Business Plan for Gentle Touch Hair and Body Salon

1.0 Executive Summary

Introduction
Gentle Touch Hair and Body Salon is a full-service beauty salon determined to
continually exceed customer expectations by providing outstanding service, high-quality
products, and a pleasant environment at an affordable price/value ratio. We will also
maintain a welcoming, fair, and creative workplace that values diversity, creativity, and
hard work.

Beauty begins here!

The timing is right for starting this new venture. Patiently searching for six months for
the perfect location, one was finally found. The demand from the owner's clients, as well
as the ambitions of the owner to one day start her own salon, and the procurement of
highly professional and qualified beauticians to support the salon, has made this business
one of great potential.

This plan includes the summary, and chapters on the company, products & services,
market focus, action plans & forecasts, management team, and financial plan.

1.1 Objectives
1. Sales grow to more than 5 million by the second year.

2. Improve turnovers of inventory.

3. Client and Employee Retention

4. Top notch customer service in town

1.2 Mission
The Gentle Touch Hair and Body Salon aims to supply services and products
that’ll enhance our clients' physical appearance and mental relaxation. It is our
mission to enhance our clients’ natural beauty from the inside out. We see
ourselves as providing avant-garde beauty and wellness services at all times.
Hence, we aim to make the everyday ordinary as extraordinary. We ensure that
 our clients have all they require to run their operations at optimal efficiency and
dependability.

1.3 Keys to Success

1. Location: providing an easily accessible location for customers.

2. Environment: providing an environment beneficial to giving relaxing and

professional service.

3. Convenience: offering clients a wide range of services in one setting, and

extended business hours.

4. Reputation: reputation of the owner and other "beauticians" as providing

superior personal service.

2.0 Company Summary

Gentle Touch Hair and Body Salon will, upon commencement of operations, sell and
operate a wide range of beauty services and products. We will provide quality hair, nail,
and skin services, along with top lines of beauty products. What will set Gentle Touch
apart from the competition is our commitment to providing all of these services in one
convenient location. The salon will be located in a retail strip mall at GJ bldg. ground
floor, in Apalit, Pampanga. The salon will utilize 143 square meter. The location is
strategically situated on one of the busiest streets in Apalit. It is a high profile area, with
easy access from all parts of town.

2.1 Company Ownership

Gentle Touch Hair and Body Salon is a LLP owned in the majority by its founder and
president, Guella Jaiana Buzon. There are six part owners, including four investors and
her two older siblings. The largest of these (in percent of ownership) are Kesia Calalo,
Kyle Buzon, and Ron David, our public relations consultant. Neither owns more than
15%, but both are active participants in management decisions.

2.3 Company History

It was in 2017 when Guella started as a massage therapist, stylist, manicurist and
hairdresser in a well-known salon named, TrendSetter in Pampanga. She works there for
almost 5 years, and later on, became owner and after seeing a need for a salon that would
offer high-quality hairdressing at a customer-friendly price, Guella established Gentle
Touch Hair and Body Salon. With the desire to share her expertise with more people, she
opened her very first salon in Apalit, Pampanga.

Balance Sheet 2018

Short-Term Assets
• Cash— ₱55,430

• Accounts receivable— ₱390,105

• Inventory— ₱641,018

• Other Short-term Assets— ₱23,000

• Total Short-term Assets— ₱1,126,441

Long-Term Assets
• Capital Assets— ₱500,000

• Accumulated Depreciation— ₱30,000

• Total Long-term Assets— ₱410,000

• Total Assets— ₱1,356,551

Debt and Equity

• Accounts Payable— ₱253,697

• Short-term Notes— ₱70,000

• Other ST Liabilities— ₱25,000

• Subtotal Short-term Liabilities— ₱348,567

• Long-term Liabilities— ₱264,866

• Total Liabilities— ₱673,749

• Paid in Capital— ₱500,000

• Retained Earnings— ₱268,140

• Earnings (over three years)— ₱347,411, ₱58,761, ₱75,652

• Total Equity— ₱562,792

• Total Debt and Equity— ₱1,346,554

Other Inputs:2017
• Payment days—30

• Sales on credit— ₱3,495,678

• Receivables turnover—9.71%

2.4 Company Locations and Facilities

We have one location—a 298 square-foot establishment located in a shopping building
conveniently close to the downtown area. The area includes, stylist booths, reception
desk, self-service coffee area, sinks to wash hair, a waiting area with TV screen, and
restrooms.

