BUDGET BEAUTY BW

Look good for less

Business Plan (ID: 201901207)

March 2021

Ahmed Zoha-E-Shamsia, Founder

Budget Beauty BW
Shop 123, Acacia Mall
Gaborone, Botswana

Phone: (+267)74255006
Email: budgetbeautybw@gmail.com
Website: www.budgetbeauty.co.bw

Copyright © 2021 Budget Beauty BW. – All Rights Reserved.

This document contains proprietary and confidential information. The contents may not be
disclosed to third parties, copied, or duplicated in any form, in whole or in part, without prior
written permission.
 Budget Beauty BW

Table of Contents
Executive Summary..................................................................................................................................... 4
Introduction............................................................................................................................................. 4
Our Mission:............................................................................................................................................ 4
Chart: Highlights......................................................................................................................................... 4
Keys to success in our business are:............................................................................................................. 4
Location................................................................................................................................................... 4
Convenience............................................................................................................................................ 4
Pricing..................................................................................................................................................... 4
Reputation................................................................................................................................................ 5
Environmental & Industry analysis.............................................................................................................. 5
Environmental Analysis........................................................................................................................... 5
Economy:............................................................................................................................................. 5
Technology:......................................................................................................................................... 5
Legal Concerns.................................................................................................................................... 5
Industry Analysis..................................................................................................................................... 5
Industry demand:................................................................................................................................. 5
Competition:........................................................................................................................................ 6
Strengths................................................................................................................................................. 6
Weaknesses............................................................................................................................................. 6
Threats..................................................................................................................................................... 6
Opportunities........................................................................................................................................... 6
Market Segmentation:.......................................................................................................................... 7
Company Summary..................................................................................................................................... 7
Start-up Summary.................................................................................................................................... 7
Table: Start-up......................................................................................................................................... 7
Table: Start-up Funding........................................................................................................................... 8
Products and Services.............................................................................................................................. 9
Hair:......................................................................................................................................................... 9
Nails:....................................................................................................................................................... 9
Skincare:.................................................................................................................................................. 9
Operational Plan........................................................................................................................................ 10
Purchasing Merchandise........................................................................................................................ 10
Storage................................................................................................................................................... 10
Presentation for sale............................................................................................................................... 10
Inventory Control System...................................................................................................................... 10

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Marketing Plan.......................................................................................................................................... 10
Organizational Plan.................................................................................................................................... 10
Organization Chart................................................................................................................................. 11
Table: Staff Plan..................................................................................................................................... 11
Assessment of risk..................................................................................................................................... 12
Work safety............................................................................................................................................ 12
Hygiene................................................................................................................................................. 12
Injuries/damages.................................................................................................................................... 12
Financial Plan............................................................................................................................................ 12
Sales Forecast........................................................................................................................................ 12
Projected Cash Flow................................................................................................................................... 13
Table: Cash Flow.................................................................................................................................... 14
Projected Profit and Loss........................................................................................................................... 15
Table: Projected Profit and Loss............................................................................................................. 15
Appendix................................................................................................................................................... 16

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 Budget Beauty BW

Executive Summary
Introduction

Budget Beauty BW is a full-service beauty salon committed to providing the best service to
clients, ensuring high customer satisfaction at the most affordable price. We aim to offer a
contemporary atmosphere for all our clients as well as maintaining an openminded,
innovative, and well-disposed work environment.
Our Mission: to make you feel beautiful without breaking the bank.
Shamsia Ahmed, founder of Budget Beauty BW has showcased her work on social media
platforms and created a large client following over the years through hard work and
dedication. Moreover, Tahia Ahmed, co-founder of Budget Beauty BW has worked in a well-
known, up-scale beauty salon in Gaborone for the past three years. With our growing
reputation, we believe we will attract new clients and beauticians to support our anticipated
growth.
Other factors that have made this business one of great potential is the location and the
procurement of highly skilled and professional beauticians. It is located in an easily
accessible area for both clients and suppliers. Together, we have what it takes to make this
venture an extremely successful one.
In order to accomplish our goals and objectives, Budget Beauty BW is seeking additional
loan financing. This loan will be paid from the cash flow of the business, and will be
collateralized by the assets of the company, and backed by the character, experience, and
personal guarantees of the owners.

