BUSINESS PLAN

CONTENT

ITEM PAGE

Company Profile

Environmental Industry Analysis

Organizational/Administrative Plan

Marketing Plan

Operation Plan

Assessment Of Risks

Financial Plan

Conclusion

References

Appendices

INTRODUCTION
1.0 Introduction

1.1 Name of the company

HBS Hair Beauty Salon

No. 48, Jalan Hang Tuah, 75100 Melaka

1.2 Nature of the business

Our company, HBS Hair Beauty Salon have provide hair care services in order to fulfil the

needs and wants of community especially students.

1.3 Industry profile

Hair Beauty Salon is a partnership company that focuses in providing hair care services at

affordable and reasonable price to our target market.

1.4 Location of the business

Based on the research, we have found a strategic area at Shah Alam was the marketable

place for us to commence the business. It is located at No. 48, Jalan Plumbum V 7/V,

Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan. Furthermore, customer easy to get

parking around this area and the building are situated near the main road.

1.5 Date of business commencement

Our business will be started on 1 January 2011.

1.6 Factors in selecting the proposed business

Based on the observation and survey, we have decided to operate the Hair Beauty Salon

because it is a profitable business and easy to manage. Because of our target market are

students, we did a research among the UiTM students and we have find out a great demand

from them. Besides that, it can create a healthy competition among the other salon.

1.7 Future prospect of the business

For the future of the business, we have discussed to open up new branches especially

nearest to the high education institution. In addition, the business can create job opportunity

to the professional workers and also helps to develop the economy for our country.
2.0 Purposes of the Business Plan

Among the main purposes for our business preparing a business plan are:

 To evaluate the project viability and growth potential

 To act as guideline for the management of the proposed business

 To allocate business resources effectively

 A detailed description of our new business, including the company's product and

services, marketing plan, financial statements and projections and management

principles.

 Its list a company's expected course of action for a specified period usually includes

a detailed listing and analysis of risks and uncertainties.

 For our business, it should examine the proposed products and services, the market,

the industry, the management policies, the marketing policies, production needs and

financial needs.
3.0 BUSINESS BACKGROUND

Name of Company : Hair Beauty Salon

Company Address :

Telephone/Fax Number : 03-55664323

E-mail : hairbeautysalon@hotmail.com
Form of Business : Partnership

Main Activity : Provide hair care services such as blow-drying, cutting,

colouring

and hair treatment

Date of Registration : 18 November 2010

Number of Registration : 516656

Date of Commencement : 1 January 2011

Initial Capital : Partners’ capital - RM 60 000

Name of Bank : Bank Islam Malaysia Bhd. (BIMB)

Bank Account No. : 12142040025522

4.0 PARTNERS BACKGROUND
Name :

Identity card no :

Permanent address :

Correspondence address :

Telephone no :

Date of birth :

Age : :

Skills :

Experiences :

Present occupation :

Previous business experiences :

Capital contribution : RM
5.0 Administration Plan

5.1 Introduction

HBS Hair Beauty Salon is a partnership business form to carry out the business that

provides services for hair care. Hair Beauty Salon will provides the best hair care services

for the target market. Administration is the management of public or business affair.
Administration is one of the important departments or parts of a business in order to control

and administer all the related work in the company. This department is controlled the

partners which has experiences and knowledge about this field. Besides that, there is also

commitment from the others to ensure the objective can be achieved by the company.

5.2 Vision

 Hair Beauty Salon is set up to provide good quality hair care and treatment services

at a reasonable price for customers.

 This company also wants to expand the business outside of Shah Alam by opening

new branches within 10 years after commencement.

5.3 Mission

 To make profit and increase the profit year by year.

 To increase the number of customer day by day.

5.4 Objective

 We want to be known and famous among the target market.

 To give full satisfaction to customer with excellent services.

 To give an adequate return on investment to partners.

5.5 Business Address

 No. 48,

Jalan Plumbum V 7/V,

Section 7, 40000 Shah Alam,

Selangor Darul Ehsan.

