Business Plan 1

Business Plan for the establishment & Operation of a high edge Beauty Salon

2345 Cutting Edge Avenue

Style, MD 22556

Salon: 301-556-6666

Fax: 301-556-6667

Website: www.hueimagethesalon.com

Executive Summary:

Hue Image´… the salon is a new up market full service beauty studio located in Style, Maryland. Primarily a beauty salon, we offer treatment for hair care that is enriched with the best hair product and equipment available. We specialize in hair treatments and services such as cutting, coloring, weaves, scalp treatment and several other services. We have specialist who are well versed and trained in different styles of massages including, Hot Stone message, Swedish message, Hot Oil messages and several other techniques. We also offer facial treatments, skin peeling treatments and anti-aging techniques.

This business plan will highlight our progress till the day of the launch of the salon and follow up with know our projection will look like in the next five years. The purpose of the pals is to secure funding and finance necessary for a great launch of Hue Image´… the salon.

Our edge lies in the fact that we offer a wide varsity of package for all type of services and treatments for head to toe and are in fact one of the only salon in town to offer these services. Our location is another advantage, located in the vicinity of several up market residential neighborhoods. Also, the owner of Hue Image´…the Salon is a well established name is the industry. A professional organization, we have trained individuals who work with us and several years of experience in the industry.

Our long term aim is to expand local, national, and international to offer our wonderful service. Also, we will create a Hue Image´ Color line in the future and to transform ourselves from just a salon to a spa and vacation resort for the mind, body, and soul.

The management of Hue Image´…the Salon, includes co-owner, Antoinette Smith and Denetra E. Smith, both of whom have an experience of over 20 years respectively in the industry. The owner will have a hands-on role in the management of the company. In addition, I will also have a board of advisor who all have expertise in the fields of beauty resorts and management.

Based on the size of the market area and the target clientele, we expect to garner sales of almost USD 60,000 by the first quarter with almost 15 services per day. We expect to double these figures by the end of the second quarter and be the end of the year we expect to be providing up to 60 services per day.

Hue Image´…the Salon is a dedicated to consistently providing high customer satisfaction by tendering excellent service, quality products, and furnishing an enjoyable atmosphere. We will also maintain a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.

Table of Contents:

Business Description

Mission Statement

Goals

Business Background

Business Structure

Management Team

Key Managers

Owners

Business Advisors

Marketing Plan

Product Description

Specifications

Research and Development

Market Research and Analysis

Industry Analysis

Target Market Analysis

Competitive Analysis

Description of Competition

Competitive Advantage

Marketing Activities & Product Activities

Product Strategy & Communication Strategy

Production Plan

Land and Facilities

Equipment

Production Strategy

Risk Strategies

Facilities Construction Schedule

Political Legal and Community Aspects

Human Resources Plan

Employee Plan, Organizational Chart, Labour, Hiring, and Training Policy

Financial Plan

Funds Requested and Their Uses

Income Statement

Net Worth or Balance Sheet Statement

Financial Indicators

Appendices

Business Description

Mission Statement:

To provide a services and products that will enhance our clients’ physical appearance, mind, body, soul, and mental relaxation. Having fun doing business by sharing the passion of cosmetology technology art, and science.

Our Motto:

A simple touch from Hue Image...the Salon to suppress our client’s shadow that will enhance their true beauty of their signature image.

Our Goals:

Hue Image´…the Salon commitment in the following time management system, excellence in all we do, to be incredible, outstanding, unbelievable client service, value-added service, and make sure our clients get the best retailing they need to take care of their hair at home. Through strong commitment, strong marketing, and a solid financial plan, Hue Image´…the Salon will service the community and be recognized as business leader. We feel very confident that the goals can be reached.

This business plan will highlight our progress till the day of the launch of the salon and follow up with know our projection will look like in the next five years. The purpose of the pals is to secure funding and finance necessary for a great launch of Hue'…the Salon.

Our edge lies in the fact that we offer a wide varsity of package for all type of services and treatments for head to toe and are in fact one of the only salon in town to offer these services. Our location is another advantage, located in the vicinity of several up market residential neighborhood. Also, the owner of Hue Image'…the Salon is a well established name is the industry. A professional organization, we have trained individuals who work with us and several years of experience in thy industry.