3.0 Products and Service

Gentle Touch Hair and Body Salon is considered an upscale full-service beauty salon.
We will offer a wide range of services that include:

Hair

• Cuts

• Relaxers

• Perms

• Colors

• Shampoo and Conditioning

• Curling/Straightening

• Reconstructing
Nails

• Manicures

• Pedicures

• Polish

• Sculptured nails

Skin Care

• European facials

• Body waxing

• Body Massage

3.1 Product and Service Description

In order to achieve our business plan, we will need to be skilled at what we do, provide
excellent customer service, and create a nice environment for our customers. Gentle
Touch strives to distinguish itself from other beauty salons that may only provide one or
two services. Guella has learned from her clients that they want all of the services we're
offering, but they're frustrated because they have to get their hair done in one area and
their nails done in another.

3.2 Competitive Comparison

Although hair services are the core of Gentle Touch, we want to provide our clients with
the convenience of having all of these services in one place. There are other salons
similar to ours, however they are primarily located in Apalit's and adjacent areas' more
affluent neighbourhoods. We don't want to compete with these "Day Spas," but we do
want to provide a middle ground for individuals who can't afford the high-end luxury
salons. Our business environment will be one of relaxation, where clients can unwind and
be pampered. Clients will be provided drinks as they enter the service area. In the waiting
and hair-drying areas, there will be televisions.
3.3 Sales Literature
Flyers, social marketing for advertising and organic posts, and advertising in local papers
and magazines are attached as appendices. We will also use social media to let people
know and for our salon to be known. One of our first jobs will be to rewrite our
literature's messaging to ensure that we are selling the company rather than the goods.

3.4 Sourcing
The compression between the manufacturer's price into channels and the end-ultimate
user's buying price remains as price competition grows. For pieces of equipment, our
margins are steadily decreasing. Beauty Concept Inc. is where we usually get our
products in the city of San Juan, Manila. As a result, our profit margins have shrunk from
20% five years ago to closer to 10% to 13% today. Our main-line peripherals are
following a similar trend, with prices for hair and beauty goods steadily falling. To keep
expenses as low as possible, we concentrate our purchasing with the owner of Beauty
Concept, who offers 20% off products from the warehouse in Manila in exchange for our
confidence and loyalty. We must continue to ensure that our volume provides us with
negotiation leverage. We can still earn great margins of 20 to 30% on accessories and
add-ons.

3.5 Technology
In today's fast-paced world, technology plays a significant role in how successful salon
owners run their businesses, from how they book and manage appointments to how they
motivate, engage, and measure team members, manage and order inventory,
communicate with clients and reward loyalty, and market to their various communities.
In a sense, technology acts as your personal assistant.

Technology also helps salons adapt to change more quickly, and never has that been mor
e essential that this year as salons faced lengthy shutdowns from COVID-
19 and complicated reopenings. From communicating with clients and selling curbside re
tail and gift cards when they were closed to educating team members and clients about ne
w policies and procedures as they’ve reopened, technology has assisted salons as they ha
ve had to reshape the narrative of the client experience.
3.6 Future Products & Services
As we walk through our future, we will experience, learn and be aware of things to might
have come. Gentle Touch wants to be in touch with every people who want to be
renewed, feel new, and look good. The salon will focus on its services and might change,
and improve for the future, and for people to keep coming back or having trust to the
salon.

