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Vogue Hair Salon Feasibility Study
Submitted by:
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Hilda T. dela Cuesta
Geraldine Tanya
Debby Albano

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Johna Cruz
Trixie Balajadia

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Submitted to : Mrs. Sardido

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 Vogue Hair Salon Feasibility Study

Table of Contents
Introduction 3
Executive Summary 3
Introduction 3
Mission 3
Motto 3
The Company 3
The Market 3-4
Industry Analysis and Marketing Plan 4
Objectives 4
Milestones 4
Market Segmentation 4
Target Market Segment Strategy 5
Service Business Analysis 5
Competition and Buying Patterns 5
Strategy and Implementation Summary 5
Competitive Edge 5
Marketing Strategy 6
Sales Strategy 6
Sales Forecast 6
Description of Venture and Organizational Plan 6
Services 6
Personnel Plan 7
Background of the Personnel 7-8
Production Plan8
Assessment of Risks 9
Financial Plan 9
Pro forma Income Statement 9-10
Cashflow Projections 10
Pro forma Balance Sheet 10-11
Sources and Applications of funds 11-12

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 Vogue Hair Salon Feasibility Study

I. Introduction
Soon, a fresh new servile salon will be opened with the name “Vogue Hair Salon”. A shopping mall is a place where a business
can have its maximum exposure and so it is decided that Vogue Hair Salon will be will be located at the 2nd floor of LCC Mall, Nabua,
Camarines Sur.
The customers will be provided with services above their expectations because the personnel of Vogue will all be professionals.

II. Executive Summary

Introduction
Vogue is a hair salon that allows the entire family to have their hair needs satisfied in one convenient visit. 
Many of salons today, such as F Salon, only provide the minimum services, whereas the expensive salons can be inconvenient due
to scheduling requirements and cost. Vogue will provide 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.

Mission
Vogue mission is to provide reasonably priced, convenient hair styling. We exist to attract and maintain customers. When we adhere
to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers. 

Motto
Our Passion is your Hair’s Fashion.

The Company
What will set Vogue apart from the competition is our commitment to providing all of these services in one convenient location. The
salon will be located in a retail strip mall at 2nd Floor, Lcc Mall, Nabua, Camarines Sur. The salon will utilize 1,540 square feet. The
location is strategically situated on one of the busiest streets in Nabua. It is a high profile area, with easy access from all parts of
town.

The Market
The marketing strategy is a simple one: satisfied clients are the best marketing tool. When a client leaves Vogue with a new look,
he or she is broadcasting our name and quality to the public. Most of the clients will be referrals from existing clients.
No major advertising campaigns are expected. Our research has shown that word of mouth is the best advertising for this type of
business. We will, however, run specials throughout the week. We will also ask clients for referrals, and reward them with
discounted or free services depending on the number of clients they bring. We will also offer discounts to the new clients who have
been referred. There are plans for a lottery that will offer a free trip to, say, Boracay. A client would simply refer new clients to us,
and we will place a card in a box for each client he or she brings. The more they bring, the more chances they have of winning the
trip.
With this strategy in mind, the company's goal is to increase the number of clients served by at least 20% per year.
Vogue will target three different market segments:
 Men will typically make up 70-75% of the clientele. 
 Females who cannot afford a high-class salon. 
 Young mothers with children. 

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III. Industry Analysis and Marketing Plan

Vogue will be targeting three different groups of customers. Vogue will work hard to distinctly appeal to each of these groups. By
focusing on more than one group, Vogue is lowering their risk that in a recession one group will negatively affect the company.

Objectives
The objectives for the first three years of operation include:
1. To create a service-based company whose goal is to exceed customer's expectations.
2. To increase the number of clients served by at least 20% per year through superior performance and word-of-mouth
referrals.
3. To develop a sustainable start-up business, contributing to increased employment of community residents.

Milestones
Vogue will have several milestones early on:
1. Business plan completion. This will be done as a roadmap for the organization. 
2. Set up the store front.
3. Revenue exceeding ₱4300000.
4. Profitability.

Market Segmentation
Vogue will target three different market segments:
 Men will typically make up 70-75% of the clientele. Men have shorter hair requiring a faster, simpler job.

 Females who cannot afford a high-class salon. Women tend to favour a female specific high-class salon if they can
afford it. There is not often a difference in quality of an high-class salon  relative to a family hair salon other than a high-class
salon will tend to pamper you more, only accepts appointments, and the facility is generally a bit plusher. Someone who is
financially responsible as opposed to someone who likes luxury will favour a family style salon.

