Business Strategy

Business planning: A case study on opening hairdresser

Product specification

Strategic business planning is an appropriate tactics of developing planning and procedure to set up an organisation (Kemp, 2018). It is essential to establish the hairstyling business and maximise profitability by utilising the organisational resources and capabilities.

The products are, Hair cutting, colours, shampoo, conditioning, reconstructing, curling, waving and straightening, organic products including shampoo and hair colour The name of the hairdressing business will be ‘Crazy Hair’ where the main focus of the business is to maximise the value of the customers by delivering high quality services to them as per their needs and preferences. In this regard, the organisation will provide hair cutting and colour facilities and along with these, there are different services such as shampoo, conditioning, reconstructing, curling, waving and straightening. The business will provide efficient hair dressing service for providing opportunity to look different, unique and also dressing hair as per different occasion of the individuals. The organisation mainly aims at develop customer centric business model to meet the requirements of the customers by delivering high quality services to them according to their specific needs and preferences. Organic products of hair are further advantageous for the organisation to establish the business sustainably and retain more clients for their products and quality services.

Market research

The company Crazy hair will focus on different customer’s group for successful segmentation and targeting the market so that it can be ensured that the sales volume and profitability of the company will be maximised. The main three segments of customers will be men, women and the mothers with children. It has been found that, the number of male customers is high as compared to the women and the mothers with children (Bryson, 2018).

As per the market analysis, it can be stated that there will be market growth in the hairdressing industry where the business Crazy Hair can establish their business and expand it successfully. The business is similar to the independent hair stylist where the owner tries to set up the organisational independently.

Financial planning

In order to start up the business, it is necessary to rent premises as well as invest for electricity and interior decoration. In addition to these, the organisation provides music system, free Wi-Fi to the customers for encouraging them. Apart from that the cost of organic hair products and the physical resources of the hair stylist organisation also need to be borne by the owner of the company. The advertisement cost and the payment to the staff members are also necessary where the company needs to bear these costs for hiring efficient employees and promoting the company in the market. The total expenses estimated for establishing the company is $80000.

Start up cost and running cost:

The start up cost is the cost that has been paid by the owner of the start up business before starting the business. On the other hand, the running cost involves once the service has been launched. This cost is variable and payable by the owner on each month. In this regard the start up cost of the business is like land, premises, advertisement, interior decoration, music system and physical resources for hair styling. On the other hand, the running or operating cost of the business is electricity, Wi-Fi, organic products and payment to the staff members where the owner has to bear these expenses monthly.

Cash flow forecast:

The cash flows are necessary to be forecasted in order to analyse the profit and loss of the business. In the initial stage of the business, ten cash flow of the organisation is higher but in the next phase the cash flows will be decreasing.

It has been projected that, on the first few months, there will be loss as the owner needs to invest more to start up the business. After proper investment, the owner cannot maximise its profitability as at the first pace of the business it is quiet difficult for the owner to retain more customers. After 10th month, it can be predicted that there will be profit volume for the business due to high customer retention. This phase is important for building brand image and customers loyalty in the market where the owner aims at deliver high quality service to the customers at affordable price.

The total expense at the initial level is approximately $80000 where the company cannot generate profit volume due to lack of customer base and promotion of the brand in the market. In the second year after establishing the company, it is possible to generate profitability through maximise the sales volume of the organisation. It can be projected that, there will be $60000 profit in the second year and in the third years the profitability volume will be approximately $70000.

Break even estimation:

Break even analysis is helpful to analyse the profitability and sales volume of the company where it is predicted that what is the exact unit the company needs to sell in order to generate profitability. Through the break even analysis, it is also possible o identify the profitability and sales volume of the company.

As the cost of the organisation is $80000 in establishing the hair styling business, it is necessary to sell 160 units where the price will be $500. If the organisation is successful in serving more than 160 customers, there will be profitability and lower than 160 customers indicates that the company is not able to generate profitability.

Required resources of opening hairdresser


Premises: The organisation needs premises with 500 square feet where the service providers can serve approximately 6 customers at a time. Cleaned floor and proper spaces are also required for establishing the saloon successfully.

Physical equipments: Shampoo bowls, dryers, straighteners, chairs, mirrors, hair dressers set, organic products

The premises are therefore important to set up the organisation where the owner needs to be concerned about the market place and the size of the premise so that he or she can establish the business sustainably. Moreover, in order to open the business of hairdressing, the organisation also needs to invest in physical equipment for providing quality hair dressing services. The main physical equipment so the company will be different products of different reputed brands including shampoo, spa and nourishment hair products and different colours so that it is possible to meet the requirements of the customers. Apart from that, it is necessary to invest in dryers, straighteners, chairs, mirrors and full hair dresser set for fulfilling the needs and preferences of different individual.

Human resource:

The company Crazy Hair targets to recruit experiences hair stylist who can manage the customers by providing high quality service. As the owner is going to start the business, it is necessary for the firm to maintain high standard and deliver quality hair dressing services in order to retain the customers successfully. In this regard, the owner needs to recruit two main experienced hair dressers. Apart from that, the owner also needs to recruit 4 helping staff members who can cooperate with the main hair dressers in order to serve high quality services to the customers. In this regard, the company needs to provide training and development to the helping staff members so that they can improve their knowledge in the hair dressing field and do their responsibility successfully in the workplace.

Evaluating successful planning

The planning process is effective where the company is trying to establish the brand at effective market by targeting the different customer segment. The variety of products and services in the hair dressing company is beneficial for the organisation Crazy Hair top establish the branch and target the customers across the country. It is also advantageous to target different groups of customer’s segment where the company targets men, women and the mothers with their children. The target segment of the customers is large which provides a scope to the business to increase their sales and profitability volume by retaining the customers for the quality services. The financial planning and start up cost are also effective to develop strategic planning and establish the company sustainably (Channon and Jalland, 2016). In addition to these, the resources and capabilities of the organisation are also helpful to meet the objective of the company where the owner aims at maximising customer’s value through delivering quality services including hair dressing, hair cutting, colouring and others. In this regard, the required premises as well as the physical equipments are also effective for the organisation Crazy hair to improve in ovation and set up the brand successfully.

The long premises as well as the branded products including organic hair products are helpful to improve brand image and reputation in the market. The organic products are therefore beneficial for the organisation to target the customers and improve loyalty among the customers. The company also can ensure that it only use the organic products which is not harmful for the human being. Organic products in this regard play a crucial role in setting up the business suitably where the company can retain the customers for their quality services and organic products. For the quality products and efficient of the service, it is possible to forecast that the target customers in this business is increasing year to year which is advantageous for the business to set up the brand and run the business sustainably (Morecroft, 2015). In addition to these, effective human resource including efficient staff members as well as the helpers in the hair styling organisation are helpful to meet the requirements of target customers and provide proper service as per their needs and preferences.

Reference List

  • Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. New Jersey: John Wiley & Sons.
  • Channon, D.F. and Jalland, M., 2016. Multinational strategic planning. Berlin: Springer.
  • Cosenz, F., 2017. Supporting start-up business model design through system dynamics modelling. Management Decision, 55(1), pp.57-80.
  • Kemp, R.L., 2018. Strategic planning in local government. London: Routledge.
  • Morecroft, J.D., 2015. Strategic modelling and business dynamics: a feedback systems approach. New Jersey: John Wiley & Sons.
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