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MAN3147 Business Plan
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MAN3147 Business Plan
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Course Code: MAN3147
University: University Of Surrey
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Country: United Kingdom
Question:
Write a report on quality services.
Answer:
Style n’ smile is a beauty salon that provides all the salon services by satisfying its customer through quality services, friendly environment in lower prices. In addition to this, it will also establish a fair, friendly, as well as innovative environment by keeping in mind the ideas, hard work and diversity.
The mission of the salon is to supply those products and services that will help in relaxing the mind of customer’s as well physical appearance at the same time. Besides this, the motive of salon is to provide the trending services. After taking the time of six month, salon is able to find the good location. After finding this, it is right time to start the new venture. The dream of owner to start the salon in future by serving as high profession has h the dream true by opening this salon.
Mohamed, who is co-owner with Ahmed worked in a well-known and renowned salon which is on larger scale in Dubai, UAE. Due to working for last two year, Mohamed has good contact with various clients. It is also known for the dedication and hard work. Mohamed as well as hard working team of beauticians has made the venture successful. In future, the salon is expecting the growth by connecting with new clients as well as by getting the support of beauticians. Therefore, in order to achieve this objective, salon is going the seek the loan for financing. Further, the loan will be paid through cash flows of the business backed by the experience, characters as well as guarantees.
Key of success
The reasons of success of business is as follows-
Environment- ensuring the customers great service with relaxing and positive environment at salon. It also ensures the professional service to its customers.
Location- Salon is located at the easy accessible location for the customers.
Reputation- Due to its best services by the staff and reputation of owner, it is achieving great success.
Wide variety of products and services- Offering the customers wide range of services in affordable prices.
Company
Style n’ Smiles offers the wide range of products as well as services related to beauty. It also provides the nail and skin services, improvement in hair quality besides proving the best beauty products. Style n’ smile believes that its commitment in providing wider range of services at best location is the reason that keeps it apart from the competitors. The salon will be located in Dubai mall which will include the 1,540 square feet of space. It has chosen the best location in the Dubai which is one of the busiest mall. In addition to this, it is accessible across almost part of town.
Start-up
After the research of too many months for purchasing of salon, owner decided to initiate the idea of salon in ground. For this, start-up capital will be used in improving the condition, purchasing the equipment of salon as well as for design. The leasehold improvement was estimated approximately AED119, 06000, and the cost for equipment will cost approximately AED99, 360. In addition, the owner will also invest the cash of AED840 at starting.
Start-up Expenses
Rent deposit
AED 6,687
Other
AED 0
TOTAL START-UP EXPENSES
AED 6,687
Start-up Assets
Cash Required
AED 1,840
Other Current Assets
AED 2,208
Long-term Assets
AED 218,960
TOTAL ASSETS
AED 223,008
Total Requirements
AED 229,695
START-UP FUNDING
Start-up Expenses to Fund
AED 6,687
Start-up Assets to Fund
AED 223,008
TOTAL FUNDING REQUIRED
AED 229,695
Assets
Non-cash Assets from Start-up
AED 221,168
Cash Requirements from Start-up
AED 1,840
Additional Cash Raised
AED 0
Cash Balance on Starting Date
AED 1,840
TOTAL ASSETS
AED 223,008
Liabilities and Capital
Liabilities
Current Borrowing
AED 0
Long-term Liabilities
AED 227,854
Accounts Payable (Outstanding Bills)
AED 0
Other Current Liabilities (interest-free)
AED 0
TOTAL LIABILITIES
AED 227,854
Capital
Planned Investment
Owner
AED 1,840
Investor
AED 0
Additional Investment Requirement
AED 0
TOTAL PLANNED INVESTMENT
AED 1,840
Loss at Start-up (Start-up Expenses)
(AED 6,687)
TOTAL CAPITAL
(AED 4,846)
TOTAL CAPITAL AND LIABILITIES
AED 223,008
Total Funding
AED 229,695
Products and Services
Style n’ smiles offers the wide arrange of products and services that includes the:
Hair- In this, it will provide the cutting, colors, perms, shampoo, relaxer, conditioning, reconstructing, curling as well as waving.
