Hair Salon Business Plan

Hair Salon Business Plan

1. Executive Summary
The full service salon establishment described in this business plan is a start-up venture created by a
determined and dedicated individual who has ten years of experience in the field of cosmetology. As a
licensed stylist, the owner has built a large customer base due to his talents, creativity and his ability to
connect with others. His knowledge and his passion have helped to create the foundation for this salon
endeavor.

By focusing on high quality customer service, diverse offerings, creative promotion strategy and continuous
development of employees, our salon will increase sales to more than $1,000,000 in three years while
maintaining the gross margin on sales and strengthening cash management and working capital.

A comprehensive analysis of the market indicates that the salon and spa industry is strong and robust,
generating $72 billion in annual revenues. With personal grooming and appearance being a core aspect of
American culture, the industry sustains its durability and growth by offering treatments that are difficult to
replicate at home. Additionally, salon and spa treatments are gathering more popularity due to their soothing
and relaxing quality counteracting the high stress activities of everyday life.

The location of our salon is highly desirable as it is based at the center of a busy downtown area with ample
traffic. Within the region, the median household income is $116,335 as compared to the national average of
$41,994. This factor strengthens our location strategy as clients will have more discretionary income to spend
on miscellaneous salon and spa treatments. Based on U.S. Census statistics, our region's five- year growth
rate for households is projected to be at 3.16%. Our chosen target markets which include young female
consumers age 16 to 24, male and female clients age 25 to 34 and individuals from the baby boom
generation will account for a total of 13,154 potential customers in the first year of operations.

A review of our competitors shows that we will be competing against five other salon establishments in a ten-
mile radius of our location. These businesses focus on different target markets, pricing structures, and
marketing approaches. With our consistent, high quality services and moderate pricing, we have the edge in
attracting consumers by delivering a full range of beauty and pampering treatments in one convenient
location. Our concrete marketing plan will distinguish us as a salon of choice for consumers.

In planning for our launch, we have put together a financial plan based on forecasts for the first three years of
operations including our start-up expenses estimated at $125,175. We will acquire a loan in the amount of
$100,000 or 80% of the start-up requirements.

For our salon, we will generate sales revenues by offering salon and spa treatments along with botanically
based retail products. During the first year of operations, we aim to generate $604,800 in sales revenue. For
the second and third year of operations, we plan to increase sales by 30% or $786,236 in our second year
and $1,022,111 in our third year.

 After deducting our operating expenses, the net profit for the first year is expected to be at $147,237 with
24.34% net profit from sales. Net profit will increase in the second year to $214,012 with 27.22% net profit
from sales. In the third year, we anticipate our net profit at $301,858 with 29.53% net profit from sales.

As a start-up salon, we project that our net cash flow will be negative for month 2 and month 3 but will gain
momentum by the fourth month. Our net cash flow is projected at $310,589 for the first year, $134,794 for the
second year, and $223,264 for the third year. The salon is expected to have a cash balance of $330,589 in
the first year, increasing to $465,383 in the second year and $688,648 in the third year.

We forecast a net worth of $129,237 in the first year, increasing to $223,248 in the second year and $374,106
in the third year.

 
 Hair Salon Business Plan

1.1. Objectives
This business plan aims to set an enduring foundation for a competitive, high quality, full-service salon
establishment. To accomplish our goal, we must meet the following measurable objectives:

 Provide 24 service treatments per day in the first month after opening
 Provide 48 service treatments per day by the end of the first year of operations
 Increase sales revenue by 30% in the second and third year through outstanding services
 Maintain a promotion budget at 3% of sales
 Maintain an annual staff development fund of $7,200

1.2. Mission

At our salon, our mission is to provide clients the opportunity to obtain high quality, high value salon and
spa treatments in a soothing, confronting environment. We continuously strive to build long lasting
relationships with clients by offering personalized, outstanding services. Our goal is to build a team of
professionals who are well versed in the arts of salon and spa techniques and who are caring and
focused on customer satisfaction.

1.3. Keys to Success

The keys to our success are summarized in four core goals:

 Minimize our costs and expenses in every aspects of our business without sacrificing quality
 Build a team of professionals who are knowledgeable, caring, loyal, and consistent in their
customer service
 Utilize creative promotions to attract our target markets
 Maintain the highest standard of quality control, safety, and hygiene

By focusing on these goals, our full-service salon will be competitive and we will become the destination
of choice for consumers.

2. Company Summary

The salon establishment defined in this business plan is a start-up venture, launched by a single individual
with 10 years of experience in the cosmetology field. The salon offers a full range of hair care services such
as cutting, coloring, styling, texturing and specialized services such as manicure, pedicure, facial, hair
removal, skin and body care, massage, and various spa treatments. In addition, the salon also sells beauty
supplies, and high quality hair/skin care products.

As a full-service salon, clients will be able to enjoy the convenience of having a variety of customized beauty
and rejuvenating treatments within one location. The owner is passionate and adamant about building long
lasting relationships with clients and about offering excellent services at a fair, moderate price. In addition, we
aim to create a friendly, comfortable, and serene environment where patrons can truly be pampered and
escape from the stresses of everyday life.
 Hair Salon Business Plan

Centrally located in the heart of town, our salon is poised to attract young adults, individuals from the baby
boom generation and many local residents and business population. We strive to exceed our clients'
expectation by ensuring consistent service quality in every aspect of our offerings. We commit to accomplish
this goal by requiring that all of our personnel complete an in-house skill and customer etiquette certification
program. Additionally, we aim to distinguish our salon through our customer care approach by providing free
refreshments, free optional beauty or hair consultation for new clients on their first visit and free prescribed
home-care beauty maintenance program for all clients.

2.1. Company Ownership

The owner is very committed and dedicated to this salon venture as it has been his lifelong dream. Aside
from his technical experience as a cosmetologist, the owner has taken several business courses such as
finance, accounting, marketing and management in order to prepare for the launch of our company. The
salon is his vision and his mission. As for the legal status of the company, the owner plans to seek the
guidance of our attorney and accountant to determine the appropriate corporate entity for the business.

2.2. Start-up Summary

We are currently in the research and planning stages for the launch of our company. We have performed
a thorough analysis of the market, the location, and the financial requirements for start-up.

Our comprehensive review of the industry provided us with the knowledge and strategy to budget for our
business and provide adequate cash flow for the first three years. The start-up costs for our salon will be
at $125,175. The majority of our start-up costs will be funded by a conventional loan of $100,000 at 8%
interest over ten years. The owner will contribute the remaining capital of $25,175.