Chart: Highlights

Keys to success in our business are:

Location: Providing an easily accessible location for clients.

Convenience: Offering a variety of services in one setting, and additional business hours.
Pricing: Offering prices that are budget friendly without compromising quality.

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Reputation: Owner and the other beauticians are known for providing excellent service.

Environmental & Industry analysis

Environmental Analysis
Economy:
According to Wikipedia, the economy of Botswana is currently one of the world’s fastest
growing economy. However, due the Covid-19 pandemic, Botswana’s economy faces an
unprecedented challenge. The economy is projected to rebound in 2021 and FocusEconomics
analysts project the economy to grow 4.2% in 2021, which is up 0.3 percentage points from
last month’s forecast, and 4.6% in 2022.
Moreover, due to COVID-19 there has been a sharp increase in the unemployment rate in the
past 3 years. In 2018, unemployment rate was 17.35% whereas in 2020 it is 18.72%.
Commencement of Budget Beauty BW will create job opportunities and contribute to the
growth of the economy as well. We will provide full time jobs as well as part-time student
jobs.

Technology:
The advancements of technology have made communication unbelievably fast and reliable.
With the help of digital technology, we will communicate and keep our customers updated as
well as advertise to attract new clients.
We look forward to utilize technology to provide our clients the best service in the most
efficient manner.

Legal Concerns
We will be working with chemicals and it’s no secret that chemicals are hazardous. We will
follow legal standards and provide our clients and staff with protective clothing/accessories
and pay close attention to expiry dates.
In order to avoid losing large sums of pay-outs and protect our business against legal claims,
we will have commerce insurance cover.

Industry Analysis
Industry demand:
Based on research and close observation, there has been a steady growth in the beauty market
over the past few years. Beauty trends continue to expand and become more competitive as
people become more self-conscious and try to present themselves in the most desirable way
possible.

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Social media has proven to become a popularity especially amongst the youth and one of the
key factors in boosting their self-confidence is beautifying themselves. Budget Beauty BW
will provide beauty services to meet up-to date customer demand ensuring high customer
satisfaction.

Competition:

Strengths Weaknesses

 Excellent customer service  Salon needs refurbishment

 Good internet marketing  Limited product availability
experience  New business
 Technological facilities
 Low profit
 Extended opening hours
 Large range of services
 Budget friendly S w
O T
Opportunities
Threats
 Good market growth
 Emerging competitors
 Area growth
 Unprepared for opening
 Few competitors
numbers
 Can implement loyalty
programmes

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 Budget Beauty BW

Market Segmentation:
Budget Beauty BW will operate in the beauty industry thus our target customers are females
who are between the ages of 20-35.

Company Summary
Budget Beauty BW will be situated in Acacia Mall, the new shopping centre north of
Phakalane. The location is strategically situated on one of the busiest streets in Gaborone.
The beauty salon will utilize 1,500 square feet. It is a high-profit area, with easy access from
all parts of the town.
Upon commencement, Budget Beauty BW will sell a variety of beauty services and products.
We will provide excellent quality beauty services for men and women

Start-up Summary
After spending months looking for a salon to purchase, the owners decided to start a salon
from the ground up. The start-up capital will be used for the design, leasehold improvements,
and equipment of the salon.

Table: Start-up

Start-up
Requirements
Start-up Expenses
Rent deposit P20,880.00
Other P0.00
Total Start-up Expenses P20,880.00

Start-up Assets
Cash Required P8,000.00

Other Current Assets P9,500.00

Long-term Assets P705,698.00
Total Assets P715,198.00

Total Requirements P736,078.00

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Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund P20,880.00
Start-up Assets to Fund P715,198.00
Total Funding Required P736,078.00

Assets
Non-cash Assets from Start-up P707,198.00
Cash Requirements from Start-up P8,000.00
Additional Cash Raised P0.00
Cash Balance on Starting Date P8,000.00
Total Assets P715,198.00

Liabilities and Capital

Liabilities
Current Borrowing P0.00
Long-term Liabilities 713,215.90
Accounts Payable (Outstanding Bills) P0.00
Other Current Liabilities (interest-free) P0.00
Total Liabilities 713,215.90

Capital
Planned Investment
Owner P8,000.00
Investor P0.00
Additional Investment Requirement P0.00
Total Planned Investment P8,000.00

