Business Plan for Salon & Spa

Introduction People seek beauty. They are constantly looking to give themselves a whole new look or improve what they have. They drop by the nearest hair and beauty salon to be pampered by stylists and beauticians to style their tresses, shape their eyebrows, and color their nails – all for a few (or more) bucks. An hour in a hair and salon shop every month and one emerges confident and ready to take on the world. Beauty salon and spa business has grown rapidly over the past decade.

Latest extrapolations from U. S. census data place the salon and spa service industry at over $35 billion annually.

And that figure doesn’t include the retail sale of professional beauty products which is at least another $7 billion annually. While traditional barbershops, hair salons and nail salons have experienced moderate growth, high end beauty salons and day spas have seen significant spikes of revenue in recent years. In the recent years, this business has seen redundant profits in Bangladesh.

In this moment introduction of “Trendster” a full-service beauty salon to the Bangladeshi market is an exciting new development for us.

Our Mission: “Trendster” is dedicated to consistently providing high customer satisfaction by rendering excellent service, quality products, and furnishing an enjoyable atmosphere at an acceptable price/value relationship. We will also maintain a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work. Owners and source of finance “Trendster” is a partnership business owned by several owners. Ms. Farzin Ahmed, co-owner with Kabir ahmed, her husband, has worked in a prestigious, upscale salon in Gulshan, Dhaka for the past two years.

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Ms. Farzin has created a large client following through hard work and dedication. She and her talented team of beauticians, has what it takes to make this venture an extremely successful one. We expect our growing reputation to lead to new clients and beauticians to support our anticipated growth. To achieve our objectives, Trendster is seeking additional loan financing. This loan will be paid from the cash flow from the business, and will be collateralized by the assets of the company, and backed by the character, experience, and personal guarantees of the owners.

Address: The salon will be located at House 25, Road 5, Block A, Bashundhara Residential Area, Dhaka. The salon will utilize 1,540 square feet. The location is strategically situated on one of the high profile area, with easy access from all parts of town. Justification As we have said before, the owner has created a large client following through hard work and dedication. So, the rising 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.

Moreover, the salon business in Bangladesh is raising potential. The keys to success in our business are: * Location: Providing an easily accessible location for customers. * Environment: Providing an environment conducive to giving relaxing and professional service. * Convenience: Offering clients a wide range of services in one setting, and extended business hours. * Reputation: Reputation of the owner and other “beauticians” as providing superior personal service. Target Market: A target market is a specific, well-defined segment of consumers that a company plans to target with its products, services and marketing activities.

Target marketing orients all of the various components of the marketing function toward a single group, maximizing the appeal of brands to specific markets. The term “target audience” is a bit narrower; it refers specifically to the group of consumers targeted by advertisements. Now we are going to describe the segments of our salon’s target market: Category of segmentation: 1. Geographic segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Behavioral segmentation Geographic segmentation:

City : Dhaka is the capital of Bangladesh . Gulshan , Banani, Baridhara , Uttara , Dhanmondi are most popular area in Bangladesh and most of the rich people are living in these areas. That is why, people of these areas are our target customers of Dhaka city. Other than Dhaka, we want to open some branches of our salon in other divisions where the market is promising, such as, Rajshahi, Chittagong and Sylhet. Because, a huge number of people of these cities are wealthy enough to bear the cost of spa services. Moreover, people of these areas are educated and style conscious.

So, they deserve a spa shop where they can meet their demand. If we launch our Salon in those areas then it will carry a good profit that’s really the main cause. Another city, which will become another large market after Dhaka, is Cox’s bazar. No doubt, the longest sea-beach has a very large amount of foreigners who come to enjoy the holidays, must seek the heavenly pleasure of spa service. It will be our best chance to start our business there considering both local and foreign visitors comfort to enjoy the sea-sight with full satisfaction.

And no doubt, a huge amount of profit will come from this target market for future. 2. Density: Certainly we are targeting the urban areas. No doubt, the poor and uneducated villagers will not agree for getting those benefits of spa and they also cannot bear the cost too. That is the main cause to target the urban area as a target market. Demographic segmentation: 1. Income: We want to give better service to the customer than the others. We will provide services to the people of different kinds of income.

But the main condition will be the customer himself/herself must have that capacity to pay for the service. So, we have planned to make target customers those who are well-off to pay such as, middle and top level employees, business persons, university faculties etc. we are also offering reasonable price for the students whose income ranges 6000-12000 with discounts. 2. Education: Students of different universities who are fashion conscious are our target customers. We are offering discounts for the students. Now, it is not possible to target the students of whole Bangladesh, or outside the Dhaka city.