5.6 Organization Chart

 General Manager

Administration
Marketing Manager
Manager Operations Manager

Hairdresser

5.7 List of Administration Personnel

Position No. of Personnel

General manager/Hairdresser 1
Administration manager/Hairdresser 1
 Marketing manager/Hair dresser 1
Operations manager/Hair dresser 1

5.8 Schedule of Tasks and Responsibilities

Position Task and Responsibilities

General manager

- Oversees all areas of the facility on day

to day operations

- Schedules all staff

- Make sure all staff is keeping their area

operating as required

- Try to solve all concerns by members

and staff

- Promote health and wellness, educate

members and recruit new members

- Other duties as assigned

Administration manager

- Carrying out the administrative duties,

using system and relevant processes to

the organization

- Design and implement staff

communication programs

- Manage and order supplies within the

budget guidelines

- Prepare and review operational reports

and schedules to ensure the accuracy

and efficiency

- Plan, administer and control budgets for

contracts, equipment
 - Monitor the facility to ensure that it

remains safe, secure, and well-

maintained

- Oversee the maintenance and repair of

machinery, equipment and mechanical

systems
Marketing manager

- Responsible for the design of marketing

strategies for the firm

- Pinpoint potential markets that the firm

can target

- Come up with effective pricing

strategies that will lead to more

profitability for the company and help in

the consolidation of market share

- Marketing managers track trends in the

market and come up with products and

services that will satisfy new demands

- To advertise and promote our services

and make them famous in the

marketing by using different techniques

Operational manager

- Direct and coordinate activities of

businesses or departments concerned

with the production, pricing and sales

- Review financial statements, sales and

activity reports, and other performance

data to measure productivity and goal

achievement and to determine areas

needing cost reduction and program

 improvement

- Manage staff, preparing work schedules

and assigning specific duties

- Determine staffing requirements, and

interview, hire and train new

employees, or oversee those personnel

processes

- Plan and direct activities such as sales

promotions, coordinating with other

department heads as required.

Hairdresser
- Hairdressers cut, style and colour hair

- Provide permanent wave, straightening

and bleaching treatments

- Advise clients on problem hair

conditions, proper hair care and

maintenance.

- Provide hair extension, wig and

restorative services

- Responsible for keeping their work area

clean and their equipment sterile,

meeting state health and safety

standards
5.9 SCHEDULE OF REMUNERATION

MONTHLY SOCSO
EPF TOTAL
POSITION NO. SALARY (2% OR
(12%) (RM)
(RM) 2.5%)

GENERAL
1 1400 168 35 1603
MANAGER

OPERATIONAL
1 1200 144 30 1374
MANAGER

FINANCIAL
1 1200 144 30 1374
MANAGER

MARKETING
1 1200 144 30 1374
MANAGER

TOTAL 4 5000 600 125 5752

Allowances:

It is additional benefits paid to workers. They are considered incentives to motivates and

encourages workers to perform their work better.

5.10 List of office equipment and supplies

Types Quantity Price/unit (RM) Total (RM)

Styling Chair 3 200 600
Styling Station 3 1876 7504
Utility Tray 3 100 300
Portable Washing 2 300 600
Total     9004

Office Furnitures
Types Quantity Price/unit (RM) Total (RM)
Sofa 1 1000 1000
Table 1 350 350
Total     1350

Other Expenses
Types Quantity Price/unit (RM) Total (RM)
2 900 1800
Air-conditioner

Magazines 10 15 150

Dustbin 2 20 40

Total     1990
5.11 Administration budget

ADMINISTRATIVE BUDGET

Monthly
Particulars F.Assets Exp. Others Total
     

Fixed Assets        

Office Furniture 1,350     1,350

  -     -

  -     -

Working Capital        

Salaries, EPF, SOCSO   2,977   2,977

Miscellaneous   500   500

    -   -

    -   -

Pre-Operations & Other Expenditure        

Other Expenditure     5,836  5,836

Total 1,350 3,477 5,836 10,663

6.0 Marketing Plan
6.1 Introduction

Marketing is a process that is vital in a company to create values for customers and

build relationships in order to attract customers to go for the services provided. It is also the

process of planning, executing the concept, pricing, promotion and distribution of ideas,

products or services to create exchange that can satisfy individuals and organizational

objectives. It is a very important element to manage a company. As a started of a new

business, the market condition and customers’ demands have been analysed. An analysis

from the marketing point of view is very important in order to make the business can reach

the sales target and profit as well.