Loss at Start-up (Start-up Expenses) -P20,880.00

Total Capital P1,982.10

Total Capital and Liabilities 715,198.00

Total Funding P736,078.00

Products and Services

Budget Beauty BW is a budget friendly full-service beauty salon. We will offer a wide range
of services that include:

Hair:
 Cuts
 Braiding/weaving
 Relaxers
 Perms

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 Colouring
 Shampoo
 Conditioning
 Curling
 Reconstructing

Nails:
 Manicures
 Pedicures
 Polish

Skincare:
 Body waxing
 Facials
 Skin peels
 Exfoliation
 Massage

Operational Plan
Purchasing Merchandise
We will source our merchandise from both local and global distributors.

Storage
Presentation for sale
Inventory Control System

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 Budget Beauty BW

Marketing Plan
We have one simple marketing plan; satisfied customers.
After thorough research, we’ve learnt that word of mouth is the best advertising for this type
of business. When a client leaves our salon with a new look, he/she is broadcasting our name
and quality to the public. Most of our clients will be referrals from existing clients. We will
offer referral discounts to our clients who recommend us.
In today’s world, social media is a powerful tool for advertising. We showcase our work on
social media and create personalised hashtags (#BudgetBeautyBW) to promote our business
and attract new clients.
In addition to that, we will also provide customer loyalty programmes. This will lead to high
customer retention creating goodwill for the business.

Organizational Plan
Budget Beauty BW will operate as a partnership business between two siblings, Shamsia
Ahmed (Founder) and Tahia Ahmed (Co-Founder). They will be responsible for the business
as whole and all profits or loss will be shared equally.
In order to assist clients, our team will include; two hairstylists, two estheticians, one nail
professional, and a makeup artist. There will be a full-time receptionist who will greet
customers, receive payments and make appointments. The receptionist will also be
responsible for notifying our stuff about appointments beforehand. Additionally, a cleaner
will be hired to ensure cleanliness and maintain high standards of hygiene at all times.
Future plans include the hiring of a colourist and junior assistants as the business expands.

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 Budget Beauty BW

Organization Chart

Shamsia Ahmed Tahia Ahmed (Owner

(Owner & Founder) & Co-Founder)

Receptionist Hairstylists Estheticians Makeup Artist Nail Professional Cleaner

Bu
dget Beauty BW is a small start-up business therefore the communication between owners
and staff is direct. Owners work closely with staff in order to achieve goals and grow the
business.

Table: Staff Plan

Staff Plan
Year 1 Year 2 Year 3
Owner (Stylist) P263,850.00 P275,238.00 P284,475.00
Receptionist P143,500.00 P165,000.00 P178,500.00
Colourist P185,650.00 P200,000.00 P215,556.00
Junior assistants P80,000.00 P100,000.00 P110,500.00
Cleaner P40,000.00 P65,800.00 P78,000.00
Total People 5 5 5
Total Payroll P713,000.00 P806,038.00 P867,031.00

Assessment of risk
All businesses face risks, and like Mark Zuckerberg, founder of Facebook, once said, “The
biggest risk is not taking any risk. In a world that's changing really quickly, the only strategy
that is guaranteed to fail is not taking risks.”

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We have identified the possible business risks and ways through which consequences of such
risks can be minimized.

Work safety
Firstly, we will be equipped with well-placed fire extinguishers in case of a fire. Security
systems and cameras will be installed in the workplace to deter crime/theft.
As for we will be working with chemicals such as glues, polishes, removers, emollients,
colourants and other salon products; our staff will be provided with protective gloves and
accessory for safety.

Hygiene
In order to prevent the risks of cross contamination, we will maintain high standards of
hygiene in our beauty salon. Before and after treating each client, it is mandatory for staff to
thoroughly wash their hands and all dirty tools are to be sanitized using disinfecting
chemicals. Clean and sterile towels will be used for each client. Cleaners will ensure work
station is clean and ready for use after each client has been assisted.

Injuries/damages
When working with chemicals or doing a treatment such as hair dyes, waxing and other
beauty treatments there is a possibility that a client might have a negative reaction for
example burns, cuts or bodily injury. These risks are inevitable and unforeseeable. Clients
will be made aware of such risks and treatments will only be performed after taking consent
from client.