In this respect, we are focusing on those who are near to our shop, such as, students of NSU, IUB, AIUB etc. it is sure that targeting this segment, we are going to get a huge number of customers who are students. 3. Age and education: Though our target market is different employees of good amount of income, business persons and students, but we cannot ignore others beside these customers who too take the services either only haircutting or spa service with barber services. The details of these customers, their potentials, occupations are stated below with target customers.

Age| Occupation| Details | Market potential| 5 to 12 (children)| Kindergarten students or primary students | Do not have so much knowledge on hair-stylingBirth rate in Bangladesh is increasing| Weak| 13 – 18 Teenagers| Secondary school students| Begin to follow the current trendStrict rules in secondary schoolSmall consumption power | Medium| 18 -25(young adults)| University students| Normally no rules restricting their hair style Have income sources because can be a home tutor or doing so work through internet like as free launching etc. Strong| 25 to 40 (mature adults )| Doctor , engineer, teacher, banker , marketing officer, business man ,| Do not communicate with customers Income sources | Medium | 40 -60(Middle aged adults )| Doctor, engineer, teacher, banker, marketing officer, business man. | Problems of having less hair Willing to pay more on hair treatment| Quite strong | Above 60(old aged adults)| N/A| Normally do not have so much hair| Weak| Psychographic segmentation: 1. Lifestyle: From achievers and striver obviously it is possible to make good profit because they are really so careful about their lifestyle.

But from the survivors the market potential is so weak that we were forced to target the achievers. 2. Social class: The upper class people is always careful about their life. So, it’s obvious that they will agree to spend much money if they get quality services. So from this segment our main target will be upper class people. The middle class people also careful about their hair and other elements of fashion, but not as the upper does. Behavioral segmentation: 1.

Occasion: In Bangladesh Eid, Pahela Baishakh, puja, Valentine’s day are the occasions people celebrate with great joy. In this time we can give some special offers or discounts for the customer for building a good relationship with the customers. We will give same facility like as another salon like as ours but will give service lower rate than them for marriage ceremony occasions. 2. Benefit: We will provide good quality products to give the service of the customer to attract them to this salon. If we do this then we will get some regular customers who will be profitable for us. User Status: We will provide discount for the regular and first time user that will help us to attract them to this salon which is essential to make good relation with the customers and to attract the customers for our salon. Positioning strategy: Positioning strategy is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer.

Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service. A successful positioning concept must be developed and qualified before a “positioning statement” can be created. The positioning concept is shared with the target audience for feedback and optimization. Brand positioning process Effective Brand Positioning is contingent upon identifying and communicating a brand’s uniqueness, differentiation and verifiable value.

It is important to note that “me too” brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s). Generally, the brand positioning process involves: 1. Identifying the business’s direct competition (could include players that offer your product/service amongst a larger portfolio of solutions) 2. Understanding how each competitor is positioning their business today (e. g. laiming to be the fastest, cheapest, largest, the #1 provider, etc. ) 3. Documenting the provider’s own positioning as it exists today (may not exist if startup business) 4. Comparing the company’s positioning to its competitors’ to identify viable areas for differentiation 5. Developing a distinctive, differentiating and value-based positioning concept 6. Creating a positioning statement with key messages and customer value propositions to be used for communications development across the variety of target audience touch points (advertising, media, PR, website, etc. )

Product positioning process Generally, the product positioning process involves: 1. Defining the market in which the product or brand will compete (who the relevant buyers are) 2. Identifying the attributes (also called dimensions) that define the product ‘space’ 3. Collecting information from a sample of customers about their perceptions of each product on the relevant attributes 4. Determine each product’s share of mind 5. Determine each product’s current location in the product space 6. Determine the target market’s preferred combination of attributes (referred to as an ideal vector) 7.

Examine the fit between: * The position of your product * The position of the ideal vector Product Positioning for salon Product positioning refers to all “products and services,” not just the physical products that we use (and sell) in our spa. Product decisions include: * Brand * Quality * Styling * Safety * Packaging * Guarantees * Support Price Positioning for salon: Pricing spa products and services is a key element of the marketing mix. Pricing decisions influence all your other marketing decisions. Pricing decisions include: * Skim pricing (to maximize profits) Penetration pricing (quantity maximization) * Suggested retail price * Discounting * Bundling * Seasonal pricing We have considered the following: To maximize profits, should we price our services and to “skim the cream” off the top of the market, to those who are less “price sensitive”? Will our target customers support that strategy? Will we and our employees be better served if we keep prices low, to reach a broader market? Will we sell at (or below) suggested retail price? Will we offer discounts by bundling products and services? Do we run seasonal promotions?