As a salon and spa establishment, we will need to have an assortment of supplies, equipment, and
furniture to accommodate four salon stations with two shampoo units, two manicure stations, two
pedicure stations, a spa treatment area, reception area, office, and a small employee break room. We
will expense $200 for stationary supplies such as business cards, letter head, envelopes, and salon
service menus. Our monthly cost for insurance at start-up will be at $100. For rent, our monthly payment
will be $4,000. We will need a personal computer for the office priced at $1,500 while our miscellaneous
office supplies such as paper products and software will account for another $2,000. Our salon and spa
supplies such as shampoo, scissors, blow dryers, perm rods, bleach applicators, towels, timer, curling
iron, and an assortment of nail and spa chemicals will require $5,000 in funds. In order to have an online
presence, we will spend a total of $1,110 at start-up to establish a website. Our utility and phone
requirement will account for $265. Additionally, we plan to spend $1,000 to promote our store prior to
opening by placing ads in local newspapers, generating newsletters, press releases, and sending
coupon offers to local residents. Our legal costs for the company at start-up are $1,000. In order to
provide a serene, pampered environment for our clients, we will incur $30,000 in renovation charges to
redesign and retrofit our leased space. The major renovation focus will be in the spa area where we will
need to have a shower space to perform our services.

As mentioned, we plan to offer a carefully selected assortment of retail hair care and spa products. Our
start-up inventory is set at $1,000. We will also need to invest in a variety of small assets such as
signage, cash registers, office furniture and prepaid expenses such as rent security deposits and
insurance. These current assets will total to $7,000. We will expense another $54,000 for long term
assets. These assets are major capital equipment items such as hydraulic salon chairs, shampoo
stations, manicure stations, pedicure stations, face and body table, Vichy shower, hot towel sanitizer,
and spa cabinetry. In order to efficiently operate and maintain our business, we will need $20,000 in cash
to support various activities at the beginning of our launch.

 
 Hair Salon Business Plan

Start-up
   
Requirements  
   
Start-up Expenses  
Legal $1,000
Stationery etc. $200
Insurance $100
Rent $4,000
Computer $1,500
Salon and Spa Supplies $2,000
Web Design $1,000
Web Hosting/ Domain Name $90
Internet Service $20
Utility Deposit $150
Phone(Line Installation Charges) $115
Start-up Promotion $1,000
Renovation $30,000
Office supplies $2,000
Total Start-up Expenses $43,175
   
Start-up Assets  
Cash Required $20,000
Other Current Assets $7,000
Long-term Assets $54,000
Total Assets $81,000
   
Total Requirements $124,175

3. Service Summary

One of the key success factors for our salon is our diverse offerings. Not only do we provide exceptional hair
and nail services, we also offer outstanding spa treatments in a stress-free, pampered environment.

The moment clients arrive at our store, they will be warmly greeted by one of our responsive staff members
who will offer them complimentary refreshments such as spring water, coffee, herbal tea, or sparkling fruit
drinks. On a regular basis, our salon will certify all of our personnel for skills, and customer etiquette to ensure
consistent service quality. We plan to build a team of professionals who are caring, courteous and passionate
about customer satisfaction and loyalty.

As a standard procedure, we take into consideration our client's hair/skin type, bone feature, and lifestyle.
Upon request, we provide free overall beauty or hair consultation for clients on their first visit. For our hair
services, we cut, trim, shampoo, style, color, and also offer permanent waves, and anti-curl treatment. For our
nail services, our client can enjoy a variety of procedures such as manicures, pedicures, acrylic nail
application, and silk wraps. These carefully administered treatments are performed with the highest standards
in quality control, safety, and hygiene. For our spa segment, we plan to pamper and spoil our clients. We
provide Swedish, deep tissue, and hot stone body massage, along with hand and foot exfoliation massage.
Our facial and body exfoliation which involve the use of salt glows, body polish, enzyme peels, and body
masks are part of our specialty. Our wraps and packs which are designed to help reduce water retention and
 Hair Salon Business Plan

the appearance of cellulites are also available. In addition, we provide the essential hair removal services
such as waxing and eyebrow shaping. In catering to our mature clients, we have several anti-aging products
that we utilize in our massage, exfoliation, and various spa treatments.

In order to entice clients to utilize more of our services, we will offer beauty treatment packages. For example,
with a 90 minute package, clients can have a combination of Swedish massage and hand/foot exfoliation
massage and nail treatments. Our gift certificate program make it easy for clients to lavish friends or family
members with a day of pampering or just a few hours of relaxation where they can choose any combination of
services that fit their need. We also provide wedding and special occasion packages as another way to better
serve our patrons.

Aside from our services, we offer high quality botanically based beauty and spa products. Just as we believe
in our service quality, we believe in the products that we use and sell. At the end of each service session, our
knowledgeable staff will prescribe a complimentary customized home-care program and recommend products
to ensure that clients can maintain and enhance the texture and integrity of their hair, nail, and skin and feel
uplifted even when they are away from our salon. This is an opportunity to gain goodwill from our clients and
also to endorse the products that we offer.

4. Market Analysis Summary

For our business, we have identified four key market segments that will utilize our services and products.

One major segment is the baby boom generation. Baby boomers refer specifically to those born between
1946 and 1964. They are the largest generation in the nation and many are affluent. According to eMarketer,
an online market research firm, baby boomers spent a total of $3.8 trillion in 2007 and are projected to spend
$4.6 trillion by 2010. In an article written by Paulette Schuster, Executive Director of Therapeutic Recreations,
boomer individuals are responsible for the tremendous growth of spa treatments in recent years as 37% of
their income is spent on spa and health club memberships. Many people within this age group no longer see
salon and spa as a luxurious treat but rather as a necessity to stay healthy and look good.

Our salon will also target young female clients between the ages of 25 and 44. In general, these women are
working professionals, and busy parents who are looking to treat themselves to a better appearance, to save
time with their beauty routine, or to relieve stress. According to the International Spa Association (ISPA), 51%
of spa users are within the 25 to 44 age group and many are women.

Our salon will also target male clients, age 25 to 44. The ISPA estimated that 29% of spa users are male and
many are using spa mainly for massage. This is a trend we cannot ignore.

Additionally, we will aim our services at young female clients, age 16 to 24, which account for 14% of spa
users in the country. These clients will tend to experiment more with different hair styles, beauty services, and
spa treatments.

