The Thousand Rand Challenge Business Plan Template
This document provides a template of headings for presenting any business idea. The objective is to produce a step-by-step tool that illustrates every step of the business creation process. It should be possible, by following the information, to produce a viable business.
All text in italics should be deleted (including these introductory paragraphs) for use as a template on newly created business idea pages. Please ensure that the new page you're creating really is a new idea. Check the front page for a current list of businesses, or perform a search.
This heading area should contain a brief outline of the nature of the business - change the heading at the top to list the type of business - e.g. Fish and Chips Frying
- 1 Description of the business
- 2 Upstream Businesses
- 3 Downstream Businesses
- 4 Competitors
- 5 Marketing the business to clients
- 6 The business inputs and outputs
- 7 Setting up the business
- 8 The manufacturing or production process
- 9 Costing and bookkeeping
- 10 Running the business
- 11 Before beginning
- 12 Related articles
- 13 External links
- 14 Business Trials
Description of the business
Within each sub-heading are a series of questions that require detailed answers. Simply fill in your commentary beneath the headings. Note that these headings and the methodology are here, partly to be pedantic, but mostly to ensure a consistent approach across a number of unrelated businesses. It makes searching for information far easier if you know where to start.
What exactly is it that is going to be sold or done?
I am going to open a hairdressing salon with the following services:
- Wash a blow
- Hair salon for men, women, boys & girls
What skills are needed to do this? Where is this taught and how much will it cost?
You must have the tecchnical skills and experience to do the work.
- The skills needed to provide the service are: knowing African Hair (i.e texture) and ways of styling it and also the experience and training in this particular service.
- Hair management and styling experience
- training from Zalon Zion and college training
What tools or equipment are needed? Where can they be bought, and how much will they cost?
- hairdryer R500
- Brushes R30 each
- Towels R15 each
- Taps R40
- Basin R150
- Shampoo, conditioner, hairspray, relxer, etc R200
- Brushes R100
- Tongs R 50
- Hairdryer R59.99 @ Discom
How much space is needed to work from? Only a corner
Where will the space be found, and how much will it cost to rent?
- At home and rent being R300.00
- The business wil be operated from home - no rent or
- The service will be delivered at the costomers home.
- Will service customers from home but will contribute R50 pm for the electricity.
What sort of people will buy the product? Who are they and where do they live?
People staying nearby, friend and family
- Community members in general around Joe Slovo area, Phoenix and Milnerton. Particularly Ladies and school Children.
How much and how often will they buy? Will they come to the shop or will it be necessary to deliver?
2 times a week or weekends. They will come to my home
- Daily and will come to her home to do the hair. Some come regularly 2-3 times a week depending on the one's needs.
A list of businesses and ideas that provide the services and products that this business needs.
- Whole Salers (Makro)
- Trade Centre
- Big Salons
A list of businesses and ideas that this business could provide products for.
What major competitors will attract clients' spending away from the business' products? Kwanoxolo Hair Salon Ayanda Hair Salon Vava Hair Salon Lee- Ann Hairdresser Develia Hairdresser Anthea Hairdresser Salon Frama (only whites)
Guys hairdresser (they travel from house to house) Renata
What prices and products do these companies have?
- Wash a blow R45
- Relaxing R90
- Cut R20
- Tint R90
Relaxer R25 Extentions R50 Cut R50
- There prices is very high and peolpe in the community don`t make use of them
What makes them popular / unpopular?
People love the guys because they come to your house They are popular because they give good and clean service - Popular:They are the only salon in town - Unpopular: The community don`t make use of them
What do they do to attract customers? Specials? Interesting marketing / advertising? They have nice working premises that attract customers, they also advertise by using boards.
Which of the competitors stand out as being particularly good at what they do? Vava is the most popular one, she offers customers a wide viriety of product and she has quality equipment. The guys because they have the experience
What can be done to stand out against them? What can be done that is more exciting / more interesting? She is going to cheaper than the competitors and she is will make nicer hairstyle and fast.
I will advertise and give free treatments when clients come to get other service I will do my best to keep my clients happy I will treat each client the same
Marketing the business to clients
What sort of people will buy the products and how important is product consistency to them (e.g. must every loaf of bread be identical)?
People who want to treat themselves with a visit to a hairdresser
- Community members at large,low income earners and middle income earners, udults and Children
How seasonal or fashion-dependent are their buying habits (do they buy only in summer, only over Christmas, etc.)?
More during the festive season
- Throughout the year,but the business does well during weekends month-ends and when there are special occassions.
Do the clients want the products to be the cheapest or the best (low price / low quality or high price / high quality)?
High quality at he lowest/ affordable prices
How do the clients decide where to buy the products? What sorts of advertising / promotions attract their interest?
They see adverts on advertising boards. Clients like to vist hairdressers in their own community.
Do the clients want the same things sold in the same way, or do they want things to change all the time?
What can be done to attract the first clients (the most important and most difficult to get)? How much will it cost?
Advertise and promise the first 5 clients a free wash and blow dry
The business inputs and outputs
List all of the inputs (products that are required to produce the products):
Products, water and electricity Hair Dryer Towels Relaxers Shampoo Oil Mosturiser Hair Food Hair Fibre Needle,wool Hair Piece
List all the suppliers for the inputs and their addresses, telephone numbers, and sales terms (cash, 30 days, etc.):
Several wholesalers in Cape Town on cash terms
List all of your outputs (products created by your business):
- Wash a blow
Braiding Treatment Pony Tail
What sort of prices can be charged and how much profit will can be made on each item (a rough estimate)?