The status of marketing encompasses the entire business. The business identifies

the needs and wants of the market for marketing plan. Marketing plan involves the activities

that are carries out systematically to encourage and increase the sales of products or

services as long as the activities are in line with ethical and religious practices. Therefore,

Hair Beauty Salon has developed some plans and strategies in order to introduce and inform

about the services provided to our target market.

6.2 Marketing Objective

The marketing concept rests on the philosophy that all activity must satisfy the needs

and wants of customer and to achieve the targeted profit. Based on this concept, the

objective of company can be satisfied. The marketing objective that needs to be achieved

are stated as follows :

Quality of services
  We are aiming to provide quality services through well trained workers and as

well as the product that we used for hair care and treatment.

Customer satisfaction

 We are trying to identify the customer’s needs and wants based on the analysis

made. It can be successfully fulfilled by giving full commitment when doing our

job.

To encourage and improve our services

 This can be achieved by preparing the effective promotion and as well as the

good business environment.

To ensure our salon is well known

 All information needed regarding to our salon will be spreader through

promotions and advertisement.

To maximize profit

 As all the objectives stated above are obtained, our targeted profit can be

reached at its maximum point.

6.3 Service Description

 Hair Beauty Salon is a service type of business which provides hair care and

treatment to customer. We are providing hair care services that are beneficial to customer.

This is due to our good quality services at the affordable price.

We are using hair care product that is formulated by using the natural ingredients

such as traditional herbs and plants extracts These not only the uniqueness of our services

but it is also safe to use and halal for Muslims. Therefore, we can easily attract the potential

customer use our services.

Besides that, after we did some research, we have identified a strategic location to

open the business. We have decided to open the business at Section 7, Shah Alam which is

near to the Universiti Teknologi Mara (UiTM) and residential area. . We will open the

business 6 days per week. The business will be closed on Friday and Public Holiday.

6.4 Target Market

Hair Beauty Salon has identified the target market based on the market segmentation

which are the students from Universiti Teknologi Mara (UiTM) Shah Alam, residents from the

near residential area include the other potential buyer that is 7 kilometres diameter from our

business premise. We have chosen these target market because nowadays, people are

more sensitive towards the quality of services and the price level due to the economics

problems.

6.5 Market size

Market size is referring to the total potential purchases of the target market. This is included

the purchases of competitor’s product or services within the same market. Normally, it stated
in terms of unit or ringgit. The market size can be calculated by daily, weekly, monthly or

yearly.

Target market in Section 7, Shah Alam

=200 000 people

Market size

Target market of people going to salon

Target market People going to salon Total (people)

Student 80 000 (15%) 12 000
Resident 120 000 (10%) 12 000
Total 24 000

Estimated money spend per year for hair care services per person

= RM 80 x 24 000

= RM 1,920,000

6.6 Market potential

6.6.1 Types of customers

Customers Market size Purchasing power Total (RM)

Students 12 000 RM80 x12 000 960 000
Residents 12 000 RM80 x12 000 960 000
Total 24 000 1,920,000
Teenagers and youngsters who describe student will be dominating our types of customers.

However, not forgotten by us another target group is working person because our business

is the area of industrial zone.

6.7 Competition

Competitor refers to other business that offer similar products, substitute or alternatives

products or services to the same target market. Two businesses may involve in the same

industry or may offer the same products or services but are not considered competitors if

they do not reach out to the same target market.

We had identified a few competitors to our company:

Name of the Duration in

Strengths Weaknesses
company market
La Hair  Offer body  Open 4 days 1 year
scrup per week
 Offer  More
reflexology expensive

Glamour and  Located near  Their shop More than 1

Beautiful the main city are small years
 Offer their  Less
own hair convenient
treatment
product

Shine Hair  Offer nail  Their target More than 1

manicure market only years
for working
people
 Services are
less
convenient
Market share refers to the portion of the market that the business can control after taking into

consideration market size and the competitor’s position in the same market. Market share is

often quoted in terms of percentage of total market size.