4.1. Market Segmentation

Since our business will be located in the center of a busy downtown area, we can expect to gain the
attention of a many potential patrons as most residents often congregate in this part of town to shop,
work, or frequent local eateries and night clubs. We have concluded an analysis of our location using
information from the U.S. Census Bureau and found that we have a total population of 26,447 with the
median age of 37. Our location is highly desirable because the median household income is $116,335 as
compared to the national average of $41,994. This implies that our target population has the
discretionary income to indulge in miscellaneous salon and spa treatments. While there is a mixture of
middle income and high income households, most are college educated and are employed as white-
 Hair Salon Business Plan

collar workers. In our township, there are two major universities, and one community college within a ten
mile radius. There is also a county court house nearby bringing ample traffic into the area.

As indicated, we will target four major groups of consumers: baby boomers, female clients age 25 to 44;
male clients age 25 to 44, and young female consumers age 16 to 24. For our town, the boomers are the
largest group with a total population of 5,236. The next group, female 25 to 44 years, has 3,470
individuals. The male 25 to 44 years group has 3,416 members while the young female group age 16 to
24 has 1,032. In our first year, we expect to attract 20% of the population in our target markets. This
number will grow as we establish our business, gain more popularity, and bond with our patrons. Our
goal is to provide strong justifications and incentives for clients to repeat their pampering experience at
our salon.

We have selected our location based on the population projected growth rate for our area. We found that
the five- year projected growth in population is estimated at 3.45%. This growth rate has been consistent
in the past three years and is expected to continue as more families are moving into our town.

Market Analysis
    2009 2010 2011 2012 2013  
Potential Customers Growt           CAGR
h
Baby Boomers 3% 5,236 5,393 5,555 5,722 5,894 3.00%
Female 25-44 years 4% 3,470 3,609 3,753 3,903 4,059 4.00%
Female 16-24 years 2% 1,032 1,053 1,074 1,095 1,117 2.00%
Male 25-44 years 4% 3,416 3,553 3,695 3,843 3,997 4.00%
Total 3.45% 13,154 13,608 14,077 14,563 15,067 3.45%

4.2. Target Market Segment Strategy

Baby boomers are projected to spend $4.6 trillion by 2010 which implies that their income is spent mostly
on spa treatments. For our boomer clients, we will promote our high quality anti-aging products and
services along with the health benefits of our spa treatments.

The female clients make 51% of the spa users. In catering to these women, we will implements special
promotional events such the express lunch service package, or girls' night out.

According to ISPA male clients are estimated to be 29% users of Spa. Since we cannot ignore this trend,
we will produce newsletters and promotional pamphlets that will speak to the male audience and
highlight the beneficial therapeutic effects of our treatments.

The young female clients of age 16 to 24 account for 14% of spa users in the country. To attract this
group of people, we will run special promotions such as back to school discounts, or special occasion
make-over. We aim to delight these young clients with our pampering offerings and high quality services.

Clients will find ample opportunities to lift their spirit refresh their look and improve their appearance at
our salon. Our personal attention and outstanding services will highlight us as an essential salon
destination.

 
 Hair Salon Business Plan

4.3. Service Business Analysis

According to the ISPA, the U.S. spa and salon industry is strong, and robust, generating $72 billion in
annual revenues. While personal grooming and appearance are important aspects of American culture,
beauty treatments at home are typically not as comparable or as satisfying as those received at the
specialized beauty salons. Moreover, in today's high stress environment, spa and salon services are
popular due to their soothing and relaxing quality. These factors help to sustain the durability and
profitability of salons in the country.

One of the recent notable industry trends is the strong expansion of salon chains by national companies
such as Fantastic Sam, and Regis. For example, Fantastic Sam, launched in 1974, now has over 1350
salons whereas Regis has over 13,400 locations. However, due to their quick, undifferentiated,
impersonal services, these chains are not always the destination of choice for consumers. Recently,
independent salons are also proliferating with additional services such as nails, skin care, and massage.
Traditional hair salon establishments are rapidly transforming into day spas. The ISPA reported that in
2006, the United States had 10,988 day spas, up from 4,389 in 2002. Fueled by boomers and their
appetite for maintaining good look and health, the industry is continuing on its growth path with
businesses of different size and niche.

In today's market, independent salon businesses have to be good at what they do, and also be creative,
personal and attentive to clients' needs. For our salon, we strive to meet these criteria. Our location
provides us with the unique opportunity to be the first hair salon/day spa in the area. There are no other
day spas within a ten mile radius to our store. Close by, there is one hair salon, specializing in trendy
looks, two quick service hair salon chains, one moderately priced nail salon, and an upscale barber
shop. Consumers would have to travel over ten miles from us to get to the next salon/day spa facility.

4.3.1. Competition and Buying Patterns

As a new business, we aim to delight our clients in all of our services and offerings. Our local
competition may have existent clientele but the assortment of their services is limited and their
focus and customer service approach are quite different from us. For example, the salon chains
in the area do not have dedicated receptionists. Guests are waited on by actual stylists who often
must interrupt their work in order to greet walk-in clients. For these chains, their prices are slightly
lower than ours but we offer the one-on one attention that they lack. They focus on quick,
convenient services that are geared towards mainly male clients and young children. They do not
provide spa treatments or hair removal services. Similarly to the independent hair salon in the
downtown area, this establishment caters to very specific clientele, mainly the younger crowd.
They are good at what they do but their target market is very different.

Our biggest competition would be the mentioned day spa located ten miles away. This
establishment focuses on hair, nail, skin care and massage therapy similar to us. Their facility is
bigger and they also have more staff. However, their prices are much higher than ours and
thereby alienating many potential clients. Our salon is smaller, more intimate, lower in price, and
less intimidating. Moreover, we are in a convenient location, where shoppers can stop in for a
delightful treat and would not feel like they are spending a lot of money.

 
 Hair Salon Business Plan

5. Sales Strategy
Our promotional materials will speak to consumers about our services and will always provide an attractive
enticement to visit our store. In our business, clients will often refer friends and family members if the services are
good. We will show our appreciation to patrons every time they make a referral. We will reward them by sending
personalized thank you cards with coupons to redeem for future treatments. We believe that a recommendation
from a happy customer is one of the best rewards for us.

Ultimately, our professional staff members will be our sales agents in many aspects of our business, providing a
seamless experience for our clients and building a reputation for us. Even in our reception area, our receptionist
who greets customers, sets appointments, helps clients with retail products and provides refreshments to waiting
guests will showcase our level of service quality. Our stylists, nail associates, skin specialists, massage therapists
will play key roles as they interact, guide, deliver services, and make recommendations to clients. Each member
of our team will be the marketing voice of our salon. For these reasons, we will focus on developing our staff and
create a strong team.