- Wash a blow R45
- Relaxing R90
- Cut R20
- Tint R90
Braiding R50 Treatment R30 Hair Extensions R50 Do the outputs have a shelf-life? Must they be sold within a specified time limit before they go off / can't be sold? Which ones?
Products will have a long shelf life
Setting up the business
List everything that needs to be done to prepare the business to be ready (list everything needed to have as well, both equipment and stock):
- Room, taps, basin chairs and towels
- hair products
How long will it take to get all of these things and how much will they cost to get?
a day R1000
List all the fixed costs to be paid every month even if nothing is sold (things like rent, electricity, telephone, staff wages):
- Water R130
- Electricity R200
- Salary R400
Total amount for fixed costs: R______730_________
How many staff will be needed and how much will each of them be paid (wages must be included in the fixed costs above)?
What training will they need, how long will it take and how much will it cost?
The manufacturing or production process
List every step, from start to finish, to produce the product
- Buy products from supplier
- Unpack in store
- clients come for appointment
- wash or treat hair
- dry hair
- client pay
- Smear relaxer all ove the hair
- Comb out the hair
- Wash off the chemical with water then shapoo & conditioner
- Dry hair8
- Base sculp with hair food
- Spray moisturiser
- Dry the hair with hairdryer and comb hair out
- Style hair
NB: For hair relax, you must leave the cream on the clients hair longer before shampooing.
Allocate each of the manufacturing steps to a process and a process to a staff member (e.g. all manufacturing steps A to process 1):
in the beginning the owner will do everything
What possible problems may happen during each step of the manufacturing process?
Transport problems to get stock people who do not pay cash
- Problems could be the burning of the sculp caused by sensitive scalp, or use of wrong products for the type of product for the type of hair.
- Falling of hair to be relaxed as required
What solutions can be identified for these problems? How much will they cost and how long will they take to fix?
Put clients on a monthly contract Try to get products delivered to my house
- You wash off the relaxer cream with running water immidiately and base the sculp with hair food.
- Relax that did not come out nicely will be redone for free.
What is the maintenance program for all the equipment?
keep hairdrier in a working condition
- All equipment needs to be washed off clean and leave them dry after each day for longer durability
- The hairdryer will need to be serviced yearly or as it requires.
What safety requirements are important for production?
goves for dy
- To wear hand cloves all the time and apron when when dealing with hair and chemicals.
- Keep your eyes and mouth away from chemicals as well, if affected rinse with running water immediately.
How will quality control and client feedback be handled?
Client can come back for a free treatment
- Quality control-Since she does the hair alone she maintains higher control of quality, buy using the required products by the clients and that are suitble for the hair type.
Feedback-Clients tell if they are happy with the service or not, feedback is recorded on th client's register.
Costing and bookkeeping
How many of each of the stock items can reasonably be sold each day (and month)?
4 people per day 48 per month
Will sales volumes be a similar number of each item each month, or is there seasonal variation (cold months, hot, or festivals)?
Most months it will be the same. Before the festive period more
What sort of pricing strategy will be chosen (cheapest or best)?
The best price my clients can afford
What profit margin will be chosen for the products
it will depend
Write down the cost prices plus the margin for each stock item you will sell, and the selling price
- Wash a blow cost time/electr R15 selling R45
- Relaxing product R60 R90
- Cut R15 R20
- Tint R45 R90
Is this competitive? Will customers pay this much? Do the margins need to be adjusted? By how much?
Now, set a target. How many items for each product need to be sold on a daily (and monthly) basis to be profitable?
- Wash a blow 2 per day 20 per month
- Relaxing 1 15
- Cut 2 10
- Tint 1 10
Set out the products, costs, margins and selling prices:
Total per Month
1 x 20 number of working days in a month
R 45 + R 45.00
= 20 monthly target x R90 selling price
What trends are included in the projections?
sales higher during festive seasons
Running the business
What is the process for running the business on a typical day? Who will be responsible for each step? Link this back to the production process.
owner will do everything open from 9H30 till 18H00
Who will act as backup should the person responsible not be there? What do they need to act as backup?
HIre another hairdresser
What weekly processes need to be performed? Who is responsible, who is backup and what tools are required?
Buy my stock
What monthly processes need to be performed? Who is responsible, who is backup and what tools are required?
Take stock Bookkeeping Paying salaries Paying bills Will do it on a MOnday What is the schedule for training and motivating staff?
What processes are required for maintenance and new product creation? Who is responsible and what tools do they need?
- Go for training for new ideas
- Read magasines
List some of the support services available (legal, business and other) that might be needed
What major laws concern the business, and which government departments should be called to keep up to date (list phone numbers)?
Insert links to articles on Wikipedia or other Wikis that may be useful (such as recipes, legal discussions, accounting articles, and so on)
List links to outside websites that may be useful for anyone starting this business
List your name if you started a business based on this plan, where you started the business, and how you did Links to case histories - you are welcome to develop these and insert them in your personal page (create this by developing a personal profile)
Daphne van Wyk CD Hairdresser Constance Jacobs,
☀Mobile Hairdresser London, Atlantis