The project team, The Winning 6 proposed a new business start-up plan named Dream Nails

in City Square, Johor Bahru, Malaysia. The business aims to offer nail polish services,
including customized nail polish color and manicure and pedicure services to customers.
Dream Nails commits that we will use the high quality in term of certified quality and provide
good services with serious attitude. To decide our potential target market, The Winning 6
conducts secondary research before we start to propose the idea of customized nail polish
color, so we are able to recognize that we have the market to continue with this proposal.

According to Research and Market (2017), the nail polish market is growing at a CAGR of
9.5% and it is forecasted to reach US$15.55 billion by 2024. The value of Malaysia nails
market is assumed to have a growth rate of 2.8% annually to reach the revenue of US$47.1
million in 2019 (Statista 2019), which is a basement of operating Dream Nails. The initial
objective of Dream Nails is to fulfill the color demand and provide friendly service to
customers.

With the location of level 3 in City Square, the shop lot combines the high footfall of visitors.
Dream Nails will start the business on 1 st January 2020, opening from 10am – 10pm every
day. Dream Nails sets up the pricing strategy of ‘cost-based pricing strategy’ on behalf of our
target market from age of 15 to 40. The six members of The Winning 6 will also contribute
themselves to the projects as partnership business.

The Winning 6 will collect RM 40, 082.50 from members, to gather the total initial start-up cost
of RM 240,495. Based on our estimated budgeting, The Winning 6 will achieve a payback
period of 10 months 27 days.

In the future, Dream Nails will expand the business through online website, so the customers
will not be limited only at the location of Johor Bahru.
 : Dream Nails

: Partnership

: J3-13, Level 3, City Square, Jalan Wong Ah Fook, 80000, Johor

Bahru, Johor, Malaysia.
: 1 January 2020

: Thin Chia Hui, Nurazmin Farzana Azuden, Tee Kian Peng,

Cheong Zhi Yan, Chua Wei Son, Harpreet Kaur a/p Mukand Singh

All owners possess Bachelor of Business degree, four specialize in Accounting and two
specialize in Marketing and Management. All owners are interested and have done thorough
research before entering into cosmetic industry.

Dream Nails is offering customised nail polish and nail care services. Customers are allowed
to name their customised nail polish. The demand of the customers during the first year is a
total number of 14,866 bottles of nail polish and nail services.

The target market of Dream Nails is females from 15 to 40 years old in Johor Bahru. Unlike
females in others age group, our target customers have higher usage of nail polish in their
daily life. They apply nail polish to impress people with good, beautiful and confident image.

Multiple promotional activities will be executed to raise brand awareness and increase the
footfall of customers. Promotional activities such as providing free manicure services to
limited number of customers, distributing free roses on Valentine’s Day occasion, organizing
photo contest event and providing discount on Christmas will be carried out once the
business operates.
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To be customers’ preferred choice for nail polish customisation.

To provide the customers with the opportunity to customise nail polish that suits their desired
colour.
To achieve a nail polish customisation business with high customer satisfaction.

The business is estimated to achieve a Return on Investment of 305.47% for the three years’
project plan which ends 31 st December 2022 with a payback period of 10 months and 27
days. The total net profit for 3 years’ project ended 31 st December 2022 is RM734,642.00.
The initial start-up cost is RM240,495.00 and will be equally contributed by the six partners.

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Dream Nails is selling customised nail polish and nail services. The customers for this
business are expected to be 14,866 customers in the first year, 2020.

: Dream Nails

: Dream Nails

: 14th October 2019

: Johor Bahru, Malaysia

: Partnership

: JM0719005-K

: Business Licenses, Halal Certification and Signboard Licenses

Dream Nails is located at level 3 of City Square, Johor Bahru. It is a shop lot with excellent
exposure because it is located in front of an escalator where the visitors use to access. The
size of the shop lot is 352 square feet.