5.1 Sales Forecast

Our sales forecast is based on reasonable sales projections and on identifying attainable sales goals within our
market. We aim to create salon environment that is ideal for customer retention. Our patrons will want to keep
using our services on a regular basis.

For the first year, our sales goal is to average approximately 8 to 15 treatments per day for each of our hair cut
and nail operation. For our facial and massage services, we believe we can meet our sales goals of 4 to 9
treatments per day. For our second and third year, we will increase our sales each year by 30%. Assuming that
for the first three months, we will be renovating our store and getting ready for launch in the fourth month. As we
open our door on the fourth month, we can expect to start generating sales. The number of treatments for each of
our signature service is fully detailed in a table within the Appendix under the heading “Sales & Personnel
Coverage". By following this plan, we aim to go from 24 service treatments per day in the first month to 48
treatments per day by the end of the first year.

In regard to our retail product sales, we are projection that at least 10% of our total sales will be from retail
products. We conservatively based our projection on a press release from Global Salon Panel, a company
providing market intelligence for the salon industry. Global Salon Panel indicated that retail sales can account for
as much as 20% of a salon's overall sales.

 
 Hair Salon Business Plan

Sales Forecast
  FY 2010 FY 2011 FY 2012
Unit Sales      
Hair cut 2,968 3,858 5,016
Nail Treatment 2,968 3,858 5,016
Deep Tissue Massage 1,680 2,184 2,839
Retail Products 6,048 7,862 10,221
Full Facial 1,680 2,184 2,839
Total Unit Sales 15,344 19,947 25,931

Unit Prices
Hair Cut $45.00 $45.00 $45.00
 Nail Treatment $45.00 $45.00 $45.00
Full Facial $80.00 $80.00 $80.00
Deep Tissue Massage $85.00 $85.00 $85.00
Retail Products $10.00 $10.00 $10.00

Sales
Hair Cut $133,560 $173,628 $225,716
Nail Treatment $133,560 $173,628 $225,716
Full Facial $134,400 $174,720 $227,136
Deep Tissue Massage $142,800 $185,640 $241,332
Retail Products $60,480 $78,620 $102,210
Total Sales $604,800 $786,236 $1,022,111

Direct Unit Costs

Hair Cut $1.71 $1.85 $1.99
Nail Treatment $1.54 $1.66 $1.80
Full Facial $2.10 $2.27 $2.45
Deep Tissue Massage $2.68 $2.89 $3.12
Retail Products $5.71 $5.71 $5.71

Direct Cost of Sales

Hair Cut $5,075 $7,138 $9,982
Nail Treatment $4,571 $6,405 $9,029
Full Facial $3,528 $4,958 $6,956
Deep Tissue Massage $4,502 $6,312 $8,858
Retail Products $34,534 $44,892 $58,362

5.2. Competitive Edge

Our salon will be a unique establishment in the area due to several factors. Our assortment of high
quality services in one convenient location will designate our salon as an attractive destination for beauty
treatments. Our caring, professional staff creates a pampering environment for our patrons. Our
customer etiquette and in house certification program will keep us on track. Our creative marketing
strategy with monthly specials and focus sets us apart from our competitors. Our moderate price will
bring clients into our stores and our high value service will keep them coming back.
 Hair Salon Business Plan

At our salon, clients will have a voice. We will ask our clients to fill out an optional evaluation card at the
end of their service session to learn what they think of us. Any comments, opinions, or suggestions for
improvement will be reviewed and implemented as appropriate. We aim to utilize these feedbacks to
enhance our image and make us more appealing to our market.

Overtime, we will review our service mix and determine areas that we need to develop or change. We
will also invest in our employees and set aside $600 each month for education funds to help them keep
abreast of the latest salon and spa techniques. We will stress teamwork and provide monthly incentives
to keep our team cohesive and happy. Because our staff will influence the image of our salon, we
will focus on these education development and team building efforts.

5.3. Marketing Strategy Summary

The primary focus of our marketing strategy is to gain a substantial awareness of our services and create
a loyal customer base through a variety of channels. Our promotional materials will provide clear reasons
why our salon is the place for pampered, high quality beauty treatments at a moderate price.

Prior to start-up, we will utilize our budget to advertise in local newspapers and magazines. We will also
create press releases with careful wordings to showcase our signature services. We plan to offer
coupons and incentives to consumers. Monthly, we will create a special event to attract patrons. For
instance, a "Mom and Daughter Bonding Day" would allow clients to bring in their daughter for reduced
price services. For each of our target markets, we will continually update and customize our services to
cater to each group. For example, with the boomers, we will focus on anti-aging and beauty maintenance
regiment such as anti-wrinkle massage or skin renewal body wrap. For the male patrons, we will provide
express spa service package, male grooming care specials, and massage indulgence day as a way to
address their needs.

We also believe in getting attention by doing good deeds. From time to time, we will set up philanthropic
pampering sessions, where a portion of our earnings will be donated to selected non-profit organizations
in the area. We believe this is the right thing to do. Moreover, clients will be more open to treat
themselves when they know that it is for a good cause and for the greater good.

Each month, we plan to set aside three percent of our sales revenues for promotional activities. As
clients visit our salon, they will experience the high quality services that we promote and will want to
return for more pampering sessions. We will assess the effectiveness of our promotional efforts each
month to ensure that we are reaching our goals and targets.
 Hair Salon Business Plan

Milestones
           
Milestone Start Date End Date Budget
Obtain Funding 12/2/2009 1/1/2010 $0
Sign contract or leased 1/1/2010 10/1/2010 $4,000
space
Renovation for leased 2/15/2010 3/15/2010 $30,000
space
Order Equipment, 2/15/2010 3/1/2010 $63,000
Supplies, and Misc.
Assets
Order Computer, Office 2/15/2010 3/1/2010 $3,500
Supplies
Decorate Salon 3/15/2010 3/20/2010 $2,000
Hire Employees 2/1/2010 3/15/2010 $0
Train and Certify 3/1/2010 4/1/2010 $5,000
Employees
Order Retail Inventory 3/1/2010 4/1/2010 $1,000
Test Run Facility 3/15/2010 4/1/2010 $0
Hire maintenance crew 3/15/2010 4/1/2010 $1,000
Promotion for launch 3/1/2010 4/1/2010 $1,000
Review Budget and 5/1/2010 5/5/2010 $0
Promotional Mix
Review Employee 5/1/2010 5/5/2010 $0
Performance
Set up monthly 5/1/2010 5/10/2010 $0
promotion
Open Store 4/1/2010 4/1/2010 $0
Set up Website 2/1/2010 3/30/2010 $1,110
Totals     $111,610    

5. 4. Milestones

The table shows important milestones that we seek to accomplish. The milestone schedule emphasizes
our business implementation plan and will keep us focused on our marketing and operation strategy.

