"Trendsetters Glamorama" Beauty Salon Business Plan | Free Essay Example

“Trendsetters Glamorama” Beauty Salon Business Plan

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Topic: Business & Economics
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Executive Summary

Trendsetters Glamorama is a proposed full-service salon and day spa with an upscale and therapeutic atmosphere for a premium price. The business will open its first location in the suburbs of Houston, Texas, in the spring of 2017. It will start with a single business in this location. The business will be dedicated to the provision of the highest quality services to the most discerning client.

The company’s focus will be the provision of beauty services in the area, with plans to expand to the surrounding states. However, it wishes to spread its operations later to the national level. The company’s focus will not only be on glamour and beauty, but also educating clients on healthy hair, skin, and nails with a whole-person approach to inner beauty and tranquility.

Apart from offering the above services, Trendsetters Glamorama will also use and sell only-top-of-the-line beauty products. The provision of these products will most definitely place it above competitors in Houston who mostly provide the services without attendant products. The company will operate as a Limited Liability Corporation (LLC) with plans of incorporating and expanding as needs dictate. The housing of this installation will be crucial just as it is for the case of its location.

The salon will be housed in a state-of-the-art 5,000 square feet retail shopping center. This bazaar will also be located in a prime area of Houston. To ensure adequate competitiveness, Trendsetters Glamorama will have operating hours that are suitable for targeted clients. The salon will work from Monday through Wednesday at 6 am–10 pm. Since most of the targeted clients are free during weekends, the salon will also operate on a 24-hour basis from Thursday through Saturday. However, it will remain closed on Sundays.

The target clients include professional women, the working diva, stressed moms, and any person who might like to experience “World Class Service” and be “Red Carpet” ready. The client will be the most important stakeholder in this institution. He or she will have the opportunity to experience an array of professional beauty services that range from a simple wash and blow-dry to a full-scale makeover, facials, body treatment, and massages.

In addition to the above services, the clients will also have the option of complimentary beverages and snacks. The staff members who are to provide the services for the clients will be selected based on experience and qualification.

The industry that the company will operate in is the beauty and cosmetic industry. Competitors will include people who are already operating here. The following is the analysis of this industry, its target customers, competitors, and its products and services. The paper also formulates a marketing plan, a management plan, location, and financial plans.

Business Idea

Since I will spend one day like to be a salon owner, the business idea that I will base my business plan on is a salon. I would like to establish a full-service salon. I will be operating it from a storefront location, but in addition to that, I will also offer mobile salon services. I will not only focus on beauty, but I will educate my clients on maintaining healthy hair, skin, and nails.

Company Description

Trendsetters Glamorama will be a full-service salon and day spa with an upscale and therapeutic atmosphere for a premium price. Since this implies a high price, the business will have quality as its key business strategies so that it can capture clients who expect premium services. Opening its first location in the suburbs of Houston, Texas, specifically at Washington Avenue/Memorial Park in the spring of 2017, Trendsetters Glamorama will be dedicated to providing the highest quality services to the most discerning client.

While our focus will not only be about glamour and beauty, we will be educating the client on healthy hair, skin, and nails with a whole person approach on inner beauty and tranquility. We will also use and sell only top of the line beauty products.

So far, we have managed to do the groundwork, such as determining the specific business location. We have also made, so efforts to inform our friends verbally and on phones about the coming business. This salon will be superior to other salons in Houston because of its unique approach to catering to the client. In addition, its high-quality services will differentiate it from the rest.

Trendsetters Glamorama will be operating as a Limited Liability Corporation (LLC) with plans of incorporating and expanding as needs dictate. The salon will be housed in state of the art, 5,000 square feet retail shopping center. Trendsetters Glamorama will have very competitive operating hours. Monday through Wednesday hours will be from 6 am – 10 pm and Thursday through Saturday will be open 24 hours and closed on Sundays.

Trendsetters Glamorama realizes that each client has a unique schedule and preferences, but the majority of clients love to be beautified toward the end of the week. This finding reveals why we chose to cater to demand with 24-hour services on Thursdays, Fridays, and Saturdays.

However, on Sundays, the business will run from am to midnight to capture clients who would have probably not had time the previous days and ones who would wish to begin their week with their hairs well made. Therefore, Sunday will be the best for this category of people.