The Winning 6 will lease a shop lot (J3-13) for three-year lease agreement with City Square.
The rental is RM8,800.00 monthly. The Winning 6 must familiarize with all terms and
conditions before signing the lease contract and pay deposits to City Square Management.

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 : Thin Chia Hui, Nurazmin Farzana Azuden, Tee Kian Peng, Cheong Zhi Yan,
Chua Wei Son, Harpreet Kaur a/p Mukand Singh

The business structure of Dream Nails is partnership. It is formed by 6 partners and each
partner owns 16.67 % of shares. The profit sharing is equal. Dream Nails will recruit 1 store
manager to monitor the daily operation of business. 1 cashier will be recruited to be in charge
of the Point-of-Sale system. 3 manicurists and pedicurists will be hired to perform nail care
services whilst 1 mixologist will be recruited to help customers create customised nail polish.
Meanwhile, the project manager will take part in the operation of business daily while the rest
of the partners remain sleeping partners.

All partners of Dream Nails hold a Bachelor of Business degree. All business partners have
strong interest and deep knowledge on beauty industry. The never-dying interest of theirs will
ensure smooth operation of business.

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Dream Nails will recruit staff by posting job vacancies on JobStreet.com from 1 st November
2019 to 31st December 2019.

Dream Nails will offer training session to employees from 27 th December 2019 to 31st
December 2019. Training mainly focuses on business SOP and the use of machines and
software.

Store manager will evaluate and record the performance of all employees daily and conduct
meetings to discuss on performance and customer feedback monthly.

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Dream Nails positions itself as the most affordable customised nail polish in the market which
offers 51 colours for customers to choose from to serve target audience ranges from the age
of 15 to 40 years old.

The USP of Dream Nails is the nail polish customisation. Customers can choose their
preferred colour combination to create their own nail polish. Apart from that, customers can
also personalise the label of the nail polish according to their own likings.

Dream Nails’ target audience is females aged between 15 to 40 years old in Johor Bahru. The
female population in Johor Bahru occupies 48.6% of the approximate total population of
124,096 in 2018 (Jabatan Perangkaan Malaysia 2019). Furthermore, this age group is more
inclined towards personal grooming and holds the highest purchasing power in cosmetics and
personal care products (Hassali et al. 2015). Hence, the demand from this age group is
expected to be very high. Dreams Nails also forecasted to attract approximately 1200
customers in a month.

Dream Nails adopts cost-based pricing strategy. The cost of producing the products will be
the main consideration. Product’s price will be set on average to cover the whole production
cost of the nail polish per unit and generate profit.

Customers will participate in the making process of the customised nail polish which is
completely different experience. The personalised product makes it more personal with
customers since they are able to integrate their own ideas into the product appearance and
design (Zhen, Zhao & Yan 2017). Nail care services will also be provided by professional
manicurists and pedicurists to ensure the satisfaction of customers.

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The attitudes and usage trend towards cosmetics are changing among the population in
Malaysia due to the rising influence by peers and social media personalities such as
Instagram and YouTube beauty bloggers and vloggers (Hassali et al. 2015). As growth in the
Malaysia’s economy picks up, personal care and cosmetics such as the nails segment are
expected to grow in the years to come.

Dream Nails uses a tailored software, TRYCOLOURS to formulate the nail polish colour
according to customers’ orders. The software will generate the exact amount of colouring
liquids needed to formulate each bottle of nail polish using the selected colour combination.

To avoid copying issue and protect the concept of nail polish customisation, Dream Nails will
file an application for a patent license under the Intellectual Property Corporation of Malaysia
(MyIPO) to obtain the copyright of the customised nail polish concept. With the possession of
the patent license, an exclusive right will be granted to Dream Nails of the customisation
process and any infringement of the copyright by others will be sued (The Official Portal of
Intellectual Property Corporation of Malaysia (MyIPO) n.d.).

All employees of Dream Nails will be registered with Social Security Organisation (SOCSO)
once they began their employment. The Employment Injury Scheme under SOCSO will
protect employees against accident or any occupational disease occurring during their
employment (Employment Injury Scheme 2017).