6. Management Summary

Our salon is being launches by a single individual with 10 years of working experience in the cosmetology
field. As a licensed stylist, the owner has built a large loyal customer base due to his talents, creativity, and
skillful interaction with clients. In his previous job, he functioned as a salon assistant manager and was
recognized with several bonuses and awards for his relentless passion for improvement and high standards
for quality. The owner has also taken several classes in nail, skin care, and massage therapy. These
experiences strengthened his enthusiasm and passion for starting this salon venture which has been his
lifelong dream. He is driven to make this business the best destination for salon and spa treatment.

In preparing for the launch, the owner has completed many online business courses offered by the Small
Business Administration. These courses are designed to provide prospective business owners with
 Hair Salon Business Plan

an overview of business management, accounting, marketing and financing. The owner plans to pursue
additional training and professional development courses either online or through local universities.

As the owner of our salon, he will have all the responsibilities of a manager, owner, trainer, and mentor. He
will also continue to serve clients as a stylist upon request. With a friendly personality and strong
communication skills, the owner is adept in working with customers and staff. These traits are crucial to the
daily operation of our salon. We will greatly benefit from his knowledge, his passion, and his ability to connect
with others.

6.1. Personnel Plan

Our personnel plan for the first three years will include 13 individuals: the owner, three stylists, three nail
operators, two skin specialists, two massage therapists, and two receptionists. Our staffing projection is
based on our sales forecast, and hours of operation. We will be open from 9am to 8pm on weekdays,
9am-6pm on Saturday, and 10am-5pm on Sunday. With a total of 71 hours per week, our challenge is to
staff appropriately so that we have coverage throughout the week while keeping our payroll costs to a
minimum.

We anticipate hiring immediately two receptionists, two stylists, two nail operators, one skin specialists
and one massage therapists. These staff members are necessary to fulfill our sales goals during the first
year and will work part time or full time dependant on the month. All of our employees will be on call on
certain days of the week so that we can have coverage if the need arises. In the seventh month, we will
add a second skin specialist, and a second massage therapist. In the eighth month, we will need to hire
a third stylist and a third nail operator. During the second year, we will maintain the same number of
employees but will increase their hours each week to accommodate more clients. In the third year, we
will add more hours but will not need to add more people. We believe in building a strong, flexible team
and have control over our service quality. This is one of the reasons why we will avoid hiring outside
contractors for our salon.

To provide further explanation on our staffing scheme, we will use our stylists as an example. Assuming
in the first two months, we will be renovating our salon, buying equipment, and setting up miscellaneous
infrastructures of our business. In month #3, we will hire employees and start the process of training and
certification. We have 40hours per employees for this purpose. In month #4, we will open our store and
assume that we will average about 224 hair cuts for this month. Each hair cut session takes
approximately one hour. This implies that we will need our stylist #1 and stylist #2 to each work
approximately 28hours per week or 112 hours total for month 4. By the end of year 1, we will have total
2968 hair cuts for the nine months of operations.

For the year 2 and year 3, we expect that our sales will increase by 30% each year bringing the total
volume of hair cuts to 3856 in year 2 and 5016 for year 3.
 Hair Salon Business Plan

Personnel Plan
  FY 2010 FY 2011 FY 2012
Owner $30,000 $32,000 $34,000
Stylist #1 $14,064 $19,417 $22,963
Stylist #2 $14,064 $19,417 $22,963
Stylist #3 $3,526 $3,875 $14,029
Nail Operator #1 $12,664 $17,487 $20,678
Nail Operator #2 $12,664 $17,487 $20,678
Nail Operator #3 $3,217 $3,490 $12,633
Skin Specialist #1 $17,512 $25,195 $28,186
Skin Specialist #2 $8,302 $4,485 $13,491
Massage Therapist #1 $22,357 $32,148 $35,962
Massage Therapist #2 $5,910 $5,722 $17,213
Receptionist #1 $12,802 $19,440 $15,754
Receptionist #2 $9,999 $11,305 $12,209
Total People 13 13 13
       
Total Payroll $167,081 $211,468 $270,759

6.2. Start-up Funding

The start-up costs for our salon will consist primarily of equipment, supplies, and inventory. In addition,
we are budgeting $30,000 for leasehold improvements. These improvements are necessary to create a
functional and inviting space for our salon and spa treatments.

We are seeking to secure a loan in the amount of $100,000 at 8% interest and to be paid back on a 10-
year amortization. The owner will contribute $25,175 to cover for other expenses during start-up.
 Hair Salon Business Plan

Start-up Funding
Start-up Expenses to Fund $43,175
Start-up Assets to Fund $82,000
Total Funding Required $125,175
   
Assets  
Non-cash Assets from Start-up $62,000
Cash Requirements from Start-up $20,000
Additional Cash Raised $0
Cash Balance on Starting Date $20,000
Total Assets $82,000
   
   
Liabilities and Capital  
   
Liabilities  
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding $0
Bills)
Other Current Liabilities (interest- $0
free)
Total Liabilities $100,000
   
Capital  
   
Planned Investment  
Owner $25,175
Investor $0
Additional Investment Requirement $0
Total Planned Investment $25,175
 
Loss at Start-up (Start-up ($43,175)
Expenses)
Total Capital ($18,000)
   
   
Total Capital and Liabilities $82,000
   
Total Funding $125,175

6.3. Important Assumptions

Our financial plan depends on important assumptions in order to provide a cohesive set of financial
statements for the first three years of operation.
 Hair Salon Business Plan

We assume that the loan proceeds of $100,000 will be disbursed in January of the first year of
operations. This loan has an 8% interest rate with a 10-year term. Both the principal and interest
payments are represented in the financial projection with interest noted in the profit and loss and
principal noted in the cash flow. In addition, we anticipate zero days for payments as clients will be using
cash or credit cards. For collection, we assume a 30 days grace period. For our tax rate, our assumption
is 30%.

We expect that once we receive our loan proceeds, it will take about three months to renovate our
leased space, purchase equipment, supplies, and inventory, hire employees, conduct training, and
promote our launch. Our salon is expected to open and start generating sales revenues beginning of the
fourth month.

6.4. Projected Profit and Loss

We have put together a three-year Profit and Loss forecast based on our sales projection and operating
expense estimates.

