Sales Letter

For the Sales Letter assignment, I drew inspiration from the countless mailers I have received from business around where I live inviting me to come and patronize their business for some reason or another. I tried to keep with the same style by presenting the reasons the customer should stop by as well as incentives to help persuade the customer to do so.

Xtreme Cuts

1604 and Bandera

San Antonio TX, 78250

October 16, 2007

Resident

Some Street Way

San Antonio TX, 78250

Dear Resident,

Xtreme Cuts has opened a new location right on your neighborhood! Our new Salon is right down the street at 1604 and Bandera, in the Target shopping center. No more having to drive around town looking for a Salon without a long wait – at Xtreme Cuts, you will never have to wait more than ten minutes! With our No Wait or Short Wait ^tm policy, you can get a quality haircut in less time than it takes to brew a cup of coffee!

At Xtreme Cuts, we stand by our idea that you should be able to get a quality haircut at an affordable price. We understand that your time is important, so we strive to provide you the best value with our convenient location, excellent customer service, and affordable price. With our new location at 1604 and Bandera, we are bringing our quality Salon to you!

So stop on by! Through the month of October children’s haircuts are half-off! Also, the enclosed coupon is good for TWO free haircuts! We look forward to seeing you and your family at Xtreme Cuts! We guarantee that you will be happy with your hair!

Sincerely,

Gabriel Gonzalez

C.E.O., Xtreme Cuts

Project Plan

The Project Plan was a much more detailed account of what things had to be done in order to get my enterprise off the ground. For my project plan, I listed ten major things in sequence of what I would need to accomplish before opening the doors for business. While the time line and financial structure of all these tasks would be covered later, the Project Plan was preliminary to those documents.

Gabriel Gonzalez

ENGL 2413.010

09/25/2007

Project Plan

Significant tasks that must be completed before Xtreme Cuts can open for business.

1. Obtain business loan.

Absent of funds, obtaining the franchise license from Xtreme Cuts cannot be guaranteed. With a business loan, all of the company expenses from the franchise license all the way through the first few months of operation can be funded. Significant efforts will be made to take out a business loan with the lowest possible interest rate.

2. Obtain franchise license from Xtreme Cuts parent company.

With the funds secured, work can begin on acquiring a franchise license from Xtreme Cuts. Getting the franchise license should be a fairly straightforward step, as availability of the license is based mostly on the acquisition of the business loan.

3. Scout for and lease suitable retail space.

Hopefully available retail space can be found in close proximity to a large grocer or perhaps inside a mall. While the size of the final leased spaced doesn’t have to be that large, long-term success of the salon may depend largely on location.

4. Obtain city business permits, Fire Department Occupancy permit, and state Cosmetology license.

The three pieces of paper necessary to eventually open for business, the city business permits, the Fire Department occupancy permit, and the state Cosmetology license are all insignificant in their cost and significant in their value.

5. Renovate retail space and install franchise theme.

Once retail space is leased, the space will need to be cleaned and readied for business. While contractors will need to be hired for the significant work such as installing the dropped ceiling, money can also be saved at this step by having friends and family members help install the franchise theme and to move in other equipment such as chairs and office furniture.

6. Hire at least 12 stylists, one manager, one assistant manager, and one receptionist.

While some franchisees may choose to save money at this step by hiring new stylists out of cosmetology school, the success of the business can be better assured by hiring more experienced (and more expensive) stylists. Also, the position of receptionist must be filled, as the receptionist can easily double salon productivity during peak hours by allowing the stylists to concentrate their efforts on cutting hair, with the receptionist handling the register and the waiting list.

7. Hold a motivational and procedural meeting for the staff.

Holding a motivational and procedural meeting for the staff is a vital step in opening a solon where everyone is on the same page. Experienced stylists have often worked at half a dozen salons in their careers, all with different operating procedures. Holding a motivational and procedural meeting will not only get the staff prepped for opening day, but will also give them knowledge of the salon necessary to make the salon successful after the opening week rush has subsided.

8. Send all stylist staff (including manger and assist. manager) to Xtreme Cuts proprietary stylist training.

Details of the perfect haircut, including building customer rapport and ideal haircut time, vary between salon companies. Having the stylist staff attend proprietary Xtreme Cuts stylist training will ensure that haircuts done once the first customer walks in the door will be done the Xtreme Cuts way.

9. Advertise heavily for special opening-month haircut price.

This is one of the most vital steps to getting the largest opening month haircut numbers. The highest goal of the opening month is not to bring in high sales, but to convenience customers to leave the comfort of wherever they get their haircuts and experience a haircut the Xtreme Cuts way. With heavy advertising and steep discounts on the haircut price, customers will stop by and have a haircut. Once they enter the door, it’s up to the staff to keep them coming back, hence steps seven and eight.

10. Open for Business.

With all of the paperwork done, the space leased, the stylists hired and trained, and the customers aware of a great deal just around the corner, it will be time to open for business. If the location is good, the price is right, and the stylists are great, my Xtreme Cuts franchise can look forward to a future of good business.

Vision and Mission Statements

For this assignment some of the more technical aspects of my enterpirse had to be thought of. With my Vision Statement, I discussed where I wanted my enterpirse to be within the next two years, and with my Mission Statement I discussed how I expected to achieve that vision.