 Young mothers with children. Most young children are notoriously difficult when it comes to getting haircuts. A family
style salon is a more laid-back place that allows the children to play while they are waiting and then will work with the
parents in calming the kids’ nerves when they are ready for their shearing.

Market Analysis
Potential Customers Growth
Males 9%
Females 10%
Mothers with young 9%
children
Total 9.27%

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Target Market Segment Strategy

Vogue will target each of the three groups separately. The males will be targeted by offering a quick, convenient, service. Because
men tend to have shorter hair, they usually require haircuts more often. If they are getting a cut every four weeks and work normal
business hours, most barbers are closed when the male customers have free time. Bravura Virtuoso will cater to males with evening
hours, no appointments necessary and quick turnaround times.
Generally females prefer the allure of high-class salons, however, not everyone can afford this luxury. For this reason Vogue will
provide the same quality hair styling, without the expensive price. Vogue will target these customers by emphasizing
the sophisticated, ultra-hip styling that Vogue can offer.
Vogue will also target mothers with children by offering the kids toys to play with while they wait and child-friendly hair stylists.
Additionally, children receive a special rate reflecting the fact that children's hair grows so fast that it can be expensive to keep up
with regular cuts, as well as the recognition that it generally takes a lot less time to cut a child's hair so it should be inherently less
expensive.

Service Business Analysis

The "hair" service industry is fairly diverse. On one end of the spectrum you have the traditional barber, on the other end you have
the fashionable boutique salons. Somewhere in between there are independent hair stylists, franchise barbers and stylists, and
beauty salons. 

Competition and Buying Patterns

Vogue ‘s competitors include:
1. Traditional barbers. They rarely serve appointments, it is generally a walk-in service. While barbers are usually willing
to provide whatever cut you are interested, they are generally providing straight forward haircuts, typically on the
conservative side. The advantages of a barber are they are inexpensive and easy to use. Their disadvantages is often
conservative styling capacities, sometimes a long wait as the barber may be an old timer who enjoys to chit chat.
2. Franchised "quick salons."  An example of this would be Charm Salon or F Salon franchised version of Vogue. The
advantage of this style is the store will be the same from location to location and some people like this regularity. 
3. Independent salons. These shops typically focus on a specific position and do not serve a wide group of customers.
The advantages to these could be an independent salon that fulfils all of your needs. The disadvantage is that because they
tend to be more focused, more often than not this type of salon will not offer exactly what customers are looking for.
The buying patterns of men and women are quite different. Typically men are more price or convenience sensitive. Men typically
care less about the task of getting their hair cut. For them whatever is easiest works best. Women on the other hand are more
caught up in hair styling and tend to bond more with their stylists. Because they bond more, they are much more loyal to their
stylist. Once a stylist has earned their trust they are more willing to blindly put their hair in the stylists’ hands.

Strategy and Implementation Summary

Vogue will rely on three separate strategies to grow market share. The first is superior customer service. Customers will be blown
away with the level of service that they receive. They have expectations of average (at best) customer service from a quick salon
based on past experiences. 
Vogue will also be influencing its high-traffic store front location in a shopping center to drive people into the store. They will benefit
from the shopping center association's marketing efforts to bring more people to the center.
Lastly, Vogue will use financial incentives early on to build a large, loyal customer population.

Competitive Edge
Vogue competitive edge is based on faultless customer service. Vogue recognizes that the hair cutting/styling market is crowded so
it is difficult to stand out. Vogue will stand out by providing superior customer attention. This is particularly important in the "quick
salon" space that Vogue operates in because margins are a bit lower and the goal of a quick salon is to crank through customers.
Bravura Virtuoso will invest time and money into training to ensure that clients receive the best experience possible making it easier
to turn them into long-term customers. By providing superior customer service, Vogue will be able to effectively compete against
and outlast larger chains and independent stores.

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Marketing Strategy
Vogue will be located in a shopping center in Lcc Mall, Nabua, Camarines Sur. While the cost of the lease per foot is higher than in
other business areas, the shopping center provides the best exposure. Additionally, the shopping center association is responsible
for marketing the center's common area which will help draw a lot of traffic to the shopping center.
Vogue will market itself as a hair salon that serves everyone, men, women, and children. This will be done through flyers to be sent
out with the local newspaper. Vogue will also have an in-store promotion for the first few months to lure new people in. Lastly,
Vogue will offer a discount for a few months to people that refer new customers.  