Sales

Our gross margin, which is our expected sales less our cost of sales, is estimated at $552,590 for the
first year, $716,532 for the second year and $928,924 for the third year. These figures correspond to
91.37%, 91.13% and 90.88% for the first, second and third year respectively.

We expect immediate payments as clients will use cash or credit cards.

Expenses

Our payroll costs are based on our sales projections. As such, we expect to incur $167,082 in payroll
costs for the first year, $211,468 for the second, and $270,759 for the third.

As mentioned, we are allocating 3% of sales revenues to our promotion program. This translates to
$18,144 for the first year, $23,587 for the second year and $30,663 for the third year.

For depreciation, we are using the straight-line method over 10 years. Since our capital assets are
$54,000, this figure equates to $54,000 divided by 120 months or $450 per month’s depreciation.

The rent for our leased space is $4,000 per month or $48,000 total for the first year. We expect to pay
first and last month rent when we sign our lease. For the second and third year, we will have to pay
$50,000 and $52,000 respectively.

Our utilities expenses include water, and electric. We estimate that the costs will be $7,200 in the first
year, increasing to $7,500 in the second year and $7,800 in the third year.

For insurance, we will have to pay a total of $1,800 for the first year, $2,000 for the second year and
$2,200 for the third year.

We will utilize an outside maintenance crew to clean our facility. This requires $200 per visit or $800 per
month.

As a way of investing in our employees, we are setting aside $600 per month for training, education
development purposes. This equates to $7,200 each year.

Our payroll taxes will be about 15% requiring us to pay $25,062 for the first year, $31,720 for the second
year and $40,614 for the third year.
 Hair Salon Business Plan

Our phone and Internet bills will be about $150 per month or $1,800 per year.

We will hire an accountant to review our monthly financial records. The costs for this endeavor are
expected to be at $4,800 for the first year, $5,800 for the second year and $6,800 for the third year.

We have included a miscellaneous expense line item to cover for unforeseen expenditures. This is set at
10% of our total operation expenses.

Net Profit

Our Profit before Interest and Taxes (PBIT) is projected at $226,047 for the first year, increasing to
$320,892 in the second year and $445,773 for the third year.

Our EBITDA or Earnings before Interests, Taxes, Depreciation and Amortization are calculated to be
$231,447 for year one, $326,292 for year two and $451,173 for year three.

Interest Expense for our $100,000 loan is estimated at $15,709 for the first year, $15,161 for the second
year and $14,547 for the third year.

With the assumption that our tax rate will be at 30%, our net profit after tax and interest expense is
estimated at $147,237 for the first year, $214,012 for the second year and $301,858 for the third year.
 Hair Salon Business Plan

Pro Forma Profit and Loss

  FY 2010 FY 2011 FY 2012
Sales $604,800 $786,236 $1,022,111
Direct Cost of Sales $52,210 $69,704 $93,187
Other Costs of Sales $0 $0 $0
  ------------ ------------ ------------
Total Cost of Sales $52,210 $69,704 $93,187
       
Gross Margin $552,590 $716,532 $928,924
Gross Margin % 91.37% 91.13% 90.88%
       
       
Expenses      
Payroll $167,081 $211,468 $270,759
Marketing/Promotion $18,144 $23,587 $30,663
Depreciation $5,400 $5,400 $5,400
Rent $48,000 $50,000 $52,000
Utilities $7,200 $7,500 $7,800
Insurance $1,800 $2,000 $2,200
Cleaning $7,400 $9,600 $9,600
Education Fund $7,200 $7,200 $7,200
Payroll Taxes $25,062 $31,720 $40,614
Phone $1,800 $1,800 $1,800
Accountant/Bookkeeping $4,800 $5,800 $6,800
Miscellaneous Expenses $32,654 $39,564 $48,315
  ------------ ------------ ------------
Total Operating Expenses $326,543 $395,640 $483,151
       
Profit Before Interest and ($226,047) ($320,892) ($445,773)
Taxes
EBITDA ($231,447) ($326,292) ($451,173)
Interest Expense $15,709 $15,161 $14,547
Taxes Incurred $63,101 $91,719 $129,368
       
Net Profit ($147,237) ($214,012) ($301,858)
Net Profit/Sales 24.34% 27.22% 29.53%

6.5. Break-even Analysis

Our break-even analysis for the first year indicates a monthly break-even of 756 units (or service
treatments) on revenue of $29,783. The average per-unit revenue is $39.42 while the average per-unit
variable cost is $3.40. For our calculation, we estimate our monthly fixed cost at $27,212.

 
 Hair Salon Business Plan

Break-even Analysis
Monthly Units Break-even 756 
Monthly Revenue Break-even $29,783
   
Assumptions:
Average Per-Unit Revenue $39.42 
Average Per-Unit Variable Cost
$3.40
Estimated Monthly Fixed Cost $27,212

7. Projected Cash Flow

Our projected Cash Flow is based on our received and expenditure estimates for the first three years of
operations.

Cash Received

We anticipate receiving loan proceeds of $100,000 at the beginning of the first month of operations, with
payback of principle and interest at the end of the first month. The owner is contributing $25,175, or 20%
of the required $125,175 in start-up capital.

Cash from operations for our first year is forecasted at $604,800, growing to $786,236 in the second year
and $1,022,111 in the third year.

Expenditures

Total cash spent on operations is expected at $429,744 in the first year, increasing to $579,109 in the
second year and $712,412 in the third year. The increase in spending is primarily due to changes in
promotional budget and payroll costs. Also, monthly principal reduction of the outstanding loan obligation
is reflected in the cash flow statement.

One of our operational goals is to always have enough cash reserve for at least three months of
operations. Our cash balance is projected to decrease to a low $96,979 in the third month but again rises
in the months thereafter as we gain more sales.

Net cash flow is negative for month 2 and month 3 with break-even expected in the fourth month. For the
year, our net cash flow is projected at $310,589 for the first year, $134,794 for the second year, and
$223,264 for the third year. We have projected a dividend distribution in year 2 and year 3. The salon is
expected to have a cash balance of $330,589 in the first year, changing to $465,383 in the second year
and $688,648 in the third year.