Hue Image'…the Salon is a dedicated to consistently providing high customer satidaction by tendering excellent service, quality products, and furnishing an enjoyable atmosphere. We will also maintain a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.

Business Structure

The business will operate as a partnership under the business name Hue Image´…the Salon. The business will include Antoinette Smith and Denetra Smith as partners each owning 50% of the business. The business will operate as a partnership for ease of tax reporting, ease of transferring assets, and control regarding business decisions.

Partnership/Owners	Share of Business
Antoinette Smith	50%
Denetra Smith	50%

Registrations and Permits	Date Issued	Number
Business License
Partnership Agreement Registration
Development Permit
Environment License
Registration of Business Name
State Board of Cosmetology

Organization Chart

Management Organization Team

The business will operate as a partnership under the business name of Hue Image´…the Salon. The business will include Antoinette Smith and Denetra Smith as partners each owning 50% of the business.

Name	Percent of Business Owned	Management Role
Antoinette Smith	50%	Owner/Marketing/Production & Facilities Manager
Denetra Smith	50%	Owner/Finance Manager

Owners

Owners are daughter and mother team which have considerable experience in the cosmetology field. Antoinette had 15 years experience in the cosmetology, Marketing and Production area of the business. Denetra had 25 years experience in the finance working for Montgomery County, a major part of the Accounting Department.

Training

All employees receive training from the President and the Supervisor in the following areas:

Given by the President

a. Hue Image’…the Salon orientation at the time they are hired

b. Company policies and procedures regarding the customers and company standards

c. Liability and safety procedures

d. Equipment care and theft policies

Given by the Supervisor

a. Overview of how to do timesheets each week

b. N/A

c. N/A

Business Advisors

All advisors are hired on an “as-needed” basis with market rate regarding wages paid for all services.

Name	Address	Role
Glenn W. Hagen, P.C. Highlands Ranch Business Park	8925 Ridgeline Boulevard Suite 108 Highlands Ranch, CO 80129 Phone: 303-683-1163 Toll Free: 1-866-LAW4BIZ Fax: 303-683-3521	Lawyer
Rebecca R Schmidt, CPA Partner Dennis & Associates Group, Inc. The Plaza at Circle Towers	9411-M Lee Highway  Fairfax, VA 22031-1819  Phone:    703-383-9710  Fax:    703-383-9716  Email:     [email protected]	Accountant

Insurance

Carrier: V.W. Brown Insurance Service Agent: Nancy Harper

10380 Old Columbia Road Suite 104 Columbia, MD 21046

(410) 730-2688

Type of Insurance:

Business/Personal 600,000

Deductible 3,000

Liability 1,000,000

Equipment 100,000

Deductible 1,000

Liability 3,000,000

Vehicles 20,000

Deductible 500

Liability 100,000

Annual Premium 10,000

Monthly Premium 800

Security

Problems situations to be considered and protective measures to be taken:

1. Internal theft- Employee Dishonesty

a. Shoplifting – of supplies – (4) closed circuit cameras in garage recording 24 hours

b. Cash Theft – petty cash limit of $600. Daily receipt drop-off to bank of all receivable

c. Falsifying signatures – all checks signed by President at the end of the day

d. Employee orientation – to reduce theft and stress security procedures

e. Monthly inventory – responsibility of the Manager

2. External Theft

a. Walk-in theft cameras at each doorway exit (2)

b. Camera in the parking lot area

c. Alarms set nightly and connected directly to local Police station

Marketing Plan

The marketing plans are presently in the development stages. Antoinette is playing an important role in this area of business. Strategy can be defined as the science of planning and directing large-scale operations, specifically of maneuvering forces into the most advantageous position prior to taking action. It is creative and easily measured. More time is needed for proper planning. We have already budgeted this area to 3% of total revenue.

In the next month the logo should be complete and ready for copy. Press releases will be sent out no later than November of this year. Antoinette will be mapping out a 12 month promotional grid. Direct marketing will introduce the new service and product menus. Employees will involve themselves in the community.

