SETTING UP A BEAUTY SALOON BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This business idea is aimed at setting up a Barber’s shop. The idea is premised on making different hair styles and haircuts 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$ 1,560 per month which translates into US$ 18,720 per year. The total project cost is US$ 12,639 annually. The net profit margin is estimated at 36% and the payback period is 4 months.

Process Description

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

Capital Investment Requirements in US Dollars

Item Unit Qty @ Total
Water kettle No. 1 40 40
Towels No. 20 1.3 26
Sink No. 2 10 20
Aprons No. 5 1.8 9
Furniture No.     300
Shavers No. 5 30 150
Fan No. 2 52 104
Wall Styling mirrors No. 3 20 60
Combs Sets 3 10 30
TC of Machinery       739

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

Cost Item Units @/ day Qty/ day Prod. cost/ day Prod. Cost/ month Prod. Cost/ year
After shave Tins 8 1 8 208 1,664
disinfectants Tins 4 1 4 104 1,248
Spray Tins 15 1 15 390 4,680
Powder Tins 2 1 2 52 624
Sub-total         754 8,216

General costs (Overheads)

Utilities (power) 15 180
(Utilities (water) 10 120
Salaries 150 1,800
renting 120 1,440
Depreciation (Assets write off) Expenses 12 144
Sub-total 307 3,684
Total Operating costs 1,061 11,900
  1. Production costs assumed are for 312 days per year with a daily capacity of 30 Customers.
  2. Depreciation is charged on electrical equipment and furniture and assumes 2 years life of assets write off at 25% per year for all assets.
  3. 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 @ Prod. Cost /year UPx TR
Hair cuts 30 9,360 1.2 11,900 2 18,720

Profitability Analysis in US$

Profitability item per day per month per year
Revenue      
Hair cuts 60 1,560 18,720
Less Prod & Operating Costs 38 992 11,900
Profit 22 568 6,820

Market Demand

The business has a great market demand in both rural and urban areas throughout the year and a higher demand during festive seasons.

Equipment Suppliers

All these equipments can be purchase from the local market.

Risk certainty

However the risks involved include fire outbreak of fire, however this can be solved through insurance of the business.

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