The Booming Beauty Salon Industry in the UK

Executive Summary

Since the start of the 21st century, the service industry has been growing steadily all over the world. Nowadays, people are more conscious about the way they look than a decade ago. As a result, the beauty industry has been growing rapidly as both men and women try to get maintain an attractive image in society. In the United Kingdom alone, beauty salons have increased exponentially in the last five years due to positive change in consumer sentiments and an increase in per capita disposable income. Beauty salons help fulfill the fantasies and needs of women who love to look and feel good at all times. Most of these salons offer services such as nail grooming, manicure, hair perming, spa services, and many more. Additionally, there has been an increasing demand for ancillary services such as massages and skin-care services. There are over 200,000 beauty salons in the UK which provide customers with an all-round beauty experience. Furthermore, the industry employs thousands of workers and the training required is small and inexpensive.

With consumer confidence rising and improvements in cosmetics, hair salons are enjoying good patronage especially if they are positioned strategically. This is where Pearl Beauty comes in to take advantage of the current market cap. Pearl Beauty is a classy beauty salon that will be opened at 28 Brentwood Avenue, Jesmond. Currently, there is an existing business in the premises known as Julie Carter Beauty and we want to buy the business and rebrand it to Pearl Beauty. The current business, Julie Carter Beauty is a classy salon established in 2004 and provides a wide range of services and treatments to more than 10,000 registered customers in Newcastle and neighboring areas. The salon has an outstanding reputation for quality, service, and innovation in the whole locality. Moreover, it has employed fully trained and qualified staffs who have been in the business for long. Pearl Beauty wants to take advantage of these aspects to become the best beauty spot in the region. Pearl Beauty will be located in the busy Brentwood Avenue, in Jesmond, which has a parade of shops that host high-quality stores such as Cake Stories Coffee House. Furthermore, the area is densely populated with young professionals, families, and students. There is also ample free parking along the street for customers. Pearl Beauty will focus primarily on helping its clients look at their best all the time. Our prices will be affordable. Moreover, we will hire a team of professionals dedicated to satisfying our client`s needs.

Key activities/Services Offered

Since the beauty industry focuses on service delivery, the business model will revolve around the activities that will be embarked on by the workforce. Pearl Beauty is a standard and well-equipped beauty salon that offers a wide range of services that revolves around hair and skin treatment. The business intends to give customers every reason to hire our services since we have customized them to fit the client`s needs. We have a nail bar with four seats, four treatment rooms and one room for the spray tan. The services that we will offer include manicure, pedicure, skin waxing, skin polishing, skin turning, fixing artificial nails, perming of hair, massage services, CACI ultra-treatments, Guinot, Bio Sculpture, Jessica, Lycon waxing, and Vita Liberata tanning. Furthermore, through a partnership with cosmetic companies, the businesses will advise customers on the best beauty products in the market.

Vision and Mission Statements

The vision of the enterprise is to provide our current and potential clients with the best beauty and treatment services in Newcastle through our highly qualified beauty therapists. Our mission is to offer professional and customized service to our customers to meet their beauty needs.

The Team

The business will embark on a thorough staffing procedure that will involve proper vetting of the candidates to ensure they are qualified for the task assigned to them. Having a competent workforce is crucial to keeping clients satisfied, which will help boost loyalty to our brand. Since the business entails dealing with multiple clients, the staff will be trained to equip them with the necessary communication skills interact well with customers. The primary goal is customer satisfaction to maintain and boost the reputation of the business. The current business has seven full time and part time qualified beauty therapists, an apprentice trainee therapist, and a part-time receptionist. Pearl Beauty will incorporate these employees to the new management because they have considerable experience with the business and they are fully trained across all products and treatments. This will lower the cost of hiring and training new personnel. However, the business will hire a full-time receptionist and one more beauty therapist to ease the workload.