When clients buy spa packages, do we offer discounts on products and/or future services. Selecting an overall positioning strategy : Consumers typically chose products and service that give them the greatest value. Marketers want to position their brands on the key benefits that they offer relative to competing brands. The full positioning of brand is called the brands value proposition the full mix of benefits upon which the brand is positioned. More for more: “More for more” positioning involves providing the most upscale product or service and charging a higher price to cover the highest cost.

Black cut hair salon, so much included instrument. Each claims superior quality, durability, performance, or style and change a price to much. Not only is the marketing offers high in quality. It also offers prestige to the customer. It symbolizes status and a loftier lifestyle. Often the price difference exceeds the actual incrementing quality. In general , companies should be on the lookout for opportunities to introduce a much-more-for-much-more brand in any underdeveloped product or service category yet more-for-more brands can be vulnerable.

More for the same: Hair salon can attack a competitors more for more positioning by in traducing a brand offering comparable quality but at a lower price. Black cut hair salon its Lexus line with a “more for the same” value proposition. The same for less: offering “the same for less” can be powerful value proposition everyone likes a good deal. For example ,fair and care salon offers equivalent service at a lower price for performance . Discount stores such as spa service. Less for much less: A market almost always exist for products that offer less therefore cost loss.

Few people need , want , or can afford “the very best” in everything they buy. In many cases , consumers will gladly settle for less than optimal performance or give up some of the bells and whistles in exchange for low price . “less-for-much-less” positioning involves meting consumers lower performance or quality requirements at a much lower price. For example fair care hair salon general stores offer more affordable goods at very low price. More for less: of course, the winning value proposition would be the offer “More for less”. Many salon claim to do this.

For example, fair and care salon claims to have better products and lower prices for a given level of performance. In the short run , some companies can actually achieve such lofty positions. Yet in the long run, companies will find it very difficult to sustain such best –of-both positioning. Offering more usually costs more , making it difficult to deliver on the “for less” promise. Fair and care salon that try to deliver both may lose out to more – focused competitors. The important thing is that each company must develop its own positioning strategy, one that makes it special to its target consumers.

Offering only “the same for the same” provides no competitive advantages . leaving the firm in the middle of the pack . salon offerings one of the three losing value propositions_ “the same for more,” “less for more”, “less for the same”_ will inevitably fail. Here, customers soon realize that they’ve been underserved , tell others and abandon the brand. Positioning statement: Company and brand positioning should be summed up in a positioning statement. The statement should follow this form: To target segment and need our brand is concept that point of difference.

The positioning first states the product membership in a category (spa or salon business) and then shows its point of difference from other members in category has more salon. Placing a brand in a specific category suggests similarities that it might share with other products in category but the case for the brand in a surprisingly different category. Differentiation Strategies of Salon Differentiation Strategies This strategy involves selecting one or more criteria used by buyers in a market – and then positioning the business uniquely to meet those criteria.

This strategy is usually associated with charging a premium price for the product – often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products. Top of Form * Complementary Services: This will encourage additional customer purchases. For example, If you offer facials, offer a free make up consult with every facial.

Customers who like to pamper themselves will appreciate the additional offers and your salon will make more money. * Products: Sell products that relate to the services you offer. For example if you offer braiding, you can sell hair maintenance product such as braid spray, hair food e. t. c. You could also create your own product; you could have different beauty services put together as a package deal. * Atmosphere: Create an atmosphere in your beauty salon that allows you to charge a premium price for your services. For example, make your beauty salon feel like a spa with, soothing music and soft lighting.

When customers feel rejuvenated and look great after they leave your salon, they will pay more and return more frequently. * Target group: Differentiate your beauty salon from your competitors. For example, if your primary competitor focuses on high-end appointment-based clients, you should focus on basic services and walk-in clients. On the other hand, you could offer services that are not available at your competitor’s salon. If your competitor only offers hair services, you should offer nail services, facials and makeup services. Strategy – Differentiation Focus

In the differentiation focus strategy, a business aims to differentiate within just one or a small number of target market segments. The special customer needs of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers. The important issue for any business adopting this strategy is to ensure that customers really do have different needs and wants – in other words that there is a valid basis for differentiation – and that existing competitor products are not meeting those needs and wants.

