Best Deal Haircuts will strive to satisfy the customer 100% of the time. 3. Our company must achieve name recognition in the Chattanooga market. We can’t do business if customers don’t know we exist. We will spend $2000. 00 annually promoting our services and image. We will also use direct selling for markets, such as nursing homes, that are less sensitive to advertising. B- Company Summary-(4-6 pages). Describe the history of the origins of your business. Bal . Industry History: Describe the industry in which the business will operate. Best Deal Haircuts will operate in the highly competitive hair cutting industry.
This industry is primarily dominated by entrepreneur’s who own and operate eighty- vive percent of the hair cutting establishments in the United States. The remaining 15% of the industry is occupied by large companies or chain salons. Because this industry is so fragmented, most Americans drive five to ten miles to find the nearest qualified barber. Once they arrive at the barber, most Americans will have to wait in line ten – fifteen minutes to receive their haircut. Even if a barber is nearby, chances are the customer will not be satisfied with the quality of the haircut.
Americans are experiencing these inconveniences due to a traditional shortage of qualified recruiters. I plan to create a business that will produce quality haircuts. Our mobile haircutting service demonstrates that we understand and appreciate the busy schedules of our customers. The haircutting industry has continued to grow and evolve throughout history. Early haircuts or barbers only had shears at their disposal to achieve the desired cut or look. Shears, due to their sometime dull blades, didn’t always provide a precise cut. Shear cuts were also time consuming due to the slow cutting motion of the shear over finger technique.
The shears over finger technique enable early recruiters or barbers to create a well balance haircut basically by evenly cutting every strand of hair. The shear over finger technique required the haircut or barber to pull a small section of hair from the scalp with two fingers and then cut the exposed hair above the fingers with the shears. The haircut or barber would follow thirty – sixty minutes for early haircuts or barbers to complete the shear over finger technique. In today’s industry, barbers use a host of tools to aid in achieving the perfect cut.
Today Barbers prefer using tools such as electric clippers and rammers versus shears because electric clippers and trimmers have sharp, rapid moving blades that create a more precise cut and saves time. In today’s industry, an average barber or cosmetologist can perform four to five haircuts an hour using electric clippers and trimmers. Best Deal Haircuts will not only provide excellent, quick haircuts, but deliver this service directly to homes, businesses, nursing homes, and mortuaries. Early in the industry, haircuts were reserved only for royalty. Rich men hair normally would not extend pass the shoulders.
While the hair of poor men extended pass the shoulders and normally grew to be extremely long. Based on the length of the hair, citizens were able to determine a person’s social class or status. The haircut would normally live and work in the royal quarters and weren’t available to the common man or woman. In today’s industry’s, haircuts are accessible and affordable to most Americans. However, many Americans are elderly and disabled. They need convenient in home service. Many elderly and disabled Americans are confined to nursing homes, and they would benefit greatly from a mobile haircutting service.
Business professionals and residential customers are now busier than ever and seeking new ways to save time. Best Deal Haircuts can help business professionals and residential customers to save time through flexible scheduling of appointments, and mobile haircutting services. The haircutting has a rich past and a very promising future. Past and present trends indicate that the haircutting industry is alive and well. This continued trend presents enormous opportunities for Best Deal Haircuts. 82. Legal Form of Ownership: Describe the ownership and legal establishment of the company, (I. E. Pacifying whether your company is a corporation, partnership, sole proprietorship, limited liability partnership, etc. . Best Deal Haircuts will operate as a sole proprietorship. Best Deal haircuts is registered with the state of Tennessee and owned and managed by Ronald L. Eaton. Ronald Eaton has over twenty five years of experience managing and supervising various businesses. Ronald L. Eaton has been a license haircut for over ten years. I chose this form of organization for the following three reasons: 1 . It is the easiest type of business organization to establish: My business will red tape.
I don’t need a complicated accounting system to keep track of credits and debits because I will accept cash only. I can start my business with little to no money. However, I’m requesting a loan in the amount of $7,200. 00 to successfully launch my 2. All profits and losses of the business are reported directly to the owner’s income tax return: Because I’m a small business owner, I don’t need a complicated tax system. My business and I are basically treated as one. 3. I don’t have any employees: A sole proprietorship is the logical choice if you are the only employee.