Measurable results include:

· Increased sales

· Increased market share

· Increased knowledge of business

· Improved image

· Identified competitive advantage

· Created improved climate for future sales

Proprietary information is available to investors upon signature of a Non-Disclosure Agreement. What sets Hue Image´…the Salon apart from the competition is the separation of the Kids Studio (Lil Prince and Princess) and hue Image´…the Salon. In the majority of salons today, children are banned unless being serviced. Over 75% of stylist prefer not to service children age 4-8 at all. Our goal at Lil Prince and Princess Kids Studio is to services and satisfy children ages 3-13 with fun-filled excitement while being made beautiful from head to toe.

The separation allows for direct target markets in service and product. Hue Image´…the Salon is to be the most technologically advanced cosmetology establishment in Washington Metropolitan area.

Products

Design Essentials is a product well-known in Washington Metropolitan area. It is used by many salons in country. This is not a 0.threat; however, it is support for the salon retail. We have the largest inventory of any salon. Our goal is to produce 45% in retail. This is a conservative number. Offering a singular note to product lines provides manageable inventory control. Design Essentials also compliments our technological position, having website that provides advertising and referrals. Presently, we are having a web site designed for Hue Image´…the Salon. Here retailing will expand along with consultation services.

MIZANI, a division of L’Oreal USA, is a complete line of professional treatments, relaxers, shampoos, conditioners, and styling products designed to meet the expanding needs of today’s global beauty. Through its advances, patented technology, MIZANI has discovered new ways to care not only for the hair, but for the scalp as well. Each MIZANI formula is customized to suit the individual needs of each hair type. From naturally curly and highly textured to color-treated, relaxed and everything in between, MIZANI offers a specialized, salon-exclusive hair care system designed to restore every hair type to its ultimate state of balance. MIZANI is a salon-exclusive brand designed for the professional stylist.

The services offered include:

Kids Studio cuts, cornrows, ponytails twist, press-n-curl, box braids, individuals, flat twist with curls, pin-ups, relaxers, and much more.

Hue Image´…the Salon design, colorization, chemical reconstruction, scalp massage and reconstruction, natural and alternative nail treatments, makeup (lessons and application, facials, waxing), and fully body massage. Stress-relieving treatment completed the wellness services.

High end salons are addressing the consumer that is spending less and still wanting quality services. Hue Image´…the Salon has designed the business to meet the current trend. We provide that.

Market Research and Analysis

According to the Occupational Outlook Quarterly, published by the U.S. Department of Labor, it shows cosmetology as a steadily growing occupation in the U.S. through 2005. However, the Department of Labor, also shows Nail Technicians as one of the 11 fastest growing occupation in the U.S. and cosmetologist as number 37 in the top 100 occupations. This is because baby boomers are youth oriented and will be the driving force for our industry for the next 20 years. Generation X is the target we are going after but the baby boomers will be paying the way. Wellness, relaxation, and nurturing the soul will supersede “beauty services”.

Cosmetology is as large an industry as the tobacco industry. Big businesses are recognizing the billions of dollars consumers spend each year in our industry and they are buying up the major manufacturers. Redken was bought by Cosimar, Matrix by Proctor and Gamble to use as two examples.

Locally, consumers demand pampering treatments while on vacation. Today’s stress-relieving treatments replace the 1980s party scene and corporate rewards are given with “Day of Beauty” packages.

The overall market demands quality services at the fair price.

Future Opportunities

Future planning includes expansion of retail department with virtual shopping which will be online services. As our client base builds in the local market, targeting marketing to the tourism trade will bring new opportunities. Still another opportunity involves providing custom packages for special groups. Hue Image´…the Salon became a volunteer of the Locks of Love organization. Locks of Love is a public non-profit organization that provides hairpieces to financially disadvantaged children under age 21 suffering from long-term medical hair loss from any diagnosis. We meet a unique need for children by using donated hair to create the highest quality hair prosthetics.

Their mission is to return a sense of self, confidence and normalcy to children suffering from hair loss by utilizing donated ponytails to provide the highest quality hair prosthetics to financially disadvantage children. The children receive hair prostheses free of charge or on a sliding scale, based on financial need.