Market share before entry of Hair Beauty Salon:

Name of the company Percentage Total (people)

La Hair 30% 7 200

Glamour and beautiful 50% 12 000

Shine Hair 20% 4 800

Total 100% 24 000

After analysing the competitor’s strength and weaknesses, Hair Beauty Saloon is confident it

can control 14% of the market. This will mean that the existing competitors will lose some of

their market after the entry of Hair Beauty Saloon.

Adjusted market share after the entry of Hair Beauty Salon:

Name of the company Percentage Total (people)

La Hair 24% 5 760

Glamour and Beautiful 46% 11 040

Shine Hair 17% 3 840

Hair Beauty Salon 14% 3 360

Total 100% 24 000

6.6 Forecasting Sales

The sales forecast is done on a monthly basis for the first year of business and can be used

for extended to cover sales for the second and third year. This section will offer a financial

overview of Hair Beauty Salon included the break-even analysis and sales forecast.

Sales forecasts

The first month will be used to set up the equipments that need in the saloon and hire and

train the employees properly. The instalment of the equipments will be officially done in the

second month.

Month Sales

Units (people) RM

January 237 18 960

February 272 21 760

March 306 24 480

April 305 24 400

May 275 22 000

June 249 19 920

July 279 22 320

August 307 24 560

September 313 25 040

October 298 23 840

November 273 21 840

December 246 19 680

Year 1 total sales 3360 268 800

6.7 MARKETING STRATEGY

Developing marketing strategy is to enable business to plan in order to achieve stated

marketing objectives. The key idea of our business is to deliver customer satisfaction yet

provide business with a competitive advantage. Marketing strategy includes product, pricing,

place or distribution and promotion strategy.

6.7.1 Product strategy (service)

Our product strategy is referring to customer service. All of salon’s employees have been

trained in exceptional customer service. We are offering the best quality and up to date

services due to customer satisfaction. Our services include shampoo treatment, rebonding,

trim and cut and also colour and bleach.

6.7.2 Distribution strategy

The saloon is located at No. 48, Jalan Plumbum V7/V, Seksyen 7, 40000 Shah Alam,

Selangor Darul Ehsan where it is the strategic place because it is near the main road and

located at the industrial area. The type of distribution channel that we used is called direct

marketing channel consists of the business selling directly to the customers.

6.7.3 Pricing strategy

The price of the service is the amount of money charged to the customer for a particular

purchase. We have decided to use competition based pricing strategy.

6.7.3.1 Competition Based Pricing

Going Rate Pricing

We based our service price largely on the competitor’s prices. The assumption is that

customer judges a product’s value on the prices competitor’s charge for their product.

6.7.4 Promotion strategy

Promotion strategy is used to disseminate information about our company’s services with the

purpose of attracting the target market. The promotion tools that we have decided to use is

advertising by banner, pamphlet, and brochures.

6.8 Marketing budget

 MARKETING BUDGET

Monthly
Particulars F.Assets Exp. Others Total
         
         
Fixed Assets        

Signboard 1,500     1,500

  -     -

  -     -

  -     -
Working Capital      

Salary 1,200   1,200

EPF/SOCSO   174   174

    -   -

    -   -

    -   -
Pre-Operations & Other
Expenditure      

Other Expenditure     7,727  7,727

Total 1,500 1,603 7,727 10,601

7.0 OPERATIONAL PLAN

7.1 Activity chart for hair treatment services

7.2 Layout
7.3 Material planning

Material planning is important to determine the type and amount of materials need for

services. Below is the list of materials required from the producer that will be used in our hair

care service.

No. Name of Inventory Quantity Price per unit Total Amount

required per (RM) (RM)
month (unit)
1 Shampoo 15 15 225
2 Conditioner 15 18 270
3 Hairspray 15 16 240
4 Root Lifter Spray Gel 10 20 200
5 Curls Scrunching Mousse 10 20 200
6 Styling Cream 20 18 360
7 Sculpting Gel 10 20 200
8 Hair Dye Cream 15 25 375
-various colours
TOTAL 2070
7.3.1 List of material required in the operation process

7.4 Machine and equipment planning

Types Quantity Price/unit (RM) Total (RM)

Hair dryer 3 150 450

Hair Steamer 2 500 1000

Total     1450

7.5 Location plan

We choose to commence our business at section 7, Shah Alam because of several factors.