I will purchase business insurance to cover my liability needs. I feel my liability needs will be minimum because a customer doesn’t have to pay for aircrafts they dislike. I will also keep my insurance needs to a minimum by having customers sign release statements agreeing to only recouping damages equal to the price of the haircut they received. 83. Location and Facilities: Describe the geographic location of your business including where the products/services will be produced. Identify any regulatory or legal Issues your company needs to consider now or in the future in reference to the location and/or facilities.
Best Deal Haircuts will be established and located in a dedicated 500 square feet office room located at 471 5 Robinsons Drive, Chattanooga Tennessee. Best Deal Haircuts provides haircuts to customers who are seeking to receive this service at their homes, place of business, nursing home facilities, or mortuaries. Since this is a mobile business, I can provide haircutting services to customers living in Chattanooga and the surrounding areas. Currently, there is no law which prevents a customer from receiving a haircut in their homes, place of businesses, nursing facilities, or mortuaries.
However, state law prohibits a barber from cutting hair in a facility that lacks running water, a rest room, and a covered trash can. Most homes, genuineness, nursing facilities, and mortuaries will meet required specifications. State Law also requires the cutting area to be sanitized and free of germs. I will carry disinfectant and cleanser to ensure the cutting area and implements meet state law sanitation standards. State Laws, Rules, and Regulations are virtually absence from the haircutting industry. With the exception of sanitation, the State of Tennessee provides little oversight over the haircutting industry.
Chattanooga has the third largest population in the state of Tennessee, over 169,000 residents and growing. Best Deal Haircuts is positioned in central woo hours away from Nashville Tennessee, which has the largest population, 619,000, in the state. After establishing our presence in Chattanooga, Best Deal Haircuts plans to hire more employees and expand into the Nashville Market. While expanding, there are several regulatory concerns to consider. The first concern is the government’s failure to control gas prices. Higher gas prices would require me to charge more for my haircuts which could greatly affect my business.
Another concern is an increase in the local sales tax rate. This increase would make hotels stays more costly, and possibly derail my plans to expand into Nashville. Finally, an increase in payroll taxes would make it more costly to hire new employees and possibly affect my plans to expand into Nashville. 84: Management Structure: Include the key personnel and positions. Best Deal Haircuts is owned and managed by Ronald L. Eaton. My Job as owner and manager of Best Deal Haircuts is to deliver dependable and professional haircutting services to customers.
The customer must be assured that we will arrive on time for their appointment and produce an outstanding cut when we’re finished. The company currently has one employee, the owner, who expects to receive a monthly salary of $2000. 0 during the start up phrase of the business. There are no short term plans to expand the business, however there are plans to hire more haircuts and expand the business into the Nashville Market within the next 10 to 15 years. Before hiring can occur, the business must achieve four bench marks. 1 . The company must build a reputation for performing excellent haircuts.
Our reputation for delivering excellent haircuts will be built one customer at a time, there are no short cuts. The owner’s technical expertise will be a main factor in achieving a reputation for delivering excellent haircuts. It should take the business anywhere from six months to one year to build a good reputation for delivering quality service. 2. Best Deal Haircuts must be dependable and show up when promised. Best Deal Haircuts will lose consumer trust if we are constantly late for appointments. The owner was in the military for 20 years and realizes how important it is to always be on time for appointments.
The owners punctuality and commitment to excellent will ensure we deliver service when promised. 3. The business will hire more haircuts when there are substantial repeat customers to sustain the business. Every company relies on repeat customers to keep them going during slow times and seasonal periods. Best Deal Haircuts will build 4. Best Deal Haircuts will be ready to hire more haircuts when annual revenues exceed $125,000. We expect growth to be gradual, yet steady, due to the work of mouth nature of our business. We predict Best Deal Haircuts will achieve all bench marks within the next 10 to 15 years.
