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

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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
= 23%
Sales
5.29
Profit before Interest and Tax
1.90
= 136%
Total Investment
1.40
Profit after Tax
1.23
= 129%
Promoters Capital
0.95

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 = = x x 100
FC +P 4.65 100

48% of installed capacity