Business Plan for Salon Spa
An Independent Learning Project
Presented by
Name
To
Professor Cyndi Bloom
Faculty advisor
In partial fulfillment of the requirement for the degree of
Master of Management
Cambridge College
Cambridge, Massachusetts
November 2001
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Table of Content
Chapter I Introduction
Chapter II Literature Review
Chapter III Methodology
? Questionnaire
? Informal Interview
? Conclusion
Chapter IV Data Analysis
? Questionnaire Results
? Interview Results
Chapter V Business Environment of Indonesia
? Geographical and Climate
? Government
? Population and Labor Force
? Regional Income
Chapter VI Business Plan
? Executive Summary
1.0 Key to Success
? Company Overview
2.0 Legal Business Description
2.1 Business Location and Facilities
2.3 Management Summary
2.4 Management Team
2.5 Staffing
? Services
3.0 Competitive Comparison
3.1 Product Trends
? Market Analysis
4.0 Industry Analysis
4.1 Market Segment
4.2 Strengths
4.3 Weaknesses
4.4 Opportunities
4.5 Customer Profile/Target Market
4.6 Competition
4.7 Risks
? Marketing Plan
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5.0 Marketing Strategy
5.1 Advertising Budget
5.2 Personnel Plan
? Financial Plan
6.0 Start-up Summary
6.1 Financial Plan
6.3 Break-even Analysis
6.4 Projected Profit and Loss
6.5 Projected Cash Flow
6.6 Projected Balance Sheet
Chapter VII Conclusion
Reference List
Appendix
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CHAPTER I
INTRODUCTION
This ILP, presents a business plan for a beauty salon spa to be located in
Jakarta, Indonesia. Indonesia is a developing country. Economic growth has
been slow for the past several years, although trade and small business,
especially in the larger cities such as Jakarta, show progression and growth.
Jakarta is the perfect place to open a beauty salon and day spa, because it is a
center of Indonesia’s business and economy, and it is a cosmopolitan city where
many women are concerned about their appearance. This includes both the
working women and the women who don’t work. In addition they need a place
where they can relax and release all the problems of their everyday lives, thus
they will come not only for body treatment but also to socialize and enjoy
themselves. The problem is that in order to go to a salon spa, they need to spend
a lot of money, and the products and services are more expensive in Indonesia
than in the U.S. cost
Salon and spas are not a new business in Indonesia, but they are very
rare. As a result of the high prices, business is slow and some have had to close,
because of few customers and high overhead. Indonesia does have a variety of
natural resources that could be used to make cheaper products rather than the
more expensive American versions, as well as talented human capital to provide
the services. I believe the problem is the lack of knowledge and management
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skills needed to make this industry more effective and efficient. My goal is to
create a business not only to solve these problems, but also to satisfy the
customer’s needs less expensively.
This business would be a start-up company. It would be a full service body treatment and beauty salon. It will provide excellent services and products,
competitive prices an enjoyable atmosphere, a friendly and creative work
environment.
Two reasons I want to do this are because I believe that it will have a
chance to succeed and because I want to run my own business. My mission will
be to provide quality services and products for the physical treatment and
appearance of the clients and for the relaxation of body and soul. I believe the
keys to success for this business will be:
1. Convenient location for customers.
2. Service and products performed and applied by experienced and talented
staff.
3. Relaxing and professional atmosphere.
4. Positive reputation.
5. Acceptable price
I believe a successful entrepreneur is a risk taker who knows their target market and does research before opening a business. An informal survey I did of
Indonesian salon spa owners revealed to me that many don’t want to take a risk
and do little preparation. For example, they didn’t write a business plan, and they
don’t know how to develop a good one. As a result, they don’t know enough
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about their target market, competitors, environment, and so on. As a result I
believe they don’t have a strong foundation for their business.
I believe that all the information that I will gather in this ILP will help others
to become successful entrepreneurs as well as helping me to start my own
business. This business plan model will not just help people who are interested in
this kind of business, but could also be used for other types of business. I hope
to bring American business practices to Indonesia, because I believe they will be
good for Indonesian business.
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CHAPTER II
LITERATURE REVIEW
My literature review will explain why a business plan is needed and what
the elements of a good business plan are. In my research, I have used studies by Ricky W. Griffin, Linda Pinson and Jerry Jinnet, Garry Amstrong and Philip Kotler,
as well as the U.S. Small Business Administration at http://www.sba.gov, which
provided an outline as a guide for developing a business plan.
