Team Good Customer Base In Cbd Services example essay topic

Description of the business Business Name: Valentino Prime Function: At Valentino, we are dedicated to consistently providing high customer satisfaction. We provide quality hair, nail and skin services at an acceptable price. We also maintain a friendly, comfortable environment for all our clients. Location: The business is located at Shop 5, Pitt Street Mall, Sydney CBD, near a busy intersection. Reasons for location: The business is situated on one of the busiest Malls in the Sydney CBD, close to our target customers.

It is a high profile area, with easy access from all parts of Sydney. Legal Structure: Sole trader Mission Statement: "We strive to understand and fulfil the needs of all our customers by supplying reliable services and quality products that enhance our clients physical appearance and overall well being". Business Goals: Financial: pay a good return on employed capital provide a good and steady income to owner gain a substantial market share generate growth and establish more outlets have enough working capital in order to repay all debts as they fall due Social: All business practices are ethical and legal Provide employment and pay above award wages Social justice- fair and non-discriminatory policies Community services such as sponsoring events and promotions We are aware of our responsibilities to the environment hence, using bio-degradable products We only use product that have not been tested on animals Personal goals of owner: Be a good employer Remain independent Become successful and enhance social status Learn more about the Beauty Industry Over time to gain recognition as one of the top beauty salon's in the wider community Marketing Market analysis Identification of the target market: Our primary segment ranges from 18-35 year old fashion conscious women and mainly consists of office workers or professionals working in the CBD. Our secondary segment consists of the grey market (55+), weddings, formals and various special occasions. Reasons for selecting the target market: Sydney is populated by a sufficient number of high-income persons with an interest in high fashion and the time and disposable income to indulge their desire to obtain our most exclusive beauty treatments. SWOT analysis: Strengths Quality hair and beauty products Highly skilled and motivated staff Energetic, enthusiastic and dedicated team Good customer base in CBD Services all under one roof Weaknesses Inconsistent cash flow in early stages New salon (starting from scratch) New team who will need to develop a good working relationship Cannot obtain financing Opportunities Ability to open more beauty salons Recently a competitor closed down, now we have the possibility of taking over their customers Due to reduced interest rates it is a good time to borrow money as it is not as expensive to repay Threats Other beauty salons Not finding qualified staff Poor economic conditions Due to the fall in the Australian dollar it is more expensive to buy our goods as we purchase them from an overseas supplier Marketing strategies / Marketing Mix Product: Hair: Cuts, colours, perms, treatment, shampoo, conditioning and blow dry Nails: Manicure, pedicure and polish Skin care: Facial, body waxing and massages Our sustainable competitive advantage is that we provide all these beauty services in one convenient location below competitor's prices.

Pricing strategy: We will apply the penetrating pricing strategy (10% below similar competitors). Using this strategy we hope to gain a greater market share and intern will create greater profit in the future. We can afford to do this and still make a sufficient profit because we know similar establishments enjoy very high profit margins. We have a credit policy of a 30 day's until payment is due, and offer discounts on early payment. Promotion: We plan to design and print simple handouts, which will be distributed to by-passers and in office buildings in the CBD area.

We will also place advertisements in the local Newspaper to attract customers at special times during the year. We also advertise in university newsletters. Word of mouth is our major promotion so we strive to fulfil our customer needs in order for our name to be spread amongst their social groups Place: Our location is our strongest part in our marketing mix. We are located in Sydney's CBD. This is a very busy foot traffic place and many by-passers see our shop. Valentino is close to a major train station, bus services, monorails and ferries, so this means that customers not just from the local community but also the wider community have easy access to transport links.

For customers who travel by car there are many parking stations just minutes away from Pitt Street mall. Where Valentino is located there are no other beauty salon's which offer the same services. Finance Financial Requirements Source and cost of borrowing: At Valentino we use both debt finance and equity finance: Debt finance - Bank loan of $75 000 at 8% p. a., repayable over 10 years. Equity finance - Retained earnings of $10 000 Capital: Fixed capital: Production equipment $20 000 Office furniture $1 000 Computer and software $4 000 Stationary $200 Total: $25 200 Working capital: $30 000 Gearing ratio: Debt / equity 75 000 / 30 000 1: 0.25 or 250% this means that we are very highly geared and for every dollar of debt we have 25 cents in equity. Valentino is a risky business, yet it also has greater potential to make a profit.

Forecasts Sales forecasting: We expect our 9 employees to be handling 25 customers per day at an average sale of $80. Annual sales = $80 (per customer) 25 (customers per day) 300 (days per year) = $600 000 Break-even analysis Price (P) $80 Sales / quantity (Q) 7500 Total revenue (TR) P Q $600 000 Fixed costs (F) $429 420 Variable costs (V) $20 Total costs (F+V) $429 440 Profit / loss (TR-TC) $564 195 In order to break-even, we must sell 596 Units at which neither a profit or loss is made. Sales above the break-even point indicate a profit and sales below indicate a loss. Business Plan for VALENTINO.