Hairvolution UK Limited

Hairvolution UK limited.

The hair extensions and beauty market is dominated by one main retailer in Luton. As we enter the market we will be the second company offering similar products to them within the town centre. The beauty market is very fast and changes a great deal, we understand this and we will ensure that we keep abreast of any changes in the market place, and continually keep an eye on our main competitor. We will check their prices and product offering regularly to ensure that we are providing our customers the best products at the best prices.

We will initially employ a cashier and shop assistant to manage the retail side of the business. We will also have a barber who will be in charge of the barber shop. The average salary for a barber excluding commission is around £15000pa, which is just under £300 per week. The barber will receive a share of the profits that the barber shop will make. Cashier earn in the region of £200-£250 per week depending on experience. The shop assistance will be paid £6.50p/h for a 40h hour week. Our total monthly wage bill will come to just over £3,600pm including tax and national insurance contributions.

We believe to ensure success of our venture all the directors will be involved in the running of the shop on a weekly basis in the first few months of the stores operation. This will enable us to understand our company, see where we can improve it, make changes where necessary, and cover any staff absence or sickness at short notice. We will also engage the services of temporary recruitment agencies in the event that we need staff cover at short notice, or if we have busy periods like Christmas we can employ staff on a temporary basis.

We have spoken to Luton borough council who informed us that we would be able to obtain the first years exemption on our business rates. Our rates that are meant to be paid for the first year are £348.66 per month. Although we may not pay this in the first year we have added the figure to our cash flow statement, to give us an idea of cost for the following year as well.

The company will be registered as a limited company and have 5 directors in total. Any profit that the company makes will be paid to directors as dividends split in 5. Each director has agreed to put in an initial £3000 investment which will mean a total initial investment of £15,000 from all of us.

We estimate that we would need an additional £15,000-£40,000 to get the company up and running. We have researched bank loans and found one with Barclays for £20,000 at an interest rate of 5.1% with a monthly payment of £377.28 over 5 years. Further advice we received suggests that it would be a good idea to approach the bank, apply for a £40,000 loan but draw down the initial £20,000 that we require, in the event that we need more money, the facility will already be in place and we can draw down more funds if required.