 
 Hair Salon Business Plan

Pro Forma Cash Flow

  FY 2010 FY 2011 FY 2012
Cash Received      
       
Cash from Operations      
Cash Sales $604,800 $786,236 $1,022,111
Cash from Receivables $0 $0 $0
Subtotal Cash from $604,800 $786,236 $1,022,111
Operations
       
Additional Cash Received      
Sales Tax, VAT, HST/GST $42,336 $55,037 $71,548
Received
New Current Borrowing $0 $0 $0
New Other Liabilities $0 $0 $0
(interest-free)
New Long-term Liabilities $100,000 $0 $0
Sales of Other Current $0 $0 $0
Assets
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $747,136 $841,273 $1,093,659
       
Expenditures
       
Expenditures from      
Operations
Cash Spending $167,082 $211,468 $270,759
Bill Payments $262,662 $367,640 $441,653
Subtotal Spent on $429,744 $579,109 $712,412
Operations
       
Additional Cash Spent      
Sales Tax, VAT, HST/GST $0 $0 $0
Paid Out
Principal Repayment of $0 $0 $0
Current Borrowing
Other Liabilities Principal $0 $0 $0
Repayment
Long-term Liabilities $6,803 $7,370 $7,982
Principal Repayment
Purchase Other Current $0 $0 $0
Assets
Purchase Long-term Assets $0 $0 $0
Dividends $0 $120,000 $150,000
Subtotal Cash Spent $436,547 $706,479 $870,394
       
Net Cash Flow ($310,589) ($134,794) ($223,264)
 Hair Salon Business Plan

Cash Balance ($330,589) ($465,383) ($688,648)

7.1. Projected Balance Sheet

Our projected Balance Sheet shows total assets of $401,401 in the first year, $536,090 in the second
year and $758,768 in the third year. Liabilities of $272,164 are projected for the first year, increasing to
$312,842 for the second year and $383,662 for the third year.

The salon is expected to have a net worth of $129,237 in the first year, increasing to $223,248 in the
second year and $375,106 in the third year.

 
 Hair Salon Business Plan

Pro Forma Balance Sheet

  FY 2010 FY 2011 FY 2012
Assets      
       
Current Assets      
Cash ($330,589) ($465,383) ($688,648)
Accounts Receivable $0 $0 $0
Inventory $15,212 $20,507 $25,321
Other Current Assets $7,000 $7,000 $7,000
Total Current Assets ($352,801) ($492,890) ($720,968)
       
Long-term Assets      
Long-term Assets $54,000 $54,000 $54,000
Accumulated Depreciation $5,400 $10,800 $16,200
Total Long-term Assets $48,600 $43,200 $37,800
Total Assets ($401,401) ($536,090) ($758,768)
       
Liabilities and Capital
       
Current Liabilities      
Accounts Payable $36,631 $29,643 $36,896
Current Borrowing $0 $0 $0
Other Current Liabilities $42,336 $97,373 $168,920
Subtotal Current Liabilities $78,967 $127,015 $205,817
       
Long-term Liabilities $193,197 $185,827 $177,845
Total Liabilities $272,164 $312,842 $383,662
       
Paid-in Capital $25,175 $25,175 $25,175
Retained Earnings ($43,175) ($15,938) ($48,073)
Earnings ($147,237) ($214,012) ($301,858)
Total Capital ($129,237) ($223,248) ($375,106)
Total Liabilities and Capital ($401,401) ($536,090) ($758,768)
       
Net Worth ($129,237) ($223,248) ($375,106)

8. Financial Plan

We are building our financial plan based on our start-up requirements, sales forecasts, and operation
expenses for the first three years. As mentioned, we will obtain a loan in the amount of $100,000 while the
owner will contribute the remaining $25,175. WE anticipate that the loan will charge 8% interest rate with a
term of ten years.

Our sales forecasts revealed that our sales revenues for the first year will be at $604,800. We will realize
$786,236 in revenues for the second year and $1,022,111 for the third year.

After deducting our operating costs, the net profit for the first year is projected at $147,237 with 24.34% net
profit from sales. Net profit for the second year is expected to rise to $214,012 with 27.22% net profit from
 Hair Salon Business Plan

sales. For the third year, we anticipate $301,858 in net profit with 29.53% net profit from sales. The increases
in net profit are based on our sales forecast as we attract more new clients and create a customer base.

Net cash flow is projected to be negative in month 2 and month 3. We expect to reach break-even in the sixth
month of operations. Our net cash flow is projected at $310,589 for the first year, $134,794 for the second
year, and $223,264 for the third year. A dividend distribution to the owner is projected in year 2 and year 3.
The salon is expected to have a cash balance of $330,589 in the first year, changing to $465, 383 in the
second year and $688,648 in the third year.

As for our Balance Sheet, we anticipate total assets of $401,401 in the first year, $536,090 in the second year
and $758,768 in the third year. Liabilities of $272,164 are projected for the first year, increasing to $312,842
for the second year and $383,662 for the third year. The salon is expected to have a net worth of $129,237 in
the first year, increasing to $223, 248 in the second year and $375,106 in the third year.

8.1. Business Ratios

Business ratios are often to assess a firm's strengths and weakness in comparison to similar companies
within the same industry. Industry statistics can be obtained from the North American Industry
Classification System or NAICS. For our business, we are most closely associated with the NAICS
Beauty Salon category with annual sales of $500,000 to $999,999. We have provided a table completed
with our ratios while comparing our performance to the industry average.

Below is a brief discussion of our business ratios table which can be found on the following page.

Percent of Total Assets, Current Liabilities and Net Worth

As a start-up establishment, our sales growth starts at zero in the first year of operations. We expect to
increase our sales by 30% in both the second year and the third year. Gradually, we expect that our
sales will stabilize and match the industry average of 3.38%.

With clients using cash or credit cards for our products and services, we do not anticipate to have any
accounts receivable. Our accounts receivable ratios are listed at zero while the industry average is listed
at 10.97%. The main reason is that some establishments in the industry accept health insurance for their
therapeutic massage treatments. With insurance billings, these businesses must wait to get their
payments processed and these revenues are reflected in their accounts receivable.

We are forecasting our inventory at 3.79% for the first year, 3.83% in the second year and 3.34% in the
third year. These figures are in line with the industry average of 3.43%.

We are projecting our Other Current Assets at 1.74% for the first year, 1.31% for the second year and
0.92% for the third year. These values are lower than the industry average of 47.76%. Other Current
Assets include prepaid expenses such as legal fees and contractor fees which we do not perceive to be
a large sum for our situation.

Our Total Current Assets, which consist of cash, prepaid expenses, and accounts receivable, are
estimated to be at 87.89% for the first year, 91.94% for the second year and 95.02% for the third year.
These percentages are higher than the industry average of 62.16%. This is due to the amount of high
cash reserves that we intend to maintain.

Our Long-Term Assets are projected at 12.11% for the first year, 8.06% for the second year and 4.98%
for the third year. These ratios are lower than the industry average of 37.84% since we are leasing and
do not have our own building.