Consumer Relationship

Pearl Beauty will be using the Consumer Relationship Model (CRM) to improve the relationship between the business and clients. The rationale using the model is to maintain a good rapport with current clients and potential customers to increase the chances of having repeat clients. Additionally, the loyalty to our brand is fundamental as it will have a significant impact on the profit margins.

Channels to Reach the Customer

Pearl Beauty is not a new venture since it is a buyout of an existing business. Despite already having a large client base, the business will need to implement marketing strategies that will ensure it maintains and increases its market share. In today`s business world, the internet is the most popular marketing platform because of accessibility. The current business has an up to date website that has a sales section for offers and gift vouchers. The website is also configured linked to Mailchimp and the Premier Spa client list which will be absorbed by Pearl Beauty as their primary site. We will also engage in social media platforms such as Facebook, Twitter, and Instagram to inform our clients about new products and services as well as updating them about upcoming events. The enterprise will also rely on its reputation to reach new customers.

Cost Structure

The cost of the business entity is the start-up costs which include finding potential premises, hiring and training staff, and making changes to the premises. The cost of housing in the region is high, and most of the capital will go to rent and buying up the already existing business. The existing business, Julie Carter Beauty, is valued at 99,950 pounds. Moreover, the rent on the premises amounts to 24,000 pounds per year inclusive of VAT. More funds are required to renew the current lease which ends in July 2019. Pearl Beauty will not be mandated to purchase a management software since the existing business has the latest Premier Spa Salon software which has a transferable license. Hence, the cost of starting Pearl Beauty will be approximately 250,000 pounds.

Market Trends Affecting the Business

In recent years, a number of unique trends have emerged in the beauty industry making many beauty entities to position themselves where they can attract all customers. As a result, creativity and innovation have become an essential characteristic of beauty enterprises. Just like other services industries, having excellent customer service gives one a competitive edge in the market. According to recent studies, those with top notch customer services attract more and more customers daily. It is also interesting to note that nowadays people are spending more money on their physical appearance even when the economy is bad. This means revenues will continue flowing regardless of the economic conditions.

Target Market

The primary target market is female adults because they ensure they do all they can to look their best. Furthermore, our target market cuts across all women and people from all walks of life. The business concept is tailored to work with all people from celebrities to lowly places individuals. In short, the business targets the entire United Kingdom. The services are specifically designed for mothers, teenagers, college students, business people, and corporate executives.

Competitive Advantage

The beauty industry has become more competitive in the last decade. Pearl Beauty will employ professionals who are licensed and highly qualified beauticians. This will provide the entity with a competitive advantage. Moreover, the employees will be cared for and provided with the best welfare package as well as offering continuing training. Consequently, they will be more willing to grow the business and achieve the set goals and objectives. Pearl Beauty will also offer customized services to meet the needs of all clients.

Pearl Beauty`s marketing and sales strategy will focus on excellent customer service and quality of service delivery. The company wants to ensure it maintains and builds a loyal clientele base. Additionally, the enterprise is located strategically to maximize available opportunities. Brentwood Avenue is visible and accessible to many people.

Demographic Profile

The population of males and females is almost the same. The people living in Jesmond have an average population of 18-30, which is ideal for a salon people since youths are conscious of their image. The majority of the people in the United Kingdom are whites accounting for 90% of the population. Christianity is the dominant religion while a significant portion of the population has no religion. Close to 80 percent of the residents in Jesmond are students and most of them are employed. Furthermore, the service industry accounts for most of the employment. Brentwood Avenue is easily accessible through the roads and railway stations. Pearl Beauty is targeting high-end clients who spend a significant amount on their appearance. Most of the people are in Brentwood, Newcastle is in the middle-class category as they serve in supervisory positions. This makes the location ideal for a high-end beauty salon. Pearl Beauty will emphasize on high customer service by welcoming its clients with herbal tea and hot towels.

