Hair Styling

Show your strut with upper cut

Cory Grenon, Travis Mard, Breanna Wilkinson, Christopher Zabriskie
Operations Management
Business Model and Operational Plan

Presentation Overview

Company Overview

Location

Operational Processes

and Services

Quality Standards

Capacity Planning

Inventory Management

Financial Plan for Success!!!

Mission Statement
Your hair is a special part of what makes you who you are.
At Upper Cut, our mission is to ensure that we offer
professional services and products to cover all haircare bases.
Our stylists are passionate about serving customers to make
sure every customers hairstyle is as special as they are.
Upper Cut sets itself apart from other hair stylists by its
legendary service, extended hours, competitive prices, and its
hometown roots. We make sure our facilities are clean and
well-maintained so you just have to worry about what which
hairstyle is right for you!

Upper Cuts Objectives

Providing high quality hair treatment services

and products at affordable prices

Accept Bison Bucks to help Nichols students

Offer internship opportunities in

management

Unique, customer focused experience

Business structure

Sponsored by Paul Mitchell

Good hours to accommodate
Nichols students and faculty
Price winner structure:
Mens haircuts start at $13
Womens haircuts start at $20
Highlights start at $35

Walk-ins and appointments

5-8 employees:

Managers
5 professional hair dressers
Work-study positions
Contracted stylists

8:00AM

6:00PM

8:00AM

6:00PM

8:00AM

6:00PM

8:00AM

7:00PM

10:00AM

7:00PM

9:00AM

3:00PM

10:00AM

2:00PM

Services

&

Haircuts and styling

Coloring and highlights
Name brand hair care
products
Gift cards

Special offers
Group discounts
Early bird rates
Nichols student and staff
special rate
10 haircut promotion

Internship/Work-Study Experience

Gain practical managerial skills:

Schedule appointments
Schedule employees
Order Inventory
Manage the operating books
Customer service

Flexible hours
Close to Nichols College

April 1, 2016

10:32am

* Dont leave your hair to

chanceget our FREE
mobile App and never settle
for an okay cut:

Store photos of your ideal

style(s)

Have precise
measurements on hand

Review past styles

Schedule appointments

Give instant feedback of

experience

Share your experience

easily to social media

PHOTOS

Style
Database

Schedule and Review Stylist

Proudly show
your Upper Cut!

iPhone
&
Android
Compatible

Location

20 Airport Rd, Dudley, MA 01571

Floor Plan

Store Layout: Economic Centers

Inventory

Sales and Reception

Hair Cutting and Styling

Waiting Area

Hair Washing, Coloring, Dying,

Highlighting, Drying, and Waxing

Main Process Flowchart

Process
Nested
Process

Yes
Intake

Waiting
Area

Wait

Services
No

Meet
Stylist

Products
Offered

Payment

Station
Cleanup

Nested Process: Intake

Yes

Scheduling
Stylist

Stylist
Appointments?

Yes

Open
Store
No

Scheduling

Greet
Customer

Appointment?
No

Correct Process Review

Basic Cuts
Buzz Cut

Yes

Shampoo/Conditioner
and Scalp Massage

Consultation:
Buzz/Scissor or Both

Male

Wash?
No

Bring to
Cutting
Station

Scissor
Cut
Consultation/
Adjustments

Male or female
style cut?
Female

Scissor
Cut

Trim

No

Blow-dry/Style
Hair

Consultation:
Cut or Trim
Hair Cut

Dry cut?

Yes

Dry Cut

Basic Cut Process Layout

Customer

Hair Cut Only

Employee
No Wait
Wait

Basic Cut Process Layout

Employee
No Wait

Hair Cut and Wash

Wait

Correct Process Review

Advanced Hair - Coloring
No

Let Dye Sit

in Hair
Put Dye in Top and Sides of
Hair and Cover with Foils

Partial

Put Dye in Hair

and Cover with
Foils

Is color ready?
Yes

Take Foils
Out

Wash Hair/Scalp
Massage

Full

Cut hair?
Yes

Mix Color and

Gather Foils

Cut Hair
Highlights
Seated

Color
Consultation

Blow Dry
and Style

Yes

Consultation/
Adjustments

Dying

Mix Color

No

Put Dye in
Hair
Is color ready?
Let Dye Sit
in Hair

No

Advanced Hair Process Layout

Employee
No Wait

Coloring: Dying, Wash and Cut

Wait

Advanced Hair Process Layout

Employee
No Wait

Coloring: Highlighting, Wash and Cut

Wait

Correct Process Review

Optional: Waxing
Haircut
procedures

Consultation
No

Extra hairs?

No

Eyebrow or
Facial Wax?

Eyebrow only
Yes

Remove wax,
apply gel

Measure
Eyebrow/
Consultation

Heat Wax
to 43F

Apply wax
completely on
other side

Facial

After sets,
remove wax,
apply gel

Facial
Consultation

Cleanse
Eyebrow/Take Note
of Any Imperfection

After sets,
remove wax

Apply Wax
No

Let wax
cool

No

Yes

Is wax ready?
Self test.