Strategy – Cost Focus Here a business seeks a lower-cost advantage in just on or a small number of market segments. The product will be basic – perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers. Such products are often called “me-tool’s product differentiation (also known simply as “differentiation”) is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products as well as a firm’s own product offerings.

Rationale Differentiation can be a source of competitive advantage. Although research in a niche market may result in changing a product in order to improve differentiation, the changes themselves are not differentiation. Marketing or product differentiation is the process of describing the differences between products or services, or the resulting list of differences. This is done in order to demonstrate the unique aspects of a firm’s product and create a sense of value. Marketing textbooks are firm on the point that any differentiation must be valued by buyers .

The term unique selling proposition refers to advertising to communicate a product’s differentiation. * Ignorance of buyers regarding the essential characteristics and qualities of goods they are purchasing * Sales promotion activities of sellers and, in particular, advertising * Differences in availability (e. g. timing and location). Marketing mix: Marketing mix is the set of controllable tactical marketing tool- product, price, place and promotion- that the firm blends to produce the response it wants in the target market. The marketing mix is everything we can do to influence the demand for our service.

The four groups of variables known as “the 4 Ps”: product, price, place, promotion. The marketing mix of our salon is stated below: Product: Product is actually the services we will provide to the target customers in our salon. There are different types of services in our salon starting from hair cutting of male and female, hair coloring service, skin care treatment, different types of massages to sooth the people from different types of pressures and other different kinds of salon and spa services. All these services are to be given with great care keeping the customers satisfaction in the mind.

In the following, the list of services is given: Salon and Spa Services:Hair Salon Business Services:? Haircuts, styling and trims. ? Hair coloring and highlights ? Hair and scalp treatments. ? Hair shampoo and conditioning. ? Hair relaxers and perms. ? Hair curling, reconstructing and waving Nail Salon Business Services:? Manicures. ? Pedicures. ? Nail polish. ? Nail repair and sculpting. ? Hand conditioning. Day Spa and Beauty Business Services:? Body scrubs. ? Body wrapping and herbal wraps. ? Massage and aromatherapy. ? Hot stone therapy. ? Acupuncture and Reflexology. ? Derma abrasion. ? Anti-aging. Facials. ? Makeup and makeovers. ? Skin cleansing and care. ? Body waxing.? Polishing, buffing and bronzing. ? Tanning. ? Piercing. | Salon and Spa Products:Hair Salon Products:? Shampoos. ? Conditioners. ? Extra hair treatment. ? Pre-styling products. ? Hair styling products. ? Hair finishes. ? Brushes and hair tools. Skin Care, Nail and Beauty Products:? Face skin care products. ? Body skin care products. ? Makeup. ? Makeup tools. ? Nail polish products. ? Nail finish products. ? Nail tools. ? Perfumes. ? Bed and bath products. | The list tells that how our shop is and how its work quality will be.

Price: Now, we will discuss about the second variable of marketing mix of our shop. In every business farm, one of the major activities is to set price of the services. The price must be fair and within the budget of the people. Also, it is also important to set price in such a way that, a farm can attend its profit. So, we have tried our best to set a fair price which meets the customer vale and our profits. The price list of our services is given below: Service providing Price (BDT) Hair Salon Business Services:

Haircuts, styling and trims. 200 Hair coloring and highlights 350 Hair and scalp treatments. 500 Hair shampoo and conditioning 350 Hair relaxers and perms 400 Hair curling, reconstructing and waving 400 Shaving (foam) 100 Shaving (gel) 150

Day Spa and Beauty Business Services: Body scrubs 1000/hr Body wrapping and herbal wraps 1000/hr Massage and aromatherapy 000/hr Hot stone therapy 1000/hr Facials (Men) 600 Facials (woman) 1000 Makeup and makeovers 2000-3000 Skin cleansing and care 800 Body waxing 500 Polishing, buffing and bronzing 800 Nail Salon Business Services: Manicures 500 Pedicures 500 Nail polish 200 Nail repair and sculpting 200 Hand conditioning 300

Place: Place include the farm’s activity that makes the service available to the target customers. Place must be a suitable site or location where people can easily get access without any hazards. Since, we are new in the salon market service and also in introduction stage, so it is actually not possible for us to open more than one branch in the city. Certainly our target market is the people of Dhaka and our shop will also be in Dhaka, but it seemed a great hectic job for us to find out a suitable place to open the salon. We thought, since Persona has its branch in Gulshan, Banani and Uttara, it will not be profitable for us to open a new salon and spa business in those busy and royal areas.