Sales Strategy
Vogue sales strategy will be based on extremely professional interactions with the customer. Typically the "quick salons"
concentrate on being quick and inexpensive, often at the expense of customer service. Anytime that a prospective customer is
speaking with someone at Vogue 's the employee will have an opportunity to impress the customer. Employee training will
emphasize seizing these opportunities.
Vogue will also have the opportunity to increase sales of their retail hair care products every time they have a customer in the chair.
Vogue offers deep discounts on the hair care products for employees to encourage usage so they can explain to the customer about
their personal experiences. Additionally, Vogue offers a product-based commission structure for the hair care products where they
give away the product to the employee for commissions for selling the items to their customers. These personal testimonials and
commission structure will allow Vogue to generate good sales from the retail hair care products.

Sales Forecast
The first month will be used to set up the store and hire and train the employees. The store will be officially open the second
month. Sales for month two through will four will be somewhat slow as Vogue will be building up a customer base. From month
four on sales will grow steadily.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Males ₱9437888.77 ₱17190614.15 ₱17889918.27
Females ₱943780.18 ₱1719070.11 ₱1789013.56
Women with small children ₱94373.67 ₱171924.40 ₱178879.62
Retail hair care products ₱1571402.05 ₱2862247.82 ₱2978660.85
Total Sales ₱12047444.67 ₱21943856.48 ₱22836472.30

Direct Cost of Sales Year 1 Year 2 Year 3

Males ₱1132527.53 ₱2062875.44 ₱2146772.80
Females ₱113239.71 ₱206265.81 ₱214699.02
Women with small children ₱11345.71 ₱20648.32 ₱21474.25
Retail hair care products ₱628578.21 ₱1144916.52 ₱1191473.03
Subtotal Direct Cost of Sales ₱1885691.16 ₱3434706.09 ₱3574419.10

IV. Description of Venture and Organizational Plan

Services
Vogue provides hair styling for the entire family. This includes hair cuts for men and women, permanents and hair coloring for
women, as well as hair cuts for children. Shampoos will be offered for all adult services. Service is offered on a walk-in basis or by
appointment. Vogue will point out a customer presumes service where the customer's needs are always the priority.
Vogue will also sell hair care products which are forecasted to account for 15% of sales. These professional-quality supplies will
include shampoos, conditioners, reconstructors, brushes, combs, and other styling aids.
We will offer a wide range of services that include:
 Hair: cuts, relaxers, perms, colours, shampoo, conditioning, curling, reconstructing, weaving, and waving.
Vogue is capable of accommodating 10 people or more at the same time, yet it is still spacious enough for them to relax.
Customer’s company will be seated on a large and spacious leather sofa wherein they can watch their companion.
Vogue’s incomplete list of equipments:
 Computers
 Hair equipments such as, shears, thinning scissors, comb, clips, shampoo cups, towel, hair brush, driers etc.

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 Vogue Hair Salon Feasibility Study

 Chair
 Washing Basin
 Cabinets
 Mirrors
 Desks
 Processors, steamers, lamps

Personnel Plan
Owners will be working full time for Vogue. They will be handling all hiring and training, purchasing, and retail sales. They will also
hire a receptionist to manage all of the appointments as well as the people who walk in and be responsible for the point of sale. The
receptionist will be paid an hourly wage. They will also be hiring six part-time hair stylists who will operate on a hourly basis. 
They will be using a partial commission basis to create incentives for superior customer attention. The more their stylists attend to
the customer's needs, the more money they will make off commissions. They are more than happy to pay for this type of
performance.

Personnel Plan
Year 1 Year 2 Year 3
Kim Jaejoong and Kim Hyun Joong ₱1564925.00 ₱1738805.55 ₱1912686.11
(owners)
2 Receptionist ₱765074.44 ₱834626.66 ₱834626.66
Part-time hair stylist ₱1434514.58 ₱1564925.00 ₱1564925.00
Part-time hair stylist ₱1434514.58 ₱1564925.00 ₱1564925.00
Part-time hair stylist ₱1434514.58 ₱1564925.00 ₱1564925.00
Part-time hair stylist ₱1434514.58 ₱1564925.00 ₱1564925.00
Part-time hair stylist ₱1434514.58 ₱1564925.00 ₱1564925.00
2 All-around assistant ₱1434514.58 ₱1564925.00 ₱1564925.00
Total People 11 11 11

Total Payroll ₱10937086.92 ₱11963102.21 ₱12136862.77

All of the hair stylists are part timer only but each has different time slot.
This business is a partnership wherein the owners are general partners which means that they share ownership and
management of the business and are liable to the extent of their separate property after all the assets of the partnership are
exhausted.
They are also thinking of not hiring friends because sometimes we tend to forgive our personnel easily because they’re our
friends even though we should’ve lecture them, this is why some business fails. Feelings should be separated from work.
It is the responsibility of the principals to watch/observe and train/lecture the personnel while the hair stylist should do his best
to meet the expectation of the customer. And the all-around assistant should be responsible enough to concentrate on his
duties and do it accordingly.