Trendsetters Glamorama’s target market is professional women, the working diva, stressed moms, and any person who would like to experience “World Class Service” and be “Red Carpet” ready. Our clients will have the opportunity to experience an array of professional beauty services that range from a simple wash and blow-dry to a full scale makeover, facials, body treatment, and massages. We will also provide complimentary beverages and snacks.

Besides our atmosphere and years of experience, one distinct advantage our salon will have is the availability of a staffed and licensed daycare for our customers while they are being pampered and beautified. Since the business is expected to grow significantly, it will later introduce mobile salon services to its elderly clientele. However, this introduction will be based on whether we will have instances of such people demanding our services since most of them do not prefer salon services.

The Industry, Target Customers, and Competitors

Beauty Industry

The industry in which the business will operate in is the beauty and cosmetic industry. This industry is a strong one in the United States. Many other institutions operate within the same industry. Some individuals have placed the salon business in the beauty industry. Their reasons include the returns of the services that are provided in the institutions.

The many salons that operate in this industry offer a variety of services to their clients. The industry is performing very well. In fact, organizations that have been established here have reported massive profits over the last few years.

Companies that offer leisure services mainly dominate the industry. The global economic crisis may have affected the beauty industry significantly. However, with the measures put in place, the economy has improved to the extent that people have more money to spend in this part of the economy. The freedoms enjoyed in the US have also contributed to the industry. Clients use this industry as a means of expression. The service industry within which this sub-industry is positioned is a lucrative one.

Most successful organizations have operated from the place. The major companies that operate within this industry have ensured the provision of services to their clients in a friendly manner. The beauty and cosmetic industry play an important role in the US economy, thus contributing significantly to the country’s GDP.

This industry has employed thousands of individuals. The proposed business will contribute to the employment of more employees. As a result, it will create employment for the unemployed in the country and state. The industry was selected based on its growth potential, diversity, and ease of investment.

Target Customers

The targeted customers include women in general, who are the main buyers of services in the target industry. Apart from this target group of customers, the company will target busy women, corporate women, and other individuals who are unable to seek beauty service during conventional times. Most women in the business world have a desire to look beautiful and still manage to perform their corporate roles. Trendsetters Glamorama will ensure that these clients have the best services in the form of beauty services at their own convenience.

The United States clients have demonstrated a preference for beauty services. The demand for these services is driven by the improved economic performance of this region. The characteristics of the targeted customers include women who are working and are unable to seek beauty services at common times.

Trendsetters Glamorama targets to offer services to employees of large organizations where companies contract the business to seek beauty services for their employees. By offering services on weekends, the company will attract people who are largely working during weekdays.

The characteristics of customers that are targeted by this company also include their ability to pay for the services offered. The company targets high-end customers. It will use this level as a baseline in its service delivery. Just like most organizations, this business is focused on profit generation, and hence, the reason for the high pricing of the rendered services. The company will focus on marketing itself to corporate women as the best for their class.

In the state of Texas, where Trendsetters Glamorama is to be located, there is a high demand for beauty services among women. Most of the available competitors offer services to the general population. Few of them offer premium services. By targeting the high-end market, Trendsetters Glamorama will ensure that it stays on top of the competition while at the same time recording a high-profit margin.

Competitor Analysis

Competitors

The existence of competitors for an organization is important since it keeps the organization on toes when it comes to looking for ways of remaining on top of the competition. Trendsetters Glamorama has few competitors in Texas. The existing companies are Body Envy Houston, SOK Salon, Hot Tops, Taura, Se’Bon Hair, and Delacour Hair.

These companies serve a number of customers. Most of them offer a variety of services that are different from those offered by Trendsetters Glamorama. Although these businesses are the largest of the competitors, many other smaller salons have a well-defined clientele. The competition will be significant for these companies. The first few years are expected to be the most competitive.

Body Envy Houston, which is one of the largest competitors, operates a number of beauty outlets in Houston. This business will be the main competitor that will offer stiff competition to a new company. This company also targets the corporate women using the strong brand name that it has built over time to attract these customers.

On the other hand, SOK Salon operates small salons in Houston, with the target customers being different from those of Trendsetters Glamorama. This salon offers its services to a wide variety of clientele. It uses pricing as the main strategy in competition. Its services are low-priced, thus attracting many of the clients in the areas where the salons are located.