We expect that our Current Liabilities will be at 19.67% in the first year, 23.69% in the second year and
27.13% for the third year. At these levels, we are roughly in line with the industry average of 24.44%.
 Hair Salon Business Plan

Our Long-Term Liabilities are forecasted to be at 48.18% for the first year, decreasing to 28.34% in the
second year and 17.29% in the third year. As we repay our loan, our Long-Term Liabilities decrease and
by the third year we are lower than the industry average of 22.82%.

Similarly for our total liabilities, we are at 50.56% by the third year. We are in line with the industry
average of 47.26%.

For our net worth, we anticipate to be at 49.44% by the third year while the industry average is at
52.74%.

Percent of Sales

Our revenues are derived 100% from the sales of our retail products and our services.

We anticipate that our gross margin will be at 91.37% for the first year, 91.13% for the second year and
90.88% for the third year. Gross margin is defined as total revenues less cost of goods sold, divided by
total revenues. The industry average is reported at 100% implying that there are no costs of goods.
Many salons chose not to include cost of goods for their services. Our preferred accounting method is to
show cost of goods because it provides a better structure for our pricing.

Our selling, general and administrative (SG&A) expenses are forecasted to be decreasing in each
consecutive year and are at 61.35% by the third year. The industry average is listed at 69.91%.

For advertising, we are budgeting 3% of our sales while the industry is shown at 2.38%.

Our PBIT is higher than the industry average. We are predicting 37.38% for the first year, increasing to
40.81% in the second year and 43.61% in the third year.

Main Ratios

By definition, Current Ratio measures a company's ability to meet its short-term debt obligation. A higher
ratio implies a more liquid company. Our current ratio is higher than the industry average of 1.64.

Quick ratio is another liquidity measurement. It is used to assess the company's financial strength or
weakness. A higher ratio implies stronger financial strength while a lower ratio implies a weaker strength.
Our Quick ratio is above the industry average.

Our Total Debt to Total Asset is expected to be at 67.80% in the first year, 58.36% in the second year
and 50.56% in the third year. The industry average is listed at 60.85%.

Pre- tax Return on Net Worth and Pre-Tax Returns on Assets are both higher than the industry average
of 11.12% and 4.35% respectively.

Our Net Working Capital increases steadily over the first three years of operations. This is critical as it
implies that there is stability and adequate cash flow to support our growth objectives.

 
 Hair Salon Business Plan

Ratio Analysis
  FY 2010 FY 2011 FY 2012 Industry
Profile
Sales Growth 0.00% 30.00% 30.00% 3.38%

       
Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00% 13.56%
Inventory 3.79%  3.83%  3.34%  3.21% 
Other Current Assets 1.74% 1.31% 0.92% 42.10%
Total Current Assets 87.89% 91.94% 95.02% 58.87%
Long-term Assets 12.11% 8.06% 4.98% 41.13%
Total Assets 100.00% 100.00% 100.00% 100.00%
         
Current Liabilities 19.67% 23.69% 27.13% 23.01%
Long-term Liabilities 48.13% 34.66% 23.44% 26.33%
Total Liabilities 67.80% 58.36% 50.56% 49.34%
Net Worth 32.20% 41.64% 49.44% 50.66%
         
Percent of Sales        
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 91.37% 91.13% 90.88 100.00%
%
Selling, General & 67.02% 63.91% 61.35% 69.81%
Administrative Expenses
Advertising Expenses 3.00% 3.00% 3.00% 2.48%
Profit Before Interest and 37.38% 40.81% 43.61% 1.87%
Taxes
         
Main Ratios        
Current 4.47 3.88 3.50 1.67
Quick 4.28 3.72 3.38 1.27
Total Debt to Total Assets 67.80% 58.36% 50.56% 62.66%
Pre-tax Return on Net 162.75% 136.95% 114.96% 7.32%
Worth
Pre-tax Return on Assets 52.40% 57.03% 56.83% 2.73%
         
Additional Ratios FY 2010 FY 2011 FY 2012  
Net Profit Margin 24.34% 27.22% 29.53% n.a
Return on Equity 113.93% 95.86% 80.47% n.a
         
Activity Ratios  
Accounts Receivable 0.00 0.00 0.00 n.a
Turnover
Collection Days 0 0 0 n.a
Inventory Turnover 5.83 3.90 4.07 n.a
Accounts Payable 8.17 12.17 12.17 n.a
Turnover
 Hair Salon Business Plan

Payment Days 27 34 27 n.a

Total Asset Turnover 1.51 1.47 1.35 n.a
         
Debt Ratios        
Debt to Net Worth 2.11 1.40 1.02 n.a
Current Liab. to Liab. 0.29 0.41 0.54 n.a
         
Liquidity Ratios        
Net Working Capital ($273,834) ($365,875) ($515,151) n.a

8.2. Strategy and Implementation Summary

In order to be competitive and to establish our salon as a high quality, highly personalized salon and spa
service destination, we must focus on the following:

 Minimize our costs and expenses in every aspects of our business without sacrificing quality
 Build a team of professionals who are knowledgeable, caring, loyal, and consistent in their customer
service
 Utilize creative promotions to attract our target markets
 Maintain the highest standard of quality control, safety, and hygiene

Most importantly, our costs and expenses must be reviewed on a regular basis to keep us on target with our
financial goals. When possible, we will partner with our suppliers to obtain special pricing and deals. We will
also keep our retail inventory as minimal as possible.

Our staff will be the reflection of our image and our reputation as they will interact closely with clients. The
owner plans to devote a minimum of 40 hours of training for each employee prior to each person's actual start
date. A written and practical exam will be administered. Each staff member will be given at least two chances
to successfully complete their certification testing. The training will not only have a strong focus on
techniques, retail product knowledge, and customer etiquette but also on teamwork and team values. Initially,
the owner will conduct all training and certification.

Our promotion will clearly showcase our high quality services and offerings. We aim to be creative in our
approach with monthly specials targeting specific groups of consumers. We plan to monitor and assess our
advertising results each month to ensure that we are meeting our goals.

In order to maintain the highest standard of quality control, safety, and hygiene, facility cleanliness will be of
the utmost importance. Each of our staff members will have the responsibility of maintaining their work station
and surrounding area. Everyone is expected to participate. In addition, to keep our salon fresh and clean, we
will retain the service of a maintenance crew once per week. The cost is estimated to be $200 per visit. By
having a clean working environment, our staff can focus on delivering the best, the most safe and hygienic
service.