Competition

Methods of Distribution

Advertising Strategy

Paid Advertising

We currently participate in several forms of advertising:

1. Newspaper ads: All ad copy is identical, and include information required by the newspaper:

a. Ad Information:

1. Ad size: The ad is two column x 3 ins.

2. Timing: Monthly

3. Section:

b. Ad location, contact and fees:

The Washington Post Contract: Steve Stup

1150 15th Street NW Circulation:

Washington, DC 20071 Fee:

The Gazette –Maryland Contract: Lindsey Robbins

9030 Comprint Court Circulation:

Gaithersburg, MD 20877 Fee:

Washington City Paper Contract: N/A

2390 Champlain Street NW Circulation:

Washington, DC 20009 Fee:

Pennysaver Contract: Jill Criscuolo

1342 Charwood Road Circulation:

Handover, MD 21076 Fee:

2. Phone Books – Yellow Pages and Directories

a. NYNEX Phone Book –Yellow Pages

Ad Information:

Coverage: So. MD area

Yearly Fee: N/A

Ad size: ¼ page

Renewal Date: February 1st

Contact: N/A

b. Business to Business Directory (Prince George’s County ONLY)

Ad Information

Coverage: All of PG County

Yearly fee: N/A

Ad Size: ¼ page

Renewal Date: January 1st

Contact: N/A

3. Local Cable Channels

a. Channel 79 – Local Prince George’s County station reaching all of So. PG

Ad information:

Length of ad “spot”: 60 seconds

Development cost: $150.00

Length of Campaign: 6 mos.

Runs per month: Three time per day, everyday

Cost for 6 mos.: $600.00

Total campaign cost: $750.00

b. Black Entertainment Television (BET) – reaching 600,000 homes

Ad Information:

Length of ad: “spot”: 15 seconds

Development costs: $100.00 (one time fee only)

Length of campaign: 6 mos.

Runs per month: 20 times per day, everyday

Cost for 6 mos.: $1,500.00

Total campaign cost: $1,600.00

Risk

Denetra or I could die before the business has established it systems. Planned financing may not be met in the timeframe we would like. This will postpone the Kids Studio (Lil Prince and Princess).The better the plan, the less the risk, but they need to be addressed.

Production plans

Facilities

Hue Image´…the Salon range from 1,200 to 2,000 square feet, although small spaces can be considerably smaller (fewer 1,000 square feet). We have four separate areas in our hair salon: Reception and retail, shampoo, cutting/service, and storage. The largest area is our salon services area, which is taking up 50 percent of the floor space. About 20 percent of the space is being allotted for retail/reception, 10 percent for the shampoo area, and the remaining 20 percent for storage and an employee break/lunch room area. The employee/client restroom and my office also will be located in this area as well. Our space permits us to have a one-person changing room for customers who are having treatments like colors, perms, and weave. All of our retail products are displayed in the reception area and placed near the cash register for easy access.

The shampoo area is located toward the back of the salon and is equipped with shampoo sinks (either free-standing or affixed to the wall) and chairs. Each station have a “back bar”, or cabinet, for storing products used in the salon, like shampoos, conditioners, and deep-conditioning treatments. These are the same products we sell in the retail area, and our stylists are trained to discuss each product used with the client as a way to spur sales.

Summary of Financial Needs

I. Hue Image’…the Salon is seeking a loan to increase it equity capital through real estate investment:

a. By purchasing the buildings currently being leased by the company.

b. By purchasing the parcel of land on which the buildings now stand.

II. Hue Image'…the Salon has $50,000 in cash to invest. An additional amount of $20,000 in loan funds in needed to complete the purchase.

Loan Fund Dispersal Statement

1. Dispersal of Loan Funds

Hue Image’…the Salon will utilize the anticipated loan in the amount of $500,000 to purchase the facility (land and Buildings) that it currently leases. The full purchase price is $600,000. The present owner of the premises is Kim Jones. The parcel and accompanying buildings, located 2345 Cutting Edge Avenue in Style, Maryland, are currently owned by Kim Jones.

2. Back-up Statement