Hot Tops is another salon that is located in Houston. It will also offer competition to Trendsetters Glamorama. Focusing on the high-end market for Trendsetters Glamorama will make it compete against this company. Most of the smaller salons in Houston are dependent on their loyal customers, thus providing their services to these customers at their preferred rate and convenience. Trendsetters Glamorama can offset this competition through the provision of the targeted high-end pricing.

Competitive Advantage

Trendsetters Glamorama’s competitive advantage is in its ability to offer services to the defined target customers. Unlike most of the salons in Houston, Trendsetters Glamorama targets to offer services for a distinct group of women in the corporate world. Few of the available salons offer these services. Hence, the company will win the competition along this line.

Pricing is another factor in any competition. Companies can use their prices to their advantage. When organizations set low prices for their goods or services, they are able to attract a large number of customers since most of them can afford these products and services. However, these types of companies are forced to cut on their profits since they offer large volumes of goods or services at a cheaper rate and lower profit margins.

Trendsetters Glamorama will offer the services at a relatively higher rate in relation to the other salons, thus providing an array of services to the corporate women.

The premium services that will be offered will also be unique, with the company providing a variety of goods and services in the industry. The other competitive advantage that the company will use is the promotion of extra services in addition to the offered hair and beauty services. Trendsetters Glamorama will offer a variety of services to women who seek services from this company.

Products and Services

Trendsetters Glamorama will be dedicated towards the provision of the highest quality services to the most discerning clients. This company will focus on the provision of services that make women more presentable while incorporating the latest in the field of beauty and fashion. Clients will be assured of the latest fashion where they can afford to choose the latest form of designs.

The focus of the company will not only be on glamour and beauty. The other role will be educating the clients on healthy hair, skin, and nails with a whole-person approach to inner beauty and tranquility.

In most of the salons that are located in Houston and its environs, the main practice is the provision of beauty services without education on how to maintain healthy skin. These businesses do not also train clients on how they can maintain a beautiful body on their own without major chemical interventions.

Trendsetters Glamorama will train patients on this and many other interventions that they can make to keep their hair and skin healthy. Apart from offering the above services, Trendsetters Glamorama will also use and sell only top-of-the-line beauty products. The provision of these products will most definitely place it above its competitors in Houston who mostly provide the services without attendant products.

Customers will be advised on the best products for their various needs. They will be provided with additional information on how to use each of the products.

They will also be educated on the effects of the various chemicals in use at such installations, thus ensuring that they are able to use them safely without inflicting any self-harm. Therefore, the salon will also serve as an outlet for beauty products. These are in high demand for these services. As a result, clients who seek services here can also get an opportunity to use the products at the same place.

Marketing Plan

Marketing is the most crucial part, especially the early stages of the new organization. It will require a mixture of many practices. In any organization that plans to put up a successful marketing campaign, there is a need for a working marketing plan. This section provides the marketing plan that may be applied in the company.

Marketing Objectives

Every marketing plan needs objectives. The objectives of the developed marketing plan include promoting the company and/or increasing awareness of the general population on the existence of its operations. The other objective is to increase the number of customers who visit the company each day. There is a need to advertise the services that are offered at the organization. Hence, the other objects will be to increase customer knowledge of the goods and services that are available at Trendsetters Glamorama.

Targeting and Positioning

The marketing campaign will target the female professionals that the company hopes to attract as clientele. The approaches used in the marketing campaign will reflect the targeted group of people.

The company’s marketing plan will also target the busy professionals who work in large organizations together with those who work in other areas and are interested in beauty and cosmetics. The company will target the area of Houston and the state of Texas in the first few years. However, it will only target other areas of the country after expanding to the other states.

The area of Texas that Houston is located in is densely populated. Many corporate women and other individuals in this place require the services being offered. The marketing plan will seek to ensure that the population is aware of the services that are offered at Trendsetters Glamorama. Many women in the area of Houston work in the companies around here. However, these companies will most likely exhibit a high demand for the services that are offered at the company.

Market Penetration

The location of the store that will house the salon is important since it will dictate the visibility of this store. A more visible and appealing store will be a major attraction for the target audience. This case will contribute to profitability for the organization. In the first few years after the start of operations, Trendsetters Glamorama will operate in one of the 5000 square feet retail shopping centers in Houston. This location will be enough to allow a large number of customers. It will create a room for the various services being provided in this business.