Gabriel Gonzalez

ENGL 2413.010

09/06/2007

Vision and Mission Statements

Vision Statement

(In keeping with my previously written Opportunity Statement, I will continue to use the hypothetical enterprise of a retail hair salon.)

“Within two years, Xtreme Cuts will be the busiest salon in the Bexar County region. In addition, we will have the most satisfied customers, who keep coming back to Xtreme Cuts to relieve the best customer service available in the salon business. Our product suppliers will find to be the most profitable, and Xtreme Cuts will become the premier model for the successful retail salon.”

Mission Statement

In order to accomplish out vision for Xtreme Cuts, we will need to accomplish the following tasks first.

1. Break the $10,000 record for opening week sales revenue.
2. Hire two stylists capable of breaking the 800 cuts in a month record.
3. Attain the highest new customer rate for San Antonio
4. Attain the highest customer return rate for San Antonio.
5. Sell $15,000 worth of product in the opening year.
6. Open our fourth salon by the two-year mark.
7. Consistently beat the national monthly average for monthly hair cuts.
8. Retain 80% initial staff through the first year.
9. Retain 60% initial staff through the second year.
10. Keep productivity above 11 cuts an hour at all times.

Opportunity Statement

This was the first document created for the enterprise assignment. In this opportunity statement, I discussed what kind of enterprise I would create (a retail hair salon) and what I thought it would take to get such an enterprise off the ground.

Gabriel Gonzalez

ENGL 2413.010

09/03/2007

Opportunity Statement

Thinking along the lines of experience, if I were to start an enterprise of my own, such an enterprise would be a retail hair salon. The longest job I have ever held was a receptionist position at a local hair salon I feel I would be most successful in running such a business.

There are two types of salons. The first type of salon is the value type, which greatly outnumber the other type of salon and are typically franchise operations. The price of services provided is always considered before the fashion value. An example of a value salon would be Great Clips. The second type of salon is the fashion salon, which are typically independently owned and operated, are located in higher-end retail outlets, and place fashionable value of service before price. An example of a fashion salon would be Cool Cuts. Since the salon where I happened to work was a value salon, I will consider the value salon model for my hypothetical enterprise.

Foremost to the success of a value salon is location. Unlike with a fashion salon, where the customer comes to the salon, the value salon must go to the customer. With location such a significant element, the most successful value salons are located proximally to large grocers and shopping outlets, so a small business space would be leased in one of those two areas. Also, space is leased at prices relative to its size and location, so the cost of space can range between a few hundred dollars to a few thousand dollars a month.

Second to the success of a value salon would be franchise option and franchise choice. Fashion salons can rely on word-of-mouth for advertisement, but value salons typically will need the large ad campaigns of the franchise company to attract new customers to the salon. Additionally, value salon franchises differ on the services provided beyond the haircut, such as hair coloring and hair perms. The cost of these additional services, as well as the local demand for specific additional services would determine which franchise I would choose. Also, typical franchise fees for a value salon are a one time cost of around twenty-thousand dollars.

Third and what would seem the most obvious element to the success of a franchise value salon operation, is the staff selection. During downturns and periods of increased competition, the ability of the stylists to provide an exceptional service for the salon prices, as well as the ability to the managers and assistant managers to adequately run the salons makes a huge difference on the long-term outlook for any franchise operation. Also, the typical pay rate for stylists is under ten dollars, with the addition of volume bonuses and tips. Managers and assistant managers are typically paid more than ten dollars, as they understandably bring in less income from volume bonuses and tips.

Some of the problems I can anticipate with a value salon operation would be high turnover, security, and local downturn profitability. Out of an initial stylist staff of twenty, less than half of the original stylist staff will probably t the two year mark, and only one or two of the original staff will remain at the five year mark. Such high turnover is caused by competitive pay offered by competing salons, as well as a myriad of other issues such as stylists leaving for more advanced positions in the cosmetology field. Another potential problem is security, where, because of an often all-female staff, the salon would be at a greater robbery risk than other types of retail operations. Implementation of security and monitoring fees can adversely affect profitability. A final potential problem is local downturn profitability. While the startup and operation costs described previously only total a few ten-thousand dollars, additional miscellaneous startup and operation costs such as insurance and inventory costs can run the final bill well over one-hundred thousand dollars for a multi-salon operation. Payments on the business loan necessary to finance such an operation can become difficult to make when monthly business volume can fluctuate up to eighty percent greater or less than the previous months earnings.

However, with the right goals for a salon operation, business success can become almost a guarantee of entering the market. Records in the salon market are rarely broken, so a salon with the record of the highest haircut volume can enjoy business many times over what franchise ad campaigns can bring in. Additionally, employing stylists who have broken records for haircuts in any interval of time can often greatly increase an individual salons business.

Lastly, I would like to stress that the ultimate goal for a value salon is volume. Often, getting the volume of haircuts involves both bringing new customers in and keeping them coming back. With a mission statement such as “Working towards the highest annual haircuts in the city”, I feel that I would be most successful with the opportunity to open a franchised hair salon.