Free Essay

New Business Development in Bangladesh (Spa)

In: Business and Management

Submitted By salsabeel
Words 5936
Pages 24
Submitted To
Samia shabnaz
Lecturer (Course teacher)
American international university -Bangladesh

Submitted By

Khan Samara Salsabeel 07-09162-2

LETTER OF TRANSMITTAL

28th February, 2011

Department of bachelor of business administration
American international university-Bangladesh

Subject: Tem paper on “A new business plan”

Dear mam,

Here is the report on “A new business plan” That you assigned us to prepare. This report will provide you with information regarding our business that is on “spa”

We have collected and studied the relevant information for preparing this report. we have enjoyed a lot during our report writing, as it required studying details about spa industries in Bangladesh.

We hope that this report will meet your requirement. We would be glad to furnish any further clarification in this regard, if needed.

Yours’ sincerely,

Khan Samara Salsabeel
Ferdous shanjida
Das Bipul
Rahman Ashiqur

We are grateful to Almighty god for giving us the chance of completing this paper within the schedule time without any kind of complex hazard.

We would like to take the chance to express our gratitude to our honorable course teacher, samia shabnaz for her continuous guidance and support regarding this term paper.

Besides this, we have found so many sincere and productive advices from many a person that we would like pay homage to them.

INTRODUCTION

What actually spa is?

The term spa is associated with water treatment which is also known as balneotherapy. Spa towns or spa resorts (including hot springs resorts) typically offer various health treatments. The belief in the curative powers of mineral waters goes back to prehistoric times. Such practices have been popular worldwide, but are especially widespread in Europe and Japan.

Spa treatment

A body treatment, spa treatment, or cosmetic treatment is non-medical procedure to help the health of the body. Spa treatments are the services that a spa provides. The most popular spa treatment in the United States and a good place to start is massage. It has been around for thousands of years and has a number of health benefits.
Massage has many important health benefits. In fact, massage can help to maintain physical, mental and emotional well being, Massage calms the nervous system and promotes a sense of relaxation . Massage reduces tension and anxiety Massage improves blood circulation, which delivers oxygen and nutrients to the cells. Massage therapy can help with pain management in conditions such as arthritis Apart from massage, other popular spa treatments include facials and body treatments.

Our spa parlor at a glance:

Our Spa is a unique combination of massage, body treatments, facials, hair styling and anti-aging treatments. The settings are upscale, beautiful and serene. We cater to both men and women and offer the latest in skin care products and therapies.
We, upon commencement of operations will also sell a wide range of beauty services and products. We will provide quality hair, nail, and skin services, along with top lines of beauty products. What will set us apart from the competition is our commitment to providing all of these services in one convenient location.
The goal and promise of our Spa can be summed up in our slogan: Spa and Salon--Rejuvenate Your Life!

Mission

Our mission is to run a profitable business by providing a comforting, yet stimulating, atmosphere in which customers will be able to relax both their body and mind, reconnecting their daily lives to their true purpose through a wide range of holistic methods including massage, body works, and hair styling. We will establish ourselves as a dependable destination to which they can always come to escape the stresses of life, and rejuvenate their energies, their souls, and their lives.
We are mindful of the overall experience - using only the finest oils and lotions, beauty treatments and aromatherapies. Special lighting, music, decor, and textiles are used throughout the spa to complete the comfortable, plush environment and enhance the client's overall spa experience.

Keys to Success:

The keys to success in our business are: Location: providing an easily accessible location for customers.
Environment: providing an environment conducive to giving relaxing and professional service.
Convenience: offering clients a wide range of services in one setting, and.
Individual Attention: Each client's experience will be tailored to his or her preference.
Repeat business/Recommendations: giving the kind of service that brings people back for regular treatments, and encourages clients to recommend us to friends, and other health professionals to recommend their clients.
Unique Treatments: We have the latest in techniques with the best products from around the world.
Quality and skilled employees

Products and Services

We will provide customers with personal beautifying and relaxation services and complimenting products. Precisely we offer therapeutic massage services, body treatments, facials and anti-aging treatments. Services are provided by licensed therapists and aestheticians who are independently contracted and paid on a commission basis. Explanations and/or consultations will be provided on all services and products if needed. We will offer a wide range of services that include: • Hair: cuts, colors, shampoo, conditioning, curling, reconstructing, weaving, and waving. • Nails: manicures, pedicures, polish, sculptured nails. • Skin Care: facials, body waxing, massage. • Men and women Hair Styling: Suitable and appropriate hair styling and coloring for both male and female will be provided by our spa. Selected hair care products (shampoos, conditioners, cleansers, brushes, mirrors) will be sold as well. • Body Works: Massage, aromatherapy.
Specific complementing products will be sold as well. Products included are high-end cosmetics, creams, candles, and other beauty products. These high-end items will be sold at 50% mark-up or higher.

Availability of product:
The same types of products and services are not yet widespread in our country so we hope to have a pioneering advantage. We have our product Desirability. That means our customers will definitely gain benefit from our products and services.

Raw material: We will use all herbal products for delivering our services namely: tea leaves, methi, amla, hibiscus, arnica henna, mulathi ,neem, orange, lemon, yaba, rose, sandal, turmeric etc. Some of these can be obtained from wholesale markets and others will be procured from the local market at competitive rates.

