Republic of the Philippines

Department of Education
Region IV A – CALABARZON
Division of Cavite City
CAVITE NATIONAL HIGH SCHOOL
Senior High School

Research Title: SALON BUSINESS OPERATION

Research Proponent:Rea Jane Cuestas

G11 – Bantayan

School: Cavite National High School

Senior High School

____________________________________________________________________

I. INTRODUCTION

Background of the Study

Of the many functions in business, there are three basic functions; operations, marketing

and finance/accounting (Gaither & Frazier, 2002, p.6). The integration of these functions

creates a better opportunity to achieving common organizational goals. However, considering

operations as a central function in a business environment influences the management of the

entire business in an organization such as a beauty salon through a substantial value added by

improving its customer satisfaction, competitiveness and ensuring a long-term profitability.

Operations management is the management of processes, people and resources to achieve

the provision of the required goods and/or services at a certain level of quality and in the most

cost-effective way. It is responsible for a successful implementation of corporate strategy by

integrating thoughts about an organization's future as well as the effective operation of the

present; thus providing a way of bringing together all various management disciplines (such as
marketing, finance and accounting) to help build a realistic strategy capable of effective

implementation (Johnston & Clark, 2001). Siegel (2009, p. 21) says that this domain

constitutes an important and critical part of business that governs the efficiency and quality with

which products are manufactured or services are provided and involves numerous human

intensive procedures. More often, operations management is regarded as an integral part of

operations research, although such facts maybe arguable. Also, Wagen (2009) agrees that

operation research suggests numerous tools, methods and procedures which can contribute to

solutions of solving many issues concerning operations management. Operation management

links strategy to action, requires coordination across functions and involves managing the largest

part of an organization (Terry, 2005). The various definitions and descriptions of operation

management give the basis of the main focus in this paper as in how operations management

influences the entire operation in the beauty salon shop.

Haven viewed the nature of operations management in various contexts, the

employability of operations management in the services of a beauty shop will then be discussed

as the subject in this paper. The salon shop business is aimed at high reputable operation

capability to add values to the physical looks of its potential customers; offering extensive

service qualities on hairdressing (for men and women), facial care, nail care and body waxing.

The shop will also contain a mini store for the sales of accessories associated with the key

businesses already highlighted. Specifically, the discussion will be focused on the usefulness of

operation management on managing planning, purchasing/supply, inventory, transportation, cost,

time and quality and also to show how these tasks work interdependently to achieve long-term

profitability, quality service and low cost of operation.

 Generally, the importance of operations management on businesses is embedded in every

aspect of the service activities and therefore has critical roles to play especially in ensuring that

the business accomplishes its primary goals in the most cost-effective way (Voss, 2007).

It is of a great interest knowing that beauty salons, hairdressing and beauty consultants

are consistently some of the most popular types of new businesses to start up in the UK,

according to monthly data from Startups plus (Salon marketing, Feb. 12, 2011). With reference

to this report, this beauty salon business being discussed will not just be an ordinary and

common salon shops traditionally known but in fact an important place to make people who have

lost the feel of beauty to experience a total transformation as it also offers a free session on

beauty counseling to potential customers who have issues with hair and facial maintenance.

However, client articles (Nov 1, 2010) says that when customers are shown such extreme care

they tend to understand that a great deal and demand for beauty is something worth spending for.

So, taking care of oneself and thus beauty transformation are the main concern in this business.

However, being aware of the business aim, operations management is thus employed in

planning the shop and mostly sourcing the required resources. A greater part of the planning is

the sourcing of the human resources (i.e. professional hair dressers and beauty artists) from

beauty schools. Therefore, sourcing of developed and skilled employees is a fundamental human

resource practice that is depicted as the "litmus test" of human resource management (Feltead &

Ashton, 2007). For the purpose of recruiting well qualified staff, a request notice would be sent

to the beauty school within the period of four months before the actual date of recruitment and

opening of the beauty shop. This way of sourcing would ensure proper provision of the required

developed and skilled staff as at when due and hence giving the beauty school certain period of

time to train the staff up to the required standard without causing delay at start up. This practice

on the other hand, would reduce fees/commission paid to the school as some beauty schools tend
to give discounts for an early request of more than three months before due date. With the

support of operations management and skilled workforce, operational results would be enhanced

absolutely.