Hair Products Body Oils & Lotion

 Nivea
 TRESemmé,  Vaseline
 L'Oréal  Shea Butter
 Kerastase’  Honey
 Revlon  Dove
 Johnson’s
 Neutrogena
Tools Beauty Products
 All-Purpose Shears
 Blow Dryer  Lancome’
 Curling Iron  Maybelline
 Razor  MAC
 Paddle Brush  Clarins
 Round Brush  Clinique
 Sectioning Clips  Chanel

4.0 Market Analysis Summary

Gentle Touch will be organized and managed in a creative and innovative fashion to
generate very high levels of customer satisfaction, and to create a working climate
conducive to a high degree of personal development and economic satisfaction for
employees. Training classes to help improve employee product knowledge and skills will
be conducted on a regular basis. As the business grows, the company will consider
offering an employee benefit package to include health and vacation benefits for
everyone.
 Strength (S) Weaknesses (W)

 Strong knowledge of
different beauty services.
 Large range of services  Relatively high price
 Extended Opening and  Limited volume of
Closing hours property
 High Hygiene Standards  Limited knowledge of
 Good accommodation some employees
 Location

Opportunities (O) Threats (T)

 Favorable economic
conditions  Unstable global economy
 Opportunity for future  Competitor expansions
expansion  Lack of tour resources
 Growth in management  Safety issues
tourism

4.1 Market Segmentation

Estimates and nonspecific definitions are allowed in the segmentation. We specialize on
small salon businesses, and finding data to determine an exact classification is difficult.
Our target companies are large enough to require the high-quality information for stock
or products management we provide, but small enough to not require a distinct
professional management team. Our target market, we say, has 5 to 20 employees and
requires 10 to twenty connect workplace or salon on a local area, but this is a broad
definition.
 4.2 Industry Analysis
According to Statista, the beauty salon sector had a market value of $66.16 billion in
2019, up $5 billion from 2017. In 2019, the market for hair and nail salons was valued at
$47 billion. According to SBDCNet, there are almost 80,000 hair salons in the United
States (including 77,000 beauty salons and 4,500 barber shops). Regis, Sport Clips,
Ratner Companies, and Premier Salons are the key players in the salon sector.

One of the most rapidly expanding divisions of the beauty industry is nail care.
Manicures and pedicures are among the services provided by these establishments.
Organizations in the nail care sector can sell nail polish and other accessories as well as
nail care supplies. In 2018, there were over 56,300 nail salons in the United States,
according to Statista. In 2018, the average salary for nail care specialists such as
manicurists and pedicurists was $25,860. The nail salon segment has a 15 percent market
share in the business.

4.2.1 Industry Participants

The target market for beauty salons spans a wide age range, from 15 to 70 years old. The
target market is frequently segmented by beauty salons based on demographic criteria. A
beauty shop, for example, can design a more targeted marketing strategy by catering to
young individuals (15 to 25), working professionals (26 to 55), or senior residents (56
and older). According to IBIS World, consumers aged 45 to 54 accounts for almost 21.4
percent of overall revenue in the beauty salon industry. People aged 34 to 45 are more
likely to spend more money on beauty services such as hairdressing, skincare, and nail
care.

 Men: Men will typically make up 70%-75% of the clientele. The reason for this is that
men have shorter hair requiring a faster, simpler job.
 Women Who Cannot Afford an Upscale Salon: Women tend to favor a female specific
upscale salon if they can afford it. There is not often a difference in quality of an upscale
salon relative to a family hair salon other than a upscale salon will tend to pamper you
more, only accepts appointments, and the facility is generally a bit plusher. Someone who
is fiscally responsible as opposed to someone who likes opulence will favor a family style
salon.
 Young Mothers With Children: Most young children are notoriously difficult when it
comes to getting haircuts. A family style salon is a more laid back place that allows the
children to play while they are waiting and then will work with the parents in calming the
kids nerves when they are ready for their shearing.