Background of the Personnel

Kim Hyun Joong and Kim Jaejoong both finished college in U.P. Diliman, bachelor’s degree in business management.
The receptionist will either be a working student or a bachelor with a course related to communication.
The hair-stylist should’ve finished hair styling and has lots of experience.
The all-around assistant should at least be a high school graduate who can speak English.

V. Production Plan

Raw Materials

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Hair Perm
Hair colours
Hair Treatment

Put in Casing then weigh

Storage

Some Machinery and Equipment:

 Computer with point of sale terminal.
 Computer with printer for back office.
 Five cutting stations, each station requires a barber chair, cabinet, large mirror, blow dryer, curling iron, electric razor,
several pairs of scissors, spray bottle, two sided mirror, and assorted combs and brushes.
 Desk for reception area.
 Three couches for the reception area.
 Display shelf for sale of retail products.

Our supplier for raw materials is Pro-Beauty Supplies. This supplier is trusted and their materials are always in its best quality.

VI. Assessment of Risk

As of what we see, the weakness of the business is that when a customer wasn’t satisfied with the service of one of the personnel,
the salon will be very much affected. The customer might tell others that Vogue’s service is bad which may cause bankruptcy of the
owners and the salon might be closed down. So, in order to prevent that event, we will contact the unsatisfied customer and give

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 Vogue Hair Salon Feasibility Study
him/her a special free treatment in exchange for the bad service. The personnel at fault will be the one who’ll be charged of the
treatment.
Another one, the most common problems in salons today, is that when the customer’s hair is damaged. It will be the responsible of
the salon. To avoid this, only well-trained personnel will be hired in Vogue. This happens because some hair stylist isn’t
knowledgeable enough to know that treatments don’t suit everyone’s hair.
As of technologies, we all know that things change as time passes. And so, the personnel should take care of the things in Vogue so
that when time comes that a new hair technology was released, the old one can be sell and many will take interest because it still
looks new.

IX. Financial Plan

Pro Forma Income Statement

Year 1 Year 2 Year 3
Sales ₱12047444.67 ₱21943813.00 ₱22836472.30
Direct Cost of Sales ₱1885691.15 ₱3434706.08 ₱3574419.10
Other Production Expenses ₱0 ₱0 ₱0
Total Cost of Sales ₱1885691.15 ₱3434706.08 ₱3574419.10

Gross Margin ₱10161753.52 ₱18509150.40 ₱19262096.67

Gross Margin % 84.35% 84.35% 84.35%

Expenses
Payroll ₱10937086.92 ₱11962982.19 ₱12136862.75
Sales and Marketing and Other ₱62683.94 ₱0 ₱0
Expenses
Depreciation ₱63640.28 ₱63640.28 ₱63640.28
Leased Equipment ₱0 ₱0 ₱0
Utilities ₱52164.17 ₱52164.17 ₱52164.17
Insurance ₱65205.21 ₱65205.21 ₱65205.21
Rent ₱1043283.33 ₱1043283.33 ₱1043283.33
Payroll Taxes ₱1640563.04 ₱1794447.33 ₱1820529.41
Other ₱0 ₱0 ₱0

Total Operating Expenses ₱13864626.89 ₱14981722.51 ₱15181685.15

Profit Before Interest and Taxes (₱3702873.36) ₱3527427.88 ₱4080411.52

EBITDA (₱3639233.08) ₱3591068.17 ₱4144051.80
Interest Expense ₱195615.62 ₱195615.62 ₱195615.62
Taxes Incurred ₱0 ₱999552.37 ₱1165434.42

Net Profit (₱3898488.99) ₱2332259.89 ₱2719361.47

Net Profit/Sales -32.36% 10.63% 11.91%

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales ₱12047444.67 ₱21943813.00 ₱22836472.30
Subtotal Cash from Operations ₱12047444.67 ₱21943813.00 ₱22836472.30