Let wax
cool

Is wax ready?
Self test.

Yes

Apply wax
completely
on one side

Yes

Use tweezers to
remove excess
hairs

Waxing Process Layout

Employee
No Wait

Eyebrow Wax

Wait

Waxing Process Layout

Employee
No Wait

Facial Wax

Wait

Correct Process Review: Products Offered

Yes

Are you interested in

buying our haircare
products?

Record
Products
Payment

Inventory
Management

No

Nested Process: Inventory Management

Yes

Evaluate
Inventory

Supplies
Needed?
No

Prepare
Order List
Intake

Order
Inventory

Receive
Inventory

Invoice

Payment

Store
Inventory

Sales Process Layout

Employee
Customer

Product Sales and Management

Nested Process: Payment

Cash

Count
Cash

Payment
Received

Give Change
(If needed)

Possible Tip
Received

Transaction
Complete

Declined
Debit or
Credit Card

Swipe
Card
Accepted

Have
Customer
Sign Receipt

Take Signed
Receipt

Benefits of the Store Layout

Priority

Benefit

Increase customer satisfaction

Easy access, bison bucks, modern

Facilitate flow of info and materials

Utilization of labor and equipment

Reducing hazards

Improving morale

Improving communication

design, open and bright

Materials near economic centers and
computers utilized to improve
scheduling and inventory
Outlets not overloaded, no clutter
and separation of service centers
Open floor design and locked storage
room
Handicap accessible and customer
focused with free WiFi
Social media and quick response

Quality Control
&
Capacity Planning

Quality Control
The store will always be clean and well maintained
Stylists will stay educated in the latest trends and styles
Monthly performance evaluations

Customer concerns will be immediately addressed during

consolations
As we grow, our level of quality will significantly improve.

We guarantee 85% customer satisfaction at grand opening

We will meet our appointments within 7 minutes guaranteed

Quality Control Charts

Quality Control Charts

Daily Walk-in Wait Time Control
25

Wait Time (Minutes)

20

15

Customer Wait Time

10

Pass/Fail Medium

Pass is <15mins
Fail is >15mins
5

0
1

7
Customer

10

11

12

13

Quality Control Charts

Customer Experience Quality Chart
Customer
1
2
3
4
5
6
7
8
9
10
11
12
13

Time
0
10
8
0
6
5
0
16
12
12
1
0
21

Service Quality (1-5)

5
4
5
5
5
5
5
2
1
3
5
5
3

Cleanliness (1-5)
5
5
5
5
5
5
5
5
1
2
4
3
2

Pass/Fail
Pass
Pass
Pass
Pass
Pass
Pass
Pass
Fail
Fail
Fail
Pass
Pass
Fail

Analyzing Quality Control

Main standards that determine quality:
Wait-time for appointments
Wait-time for non-appointments
Store cleanliness

Level of education of employees

OSHA standard testing
Formaldehyde air contamination test (limit = 0.75ppm for 8hr shift or
2ppm for 15 minute exposure)

Secondary standards that determine quality:

Customer survey results
Level of satisfaction: wait-time, desired result, store cleanliness

Analyzing Quality Control

OSHA Formaldehyde Quality Standard
2

Contamination (ppm)

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

Results

Acceptable

Identifying Problems
Crowding of wait area
Short staffed, unexpected level of business, procedure failure

Efficiency of employees
Monthly performance evaluation

Quality of supplies
Card processor not working, scissors dull, hair dryer problems

Appointments not being met within 5 minutes

Non-appointments waiting over 15 minutes

Responding to Quality Concerns

Survey results:
If employee receives 3 failing surveys a month, termination will

be considered
If wait times for appointments become longer than 7 minutes
on average, scheduling process and appointment process will be
reviewed
If store cleanliness receives failing scores, stricter cleaning
controls will be implemented

Capacity Planning
Estimating Requirements:
6 cutting stations
3 washing and 2 drying stations

Typically 3 employees working

Basic cut time is 10 minutes
Advanced cut is 20 minutes

Eyebrow wax is 15-30 minutes

Facial wax is 15-30 minutes
Coloring is 45-90 minutes

Highlighting is 30-90 minutes

Capacity Calculation Data

Mens haircuts start at $13
Womens haircuts start at $20
Highlights start at $35
Waxes start at $8
Total weekly hours open are 60

5-8 regular employees, 7 contracted employees (15 total available)

340 days open a year
48.5 weeks per year

Monthly Store Capacity Calculation

Estimating Requirements:
Most customers/week is:
2007 for all basic cuts that are 10
minutes all day with no breaks with 15
employees working
Least customers/week is:

0 if no one comes in, and we have the 3

employees working
Realistic customers/week is:

50-175 with a mix of services and 3-5

employees working with down time

Store Volume
Month of: April
Week
1
2
3
4
5
Total

Actual Expected
64
52
48
48
20
232

Utilization & Capacity Cushion

Average Utilization = 36.6%
Slow = 27%
Busy = 76%
Major Holidays and Events = 88%