Nails-in this, it includes polish, pedicure, manicures and sculptured mails.
Skin care- it includes the Body waxing, European facials as well as massage.
Strategy and implementation
Innovative services, better customer service and friendly environment at salon is necessary for implementing the business plan.
Competitive edge
In order to set the salon apart from other salons who only offers some of the products and services, it has decided to offer the wider range of products and services. Due to the experience of Mohamed in other salon, it interpreted that clients remain frustrated due to availing of one service from other and other service from another. They have to go to one salon for nail and other salon for hair. Therefore, Style n’ smiles has decided to offer all the services at one place so that customer feel delighted.
There are several other salons like our salon but they are situated in high income areas of Dubai. We are not aiming to compete with those. The desire is only to offer those services to customers who cannot afford to avail those luxury service. For fulfilling’s this aim, our environment of salon will be so much relaxing. In addition to this, soft drinks will be offered to the clients. Televisions will also be there in the salon in the waiting area.
Marketing strategy
Style n’ smiles salon marketing mix is too simple. It is just satisfying the customers by using best marketing tools. It is simple whenever any client will leave the business by satisfaction, it will definitely recommend it to everyone by our quality. Most of the clients are the referrals from our current clients.
There is no such advertising campaign. We have done lot of research and it is founded that word of mouth is the best method to so publicity of the business. However, we will offer some special offers in a week. In addition, we will also give the discount to those clients who will approach clients. A lottery system is also planned in which we will offer a trip. For getting lottery, client will offer a client and we will put a card in a box in the name of each client person will bring. In this way, there will be more chances of lottery if they will bring more clients.
Sales forecasting
The charts and tables that are presented below will show our projected sales. We are expecting to increase the flow of income in the upcoming three years due to its quality services. Some revenues are also expected in the second year. We do not list any direct cost for services. As the service cost are already tracked in the regular monthly expenses.
SALES FORECAST
YEAR 1
YEAR 2
YEAR 3
Sales
Owner
AED 182,528
AED 209,907
AED 241,761
Stylist #1
AED 182,528
AED 209,907
AED 241,761
Barber #1
AED 61,824
AED 71,097
AED 81,762
Stylist #2
AED 83,904
AED 94,288
AED 108,431
Stylist #3
AED 0
AED 80,960
AED 88,320
Nails and massage
AED 66,240
AED 73,600
AED 80,960
Product sales
AED 35,328
AED 36,800
AED 40,480
TOTAL SALES
AED 612,352
AED 776,560
AED 883,108
Direct Cost of Sales
Year 1
Year 2
Year 3
Product Costs
AED 15,897
AED 15,824
AED 16,192
Other
AED 0
AED 0
AED 0
Subtotal Direct Cost of Sales
AED 15,897
AED 15,824
AED 16,192
Milestones
Charts and tables of milestones show the specific detail regarding all the program activities that will take place in the whole year. Each activity has its starting date, manager, ending date as well as allocated budget. After the completion of the activity, proper check will be done regarding the completion of work.
MILESTONES
Milestone
Start Date
End Date
Budget
Manager
Department
Sample Milestones
1/4/2018
1/4/2018
AED 0
AHMED
Department
Finish Business Plan
8/20/2018
9/19/2018
AED 368
MONA
Boss
Acquire Financing
8/30/2018
10/19/2018
AED 736
ZAHRAA
Legumes
Ah HA! Event
9/9/2019
9/14/2018
AED 220
MARYAIM
Bosses
Ah Merde Alors! Event
10/9/2018
10/14/2018
AED 920
MARYA
Marketer
Grande Opening
10/19/2018
10/24/2018
AED 1840
MOHAMED
Nobs
Marketing Program Starts
9/19/2018
10/14/2018
AED 3680
GAWAHER
Marketers
Plan vs. Actual Review
2/14/2019
2/21/2019
AED 0
VALLERY
Planner
First Break-even Month
6/18/2019
7/18/2019
AED 0
ALLAN
Sales
Hire Employees
5/17/2019
6/16/2019
AED 552
ASHRAF
HRM
Upgrade Business Plan Pro
8/5/2019
8/7/2019
AED 368
AMONA
Bossies
Totals
AED 8,685
Management
Style n’ Smiles salon will be managed and systematized in very innovative as well as creative way in order to maximize the customer’s satisfaction. In addition, it uses innovative fashion to creative such working climate which also economically satisfy the employees.