Before explaining the reasons to write a business plan and the elements
of a good business plan, it is useful to review the first steps for entering the
business world. As R.W Griffin stated, “Entrepreneurship is the process of
planning, organizing, operating, and assuming the risk of a business venture”
(1999, p. 292). In his book Management, Griffin presented the process of starting a new business. He began by exploring the nature of entrepreneurship in the
business world and examined and discussed the strategies for entrepreneurial
organizations. Griffin explained what is needed to be considered as a successful
entrepreneur He also explained how to choose an industry for a small business
likely to do well and be strong. Third, in understanding the basic method for
starting a new business, as Griffin stated, “ a business plan is a document that
summarizes the business strategy and structure” (1999, p. 301).
Griffin (1999) described the forms of ownership and sources of the
financing. The forms of ownership are sole proprietorship, partnership,
corporation, and venture capitalist. He provides set of questions that an
entrepreneur must address when organizing a business, such as whether to buy
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an existing business, start a new one, or seek a franchising agreement as
methods for starting a new business.
A significant source of information on business plan is the U.S Small
Business Administration. SBA (2000) recommended that the elements of a
business plan are a cover sheet, statement of purpose, table of contents, the
business plan (including company summary, marketing, competition, personnel),
financial data (including loan application, balance sheet, break-even analysis,
income projection), and supporting documents. A tutorial and self-paced activity
to help develop a business plan is included in this article, as well as a list for
financial projection with tips, tricks, and traps. I intend to use this to develop my
business plan for a beauty salon and day spa.
Linda Pinson and Jerry Jinnett, who wrote the SBA publication, give a
significant source, from the book titled Anatomy Of A Business Plan by Kaplan,
published in 1986, 1993, 1996, and 1999. L. Pinson, (1999) suggested that in the
business plan should include cover sheet, executive summary or statement of
purpose, the organizational plan, the marketing plan, financial documents, and
supporting documents. The book is designed to help an entrepreneur write a
complete, concise, and well-organized plan that will guide one and toward a
profitable future.
Pinson and Jinnett (1999) explained the three main purposes for writing a
business plan. First, the plan is a blue print of the business and will serve as a
guide during the lifetime of the business. Second, it is a requirement if the
entrepreneur plans to seek financing, and for a new company, this will give the
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lender/investor insight into ways in which the business will be conducted. Finally,
if the business will be conducted internationally, the business plan provides a
standard means of evaluating the business potential in a foreign marketplace. I
really like this book because it explains that the necessity of a business plan will
demonstrate ways in which I believe the business plan failure is lack of planning.
L. Pinson very clearly argued, “The business that fails to plan plans to fail” (1999, p.3). Taking the time to write a clear, concise business plan is critical. The
success of the business could depend on it.
Armstrong and Kotler described the strategic planning and the marketing
process in their book called Marketing, especially in chapter 2. They detailed the “four Ps” of the marketing mix as a tool to create a marketing process that is vital
in an organization. They also developed a marketing plan and the statement of
purpose, which is similar to a business plan. How to develop a research plan
was described in this book. The problem statement is defined, and then the
research method to be used to gather the data is developed. There are two types
of data used for collecting information for research. The first, is “primary data, which is information collected for the specific purpose at hand”. Second, there is
“Secondary data, which consists of information that already exists somewhere,
and have been collected for another purpose” (2000, p.144).
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CHAPTER III
METHODOLOGY
For the research in this Independent Learning Project, two primary
methods were used. The first is a questionnaire, the second an informal interview
with an expert who works in the salon spa business.
Questionnaire
I prepared 12 questions in my questionnaire for people in the location
where I plan to open my salon spa. The forms of the questions were multiple
choice, scaled responses, and open questions. I also used a combination of all in
one question to allow flexibility and to get more information. There were only 12
questions because most people don’t have much time.
In the first three questions, I asked what they do for a living, what age
group they are in, and their household income per month. Those questions are
important to give me an idea of the target market for my salon spa. I also asked
whether they have ever been to a salon spa before, and if so how often, following
with which spa have they been to and why they went there. I asked them how
much money they can afford to spend to go to a salon spa, the reason they go
there, and what they like the most about a salon spa. In my questionnaire, I also
asked people to define the least important and the most important qualities of
salon spa, in terms of the size of the salon spa, the location, the quality, the
products that they’ve been using, the costs, and the hours of operation which are
good for them. I asked them about the level of satisfaction that they get from their
previous salon spa experiences, including the services and products that the