One of the factors is the distance from market or customers. The distance from customer will

influence sales revenue. Increase in revenue will contribute in increase in profit. Based on

our research, some of the people that live at section 7 in the flat let are consists of non

resident students from UiTM that are our target market.

UITM SHAH
ALAM
JAKEL

KFC AND PIZZA HUT

Key :

Hair Beauty Salon

7.6 Business and operation hours

Days Period

Monday – Thursday 10 am – 7 pm

Weekends 10 am – 11 pm

Friday Closed

Public Holidays Closed

7.7 Operation Budget

OPERATIONS BUDGET
 Monthly
Particulars F.Assets Exp. Others Total
         
         
Fixed Assets        
4
Hair dryer 450     50
1,0
Hair steamer 1000     00

 Equipment Operation 9004     9,004

        -
Working Capital    
2,0 2,0
Raw Materials   70   70
1,3 1,3
Salaries, EPF & SOCSO   74   74

 Rental   1,000   1,000

 Utilities   700   700

    -   -

  - -
Pre-Operations & Other Expenditure        

Other Expenditure     11,373 11,373 

Deposit (rent, utilities, etc.)     1,700 1,700

Business Registration & Licences     70 70

Other Pre-Operations Expenditure     - -

10, 5,1
Total 454 44 13,143 28,741
8.0 Financial Plan

8.1 Projected Expenditure

ADMINISTRATIVE EXPENDITURE
Fixed Assets RM
Land & Building  
Office Furniture 1,350
   
OPERATIONS EXPENDITURE
Working Capital  
Fixed Assets RM
Salary, Epf, SOCSO 2,977
Miscellaneous
Hair Dryer 500
450
  Hair Steamer   1,000
Equipment 9,004
Other Expenditure  
   
Other Administrative Expenditure 5,836
Working Capital  
TOTAL ADMINISTRATIVE EXPENDITURE 10,663
Raw Materials 2,070
Carriage Inward & Duty  
Salaries, EPF & SOCSO 1,374
Rental 1,000
Utilities Bills 700
  MARKETING EXPENDITURE  

Other Expenditure  
Fixed Assets RM
Other Operations Expenditure 11,373
Pre-Operations
Signboard   1,500
Deposit (rent, utilities, etc.) 1,700
   
Business Registration & Licences 70
Working Capital  
TOTAL OPERATIONS EXPENDITURE 28,741
Salary 1,200
EPF/SOCSO 174
   

Other Expenditure  
Other Marketing Expenditure 7,727
TOTAL MARKETING EXPENDITURE 10,601
8.2 Projected Sales And Purchases

SALES PROJECTION
Month 1 18,960
Month 2 21,760
Month 3 24,480
Month 4 24,400
Month 5 22,000
Month 6 19,920
Month 7 22,320
Month 8 24,560
Month 9 25,040
Month 10 23,840
Month 11 21,840
 Month 12 19,680
Total Year 1 268,800
ToTal Year 2 295,680
Total Year 3 325,248

PURCHASE PROJECTION
Month 1 2,070
Month 2 1,614
Month 3 1,614
Month 4 2,070
Month 5 1,614
Month 6 1,614
Month 7 2,070
Month 8 1,614
Month 9 1,614
Month 10 2,070
Month 11 1,614
Month 12 1,614
Total Year 1 21,192
ToTal Year 2 22,888
Total Year 3 24,719

Hair Beauty saloon

PROJECT IMPLEMENTATION COST & SOURCES OF FINANCE
Project Implementation Cost Sources of Finance
Requirements Cost Loan Hire-Purchase Own Contribution
Fixed Assets       Cash Existing F. Assets
Land & Building          
Office Furniture 1,350     1,350  
           
           
           
Signboard 1,500     1,500  
           
           
           
Hair Dryer 450     450  
Hair Steamer 1,000     1,000  
Equipment 9,004     9,004  
           
Working Capital 2 months    
Administrative 6,954     6,954  
Marketing 2,748     2,748  
Operations 10,288     10,288  
Pre-Operations & Other
Expenditure 26,706     26,706
Contingencies            
               
TOTAL     60,000     60,000  
8.3 Projected Implementation Cost & Source Of Finance

