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INTRODUCTION

Salon Loop is a healthcare services provider that allows the senior citizens, business women and college girls to have their healthcare and makeup needs satisfied at their doorstep in Melbourne, Victoria. Salon Loop serves the senior citizens, business women and teenagers and accepts the appointments over website, phones or android/iOs application. Salon Loop also sells retail healthcare products to its customers while serving the entire family in one quick and convenient door visit. While there are several Salons and makeup stop shops, Salon Loop will excel due to its focus on providing healthcare and grooming services at door step with superior customer service. Through unheralded customer attention, Salon Loop is likely to gain market share as its services are for senior citizens and business women who do not get enough time or resources to drive all the way to salon locations. Lastly, Salon Loop will allow it to attract a lot of customers through mobile application and online appointments.

 

MISSION

“To supply healthcare services and products that enhances our client’s physical appearance and mental relaxation”.

 

PRODUCTS/SERVICES

Salon Loops offer the following services at the door step of clients:

  • Hair: cuts, makeovers, reconstruction, shampoo, conditioning, curling, straightening, perms and dye
  • Nails: manicure, pedicure, polishing, sculpting and nail art
  • Skin care: body waxing, face waxing, polishers, massage, threading and facials
  • Range of organic products to be sold directly to clients

EXECUTIVE SUMMARY

Salon Loop is a healthcare services provider that allows the senior citizens, business women and college girls to have their healthcare and makeup needs satisfied at their doorstep in Melbourne, Victoria. Salon Loop also sells retail healthcare products to its customers while serving the entire family in one quick and convenient door visit.  The Beauty Services Industry in Australia has expanded exponentially in past five years. The rising demand for the beauty and healthcare services has propelled in Australia due to higher discretionary income and growing population.  The beauty services industry revenue is expected to increase by an annualized 2.0% over the five years through 2017 to reach $4.8 billion.  According to IBISWorld (2017), 39% of all beauty treatment demands come from hair cutting and hair care services segment. The customers are getting haircut, hair color and other beauty services at bricks and mortar salons. In order to attract the customers, Salon Loop will have to give customers a reason to change. In this case, the reason to change is “getting beauty services at door step”.  Salon Loop will also use mobile technology through offering mobile apps over which customers can book appointments and level of services needed.  The designing of salon bunker and provision of services will be provided in-house.  Salon Loop will have to comply with Cosmetic Compliance and Safety Law of 2014 and Australian Consumer Law.  Since beauticians are making use of compounds and techniques that need special skills and may entail risks for clients, they are shouldering even more responsibility. The beauticians are ethically liable to let their customers know about the risks of a treatment before starting it. With mixed blend of perfect human, financial and technical support, Salon Loop can quickly gain market share in the current industry.

 

FEASIBILITY ANALYSIS

Feasibility analysis allows the entrepreneur to determine if the proposed business idea is technically and financially viable (Currie et al., 2009). It is also used for assessing the strengths and weaknesses of the proposed business idea and presents the directions of activities in order to improve the project and achieve the desired results out of proposed business idea. The report will outline the market, technical, human and financial feasibility of Salon Loop.

 

Market Feasibility

The Beauty Services Industry in Australia has expanded exponentially in past five years. The rising demand for the beauty and healthcare services has propelled in Australia due to higher discretionary income and growing population (IBISWorld, 2017).

 

Targeted Customers

Salon Loop is targeting the following customer segments.

According to ABS (2017), the proportion of people aged above 65 years have risen from 12% in 1996 to 15.3% in 2017 and the proportion of people aged 85 years and above have also doubled from 1.1% in 1996 to 2.0% in 2017. In 2016, the number of people aged above 65 reached 784,600 out of which females are twice as many as males. Hence, the statistics show a higher life expectancy for females. The figure below shows the increase in female population in all age groups.

Figure 1: Population Growth by Age and Sex

Source: (ABS, 2017)

Market Size and Growth

The beauty services industry revenue is expected to increase by an annualized 2.0% over the five years through 2017 to reach $4.8 billion (Euromonitor, 2017). The projected revenue is to improve by 0.4% in the current year. Currently there are over 21,949 businesses beauty service salons operating in Australia while no companies have a dominant market share in the industry. According to IBIS World (2017), 84% of all women invest in their hair and beauty treatments for themselves. This shows an opportunity for Salon Loop to capture the market share by catering the beauty and healthcare needs of women while sitting at home.

 

Market Characteristics

According to IBISWorld (2017), 39% of all beauty treatment demands come from hair cutting and hair care services segment. The customers are getting haircut, hair color and other beauty services at bricks and mortar salons.