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According to the Companies Act, Dream Nails needs to register for the business permit and
business name to start the business.

Dream Nails’ compliance with rules and regulations of Ministry of Health Malaysia of National
Pharmaceutical Regulatory Agency (NPRA) will ensure the quality of the product fulfills the
requirements of the law.

Dream Nails needs to apply the Halal certification from the JAKIM. After approved by the
government, Dream Nails can apply the Halal logo on the product packaging and retailed
shop.

Dream Nails must pay the EPF and SOCSO for employees according to the employees’
salaries. Due to SST Act, Dream Nails needs to register and pay the Sales and Service Tax
to the government in the contribution rate of 6%.

Cashier will greet customers and introduce Dream Nails to them. Next, cashier will guide
them to use the software to create and name their desired nail polish. After that, mixologist
will start to mix the nail polish while customers are watching. The system will automatically
generate the ingredients needed after customers’ selection. Next, mixologist will add the
ingredients into a small cup and mix them together. Mixologist will then pour the nail polish

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into the bottle and put a name sticker at the bottom of the bottle. Lastly, customer will make
the payment at the cashier counter. The estimated time of whole process is 20 minutes.

Dream Nails’ supplier of raw material is Soap Lab. They will provide nail polish powder and
liquid to Dream Nails. To maintain a good relationship with the supplier, Dream Nails will pay
bills on time and communicate with them politely.

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Dream Nails will use two software in the business, POS system and a tailored software for
nail polish customisation called TRYCOLOURS. POS system is used to record and track the
daily transactions of Dream Nails. TRYCOLOURS is used to formulate the nail polish colours.

Dream Nails operating hours is from 10am to 10pm every day.

Dream Nails uses phone call, WhatsApp, Facebook, Instagram to communicate with
customers.

Dream Nails only accept cash payment.

Mixologist will follow the amount of ingredients that has been formulated in the software. All
employees are required to wear latex gloves and all equipment will be sanitised after every
service to ensure hygiene.

Dream Nails has completed market research based on secondary data analysis. Dream Nails
analyses reports, data and statistic of cosmetics industry, the data of target customers, rules
and regulations of government, terms and conditions of location and relevant academic
journals. The value of Malaysia nails market is assumed to has a growth rate of 2.8%
annually to reach the revenue of US$47.1 million in 2019 (Statista 2019).

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Dream Nails plans to offer customised nail polish to female aged between 15 to 40 years old
in Johor Bahru. The age group below 30 years-old is inclined to spend more on cosmetics
(Swidi et al. 2010). Research showed that 14% of 18 to 29 years old female polish their nail
every day and 12% of those between the age of 30 to 59 years-old use nail polish every day
(Kunst 2019). Besides that, 36% of consumers under 40 years old from the age of 16 are
interested in customising products. Thus, the business narrows down the target market to the
age of 15 to 40 years old.

According to Research and Market (2017), the nail polish market is growing at a CAGR of
9.5% and it is forecasted to reach US$15.55 billion by 2024. According to Doan (2019), the
market size of cosmetics in Asia Pacific region has increased to more than US$70 billion,
which is the second highest market after Western European market and is estimated to reach
around US$126.86 billion by 2020. Malaysia will witness growth in the nail care market due to
the strong demand for nail products that will bring positive effect on market growth (Ng et al.
2017). Therefore, Dream Nails able to enter the market and growth steadily.

Malaysian government has identified halal as a strategic theme for the Malaysian economy.
Lutfie et al. (2015) found that Muslim women are very concern on the Halal certification of the
product when making decision, but the quality of the product remains as an important
criterion. Malaysia is a Muslim country with a population of exceed 60 percent of Muslims
provides a large profitable market for the Halal cosmetics products in Malaysia (Kaur et al.
2018). Hence, there is an opportunity for Dream Nails to approach Malay customers when it
offers Halal products.