Training is also an important element in the salon. Various training programs are conducted to improve the skills of employees on regular basis. When the business grows, company will offer the various benefits and packages of vacations and health for each one.
Personnel Plan
It includes the receptionist who will politely handle the customers as well as take the payment of services and products they avail. There will be one barber, five to six stylists for hair, one facialist, one nail technician, and one or two massage therapist. Among all, receptionist work will be to contact the customers and it is something commission based work based on the revenue that salon will get. The future plan is to hire the shampoo technician whenever the business will grow.
In the initial year, assumptions are of a barber, three hair stylist, part time facial, nail and massage technician till the business get a high reputation for attracting others to work in salon.
PERSONNEL PLAN
YEAR 1
YEAR 2
YEAR 3
Owner (Stylist)
AED 88,320
AED 92,000
AED 95,680
Receptionist
AED 52,992
AED 55,642
AED 58,424
Shampoo Tech
AED 29,440
AED 45,632
AED 47,840
TOTAL PEOPLE
3
3
3
Total Payroll
AED 170,752
AED 193,274
AED 201,944
Financial plan
In the first month, our salon objective is to earn some profit. The important thing is that salon is not required to wait for long since the stylist already has some clients in their list. For assuring the financial stability of owner, financial statement is surrounded which includes the dividend income as well income from investments (AED 10,451), commission income (AED 55,200), and salary (AED 109, 141).
Important assumptions
All the financials enclosed have various assumptions:
Revenue is estimated to increase 15% annually by increment of 20% in November as well as December due to jump in revenue in this year. We are also anticipating the increase to continue grow through the coming years due to increase in the new clients at salon. The estimation for growth and revenue are decided intentionally low whereas estimated expenses are inflated high in order to show the worst case.
We do not use the “cost of goods sold” in doing the calculation of net service sales. However, it will include the frequent expenses like supplies, payroll in the area of operating expenses (profit and loss table).
Sales of product are at minimal in our market. Salon is not sure regarding the money that will be receive from products so we have took estimation of low ball approach by estimating the sales of AED2,944 per month. In the projected sales table, Services reading massage and nail are included. We are also not sure regarding the revenue that this revenue will generate. Therefore, the estimation of revenue from these services are estimated at AED 5,520 per month in the initial year.
GENERAL ASSUMPTIONS
YEAR 1
YEAR 2
YEAR 3
Plan Month
1
2
3
Current Interest Rate
10.00%
10.00%
10.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
Tax Rate
30.00%
30.00%
30.00%
Other
0
0
0
Projected cash flow
Our salon is expecting the management of cash flow In the next three by growing the cash flow of business. The salon business will generate the enough cash flow that covers the expenses.
