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 |
- 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 | @ | 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.