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Dream Nails targets on female customers of different ethnicities, including Malays, Chinese
and Indians, between the age of 15 to 40 years old in Johor Bahru. The target consumers are
expected to earn an average income of RM1,700.00, and thus they are able to afford the
products and services.

The main consumers of Dream Nails will be Malay. Since Malaysia consists of more than
60% of Muslim (Kaur et al. 2018), Dream Nails also offer halal-certified products to meet the
requirements of Muslim customers. Nail polish is halal if it is breathable, meaning large
amount of water can penetrate the applied layer of nail polish and reaches the nail bed
(Sugibayashi et al. 2019). Thus, by providing halal-certified product to the market, Muslim
female customers will be attracted as well.

Dream Nails believes that maintaining good customer relationship is more important than
acquiring new customers for business sustainability (Adhikari & Adhikari 2009). According to
Pareto’s Principle, acquiring new customers will be 5 to 10 times expensive than retaining
existing customers (Hassan et al. 2015). As a result, Customer Relationship Management
(CRM) is practiced in Dream Nails’ daily business operation to create and maintain
relationship with customers. Dream Nails aspires to provide quality products and services to
customers to fulfill their expectations and requirements. Besides, customers’ feedbacks are
highly valued for the improvement of our business, and CRM training is provided to
employees to enhance their productivity and relationship with customers. Dream Nails also
offers advertising and promotion in specific periods, including free gifts and photo contests, in
order to engage with customers. Therefore, through CRM, Dream Nails is able to maintain a
good relationship with customers and achieve business sustainability.

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To achieve total sales by RM683,836.00 by selling a total number of 14,866 of customised
nail polish and nail services in 2020 based on average selling price of RM46, and has an
annual sales increase of 10%, through several communication and promotional ways by 31 st
December 2022.

To provide free manicure services to first 10 customers per day that purchase
customised nail polish in single receipt from 1st January 2020 to 3rd January 2020.

Providing free gift or service encourages customers to purchase products and visit more
frequently which will increase the number of customers visiting the store (Cuellar 2013). It
also has more persuasive effect on the brand than the price of the product (Dib & Alnazer
2014). Dream Nails provides free manicure service to the customers to promote the brand
and increase the number of potential customers.

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To distribute free single roses for first 214 customers through Valentine's Day Event
from 7th February 2020 to 14th February 2020.

Valentine’s Day is a time related with lavish consumption and commercialism spending
(Scheinbaum & Zinkhan 2006). Giving free red roses or chocolates during Valentine’s day is
an effective way to promote the products and services (Ouyang 2019). Dream Nails will
provide free one red rose to the customers to show our love and commitment in satisfying
customer’s needs (Proflowers n.d.).

To increase brand awareness by reaching 4,725 number of people through Facebook

by organising photo contest event in Dream Nails outlet from 1 st September 2020 to 7th
September 2020.

Brand awareness shows the level of acquaintance of a brand with customers (Karam &
Saydam 2015). The usage and importance of internet been increasing among the population,
thus it’s important for brands to develop brand awareness (Išoraitė 2016). Facebook contest
represents a tremendous way to increase brand awareness among target audience and
generate sales (Allow & Dastane 2016). Participants of this contest will be gifted a free
customised nail polish from Dream Nails (refer to Appendix 4.8).

To increase sales by providing discount of 25% during the Christmas Eve from 19 th
December 2020 to 25th December 2020.

Malaysia is one of the countries that celebrate many festivals and enjoys shopping during
holidays (Allow & Dastane 2016). One of the most celebrated festivals is Christmas. Giving
discount encourages customers to purchase the products more and increase the sales of the
outlet (DJPR 2019). Dream Nails will deduct 25% from the products to entice a greater
number of customers during the promotion.

Dream Nails is selling a customised nail polish with a selection of 51 colours and 7 coatings.
Customers is able to choose their preferred colour combination to create their own nail polish
colour as well as personalised the label on the bottle with any desired name.