8.4 Office Furniture Depreciation Schedule

Fixed Asset Office Furniture

Cost (RM) 1,350  
Method Straight Line  
Economic Life (yrs) 8  
Annual Accumulated
Year Depreciation Depreciation Book Value
  - - 1,350
1 169 169 1,181
2 169 338 1,013
3 169 506 844
4 169 675 675
5 169 844 506
6 169 1,013 338
7 169 1,181 169
8 169 1,350 -
Signboard Depreciation Schedule

Fixed Asset Signboard

Cost (RM) 1,500  
Method Straight Line  
Economic Life (yrs) 8  
Annual Accumulated
Year Depreciation Depreciation Book Value
  - - 1,500
1 188 188 1,313
2 188 375 1,125
3 188 563 938
4 188 750 750
5 188 938 563
6 188 1,125 375
7 188 1,313 188
8 188 1,500 -

Hair Dryer Depreciation Schedule

Fixed Asset Hair Dryer

Cost (RM) 450  
Method Straight Line  
Economic Life (yrs) 8  
Annual Accumulated
Year Depreciation Depreciation Book Value
  - - 450
1 56 56 394
2 56 113 338
3 56 169 281
4 56 225 225
5 56 281 169
6 56 338 113
7 56 394 56
8 56 450 -
Hair Steamer Depreciation Schedule

Fixed Asset Hair Steamer

Cost (RM) 1,000  
Method Straight Line  
Economic Life (yrs) 8  
Annual Accumulated
Year Depreciation Depreciation Book Value
- - 1,000
1 125 125 875
2 125 250 750
3 125 375 625
4 125 500 500
5 125 625 375
6 125 750 250
7 125 875 125
8 125 1,000 -

8.5 PROFORMA CASHFLOW

STATEMENT
8.6 Proforma income statement

Hair Beauty saloon

PRO-FORMA INCOME STATEMENT

          Year 1 Year 2 Year 3

  Sales 268,800 295,680 325,248
  Less: Cost of Sales      
  Opening stock
  Purchases 21,192 22,888 24,719
  Less: Ending Stock
  Carriage Inward & Duty      
 
  Gross Profit
       
  Less: Enpenditure      
Administrative
41,724 41,724 41,724
  Expenditure
  Marketing Expenditure 16,488 16,488 16,488
  Other Expenditure 24,936 24,936 24,936
Business Registration &
70    
  Licences
Insurance & Road Tax
     
  for Motor Vehicle
Other Pre-Operations
     
  Expenditure
Interest on Hire-
     
  Purchase
  Interest on Loan      
Depreciation of Fixed
1,663 1,663 1,663
  Assets
   Operations Expenditure 36,888 36,888 36,888
  Total Expenditure 142,961 144,587 146,418
  Net Profit Before Tax 125,839 151,093 178,830
  Tax   0 0 0
  Net Profit After Tax 125,839 151,093 178,830
  Accumulated Net Profit 125,839 276,932 455,762

8.7 Proforma Balance Sheet

Hair Beauty saloon

PRO-FORMA BALANCE SHEET

        Year 1 Year 2 Year 3

  ASSETS      
       
Non-Current Assets
     
(Book Value)  
  Land & Building      
  Office Furniture 1,181 1,013 844
       
       
       
  Signboard 1,313 1,125 938
       
       
       
  Hair Dryer 394 338 281
  Hair Steamer 875 750 625
  Equipment 7,879 6,753 5,628
       
  Other Assets      
  Deposit 1,700 1,700 1,700
       
  13,341 11,678 10,015
  Current Assets      
  Stock of Raw Materials 0 0 0
  Stock of Finished Goods 0 0 0
  Accounts Receivable      
  Cash Balance 172,498 325,254 505,747
  172,498 325,254 505,747
       
  TOTAL ASSETS 185,839 336,932 515,762
       
  Owners' Equity      
  Capital 60,000 60,000 60,000
  Accumulated Profit 125,839 276,932 455,762
  185,839 336,932 515,762
  Long-Term Liabilities      
  Loan Balance      
  Hire-Purchase Balance      
       
  Current Liabilities      
  Accounts Payable      
       
TOTAL EQUITY &
  185,839 336,932 515,762
LIABILITIES