The shop layout is designed is such a manner to allow easy access to all sections, to

support healthy communication amongst staff, support customers' convenience and enable fast

services by positioning the necessary item needed for a particular service where they will be

easily accessed. For instance, the hairdressing section and nail care section will be separated with

just a narrow aisle while the facial care will be in same section with the hair dressing since both

services are rendered on the head, though on separate stands containing all the necessary tools

required for the service.

The degree to which a business's functions are aligned to the need of its market will

significantly affect its overall growth in sales and profit (Hill & Hill, 2009). However, the

development of a forecasting system requires a considerable amount of data to be collected and

analyzed for usefulness and validity (Lancaster & Reynolds, 2004). Therefore, forecasting

would be done according to the data collected on; seasonal requirement in fashion/style trend and

seasonal (summer, etc) customer population from the previous years' records of already existing

salons around, to know what the customers expect and how to handle the traffic. This will be

achieved through online researches.

Purchasing is the management control point where all significant purchases are

monitored for the right authorization of the right item, at the right price, quality and quantity,

from right supplier at the right terms and at the right time (Business dictionary, 2011). However,

getting the beauty parlor instruments such as hairdressing equipments, furniture, cosmetics,

hairdressing materials and other accessories before start up would be from an equipment

wholesaler since the wholesalers typically offer many various styles and trademarks of
instruments, hence, more options of choosing the best from variety of products considering usage

and durability in order to avoid unnecessary maintenance cost. The need for subsequent

equipment updates and monthly supplies of cosmetics and other accessories, calls for a good

business relationship between the business and the supplier; thus improving the supplier's

performance through good rapport and appreciated efforts.

To generate a better and clearer inventory management in this business especially for

peak periods such as Christmas season and summer, accurate records of stock will be kept on

monthly basis, hence solving the problems of under estimation at such periods and otherwise.

This technique will not only reduce cost of unnecessary runarounds due to under estimation of

available stock but will also create a room for budgeting on operational expenses such as cost of

transportation for private services (home services ), wages/salaries, etc. However, inventory will

be managed by reviewing the monthly records/reports on available and used stock. The issue of

transportation in this business will be tackled by the use of a mini-truck during supplies and

purchases but by bus for external services (such as home services) or by taxi/cab on urgency as

the case may be.

Studies

Last year, the beauty industry lost more 21,000 salons, almost 9% of the previous years’

total. There are various reasons for this reduction, including salon walkouts, salon suite/loft

growth, escalating overheads, standard of work and bored consumers. In other words, the salon

didn't excite the consumer with anything new. Additionally, many salons are operating at a loss

or have reduced profits. I often hear salon owners talk about their annual sales and what percent

they have increased over last year. In England, they have a saying, “Turnover (sales) is flattery,

profit is sanity.”
 How can the current business model flourish with increasing costs of workers

compensation, corporate tax, insurance, rent, social security and bank fees?

One of the primary objectives for salon owners is to increase the average visit consumer’s

make to the salon. Typically, a consumer visits every 4-6 weeks. Imagine what it would do to the

profit of a salon if a good portion of customers visited twice a week! In a previous article, I wrote

about the opportunity of high street salons offering a high-end wine bar in the evening that

converts to a high-end coffee bar in the morning, or an organic juice bar. This will not only

increase visits for existing consumers; it will also entice new customers, resulting in a higher

average ticket and the opportunity of additional retail sales. ( Leon Alexander | February 9,

2017)

THE beauty salon market in the country has been growing steadily over the last few

years.As at the end of FY 2003, there were an estimated 61,000 salons in towns and cities with a

population in excess of 10 lakh which racked up an aggregate turnover between Rs 1,493 crore

and Rs 1,805 crore, according to Value Notes Database Pvt Ltd.While most of these salons are in

the major metros - Mumbai, Delhi and Kolkata (all with a population in excess of 1 crore ) - the

others are balanced almost equally between the mini-metros with a population of 30 lakh-1crore

and smaller towns with a population between 10-30 lakh.Interestingly, half these salons fall in

the `home' category (one to two employees offering limited services) with large saloons (more

than six employees providing a wider range of services) constituting only four per cent of the

total number of such establishments in the country.However, the home segment, despite being

the largest in numbers, accounts for 15-24 per cent of the total revenue while the large salons

account for 27 per cent of the revenue.According to Value Notes, haircuts emerged as the most

revenue generating service across all the categories of salons, accounting for roughly 25-30 per

cent of the revenues.