Pricing Strategy

As stated earlier, the company will use pricing as a major strategy to promote itself as the best option for the Houston inhabitants. The company will offer its goods and services at a premium price. The strategy is expected to attract corporate women that work around the area. The products available at the salon will be provided at an appropriate price to customers, with those attending the salon receiving goods at a lower price.

Marketing Mix

Different modes of marking will be employed in the company. The main advertisements will be printed on paid adverts, which will be in magazines and newspapers. The company will also use billboards for advertising itself while at the same time popularizing the goods and services that it offers. Television is a major marketing tool. This organization will put up adverts in the local television stations to ensure that the public is aware of the products and services provided in the organization.

The company will hire vehicles that are specifically created for marketing. It will use them to spread the word on the new company. Apart from the use of television in broadcast, the radio is another important tool in marketing. The company will utilize it in the marketing plan.

A program will also be created where the most frequent clients will be awarded special gifts as a form of appreciation. The internet is rapidly growing as a tool for marketing. Trendsetters Glamorama will operate a website where individuals can make appointments or confirm the events and the services offered at the institution.

Management Plan

The company will have a management plan that allows room for rapid growth. In the initial years of operations, the company will be directly managed, with the owner being the Chief executive officer. The manager will be responsible for the operations in the company.

The responsibilities of the CEO will include the control of the overall functions of the organization, including the financial analysis of the company. The performance of this company will also be under review from the CEO. The manager will be responsible for the daily operations within the company where he or she will provide administrative functions to the company.

The company will have several departments for easy management. The department that will be important at the start of the company is the marketing department, which will be responsible for popularizing the company. The department will be responsible for the implementation of the marketing plan that is highlighted earlier. The other department that will be formed is the human resource department that will be responsible for the employment and motivation of staff.

The company will require highly qualified and active staff members. This department will oversee the implementation of this activity. The finance department will be responsible for the company’s financial performance. A manager will run each of these departments. This staff member will oversee the execution of plans for the respective departments.

Location Plan

The company will be strategically located in Houston, Texas. The location will be close to the target clients. The company’s strategy is to operate in a location that is open to corporate women and presentable enough to allow easier marketing. The company will target a population that is mainly between 18-50 years.

Houston is a place to find this generation of women. Hence, the company will be located close to the central business district, where there are many companies with women working in them. The location will also target customers who spend most of their time in the central business district.

The site that is selected for the company should be accessible to the clients on foot together with those who have their cars since there is available parking. Therefore, the building will also house secure parking for its customers, with most of them being expected to drive here. The building should be within sight from the town to enable easy access for the clients. The neighbors of the organization need to be well chosen. The company should be far from the competition, but within areas that are busy enough to guarantee successful operations.

The companies that should be in the neighborhood of this corporation should be synergistic to it to provide the resources that are needed to operate the business. Such a neighbor will also provide customers to the organization. The plan is to house the salon in a state-of-the-art, 5,000 square feet retail shopping center. This building will have adequate parking and a host of other businesses within it.

Financial Plan

Trendsetters Glamorama needs a well-defined financial plan to ensure that it succeeds. This section contains the unit economics of Trendsetters Glamorama’s first store that will open in Houston. The company targets to serve about 100 customers in a day for this first store, which is about 50% of the daily 200 customers who are targeted in the first year of operations. The number is expected to have stabilized over the next three years.

Hence, the company should be recording the targeted profitability by the third year. The company will source its funds from investors and savings. It will get $500, 000 from investors and $200, 0000 from savings. An estimate of the earnings per customer is about 80 dollars. This figure is the average expected payment of services. Therefore, the company will make about $8000 a day, with a monthly return of $240,000 dollars at the peak of its operations.

The operating expense will increase as the company grows and opens more branches in Houston and other parts of Texas. The amount of money that will be used to popularize Trendsetters Glamorama is $10,000 for the first year, which will mainly go towards the implementation of the marketing plan. Trendsetters Glamorama will have full-time employees. Hence, the company will also spend significant sums of money on the employees’ salaries and wages.

The estimated value of the salaries and wages for the first year of operations is $100,000, which will pay the founder, the general manager, and the other staff members. The company will be housed in a rented store for the first year.

Hence, the rent will also contribute to operating expenses. This expenditure is estimated at $50, 000 for the first year. The overhead costs will also be important for the company, including the payment of electrical bills. The sum of money to be used for all the overhead costs is about $20,000 for this first year.