4.2.2 Distribution Patterns

Master distributors and/or brokers represent several manufacturers, who then sell the
product to direct distributors and other wholesalers. Other manufacturers allow
distributors and suppliers to buy directly from them, depending on the quantity of product
ordered. The product is subsequently distributed or sold to retail enterprises through cash
and carry wholesale outlets, as shown below. All of Gentle Touch services and products
will be dispensed from its centrally located salon.

4.2.3 Competition and Buying Patterns

Residents of Apalit frequently remark that few salons provide comprehensive services
like those offered by other. Clients have also indicated a need for a salon that not only
looks professional, but also has the expertise to back it up. Potential clients seeking a
positive salon experience expect high-quality products, a professional, clean, and luxury
environment, as well as knowledgeable employees. They are willing to pay more for such
aspects within our target market. Our service has the appearance of being an inexpensive
luxury, similar to high-quality products, which strengthens our customers' identities as
affluent, stylish individuals. Satisfied customers are, without a doubt, the most significant
aspect in a salon's success. The most effective technique for us to create a customer is
through word of mouth.

4.2.4 Main Competitors

 Direct & Indirect Competitors
The following retailers are located within a 5 mile radius of Gentle Touch, thus providing
either direct or indirect competition for customers:

Chazd Beauty Salon

Chazd’s Beauty Salon is the town’s most popular beauty salon and has been in business
for 32 years. Chazd’s offers a wide array of services that you would expect from a beauty
salon. Besides offering haircuts, Chazd’s also offers nail services such as manicures and
pedicures. In fact, over 60% of Chazd’s revenue comes from services targeted at women
outside of hair services. In addition, they do not offer its customers premium salon
products.

HAZEL SALON

Hazel Salon has been in business for 5 years. They offers an extremely high-end hair
service, with introductory prices of 120 pesos per haircut. However, they will primarily
be targeting a different customer segment from Gentle Touch, focusing on the households
with an income in the top 10% of the city.

Furthermore, Gentle Touch offers many of the services and products that Hazel Salon
offers, but at a fraction of the price, such as:

 Hair style suggestions & hair care consultation

 Hair extensions & coloring

 Premium hair products from industry leaders

4.3 Market Analysis

Target Market

Without a target market, a business would fail miserably. This is why, as part of our
business plan, we spent time mapping out and identifying our target market. Our target
market is inexhaustible. This is because there is a deluge of females and men who suit
our desired client profile. They can be found in all walks of life, which is interesting.

Here is a list of our target market; the people and organizations which our business is
designed for:

 Career women
 Career men
 Stay at home moms
 Stay at home dads
 Teenagers
 Children
 Celebrities
 Tourists

Sources of Income
Gentle Touch Salon business will generate income from the following service offerings;

 Perming
 Weaving
 Braiding
 Washing and dressing of hair
 Fixing of artificial nails
 Hair cuts
 Manicure
 pedicure

5.0 Strategy and Implementation Summary

Our primary focus on the next year is to incorporate our existing services into a full-scale
salon concept. We will leverage our skills and reputation and our highly visible new
location to increase our client base with more extensive marketing campaigns on the
benefits of people going to salon.

We will continue to provide great service and will track our sales and marketing goals as
we go. We will work with our independent stylists to ensure a consistent level of quality
and customer service at Gentle Touch. We will train them in some of the cosmetic forms
of hair treatments, such as extensions, to incorporate some of that business into the
“salon” portion of the business, further de-stigmatizing it.
5.1 Marketing Strategy
The marketing strategy is at the heart of the whole plan:

1. Brand Consistency

2. Create a relationship-based business.

3. Organize family month- where families can come and have a hair makeover.

4. Making use of referrals and recommendation

5.1.2 Pricing Strategy

We understand the necessity of breaking into the market by lowering our prices to appeal
to everyone, which is why we talked with experts who have provided us with the best
advice on how to do so and effectively get more clients shortly. Our pricing strategy will
be based on what is available in the industry; we do not intend to charge more (except for
premium and bespoke services) or less than what other competitors are offering.