Competition

Brentwood Avenue has various beauty parlors that offer the same services as Pearl Beauty. These include Evolution Hair and Beauty, Boilerhouse Hair and Beauty Salon, Jo Bullerwell Hair Salon, other small entities. These beauty enterprises control a significant portion of the market as Evolution Hair and Beauty has a client base of over 10,000. Moreover, our message and skin tanning services mean that we will be competing not only against beauty salons but also against spas and skin treatment centers. Despite the area having some beauty parlors, there is still a wide market gap that stills needs to be catered for and Pearl Beauty is in a position capture this market.

Revenue Streams

For any enterprise to achieve its objectives, it must develop various revenue streams by diversifying. The beauty and cosmetics industry is one of the broadest sectors in the economy because of the number of services in demand. Pearl Beauty offers a wide range of services including massages, skin tanning and treatment, and manicure which act as the main sources of revenue. The goal of the business is to maximize profits but ensuring it does all it takes to attract clients regularly. Income will be generated by offering the following services; manicure, skin treatment, pedicure, hair perming, sales of beauty products, skin tanning, massages, and other services. Furthermore, the entity will get additional revenue from consultancy services to clients and potential customers and training new entrepreneurs. The current turnover of the existing enterprise amounts to 210,000 pounds per year and we expect to increase a year.

Sales Forecast

Sale forecasting is an integral part of any business entity it helps it plan for the future. It provides a company will specific goals which drive the staff and management to achieve them. Pearl Beauty has several sales projections that we will set to accomplish. Julie Carter Beauty ha a clientele of close to 10,000 people and we predict this will increase significantly after intensive marketing. The enterprise is strategically positioned to capture the available market in the UK and we are confident we will meet the target of generating enough income in the first year of operations as well as expanding or clientele base beyond Newcastle to other parts of the country. Sales forecasting is based on the information collected on the field. Since it’s a change of ownership, sales for the first three to six months are expected to decline or remain stagnant ranging from 10,000 to 17,500 pounds per month. However, sales are expected to increases after that at a steady rate to around 20,000 pounds a month. The first year of operation should bring a turnover of close to 200,000 pounds. This will increase in the second year to 250,000 pounds in the second year and 280,000 pounds by the third year.

Pricing Strategy

The best way to attract new clients is to price our services moderately. This entails charging a fair price that is close to competitors` and the business will maximize profit without mandating customers to spend more. This involves lowering the price a bit below our competitors to gain an advantage in the market. Moreover, since the business has a considerable number of clients, we will offer discounted services at times and reward loyal customers particularly those who refer others to us. We will also have open and special days for our clients, where we will invite them over and offer our services for free. Those who need consultancy and advisory services will be provided at a flat rate.

Payment Options

The business will be dealing with different types of clients thus the need for different forms of payment options. The payment policy will be all inclusive to suit each customer. These include payment with cash, through mobile money, online bank transfers, check, and via credit or debit card.

The Ask

Pearl Beauty is a venture that will be dedicated to improving peoples` image and confidence, which are significant aspects of human nature. We deserve the best care when it comes to our bodies and the business provides high-end beauty services. The company is set out to conquer the beauty industry by changing the beauty industry in the region. There is a huge opportunity in this industry and that is why I am asking for investment in my business plan since the benefits are unlimited.

References

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• Montgomery, R. L., Agius, R., Wilkinson, S. M., & Carder, M. (2018). UK trends of allergic occupational skin disease attributed to fragrances 1996–2015. Contact dermatitis, 78(1), 33-40.
• THE BEST 10 Hairdressers near Brentwood Ave, Newcastle upon Tyne, Tyne and Wear - Last Updated April 2019. (n.d.). Retrieved from https://www.yelp.co.uk/search?cflt=hair&find_loc=Brentwood Ave, Newcastle upon Tyne NE2 3DQ
• Wired Software Ltd. (n.d.). Interesting Information for Brentwood Avenue, Newcastle Upon Tyne, NE2 3DH Postcode. Retrieved from https://www.streetcheck.co.uk/postcode/ne23dh