Best Deal Haircuts will hire more haircuts and start our expansion efforts when all bench marks are achieved. 85. Products and Services- Explain the primary product(s) and/or service(s) your many produces and any unique attributes they may have. Best Deal Haircuts delivers mobile, professional haircutting services to residential customers, business people, nursing home residents, and mortuaries. Our mobile haircutting services will be a main factor in attracting these customers. Our customers can take comfort in the fact that Best Deal Haircuts specializes in clipper and trimmer cuts.
There are extra charges for customers who request additional haircutting services. For example: a ten dollar charge is added to the price of a regular haircut for clients who desire to have their hair cut with shears or razor. There is also a ten dollar additional charge for customers who receive a shampoo. Best Deal Haircuts is unique because we are mobile haircuts. Customers can receive a professional haircut while they are relaxing at home, or get well groomed while they are busy at work. Customers will no longer have to drive five to ten miles looking for a qualified haircut.
Customers will no longer have to wait in lines for fifteen – twenty minutes to receive a professional looking haircut. Best Deal Haircuts allows customers to determine the best time and location for their next haircut. This type of scheduling flexibility is truly unique for the average customer and usually reserved for the rich and famous. Best Deal Haircuts, mobile service, demonstrates our understanding of the consumer’s need for flexible and convenient haircutting services. Best Deal Haircuts isn’t limited to providing haircuts to home and businesses.
Best Deal Haircuts will also provide haircutting services to nursing home residents, and to the deceased. Most nursing homes spend thousands of dollars a year in fuel transporting their resident to barbershops. Best Deal Haircuts mobile haircutting revise will allow theses nursing homes to save thousands of dollars a year in transportation cost. Best Deal Haircuts will also provide courteous, dignify, and respectful haircutting services to the deceased at no extra charge. Most haircuts will charge anywhere from $100. 00 to $300. 00 to perform service on a deceased member. Donating free haircuts on a case by case basis.
Our charity work shows we care about the less fortunate and we believe in making a positive difference in the community. I have worked in the hair cutting field for over ten years and I have never encountered any company as unique as Best Deal Haircuts. C. Market Analysis (3-5 pages)- The market analysis section of your business plan should demonstrate that you know your customers. CLC : Target Market- Describe the current market for your company’s product. Best Deal Haircuts is a mobile haircutting service which caters to individuals who find it difficult or are too busy to travel to the nearest barbershop to receive a haircut.
Best Deal Haircuts target market will consist of four categories: 1 . Customers who are immobile, such as residents in nursing homes. There are currently 50 nursing homes in the Chattanooga Market and they house an average of 60 patients. These residents are generally low income, between the ages of 50 to 75, and unable to travel. The census bureau predicts nursing home enrollment will increase by 6% annually as the Baby Boomers become older. Best Deal Haircuts will educate and acquire this market segment by communicating the benefits of our mobile service to nursing home directors and staff.
One benefit is that nursing home directors and staff will no longer have to rent specialized vans or sport utility vehicles to transport residents to the nearest barbershop. Residents will care about our mobile haircutting service because they will be able to enjoy a great aircraft in the privacy of their rooms. The nursing home segment of the market promises to produce nice revenues for Best Deal Haircuts for the foreseeable future. 2. Business professionals who are too busy to run out and get a haircut. These customers are middle to high income, work in a professional setting, very busy, and like the prestige of having mobile haircuts.
Over 500 professional businesses are located in the downtown Chattanooga Market. The downtown Chattanooga area has added over 200 new businesses, an annual 2% growth rate, in the past two years. Best Deal Haircuts will educate and acquire this market by passing out flyers and seines cards in the business district. Best Deal Haircuts will also place a newspaper advertisement explaining our convenient, work around their schedule, mobile haircutting service. Our mobile haircutting service will benefit business professional in two ways.
First, no more waiting in line to see a barber for a haircut boost to their egos, self esteem, and social status. 3. Residential customers who are very busy, and would like to receive a quality haircut in the comfort of their homes. These customers are middle to high income, very busy, don’t have much leisure time, and don’t like to wait in lines. These customers are most likely to be male or female, between the ages of 35-40, have small kids, and seeking convenient ways to simply their lives. Best Deal Haircuts predicts residential customers will be the primary user of our services for the following four reasons: 1.