Regardless, we have plans in place to provide discounts on occasion and to thank our
loyal customers, particularly when they refer clients to us. Our products will be priced
similarly to those available elsewhere. Our hair services range in price from $10.00 to
$50.00 each service done on average. Keep in mind that this is dependent on the type of
service provided.

Our Unique Selling Point; What Makes Our Hair Salon Unique to Our
Competitions
We do not want to go with the crowd and offer only the things they do, this is why we
have added some extra things to the pack. This way we will be more endearing to our
clients. Here they are:
 Our unique selling point is hinged on the fact that every client leaves with a smile
on their face there is a nanny attached to a kid per time.
 There is a freebie for our clients at all times
 Our Pricing is moderate
 There is a side attraction for clients whenever they come to our hair salon.
5.1.3 Promotion Strategy
Cost Effective Ways We Intend to advertise/ Promote Our Hair Salon Business
without Using the Internet
Here are the platforms we intend leveraging on when it comes to advertising and
promoting our hair salon in the market place;

 Place adverts on Newspapers / Magazines

 Distribute our fliers and handbills to targeted areas and offices from time to time
 Send out introductory letters to corporate organizations and households within our
target market locations.
 Ensures that our employees wear our branded shirts at all times during working
hours

Affordable Ways We Intend to advertise/ Promote Our Hair Salon Business

The number of clients that can be gained online cannot be over-flogged. This is because
of the huge followership which the internet has. It is for these reasons that we too would
want to plug into the goodies that this technology has got to offer. Here are the ways we
intend leveraging on the internet to advertise / promote our day care services:

 Leverage on social media platforms such as the instagram- by uploading pictures

of the latest hair styles we offer
 Start a facebook page where our services are displayed.
 Start a website and make it really attractive and interactive.
 Offer freebies through the social media platforms.

Creative Marketing Ideas Specific to Our Hair Salons

There will always be the need to be creative at all times. This is so that our hair salon
business will continue to grow and we will be relevant in the industry. Hence, these are
some of the marketing ideas and strategies that we will adopt for our day care:

 Direct Marketing- word of mouth

 Making use of referrals and recommendation
 Leverage on Online Marketing
 Revenue Sharing Business Partners
 Organize family month- where families can come and have a hair makeover
5.2 Sales Strategy
 We aim to achieve a sustainable growth at the rate of 15% annual sales growth
 Make sure that every client that visits our hair salon leaves with optimum
satisfaction.
 We intend to attract both male and female from all walks of life be a part of our
clientele base.
 We have set the goal to consciously increase our clientele base by 30% in the next
5 years and then 25% annually.
 We have set the goal to consciously increase our clientele base by 30% in the next
5 years and then 25% annually.

5.2.1 Sales Forecast

It's vital to note that our sales projection is based on data collected during our feasibility
studies as well as some assumptions that are easily available on the ground. We provide
hair services to approximately 50 clients per day and 350 people per week.

Then 1,500 people in a month, and 20,000 people in the first year. Apart from male and
female hair treatments, our expanded manicure and pedicure services will also contribute
to increased revenue. The sales prediction for Gentle Touch Salon is shown below, and it
is based on our business's location as well as the services and products we will be
providing.

 First Year-: ₱50,000

 Second Year: ₱90,000
 Third Year-: ₱130,000

Note: This projection is done based on what is obtainable in the industry and with the
assumption that there won’t be any salon offering same additional services within 4.5
miles radius from our salon.

5.2.2 Startup Summary

Starting a hair salon business can be cost-effective because you are unlikely to need to
purchase any expensive equipments or equipment. Basically, you should be concerned
about the cost of securing a basic salon location in a decent and busy business district, the
cost of furnishing and equipping tools and equipments, the cost of paying bills,
promoting the firm, and obtaining the necessary business licenses and certifications.
Leasehold improvements will amount to approximately $32,500, and salon equipment
will cost about $27,000. The owner will invest $500 for cash-on-hand at starting date.