But there is a place where Persona still did not open their branch. The place is Bashundhara Residential Area. So, this was the best chance for us to open and grab a whole market of Bashundhara where different University students, business persons, employees of different big corporate giants live. Promotional strategy 1. Stealth marketing: Viral marketing is used to build brand awareness. Viral marketing is done through Facebook, twitter and other different blogs. 2. Referral program: Referral program is a very powerful word of mouth advertising and more believable than any other form of endorsement. It is done mainly by endorsements or reference. Reference can come from friends and clients.

The most powerful recommendation is the recommendation of clients who will tell to his/her friends about the service we will provide him/her. For this reason, we have to identify those people who can influence our target market and get them endorse our service. 3. Telephone marketing: Everything should be about increasing perceived value of the service in the eyes of the clients. Now the question arise how telephone marketing helps us? Every single contact clients has with the business forms a perception, either good or bad. In telephone marketing, we have to call our clients and let them know about our new promotions. Not only that, we have to ask them questions that what he/she thinks about our service according.

Another part of telephone marketing is, if the clients ask us about any problems and solutions, then we will solve the problems by providing them guidelines. 4. Keep in touch: It will be very important for our business to give emphasis the existing clients and customers. For this, we have to maintain a good relationship by remaining in touch with them. We can be in touch with them by sending promotional materials, greeting cards, birthday wishes and by e-mails. E-mail marketing is highly effective to build and maintain relationship with existing customers and also to build loyalty and trust. 5. The power of free: The customers who regularly take the service of salon and spa, mainly they get some gifts from the salon. But as we are new in the market, we are giving gifts to the customers from now.

Those who would have already arrived to us for taking our service more than three times, we will actually offering them different kinds of gifts. The gifts are cosmetics, skin care products, hair care products, salon voucher, product samples etc. this system is called ‘Gifts with purchase (GWP). ’ 6. Perform SWOT analysis: SWOT analysis too plays a great role in promotion. SWOT analysis helps to know which are our strengths, our weakness, and what is our opportunities and threats and considering these four variables, to check and analyze our strengths, weakness, threats and opportunities. By researching these four, we can promote our business easily with practical logics.

Our strengths are, we are placing our business in such a place where there is no salon and spa which can provide the services as we are providing. Not only that, we are charging comparatively cheaper than other salon and spa shops in Dhaka city with qualified manpower. By doing our SWOT analysis, we got some weakness in our business which is not surprising because, we are new in the market and weakness will be there. These weakness are since we are new, we don’t have that much manpower, but the good news is that the existing manpower are as good as other reputed salons and spas. Another weakness is we cannot charge more than other salons and spas in our every service since we are still in introducing stage and people are lacking about our brand.

Our management is not consists of experts like persona or women world, the employees are still learning, so it is sure that we have to wait for a long time to take our salon in the top. We have got huge opportunity to take ourselves in a class of reputed salon and spa shop. Salon and spa shop market is not that much widespread in our country, only in Dhaka there are some spa shops and in Chittagong too, there are may be 2 or 3 salon and spa shops, but those are very costly, actually located in five star hotels. In other cities, there are no salon and spa shops. So we can extend our business throughout Bangladesh and can create an opportunity for those people who cannot afford the huge cost of salon and spas and we can increase our brand image.

There are some threats for us in this market. We are not thinking that we will be dissolved in this market, but there is a threat of not reaching in our vision. Because other salon and spa like Persona, Women’s World are so popular, strong and wide that, we may remain under them, ie, the competition is intense though the competitors are small in number. Another thing is that since our services are cheaper than others, so we may face losses in first few years which may create problems for us to attain a good return on investments (ROI). However, we are confident that despite weakness and threats, we will be the best salon and spa service institution in Bangladesh. Advertising media

Media is the most important medium of conveying the messages to the people. people come to know about a product or service at first through media. So media plays a big role in a product or service development. We considered some major steps in selecting advertising media. These major steps are: 1. Deciding on reach, frequencies and impact. 2. Choosing among major media types. 3. Selecting specific media vehicle and 1. Deciding on reach, frequencies and impact: To select the media, the advertiser must decide on the reach and frequency needed to achieve advertising objectives. We are not unaware of this fact. So we also decided on reach, frequency and impact.

Reach is the measure of percentage of people in the target market who are exposed to the advertisement campaign during a given period of time. Frequency is a measure of how many times the average person of the target market is exposed to the message. The media i