The size of the population: 169,844 2. Median resident age: 36. 8 3. Median household income: $42,367 4. In family households: 119,550. Best Deal Haircuts will educate and acquire the residential market, which increases by 3% annually, by purchasing a newspaper advertisement and passing out flyers in middle to high income neighborhoods. The newspaper advertisement and flyers will explain the convenience of our mobile haircutting service, and our flexible operating hours, am-pm, Monday-Saturday, will surely hit a home run with residential customers who are tired of driving 10-15 miles and waiting in long lines to see a qualified barber. . Families who need a haircut for a deceased relative or friend. There are currently 60 mortuaries in the Chattanooga Market. Mortuaries in the Chattanooga Market averages 3-5 new bodies a week. The number of mortuaries and average body counts are expected to increase by 3% as the population increases. Best Deal Haircuts will educate and acquire this market by communicating the benefits of our services to mortuaries directors and coordinators. This communication will allow directors and coordinators to referral our services to family members or love ones who need a haircut to assist in the final preparations for the deceased.
This market is basically UN-serviced, and generally the barber of the decreased will charge extra to perform the service. Best Deal Haircuts won’t charge extra to perform haircutting services for the deceased, which is why family members will prefer hiring us versus a barber. Best Deal Haircuts expects our services to gradually grow in this market, but we will expand this market by treating family members with dignity and respect. There are no plans for aggressive advertisement. CO: Industry Analysis – Discuss the characteristics of this industry such as growth trends, units sold, or employment.
In the United States, about 80,000 hair care salons (75,000 beauty salons: 5,000 barber shops) generate combined annual sales of $16 billion. The hair care industry has increased annual sales by five million dollars over the past three years. Large companies include Regis Corporation and Rather Companies. The industry is highly fragmented: the 50 largest companies hold Just 15 percent of the is emerging due to Job security, paid vacations, medical, and life insurance offered by larger company. A large company salon has annual revenue of about $300,000 and 10 employees.
With the exception of employee benefits, big companies have few advantages over smaller ones, which is why the industry remains fragmented. Small businesses can compete successfully through technical superiority or favorable location. The industry is highly labor-intensive: average annual revenue per haircut is Just $35. 000. The average salon occupies about 1,500 square feet and is located near a mall. Average operating expenses, mainly rent and labor, are a high 80 percent of revenue. Haircuts expect tips for providing excellent service.
In the United States, 85 percent of the haircuts are entrepreneurs and self employed. There’s no reason to believe this dominate trend will discontinue. This dominate trend is expected to continue for the following three reasons: 1. It doesn’t cost much to start your business. The haircut is the service and can be produced with shears or electric clippers and trimmers. A good pair of shears cost $50. 00 and up. A good pair of electric clippers and trimmers each cost $65. 00 and up. 2. Many haircuts have home barbershops; this eliminates the concern for finding a building to establish their business.
The start up cost for a home barbershop runs around $400. 00. A styling chair cost around $200. 00 and clippers and trimmer cost around $65. 00 for each. Customer capes, combs, and brushes will run around $10. 00 for each. A good pair of shears cost $50. 00 and up. 3. The entrepreneur trend is expected to continue due to the popularity of booth rentals. Booth rental entails eying a shop owner, who may or may not be a haircut, an agreed weekly dollar amount in compensation for a booth rental space. Haircuts who lease rental spaces are classified as sole proprietors.
Haircuts who elect to booth rent generally charge more for haircuts due to high rental cost. Booth rental spaces are popular with haircuts because the shops are usually located in high traffic locations, which allow them the opportunity to make good money. Obviously, the hair cutting market is expected to grow as the population grows. However, there is a shortage of qualified haircuts. This is mainly true for two reasons: The average annual salary is low. A haircut must establish and build a client base in order to remain in business.
This is a slow and tedious process. For this reason, the average haircut can expect to earn during their first year. 2. The Job has demanding physical requirements. Haircuts spend long hours standing on their feet. Haircuts are constantly twisting and bending their bodies. For these reasons, many haircuts quit the industry or retire early. Best Deal Haircuts will solve this dilemma by establishing a good relationship with the local tatty schools, thereby resulting in a constant flow of qualified haircuts.