PRO FORMA CASH FLOW
YEAR 1
YEAR 2
YEAR 3
Cash Received
Cash from Operations
Cash Sales
AED 612,352
AED 776,560
AED 883,108
SUBTOTAL CASH FROM OPERATIONS
AED 612,352
AED 776,560
AED 883,108
Additional Cash Received
Sales Tax, VAT, HST/GST Received
AED 0
AED 0
AED 0
New Current Borrowing
AED 0
AED 0
AED 0
New Other Liabilities (interest-free)
AED 0
AED 0
AED 0
New Long-term Liabilities
AED 0
AED 0
AED 0
Sales of Other Current Assets
AED 0
AED 0
AED 0
Sales of Long-term Assets
AED 0
AED 0
AED 0
New Investment Received
AED 0
AED 0
AED 0
SUBTOTAL CASH RECEIVED
AED 612,352
AED 776,560
AED 883,108
Expenditures
Year 1
Year 2
Year 3
Expenditures from Operations
Cash Spending
AED 170,752
AED 193,273
AED 201,943
Bill Payments
AED 366,307
AED 473,726
AED 542,008
SUBTOTAL SPENT ON OPERATIONS
AED 537,059
AED 667,000
AED 743,952
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
AED 0
AED 0
AED 0
Principal Repayment of Current Borrowing
AED 0
AED 0
AED 0
Other Liabilities Principal Repayment
AED 0
AED 0
AED 0
Long-term Liabilities Principal Repayment
AED 44,160
AED 44,160
AED 44,160
Purchase Other Current Assets
AED 0
AED 0
AED 0
Purchase Long-term Assets
AED 0
AED 0
AED 0
Dividends
AED 0
AED 0
AED 0
SUBTOTAL CASH SPENT
AED 581,219
AED 711,160
AED 788,112
Net Cash Flow
AED 31,132
AED 65,400
AED 94,995
Cash Balance
AED 32,972
AED 98,377
AED 193,372
Break even analysis
The break-even analysis depicts that Style N’ Smiles has enough balance of fixed costs as well as well good sales in order to grow. This calculation focuses on the service sales as well as excludes cost related to the sales of products. Our salon has forecasted that the salon will pass the breakeven analysis in the initial year but we are expecting the actual sales a bit higher.
BREAK-EVEN ANALYSIS
Monthly Revenue Break-even
AED 47,821
Assumptions:
Average Percent Variable Cost
3%
Estimated Monthly Fixed Cost
AED 46,577
Projected Profit and Loss
The table showed below shows the profit and loss for the coming three years. Therefore, table includes all the payment for contracted stylist independent, supply expenses recurring regularly, as well as expenses of technicians.
PRO FORMA PROFIT AND LOSS
YEAR 1
YEAR 2
YEAR 3
Sales
AED 612,352
AED 776,560
AED 883,108
Direct Cost of Sales
AED 15,897
AED 15,824
AED 16,192
Other Costs of Sales
$0
$0
$0
TOTAL COST OF SALES
AED 15,897
AED 15,824
AED 16,192
Gross Margin
AED 596,454
AED 760,736
AED 866,916
Gross Margin %
97.40%
97.96%
98.17%
Expenses
Payroll
AED 170,752
AED 193,273
AED 201,943
Marketing/Promotion
AED 83,904
AED 88,320
AED 95,680
Depreciation
AED 29,977
AED 29,977
AED 29,977
Rent
AED 83,904
AED 83,904
AED 83,904
Utilities
AED 15,456
AED 15,456
AED 15,456
Insurance
AED 4,416
AED 4,416
AED 4,416
Payroll Taxes
AED 0
AED 0
AED 0
Independently contracted stylists
AED 148,672
AED 202,400
AED 253,920
Supplies
AED 22,080
AED 22,080
AED 22,080
Other
AED 0
AED 0
AED 0
Total Operating Expenses
AED 558,940
AED 639,606
AED 707,156
Profit Before Interest and Taxes
AED 37,513
AED 121,130
AED 159,759
EBITDA
AED 67,491
AED 151,108
AED 189,737
Interest Expense
AED 20,394
AED 16,162
AED 11,746
Taxes Incurred
AED 5,137
AED 31,489
AED 44,402
Net Profit
AED 11,985
AED 73,478
AED 103,610
Net Profit/Sales
1.96%
9.46%
11.73%
Projected Balance Sheet
As shown in the balance sheet, salon is expecting the healthy growth.
