclusion
This business, if adequately planned and managed on good advice as envisage in this
proposal, it will be a model. It is highly profitable, worthwhile, satisfying and feasible
based on the in-depth analysis shown in this proposal from year one to three.
On the whole, the business plan does not claim to be all inclusive. What we tried to do is
to give the basis on which a salon could operate profitably. As the business progresses,
unavoidable risks, especially those of environmental factors could evolve thereby causing
some slight changes to the set up.

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 APPENDIX
Organisational structure
Organogram
General Manager

Barbers Manager Stylists Manager

Barber 1 Barber 2 Cashier Stylist 1 Stylist 2

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