The Management Accounting

Company Overview

Lillian’s Hair Salon is a 24 hours beauty salon dedicated to steadily offering customer satisfaction. The Salon renders quality products, furnishing, enjoyable atmosphere and excellent service at an acceptable price. Relationship is valued relationship at Lillian’s Hair Salon.  We will maintain a fair, creative and friendly working environment that respects ideas hard work and diversity. The salon has now expended and the owner plans to start manufacturing Aloe Vera Shampoo and Moisturizing Hair Lotion. These two products will be made successfully in the salon as they only require mixing Aloe Vera plant with warm water and storing at specific degrees. Adding color and scent makes it perfect and healthy for use. The two products are preferred by many customers as they are free from chemicals (Atkinson et al, 2012). They help the hair grow. Lillian and her Company will enrich the products with vitamin E and bee wax to lubricate the hair and make it easier manage and style.

 Mission: To provide products and services that enhances our customer’s and physical appearance mental relaxation.

Our Motto:  Client Satisfaction Guaranteed. Lillian Chris, co-owner with Paul Julius, her husband, has worked in an upscale prestigious salon in UK for the past one year.  Lillian has created a huge customer following through dedication and hard work.  Lillian, and her talented team beauticians, has all it requires to make this enterprise an exceptionally successful one.  The business expects its growing reputation to make to new customers and attract other beauticians to support the anticipated growth.

Keys to the success in Lillian’s Hair Salon are:

1. Location:  Providing and straightforwardly easy to get location for clients.

2. Environment:  Providing favorable environment which gives professional and relaxing services.

3. Convenience:  Offering customers a wide range of services in a single setting, as well as extended working hours.

4. Reputation:  The owners and other beauticians in the business have a reputation for offering excellent personal services.

Services and products

Lillian’s Hair Salon will be providing products and services to better meet our client’s requirements.

Services

Lillian’s Hair Salon is considered a fashionable, full-service salon.  We offer a wide range of services such as

• Hair: cuts; perms; colors;  relaxers shampoo; conditioning;; reconstructing; weaving; waving and curling.

•  Nails: pedicures; manicures and polish sculptured nails.

• Skin Care: Germany facials; massages and body waxing.

 Products

Lillian’s Hair Salon will, upon commencement of its functions, sell a wide range of cosmetics. 

We will provide quality nail, skin care and hair products (Bodnar & Hopwood 2009).   Lillian’s Hair Salon has a fashionable contract with Joy-Mark to put on market their top quality products.  Additionally, we will have other products for sale to meet our client’s requirements, such as: Paul Mitchell, Matrix, Rusk, Nice & Lovely, Miadi and Biolage.  These products will include conditioners, mousse, shampoos, hair spray, nail files, nail polish, skin conditioners, facial masks, and cleansers among other beauty products.  Lillian’s Hair Salon will be set apart from competition through commitment to providing products and services in a convenient location.

Pricing

The new brand-name hair products will range in cost from $10.00 - $100.00.  These costs will hardly vary from other competitors since there is a standard price which salons should charge for such products.  Our mark-up is expected to be approximately 65% above cost for retail price range of $26.00 - $82.00.  This is the standard pricing in association with the current competition. Our services will average $60.00, with a range of $20.00 for a hair trim to $185.00 for a full beauty package, that is; massage, facial, hair, pedicure and manicure.  These prices are a bit lower as compared to our competitors’ prices (Schreyogg 1980).

Market

Beauty industry is economically constant.  However, the market share is rising with an improvement in non-refundable income as more ladies join the labor force.  Industry trends demonstrate that as time people concentrate more in their jobs as a result of the competitive economy in the world, times becomes limited and  people go for easier,  and faster economical services in one location.  Clients are more demanding and more educated. Customers are now in need of quality services.  Lillian’s Hair Salon is located in UK. The business targets a population of 3500-4000 in the nearby community and a larger population as far as the entire universe is concerned. Ladies are the main potential customers. However, men are also expected considering the fact that men are nowadays using beauty products and making their hair nails (Larson et al., 1996).

Competitive Summary

Lillian’s Hair Salon plans to set itself apart from the other beauty salons which might provide only one or two types of service.  The enterprise has a whole year experience and has learned from customers that they desire getting all services at one stop. The customers kept on complaining as they loved the services offered at this salon, but had to go for several services elsewhere since they were not available in that salon.   There are several of salons like ours; however, they are largely in the very high income parts of UK and surrounding areas.  Therefore, we do not plan to compete with “day spas”.  Instead, we intend to provide a middle ground for customers who can’t afford those high-end luxurious salons. All clients will have a comfort zone in our relaxing atmosphere.  Soft drinks and coffee will be offered to customers as they get served.  Televisions, radios and magazines will be located in the hair-drying and waiting areas.

Customer Profile

Lillian’s Hair Salon typical customer will be as described below:

• Between the ages of 15 and 50

• Income levels of $10,000 to $50,000

• Females

• Students or full-time employed

• Looking a one stop salon with all services and products

• searching for reasonably priced services

Conclusion and Recommendation

Lillian’s Hair Salon will be opening on 1^st January once the finances are received. Firstly, the salon will focus on the marketing features to target new customers.  We expect to service about 90 clients per week for hair services, and about 13 customers per day.  It is estimated that about 15 clients will use, facial, massage services and nail per week.  The salon is expecting approximately $40.00 in daily sales.  We expect the sales to rise with 20% after six months. As the customer base increases, Lillian’s Hair Salon expects to expand and employ a total of fifteen positions. This includes the owners, which would include: a receptionist, a financial manager, seven hair stylists, a barber, a nail technician, a facial expert, and a massage analyst (Simons 2000).

Environmental impact

Lillian’s Hair Salon will have waste disposal which can destroy the environment. This includes waste hair products, nail products and other chemicals used in the beauty industry. Therefore, the enterprise is likely to destroy the environment if care is not taken. To curb these hazardous actions, Lillian’s Hair Salon has come up with acceptable means of disposing the waste appropriately.

The business aims at improving the living standards of the shareholders, workers and the entire community. This will be achieved through proper public relations with the surrounding community. Additionally, the Salon will give people from the surrounding a higher opportunity when it comes to recruiting and emp0loying new workers. The owners are planning to start training young girls who desire to work in beauty industry with reasonable charges.

Reflection

Preparing an accounting report has not only been interesting but also innovative activity. It has helped me apply the knowledge I have gained in class. It has been a creative activity which has made me remember all I have learnt in my accounting classes. Additionally, it has helped me discover my weak points and the topics I need to revise thoroughly. Specifically, it has been hectic to produce a break-even point for each product and for the company as a whole. The most interesting activity was to plan for a five year budget. It was interesting to put money in paper when I do not have it either as liquid, cash at bank or investment (Mintzberg 1994).