PRO FORMA BALANCE SHEET
YEAR 1
YEAR 2
YEAR 3
Assets
Current Assets
Cash
AED 32,973
AED 98,377
AED 193,372
Other Current Assets
AED 2,208
AED 2,208
AED 2,208
TOTAL CURRENT ASSETS
AED 35,180
AED 100,585
AED 195,580
Long-term Assets
Long-term Assets
AED 218,960
AED 218,960
AED 218,960
Accumulated Depreciation
AED 29,977
AED 59,954
AED 89,931
TOTAL LONG-TERM ASSETS
AED 188,983
AED 159,005
AED 129,028
TOTAL ASSETS
AED 224,163
AED 259,591
AED 324,609
Liabilities and Capital
Year 1
Year 2
Year 3
Current Liabilities
Accounts Payable
AED 33,330
AED 39,438
AED 45,006
Current Borrowing
AED 0
AED 0
AED 0
Other Current Liabilities
AED 0
AED 0
AED 0
SUBTOTAL CURRENT LIABILITIES
AED 33,330
AED 39,438
AED 45,006
Long-term Liabilities
AED 183,694
AED 139,534
AED 95,374
TOTAL LIABILITIES
AED 217,024
AED 178,973
AED 140,380
Paid-in Capital
AED 1840
AED 1840
AED 1840
Retained Earnings
AED 6,689
AED 5,299
AED 78,777
Earnings
AED 11,986
AED 73,478
AED 103,610
TOTAL CAPITAL
AED 7,139
AED 80,617
AED 184,228
TOTAL LIABILITIES AND CAPITAL
AED 224,163
AED 259,591
AED 324,609
Net Worth
AED 7,139
AED 80,618
AED 184,228
Business Ratios
All the business ratios are shown below. Profile ratios of industry based on the SIC that is Standard Industrial Classification in Beauty shops and United Arab Emirates are shown below for comparison.
RATIO ANALYSIS
YEAR 1
YEAR 2
YEAR 3
INDUSTRY PROFILE
Sales Growth
N/A
26.82%
13.72%
7.35%
Percent of Total Assets
Other Current Assets
0.98%
0.85%
0.68%
50.11%
Total Current Assets
15.69%
38.75%
60.25%
64.74%
Long-term Assets
84.31%
61.25%
39.75%
35.26%
TOTAL ASSETS
100.00%
100.00%
100.00%
100.00%
Current Liabilities
14.87%
15.19%
13.86%
21.71%
Long-term Liabilities
81.95%
53.75%
29.38%
25.39%
Total Liabilities
96.82%
68.94%
43.25%
47.10%
NET WORTH
3.18%
31.06%
56.75%
52.90%
Percent of Sales
Sales
100.00%
100.00%
100.00%
100.00%
Gross Margin
97.40%
97.96%
98.17%
100.00%
Selling, General & Administrative Expenses
95.45%
88.50%
86.43%
67.01%
Advertising Expenses
4.90%
3.86%
3.39%
2.18%
Profit Before Interest and Taxes
6.13%
15.60%
18.09%
4.59%
Main Ratios
Current
1.06
2.55
4.35
1.97
Quick
1.06
2.55
4.35
1.46
Total Debt to Total Assets
96.82%
68.94%
43.25%
53.38%
Pre-tax Return on Net Worth
239.86%
130.21%
80.34%
8.92%
Pre-tax Return on Assets
7.64%
40.44%
45.60%
19.14%
Additional Ratios
Year 1
Year 2
Year 3
Net Profit Margin
1.96%
9.46%
11.73%
N/A
Return on Equity
167.90%
91.15%
56.24%
N/A
Activity Ratios
Accounts Payable Turnover
11.99
12.17
12.17
N/A
Payment Days
27
28
28
N/A
Total Asset Turnover
2.73
2.99
2.72
N/A
Debt Ratios
Debt to Net Worth
30.41
2.22
0.76
N/A
Current Liab. to Liab.
0.15
0.22
0.32
N/A
Liquidity Ratios
Net Working Capital
$503
$16,616
$40,917
N/A
Interest Coverage
1.84
7.50
13.60
N/A
Additional Ratios
Assets to Sales
0.37
0.33
0.37
N/A
Current Debt/Total Assets
15%
15%
14%
N/A
Acid Test
1.06
2.55
4.35
N/A
Sales/Net Worth
85.79
9.63
4.79
N/A
Dividend Payout
0.00
0.00
0.00
N/A
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Introduction
An operating system (OS) is defined as a system software that is installed in the systems for the management of the hardware along with the other software resources. Every computer system and mobile device requires an operating system for functioning and execution of operations. There is a great use of mobile devices such as tablets and Smartphones that has increased. One of the widely used and implemented operating syste…
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Australia Cheltenham Computer Science Litigation and Dispute Management University of New South Wales Information Technology
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