Cranium Filament Reductions

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Hair Salon Business Plan

Strategy and Implementation Summary

Cranium Filament Reductions 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. 

Cranium will also be leveraging 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, Cranium Filament Reductions will use financial incentives early on to build a large, loyal customer population. 

5.1 Competitive Edge

Cranium Filament Reductions' competitive edge is based on faultless customer service. Cranium Filament Reductions recognizes that the hair cutting/styling market is crowded so it is difficult to stand out. Cranium Filament Reductions will stand out by providing superior customer attention. This is particularly important in the "quick salon" space that Cranium operates in because margins are a bit lower and the goal of a quick salon is to crank through customers.

Cranium 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, Cranium will be able to effectively compete against and outlast larger chains and independent stores.

5.2 Marketing Strategy

Cranium Filament Reductions will be located in a shopping center in Shaker Hts., OH. 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.

Cranium Filament Reductions will market themselves 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. Cranium will also have an in-store promotion for the first few months to lure new people in. Lastly, Cranium will offer a discount for a few months to people that refer new customers.  

5.3 Sales Strategy

Cranium Filament Reductions' 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 Cranium's the employee will have an opportunity to impress the customer. Employee training will emphasize seizing these opportunities.

Cranium Filament Reductions will also have the opportunity to increase sales of their retail hair care products every time they have a customer in the chair. Cranium 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, Cranium 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 Cranium to generate good sales from the retail hair care products.

5.3.1 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 Cranium will be building up a customer base. From month four on sales will grow steadily.

Sales Forecast
Year 1 Year 2 Year 3
Males $217,112 $395,458 $411,545
Females $21,711 $39,546 $41,155
Women with small children $2,171 $3,955 $4,115
Retail hair care products $36,149 $65,844 $68,522
Total Sales $277,143 $504,802 $525,337
Direct Cost of Sales Year 1 Year 2 Year 3
Males $26,053 $47,455 $49,385
Females $2,605 $4,745 $4,939
Women with small children $261 $475 $494
Retail hair care products $14,460 $26,338 $27,409
Subtotal Direct Cost of Sales $43,379 $79,013 $82,227

5.4 Milestones

Cranium Filament Reductions 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 $100,000.
  4. Profitability.
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Set up the store front 1/1/2001 2/1/2001 $0 ABC Department
Revenue exceeding $100,000 1/1/2001 7/1/2001 $0 ABC Department
Profitability 1/1/2001 9/1/2001 $0 ABC Department
Totals $0

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