Financial Plan
Our goal is to be a profitable business beginning in the first month. The business will not
have to wait long for clients to learn about it since the stylists will already have an existing
client base.

Sales Forecast
In our sales forecast, we anticipate the highest peak especially during festive seasons, on the
months of November and December.

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
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Sales
Owner P447,304.00 P529,400.00 P624,913.00
Co-owner P447,304.00 P529,400.00 P624,913.00
Nail Professional P356,816.00 P490,687.00 P522,756.00
Makeup Artist P200,556.00 P288,856.00 P320,110.00
Hairstylist #1 P389,600.00 P420,550.00 P500,000.00
Esthetician #1 P325,800.00 P390,500.00 P428,600.00
Hairstylist #2 P218,642.00 P396,600.00 P420,800.00
Esthetician #2 P200,865.00 P258,600.00 P310,823.00

Product Sales P105,929.00 P110,350.00 P121,738.00

Total Sales P2,692,816.00 P3,414,943.00 P3,874,653.00

Direct Cost of Sales Year 1 Year 2 Year 3

Product Costs P47,668.00 P47,440.00 P48,550.00
Other P0.00 P0.00 P0.00
Subtotal Direct cost of sales P47,668.00 P47,440.00 P48,550.00

Projected Cash Flow

Over the next three years, we plan to manage cash flow solely through the growth of the
business's cash flow. The company's cash flow will be sufficient to cover all of its expenses.

Table: Cash Flow

Pro Forma Cash Flow
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales P2,692,816.00 P3,414,943.00 P3,874,653.00
Subtotal Cash from Operations P2,692,816.00 P3,414,943.00 P3,874,653.00
Additional Cash Received
Sales Tax, VAT, HST/GST Received P0.00 P0.00 P0.00
New Current Borrowing P0.00 P0.00 P0.00
New Other Liabilities (interest-free) P0.00 P0.00 P0.00
New Long-term Liabilities P0.00 P0.00 P0.00
Sales of Other Current Assets P0.00 P0.00 P0.00
Sales of Long-term Assets P0.00 P0.00 P0.00

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New Investment Received P0.00 P0.00 P0.00

Subtotal Cash Received P2,692,816.00 P3,414,943.00 P3,874,653.00
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending P713,000.00 P806,038.00 P867,031.00
Bill Payments P110,590.00 P140,260.00 P168,500.00
Subtotal Spent on Operations P823,590.00 P946,298.00 P1,035,531.00
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out P0.00 P0.00 P0.00
Principal Repayment of Current P0.00 P0.00 P0.00
Borrowing
Other Liabilities Principal Repayment P0.00 P0.00 P0.00
Long-term Liabilities Principal P131,526.00 P131,526.00 P131,526.00
Repayment
Purchase Other Current Assets P0.00 P0.00 P0.00
Purchase Long-term Assets P0.00 P0.00 P0.00
Dividends P0.00 P0.00 P0.00
Subtotal Cash Spent P955,116.00 P1,077,824.00 P1,167,057.00
Net Cash Flow P1,737,700.00 P2,337,119.00 P2,707,596.00
Cash Balance

Projected Profit and Loss

Our very conservative profit and loss forecasts for the next three years are shown in the table
below. All payments for independently contracted stylists and technicians, as well as all
frequently occurring supply costs associated with service sales, are included in the table.

Table: Projected Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales P2,692,816.00 P3,414,943.00 P3,874,653.00
Direct Cost of Sales P47,668.00 P47,440.00 P48,550.00
Other Costs of Sales P0.00 P0.00 P0.00
Total Cost of Sales P47,668.00 P47,440.00 P48,550.00

Gross Margin P2,645,148.00 P3,367,503.00 P3,826,103.00

Gross Margin % 98.23% 98.61% 98.75%
Expenses
Payroll P713,000.00 P806,038.00 P867,031.00
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Payroll Taxes

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Independently contracted stylists

Supplies
Other
Total Operating Expenses
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

Appendix
https://www.focus-economics.com/countries/botswana
https://www.statista.com/statistics/407807/unemployment-rate-in-botswana/
https://en.wikipedia.org/wiki/Economy_of_Botswana

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