 "Hair styling (hair colouring, perming, streaking etc) contribute to about 18 per cent of

the revenues for the larger salons, but are very insignificant revenue earners for the other

categories. This is especially true of high-end specialty parlours.In the medium size parlours,

hairstyles lose out as the revenue generators since the skill sets are generally perceived to be

lower in this category. However, facials, being comparatively price inelastic, make up for 31 per

cent of the revenue generation in this category. This trend also follows to the smaller and home

parlours, as this is a function of price rather than volumes. Therefore, it is easy to say that haircut

is the most popular as well as the most revenue earning service in this business.Interestingly, for

the medium and small beauty salons, facials form about 30-35 per cent of the earnings. Quite

obviously, the price differences are highly significant between the town classes, with prices in

the metros being considerably higher than the smaller towns, the difference being up to Rs 500

for haircuts.Price differences are the highest in haircuts and facials, followed by hairstyles.

Among the other services, the price differences do not appear to be so dramatic.""The main

drivers for price variations are quality of the services offered and the retention of good

employees. These are also important factors which drive customer loyalty. Also the locality in

which the parlour is located drives the price. In case of large parlours, a certain niche or specialty

determines the price points for the services offered."

Dealing with product sales, Value Notes says that they constitute a very low part of the

revenues. In fact, it is only the large parlours that engaged in product sales. But this too

contributed to only about seven per cent of the revenues."Only L'Oreal appears to have managed

to successfully push its product line, especially the hair treatment products through the beauty

salons. The reasons for this encompass exclusive sales of L'Oreal products in the salons, regular

training for the salon staff and sale of certain L'Oreal products not available at any other

outlets."According to Value Notes, the overall estimated growth rate for this industry (in FY
2003-04) in terms of number of parlours would be between 20-25 per cent, but revenue growth

would be only about 4-5 per cent. The firm estimates that the growth rate would be higher among

the metros and the smaller towns.

Moreover, growth rates would be better among the large parlours rather than the medium

and small parlours. "This is because the smaller players are being threatened by the burgeoning

home segment."Value Notes has identified as the industry "growth drivers" an overall increased

awareness of beauty, improvement of technical skills, a growing demand for something new,

veering of beauty salons towards "treatment" and "therapy" and aggressive efforts by companies

like L'Oreal for their products."The inhibitors to growth are mainly the stiff competition due to

the establishment of small and home size parlours. This is also due to the emergence of a lot of

training institutes offering inexpensive short duration courses. The other problems faced by the

parlour owners include the service tax, felt by mostly the large beauty salon owners.

Undercutting by smaller parlour owners was also another problem faced by this industry. (Pune ,

Jan. 22)

II. REVIEW OF RELATED LITERATURE AND STUDIES

Foreign Studies

G-six Hair and Beauty Salon provides on providing a high standard of costumer service. In

addition to the quality hair and beauty services, the costumer service has been found to be one of

the main reasons of clients keep coming back to the salon. Today, beauty care becomes a big

business, which can contribute to an economy significantly (Peiss 2000).

Large scale production, global distribution networks, extensive advertisement efforts,

scientific marketing and sales at a large scale, all these have contributed to the emergence of

beauty as an industry (Peiss 2000). Beauty is always considered as an important attribute for

female. From the ancient time till now, we can trace many descriptions of beauty and beauty care
practices in the poetry, literature and arts (Peiss 2000). As globalization intensifies, the concepts

of beauty and the necessity of being beautiful have gone through an evolutionary change.

Local Studies

Research Framework
(Illustration of independent and dependent variables)

III. RESEARCH QUESTIONS

This study focuses on salon business operation.

1. What are the services of this salon?

2. How does a salon business operate?

 3. They did have any sales?

Significance

The purpose of this study is for researchers to find out information about Salon Business

Operation such as how employees work their family in what way they live, and how they operate

their business.