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To be customers’ preferred choice for nail polish customisation.

To provide quality assured customised nail polish that can fulfill the market gap and enhance
customer satisfaction.

To enhance customer satisfaction by letting the customers to experience the customisation

process and enjoy the high quality of nail polish produced that meets the expectation.

To achieve high brand awareness and acknowledgement in Johor Bahru through effective
marketing strategies and premium nail polish quality.

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To achieve Return on Investment rate of 305.47% for the three years’ project plan which ends
at 31st December 2022 with payback period of 10 months and 27 days.

In order to establish Dream Nails, a start-up cost of RM240,495.00 is incurred. The funds will
be obtained from the six partners of The Winning 6. Each partner will contribute RM
40,082.50 to start the business.

1. Each partner of The Winning 6 will equally contribute the initial capital.
2. Profit or loss of the business will be equally shared among six members.
3. Inventories will be purchased once a year.
4. Constant use of stationeries, utility electricity, office cleaning liquid and yearly-
purchase equipment.
5. All the transactions are on cash basis.
6. Peak seasons of the business will be in January, February, May, June, November and
December.

The initial start-up costs of Dream Nails are RM240,495.00, with RM128,733.00 for the
expenses, including registration fees, shop lot expenses, utilities, marketing and advertising,
and others, while RM111,762.00 for equipment/capital costs, including equipment, furniture
and fittings, office cleaning equipment, Electric appliances, ICT equipment and software, as
well as renovation and installation (refer to Appendix 3.1).

The cash incoming of Dream Nails is generated from sales, which is RM683,836.00,
RM758,356.00 and RM849,436.00 from 2020 to 2022. For three financial years, the cash
outgoing is RM479,518.00, RM503,114.00 and RM528,885.00 respectively. Therefore, by
deducting the total cash outgoing from total cash ingoing, the cash balance for three financial
years is RM204,318.00, RM255,242.00 and RM320,551.00 (refer to Appendix 3.4).
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The expected gross profit for Dream Nails from 2020 to 2022 is RM573,011.00,
RM635,478.00 and RM711,825.00 respectively. The total expenses for three financial years
are RM370,903.00, RM394,499.00 and RM420,270.00. By deducting the expenses from
gross profit, Dream Nail’s net profit for three financial years are RM202,108.00,
RM240,979.00 and RM291,555.00 (refer to Appendix 3.6).

Dream Nails’ total current asset for three financial years are RM323,598.00, RM576,145.00
and RM879,268.00. For non-current assets, total amount after deducting accumulated
depreciation for three financial years are RM100,194.00, RM88,626.00 and RM77,058.00.
However, there is no liability for the business, resulting in net assets of RM423,792.00,
RM664,771.00 and RM956,326.00 for three financial years. Total equity includes capital,
profit and retained earnings, and has the same amount as the net asset (refer to Appendix
3.7).

Dream Nails’ products and services have an average selling price of RM46.00, with an
average cost of RM7.44, which the profit possess 84% of the average selling price. In order to
cover the fixed cost of RM417,423.00, break-even units of 10,824 of customised nail polish or
services are required to be sold, to achieve sales of RM497,898.56 (refer to Appendix 3.8).

From 2020 to 2022, the total present value benefits are RM2,200,970.63, with total present
value costs of RM1,726,699.72, resulting to a cost-benefit ratio of 1:1.27. It indicates that
Dream Nails could expect RM1.27 of benefits for each RM1.00 of costs (refer to Appendix
3.11).

The nail polish customisation saloon is a sustainable and profitable start-up business by
referring to the financial projections and overall idea of business plan. Since the demand of
the customisation nail polish is increasing, the venture is expected to continue. Additionally,
there is 47% of Malaysians does online shopping and at least 39% of Malaysians buys
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cosmetic and beauty products online (Išoraitė 2016). Therefore, our project team
recommends expanding our business to online platform in future.

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APPENDICES