Source: (IBISWorld, 2017)

 

PEST Analysis

The PEST analysis allows the entrepreneur to scan through the macro environment in order to check the feasibility of the business venture (Koumparoulis, 2013). This entails the factors that are not in control of company. These include political, economic, social and technological factors. The PEST analysis for Salon Loop is given below:

 

Barriers to Entry

An important step for assessing the business idea is to analyze the kinds of obstacles that a business faces (also known as barriers to entry) (Caves & Porter, 1997). If the barriers to entry are low, almost anyone can join the industry and compete against established ones. The biggest entry barrier in beauty salon and healthcare service industry includes the following:

  • Customer loyalty to existing salons: Since beauty maintenance is a priority for many women around the world, so the businesses tend to build customer base through provision of prime services that solidify the customers’ loyalty(Wei, 2013). In order to attract the customers, Salon Loop will have to give customers a reason to change. In this case, the reason to change is “getting beauty services at door step”.
  • New technology in salons’ industry: Beauty and healthcare salons require sophisticated skills and new technology. Use of technology in beauty salons has come a long way in past decade(Brand & Ahmed, 2010). Salon Loop will streamline newest technology and install it into the mobile bunker that can be carried over wheels. Apart from the relevant technology, Salon Loop will also use mobile technology through offering mobile apps over which customers can book appointments and level of services needed.

Technical Feasibility

The designing of salon bunker and provision of services will be provided in-house.

 

Technology

In order to setup a business venture of mobile salon services, several technologies will be required. Since Salon Loop is primarily a service provider, so it will buy the technology related to hair styling, facial treatments and nail/feet treatments off-the-shelf. There are several suppliers available that deal with beauty suppliers. Salon Loop will buy the technological equipments from Zhav International and Aussie Medi Tech.

 

Services

Salon Loop will provide the services in-house by having trained beauticians and helpers on the wheels. Salon Loop will bring the best on-demand beauty treatments including the manicures, massages, makeup and hair cut at the door step of its clients. Hence, the services will be provided totally in-house. However, Salon Loop will acquire business partnerships with L’Oreal and other beauty brands to get products at discounted prices.

 

Sales & Distribution

Salon Loop is dealing with services provision. Apart from the services, it will also sell a line of beauty products to its existing clients ranging from hair care to skin care. The products will also be sold in-house at the spot. The products will be bought from different suppliers and brands who want their products to be marketed.

 

Resources

In order to start this business venture, Salon Loop will require the following resources:

Category

Resources Required

Human

Skillful human resource is required that can perform various tasks ranging from hair styling to face makeovers and from nail art to makeup.

Physical

Furniture is required for the moveable bunker. Lightning, fixtures and other raw materials including beauty products from various brands is required. Beauty range can include dyes, nail art range, hair care products, makeup products and skin care products.

Technological

Physical and chemical technologies include ion technology, ceramic plated hair straighteners, seamless bristles brushes and dryers, digital heat controls, heat distribution technology, coloring machines and other technologies are required by Salon Loop.  

 

Industry Laws and Regulation

Australia has set up number of laws and regulations that relate to Beauty Salon industry. Salon Loop will have to comply with Cosmetic Compliance and Safety Law of 2014 and Australian Consumer Law. Apart from these laws, Australia also has set Hygiene Standards to be followed by beauticians and beauty salon operators who carry out skin related procedures (ACCC, 2014). Salon Loop will have to comply with Hygiene Standard during hair waxing, blackheads removal using a needle and cuticle cutting during manicure and pedicure (NSW Health, 2016).

Salon Loop will have to ensure that the flooring of bunker should be non-slippery, lightning should be provided, hand wash basin should be provided with clean and portable water, separate sink should be there with warm water for cleaning equipment and waste disposal system should be installed in bunker. The equipment are required to be sterilized under AS 2182-1998 Sterilizers and cleaned after using (NSW Health, 2016). All instruments are required under Hygiene Standards to be wrapped and packaged prior to usage and beauticians must adhere to personal hygiene standards before and after dealing with a client.

 

Ethical Issues

Customers are the lifeblood of beauty salon industry as they help in creating an image of a company. Research has identified that in beauty salon industry, customer dealing is the most important agenda (Beauty Demands, 2016). Since beauticians are making use of compounds and techniques that need special skills and may entail risks for clients, they are shouldering even more responsibility. The beauticians are ethically liable to let their customers know about the risks of a treatment before starting it. Recently, the news highlighted how Kaity Hull (21 years old girl) caught staph infection after going to an “unhygienic” salon in Melbourne for application of eyelashes (Today , 2017). Similarly, Golnaz Bassam had to see her burnt face after getting a facial treatment from a local salon in Melbourne. The Salons industry is prone to highest standards of codes of ethics as they are dealing with customers’ skins and hair directly (ACCC, 2014).

 

Technological Trends

Virtual imaging has caught attention of several beauty salons as they allow the client to see an “after” style before the beauty procedure has even started (Lohrey, 2017). It just requires a camera and few minutes to show clients of how they will look in variety of different makeup, hair colors, cuts and even eyebrow shapes. Most of the programs in this technology come with database of different hairstyles and makeup tools (Lohrey, 2017). A professional imaging program is easily available to be bought from cyberimaging.com and salonstyler.com.

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