Capacity Cushion = 63.4%

*** With our current set up, we can handle unexpected

increases in demand assuming our contractual employees are
available ***

Growth Forecasts
Customer Expectations
Month
April
May
June
July
August
September
October
November
December
January
February
March
Total

Year 1
232
220
213
213
220
214
206
195
180
185
195
230
2503

Year 2
252
243
240
238
242
238
235
210
201
197
200
246
2742

Year 3
278
270
253
246
250
242
240
224
210
198
201
250
2862

Year 5
300
287
286
283
288
281
272
269
234
220
230
276
3226

Revenue Separation
Revenue %
Waxing, 4%

Sales, 2%

Basic Cut, 34%

Advanced Cut,
60%

Capacity Planning
Identifying Gaps
Increases in Capacity from:
Decreased competition in the area
Perception of quality increases

Advertising

Decreases in Capacity from:

Bad P/R
Slow, inconsistent service
Weak economy

Capacity Planning
Developing Alternatives
Discounts during slow periods to attract customers
Extended hours available by appointment to spread out busy
periods / Long normal hours
Hiring more employees or contracting more employees
during busy periods

Capacity Planning
Evaluating Alternatives
Discounts during slow periods to attract customers
Reduced sales, but better than slow business

Extended hours available by appointment to spread out busy

periods / Long normal hours

Increased operating costs, but convenient for everyone

Hiring more employees or contracting more employees

during busy periods

Increased payroll costs, but necessary with increasing demand

Capacity Planning

Small Expansion = 2 hair stations

Decision Tree

Large Expansion = 4 hair stations

Low Volume (100/mnth)

$46,000
Dont Expand (175/mnth)

$2,200

$80,000

Expansion 2
High Volume (180/mnth)

Expansion 1

$7,000
$132,000

$12,000

Expand (200+/mnth)

Low Volume (175/mnth)

$57,000
$12,000

$144,000
High Volume (200+/mnth)

Inventory Management

Shampoos & Conditioners

Paul Mitchell: Original shampoo

Paul Mitchell: Kids shampoo
Paul Mitchell: Curls shampoo

Paul Mitchell: Extra-Body conditioner

Paul Mitchell: Color Care conditioner
Paul Mitchell: Strength conditioner

Hair Gels & Treatment Products

Paul Mitchell: Soft Style hair gel

Paul Mitchell: Express Dry hairspray
Paul Mitchell: Awapuhi moisture mist
Paul Mitchell: Flexible Style Sculpting Foam

Hair Coloring Products

Paul Mitchell: The color conditioner hair color cream

Paul Mitchell: Cream Lightener

Operating Supplies

Paul Mitchell: Haircut Cape

Paul Mitchell: Neuro Hair Dryer
Paul Mitchell: Pro Tools Clipper
Paul Mitchell: Pro Tools Shears
GiGi All Purpose Honee wax
Colortrak Hair Foils: Embossed Pop-Up 500 count

Misc. Supplies

Towels
Printer Paper
Detergent
Wooden sticks
Cotton balls
Hair extensions
Random Magazines for customers

Suppliers

Paul Mitchell Northern New England

Hair Lines
The Hair Studio
LoxaBeauty.com
Sally Beauty Holdings, Inc.

CosmoProf
Sally Beauty Supplies
Beauty Systems Group
Armstrong McCall

Inventory Considerations

Shampoo and conditioner bottles last ~ 50 100 washes

- Need in store and for sale

Hair gel tubes last ~ 100 customers

- Need in store and for sale

Hair spray lasts ~ 30 50 customers

Sculpting foam lasts ~ 40 60 customers
Hair coloring tubes last ~ 15 customers/color tube
Facial wax lasts ~ 100 customers

Inventory Considerations cont.

Shelf-Life of Supplies:
Shampoos and Conditioners:
Unopened: 30 months
Opened: 12 months

Facial Wax:
If stored in 65*F room temp, 1-2 years before hardens

Hair Foils, Wooden Sticks, Cotton Balls, Other

Dispose after 1 use

Reordering & Tracking

Goal = Once per month

Excel Inventory Management Software Program
Any item falls below 25% our required, evaluate all
inventory for bulk order
Periodic physical count and evaluation of supplies to
update system
Expired or unusable inventory is discarded properly at Hair Lines and
operational procedures and ordering is examined if becomes routine

Financial Planning For Success

START-UP COSTS
Designing
Construction
Lease Agreement
Equipment
Personal Equity

10,000
15,000
32,500
25,000
(10,000)

Total Start-Up Costs

72,500

Upper Cut Hair Styling

Income Statement
For Year Ended December 31, 2016
Sales Revenue
Cost of Sales
Net Sales

$132,000
12,000
$120,000

91%

49,500

38%

Operating Income

$70,500

53%

Income Before Tax

Income Tax (25%)

$70,500
(17,625)

Net Income

$52,875

Operating Expenses
Selling Expenses
Administrative Expenses
Total Operating Expenses

$6,500
43,000

40%

Wear your Upper Cut Proud!

Hair Styling

Cory Grenon, Travis Mard, Breanna Wilkinson, Christopher Zabriskie

Operations Management
Business Model and Operational Plan