BUSINESS IDEA FOR SETTING UP A BEAUTY SALOON

This business idea is aimed at setting up a Barber’s shop. The idea is premised on making different hair styles and hair cuts for both males and females. The business has a good market demand due to the changing fashion of hair trends among Ugandans especially the youths.

The revenue potential is estimated at US$ 2,273 per month which translates into US$ 27,273 per year. The project cost is US$ 11,582.

Process Description

Depending on the customer’s desired style or service being sought for.

Market Analysis

The business has a great market demand in both rural and urban areas throughout the year and a higher demand during festive seasons. The major players in this sector include; LA’ Saloon, Exotic Saloon Kamyokya, Delight Saloon, among others.

Capital Investment Requirements in US Dollars 

Item                    Unit   Qty   Unit Cost   Total  
Water heater  No. 1  25  25
Towels  No. 10       1.3       13
Sink  No. 1     10    10
Aprons  No. 10        1.8   18
Smoother  No.   1         8   8
Furniture  No.   300
Shavers  No. 5   25  125
Fan  No. 2   50      100
Wall Styling mirrors  No. 3 18     53
Combs  Sets 3        8    23
Total cost of Machinery       673

Production and Operating Costs In US$ Direct Materials, Supplies and Costs

                                       Unit

Cost/ Qty/d Cost Item  Units  day  ay

 Prod. cost/ day  Prod. Cost/ mont

h

 Prod. Cost/ year
After shave  Tins  7.5     1      8   195 2,340
disinfectants  Tins      3 1        3    78      936
Spray  Tins     13 1     13 325 3,900
Powder  Tins   2 1 2  

52

624
Sub-total    650 7,800
General costs (Overheads)
Utilities (power) 15     180
(Utilities (water) 8        90
Salaries  125 1,500
renting   100 1,200
Depreciation (Assets write off) Expenses 12  139
Sub-total    259 3,109
Total Operating costs 909 10,909

Production costs assumed are for 312 days per year with a daily capacity of 30 Customers.

Depreciation is charged on electrical equipment and furniture and assumes 2 years’ life of assets write off at 25% per year for all assets.

Direct costs include: materials, supplies and other costs that directly go into production of the product.

Product Cost and Price Structure In US$

Item  

Qty/ day 

 Qty/ yr   

Unit Cost 

 Prod. Cost

/year

 Unit price   Total revenue 
Hair cuts 30 9,360 1.2 10,909 2.5 27,273
10,909   27,273 

 Profitability Analysis In US$

Profitability item  per day   per month   per year 
Revenue
Hair cuts      87 2,273 27,273
Less Prod & Operating Costs      35 909   10,909
Profit    52  1,364      16,364

 Source of Supply of Equipment and Raw materials

All these equipment and Raw materials can be purchased from the local market.

Government Incentive

The Government is encouraging the setting up of Small Scale businesses through empowerment in form of Grants.

Research was done by Business Synergies for Uganda Investment Authority SME Department.