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BEAUTY PARLOUR

A. INTRODUCTION

Life style is fast changing in the modern era, and the women have become more

conscious about their make up. More women are seen frequenting the beauty

parlours for availing themselves of some kind of service to enhance their

appearance to look good. The status of women has improved a lot and is

improving further. This has resulted in their life style changing. Also their

economic independence encourages them to resort to this type of service.

B. PRODUCT USES

This is a service industry

C. MARKET POTENTIAL

As more and more women are becoming beauty conscious in the modern era,

the beauty parlours will have more patronage. A beauty parlour with all

modern facilities provide services at a reasonable charges so that more visits

could be expected from each individual.

D. TECHNICAL ASPECTS

1. Installed capacity

Based on the service of the beauty parlour and the number of persons to be

employed the capacity is determined. For the proposed service of the beauty

parlour, the following services can be given and taken as installed capacity.

Nos. Rate(Rs.) Total value (Rs.)

Eye Brow 2400 15.00 36000

Manicure 600 40.00 24000

Pedicure 240 55.00 13200

Head Massage 360 55.00 19800

Hair bleaching 720 55.00 39600

2

Arm bleaching 840 55.00 46200

Face bleaching 960 55.00 52800

Stomach bleaching 240 55.00 13200

Waxing 840 40.00 33600

Facial 720 120.00 86400

Hair style 2400 25.00 60000

Hair cutting 2400 25.00 60000

Synthetic dye 480 80.00 38400

Bridal make up 120 800.00 96000

Puffing of hair 120 200.00 24000

Make-up 120 150.00 18000

Total 661200

2. Equipments

Qty. Unit Cost(Rs.) Total cost (Rs.)

Rotating chairs 2 nos. 10000 20000

Mirrors (Big size) 2 nos. 1500 3000

Dressing tables 2 nos. 5000 10000

Drier 2 nos. 6000 12000

Massager 2 nos. 1500 3000

Ozone machine 1 no. 4000 4000

Interiors, Furniture 28000

Total

80000

3. Process

The process of a beauty parlour is a personalised service. This will vary from

case to case.

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4. Consumables

Cosmetic items are to be regularly purchased from shops. The main cosmetics

to be purchased are moisturizers, lotions, nailpolish, lipsticks, compact

powder, eye paints, eye liners, eye shadows, muskara, blushers, pancake.

5. Land & Building

A covered area of 300 sqft. is to be taken on rent.

6. Utilities

Power: Only domestic power connection is required.

Water: About 500 litres of water is required for washing and human

consumption.

Man Power:

Category Nos. Monthly Total

Beautician 1 4000 4000

Helper 1 3000 3000

7000

Add: 20% benefits 1400

Total 8400

Total salary per annum (Rs.lakhs) Rs.1.01 lakhs

7. Implementation Schedule

The projects can be implemented within a month after financial arrangements

are made.

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ASSUMPTIONS

- Total Revenue at 100% is assumed at Rs.6.61 lakhs per annum. This is

based on number of persons to be employed and infrastructure facilities

to be created. This can be increased.

− During first year 60% of the capacity is proposed to utilised. This will be

increased to 70% and 80% in subsequent years.

− The cost of materials at 100% works out to Rs.6000 p. m

− Electricity charge for lighting is assumed at Rs.500 per month.

− Wages & Salaries is assumed for two persons.

− Depreciation is calculated on WDV method.

− General & Adm. Expenses is estimated at Rs.6000 per month.

− Interest on Term loan is calculated at 12% p.a.

− Income tax is provided at 33.99% on taxable income.

LIST OF EQUIPMENT SUPPLIERS

1. Angles, Shop No.14, 29, Cisons Complex, 150, Montieth Road, Egmore,

Chennai 600 008.

2. Monica Beauty Centre, No. 22 (New No. 43 ) NSC Bose Road,

Chennai 600 079.

3. The Beauty Shoppe, 6,3rd Floor,Alsa Mall, Montieth Road, Egmore-79

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LIST OF CONSUMABLE SUPPLIERS

1. Molly-An Beauty Centre, 85 New-8,4th Main Road, Gandhi Nagar

Chennai-600 020

2. Lakme Beauty Salon, 142, Nungambakkam High Road, Chennai 600 34.

3. Tips & Toes Cosmetic India Ltd., No.44, Vallalar Street, Aminjikarai,

Chennai 600 029.

4. Rajendra Traders, No.12, Kasi Chetty Street, Chennai 600 001.

FINANCIAL ASPECTS

1. COST OF PROJECT

[Rs.lakhs]

Building (Advance) 0.30

Equipments 0.80

Pre-Operative expenses 0.20

Margin for Working Capital 0.10

Total 1.40

2. MEANS OF FINANCE

Capital 0.95

Term Loan 0.45

Total 1.40

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3. COST OF PRODUCTION & PROFITABILITY STATEMENTS Rs. lakhs

Years 1 2 3

Installed Capacity

Total Income p.a. (Rs.lakhs) 6.61 6.61 6.61

Utilisation 60% 70% 80%

Income p.a. (Rs.lakhs) 3.97 4.63 5.29

Consumables (Rs.6000 p.m) 0.43 0.50 0.58

Power 0.06 0.06 0.06

Wages & Salaries 1.01 1.06 1.11

Repairs & Maintenance 0.60 0.66 0.73

Depreciation 0.20 0.15 0.11

Cost of Production 2.30 2.43 2.59

Admin. & General expenses 0.72 0.76 0.80

Interest on Term Loan 0.05 0.05 0.03

Interest on Working Capital 0.00 0.00 0.00

Total 3.07 3.24 3.42

Profit Before Tax 0.90 1.39 1.87

Provision for tax 0.00 0.47 0.64

Profit After Tax 0.90 0.92 1.23

Add: Depreciation 0.20 0.15 0.11

Cash Accruals 1.10 1.07 1.34

4. WORKING CAPITAL:

Months Values % Margin Bank

Consumptions Amount Finance

Raw Materials 0.50 0.02 100% 0.02 0.00

Expenses 1.00 0.03 100% 0.03 0.00

0.05 0.05 0.00

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6. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax

1.23

Sales

=

5.29

23%

Profit before Interest and Tax

1.90

Total Investment

=

1.40

136%

Profit after Tax

1.23

Promoters Capital

=

0.95

129%

7. BREAK EVEN LEVEL

Fixed Cost (FC): [Rs. lakhs]

Wages & Salaries 1.11

Repairs & Maintenance 0.73

Depreciation 0.11

Admin. & General expenses 0.80

Interest on TL 0.03

2.78

Profit Before Tax (P) 1.87

FC x 100 2.78 80 BEL =

FC +P=4.65

x 100

x 100

48% of installed capacity