Additional Cash Received

Sales Tax, VAT, HST/GST Received ₱0 ₱0 ₱0
New Current Borrowing ₱0 ₱0 ₱0
New Other Liabilities (interest-free) ₱0 ₱0 ₱0
New Long-term Liabilities ₱0 ₱0 ₱0

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 Vogue Hair Salon Feasibility Study
Sales of Other Current Assets ₱0 ₱0 ₱0
Sales of Long-term Assets ₱0 ₱0 ₱0
New Investment Received ₱0 ₱0 ₱0
Subtotal Cash Received ₱12047444.67 ₱21943813.00 ₱22836472.30

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending ₱10937086.92 ₱11962982.19 ₱12136862.75
Bill Payments ₱4425955.65 ₱7480776.18 ₱7889352.02
Subtotal Spent on Operations ₱15363042.57 ₱19443758.38 ₱20026214.77

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out ₱0 ₱0 ₱0
Principal Repayment of Current ₱0 ₱0 ₱0
Borrowing
Other Liabilities Principal Repayment ₱0 ₱0 ₱0
Long-term Liabilities Principal ₱0 ₱0 ₱0
Repayment
Purchase Other Current Assets ₱0 ₱0 ₱0
Purchase Long-term Assets ₱0 ₱0 ₱0
Dividends ₱0 ₱0 ₱0
Subtotal Cash Spent ₱15363042.57 ₱19443758.38 ₱20026214.77

Net Cash Flow (₱3315597.90) ₱2500098.09 ₱2810257.53

Cash Balance ₱882748.11 ₱3382846.20 ₱6193060.26

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash ₱882748.11 ₱3382846.20 ₱3382846.20
Other Current Assets ₱0 ₱0 ₱0
Total Current Assets ₱882748.11 ₱3382846.20 ₱3382846.20

Long-term Assets
Long-term Assets ₱318201.42 ₱318201.42 ₱318201.42
Accumulated Depreciation ₱63640.28 ₱127280.57 ₱190920.85
Total Long-term Assets ₱254561.13 ₱190920.85 ₱127280.57
Total Assets ₱1137309.24 ₱3573767.05 ₱6320340.83

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable ₱519250.81 ₱623405.26 ₱650661.04
Current Borrowing ₱0 ₱0 ₱0
Other Current Liabilities ₱0 ₱0 ₱0
Subtotal Current Liabilities ₱519250.81 ₱623405.26 ₱650661.04

Long-term Liabilities ₱1956156.25 ₱1956156.25 ₱1956156.25

Total Liabilities ₱2475407.05 ₱2579561.51 ₱2606817.28

Paid-in Capital ₱2608208.33 ₱₱2608208.33 ₱2608208.33

Retained Earnings ₱ (47817.15) ₱ (3946306.14) ₱ (1614046.25)
Earnings ₱(3898488.99) ₱2332259.89 ₱2719361.47
Total Capital ₱(1338097.81) ₱994162.07 ₱3713523.55
Total Liabilities and Capital ₱1137309.24 ₱3573767.05 ₱6320340.83

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Net Worth ₱(1338097.81) ₱994162.07 ₱3713523.55

Start-up Funding

Start-up Expenses to Fund ₱47817.15

Start-up Assets to Fund ₱4516547.42
Total Funding Required ₱4564364.57

Assets
Non-cash Assets from Start-up ₱318201.42
Cash Requirements from Start-up ₱4198346.00
Additional Cash Raised ₱0
Cash Balance on Starting Date ₱4198346.00
Total Assets 4516547.42

Liabilities and Capital

Liabilities
Current Borrowing ₱0
Long-term Liabilities ₱1956156.25
Accounts Payable (Outstanding Bills) ₱0
Other Current Liabilities (interest-free) ₱0
Total Liabilities ₱1956156.25

Capital

Planned Investment
Kim Jaejoong ₱1738805.55
Kim Hyun Joong ₱869402.78
Other ₱0
Additional Investment Requirement ₱0
Total Planned Investment ₱2608208.33

Loss at Start-up (Start-up Expenses) (₱47817.15)

Total Capital ₱2560391.17

Total Capital and Liabilities ₱4516547.42

Total Funding ₱4564364.57

Start-up

Requirements

Start-up Expenses
Legal ₱43470.14
Stationery etc. ₱4347.01
Other ₱0
Total Start-up Expenses ₱47817.15

Start-up Assets
Cash Required ₱4198346.00
Other Current Assets ₱0

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Long-term Assets ₱318201.42

Total Assets ₱4516547.42

Total Requirements ₱4564364.57

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