Employee – This study provides information such as how to become a salon business employee

an employee is have their usually salary and benefits.

Management – This study will provide to how they manage their business.

Other researcher – This study will benefit the other researchers in the future because they can use

this as a basis if they will do a study related to this topic.

Costumer – Their viewing if their services is good.

Respondents - The services offered by the applicant were run-of-the-mill and nothing

extraordinary.

IV. SCOPE AND LIMITATION OF THE STUDY

This study will focus on salon of Sta. Cruz Cavite City. The target respondent of this

study are the owners of salon.

V. RESEARCH METHODOLOGY

a. SAMPLING
 Purposive sampling (also known as judgment, selective or subjective sampling) is a

sampling technique in which researcher relies on his or her own judgment when choosing

members of population to participate in the study. Purposive sampling is a non-

probability sampling method and it occurs when “elements selected for the sample are chosen by

the judgment of the researcher. Researchers often believe that they can obtain a representative

sample by using a sound judgment, which will result in saving time and money”.

TV reporters stopping certain individuals on the street in order to ask their opinions

about certain political changes constitutes the most popular example of this sampling method.

However, it is important to specify that the TV reporter has to apply certain judgment when

deciding who to stop on the street to ask questions; otherwise it would be the case of random

sampling technique.Alternatively, purposive sampling method may prove to be effective when

only limited numbers of people can serve as primary data sources due to the nature of research

design and aims and objectives. For example, for a research analysing affects of personal tragedy

such as family bereavement on performance of senior level managers the researcher may use

his/her own judgment in order to choose senior level managers who could particulate in in-depth

interviews.

b. DATA COLLECTION

The researcher will sought permission from the Principal of Cavite

National High School to administer the interviews and questionnaires to the

respondents of this study.

Upon retrieval of the information gathered from the interview and survey

questionnaires it will be recorded, analyse and interpreted.

a. ETHICAL ISSUES
 To complete with appropriate research guidelines research ethics is very

important. Considering ethical aspect of research, enough time is given to the

respondents of the study so that they can depict their true view on research

questions. Consent from the respondents were taken and appropriate permission

were also ensured for usage of their given data. Confidentiality of the responses

were maintained strictly to ensure privacy of their data. The disclosure of

respondent identity was based on their permission where if they are not willing to

disclose identity, their identity will not be exhibited. Hence, the ethical aspect of

research will be followed very strictly in this research.

b. PLAN FOR DATA ANALYSIS

Data requirements of this study were obtained through the administration

of a locally-structured survey-questionnaire. Interviews were also being done to

validate responses to achieve more reliable data.

The survey-questionnaire that was used supported our research question

for the student-respondents contained three (3) parts:

1st – Basic information from the student-respondent such as:

Name of the student, Gender, Name of School, and Age

2nd – Series of statement that will support the research question on

the student’s response

3rd – The research interview

VI. TIME TABLE

Table 1

Time Table / Gantt Chart

DATE ACTIVITY REMARKS

May 13-20, 2018 1. Securing of permits for
 the conduct of the study in
the division
2. Tracing the students that
graduated last march 2017

Distribution of
questionnaires (students,
September 20-23, 2018 teachers and parents)

March 29, 2018 Retrieving of questionnaires

April 12-15, 2018 Conduct of interviews

1. Tabulate responses,
create data matrix
October 1, 2016 –
2. Perform statistical
November 30, 2016
treatment and
Interpretation of data
1. Presentation of result
August 8 - 15, 2016
2. Strategic planning

VII. COST ESTIMATES

Table 2

Cost Estimates

ITEM ACTIVITIES SUB TOTAL

Materials, services and Communication Php 20,000.00
expendables Manuscript printing
Special activities Transportation Php 5,000.00
 Monitoring and Meeting Php 5,000.00
evaluation Strategic planning

Other expenses

Php 30,000.00
TOTAL COST

VIII. PLANS FOR DISSEMINATION/ADVOCACY

(What is your plan after conducting this research, state how you are going to promote to

fulfil the purpose of this research)

IX. REFERENCES

Note: PAGDATING SA REFERENCING, ALPHABETICAL NA PO SIYA DAPAT. Hindi na sine-

separate kung books, periodicals, unpublished materials