Technology

Technology is important in spa treatment, because it is all about satisfaction and beauty. No one wants to compromise with it. Basically in spa treatment we use technologies such as: • The finest European hydrotherapy treatments in a normal treatment room - no wet-room is required. • Steamy Wonder : Steam system that fits on any massage table • Steamy Canopy System : Fits on any standard table Width 27" to 33", Length 70" to 72"and Special fitted sheet that allows the steam shade to attach to table, Steam Generator ,Temperature determine ,Fan, Insulating Blanket . • The Mermaid Hydrotherapy Massage Table is a unique concept in massage table that offers exceptional advantages both for the client and the therapists. Ease virtually any form of pain or stress by stretching out on this revolutionary hydrotherapy table. • Integrated Spa System : Vichy Shower, Steam, Handheld Shower & Wet-Table, Massage in One System Vichy Shower with 7 shower heads (located inside steam canopy)handheld Shower for wet-table treatments Quality professional mixing value for precise water temperature, scald protection & pressure balancing.

[pic][pic]

Intended market environment
Target market: Our target market will be divided by salon customers and spa customers. Salon customers will be from every age and gender. On the other hand, spa customers will be male and female professionals and retirees, from the age of 25, with individual and household incomes greater than Taka 25,000.

Target Market Segment Strategy

The members of these market segments have luxury money on hand, and lead professional lives filled with stress at a consistent level. All persons usually need hair styling regardless of income level, and make the effort to find the money available to style their "look.

Market Segmentation-
Within our target market group, clients who use spa services fall into three basic groups: 1. Clients recovering from injuries or accidents needs Massage Therapy 2. Clients pampering themselves needs Massage Therapy, Body and Facial Treatments

o Individuals with high disposable income. Clients who have the disposable income to indulge in massage and body treatments for self-pampering or relaxation are the core of our long-term repeat customers. These clients will come once a week to once a month for years, and often refer other family and friends. This type of client can be difficult to find. Our desired location will provide an excellent demographic to provide this type of client o Sometimes have chronic pain or old injury issues o Massage 1 - 4 times a month for relaxation o Huge anti-aging and beauty market potential o Local hotels that do not offer spa services will be able to refer to our facility.

3. Clients who prefer alternative health care o Use massage as preventative health care o Use other alternative practices - e.g. acupuncture. o Try to have massage as regularly as they can afford - usually once per month o Commuters in Metropolis suffer through some of the worst traffic in the country. As the population grows, the traffic worsens and the need for massage therapies increases. Extended hours will capitalize on those who want an appointment on their way home from work.

Market Needs

People love to pamper themselves, especially people who have achieved a modicum level of professional success. In our country, spa service is being provided only by one or two parlors. So this crucial service is very limited and the market seems quite lucrative as there is adequate market need for this service in our country.
We want to provide this service to the Bangladeshi people at a reasonable price so that most of the people can enjoy our service. "Quality tells, Quality sells” is our motto. Price-range will be kept reasonable but befitting. Our competitive advantage will be “lower cost with higher Quality”. So, we will follow the cost leadership strategy.

Competition

We have set ourselves up to be different to other spas on broadways. The services we are offer are a different mix/emphasis. A potential buyer could either carry on in a similar style or they could convert to a style which would be in direct competition with the other spa. Our target is to attract the customer by our style. In this case direct competition we have to compete with persona, Bithi’s .shahnaz herbal, Harmony spa and many other parlors that provide spa treatment and service.

In case of indirect competition we have to focus on close substitutes that are provided by another company. For example: we can face indirect competition from any facial and massage parlor, pedicure and manicure parlor and so on.

We have to face a huge competition to promote our business. Our rivals/competitors are already established in market. Today our most strong competitors are persona spa and Harmony spa. They cover two-third of the market share and their growth rate is also very high. They use some unique resources and product, like: Spa Sentiments Collection which is made with fresh, pure and natural ingredients (Ingredients such as 100% pure essential oils, fresh butters, organic cold pressed oils, organic hydrosols, glycerin-based extracts and paraben-free preservatives).

By investigate the market we find that our competitors’ strengths are: • Skilled and experienced staff • Well behavior with the customer • Environment • strength of management, and management style

Weaknesses are:

• higher labor costs • online service • late service

Barriers to entry: 1. Lack of proper advice: As a new business owner we don’t know nothing about taxes, legal business practices and finances, we need to hire extra help. This is an expense that not many new business owners can afford. 2. Lack of funding to start a business can become a barrier, especially if the funding is to be used to create or build the products for the company. 3. Lack of marketing of the business. 4. Disorganization becomes a barrier. 5. Customer loyalty to competitor’s brand: The presence of established strong brands within a market can be a barrier to entry in this case. 6. Government regulations - It may make entry more difficult or impossible.

Uniqueness of the product and services:

Our Spa is a unique combination of massage, body treatments, facials, hair styling and anti-aging treatments. The settings are upscale, beautiful and serene. We cater to both men and women and offer the latest in skin care products and therapies.

We always try to bring something new and modern technologies. We use the European hydrotherapy treatments that are served by world class therapists and experts. We use different types of service in a basket. It will help to consume the time as well as labor. So all these things make our product unique and it will quite hard for another company to copy our product and service.
Industry

The spa industry in Bangladesh is under hospitality industry as well as under the life style and beauty industry. In Bangladesh SPA is basically a growing industry. Now a day the appeal for SPA is increasing and it will lead the industry towards achieving the economics growth.

Growth rate

[pic]Year

Spa was first introduced in Bangladesh at the year 2002 by Prima Bangladesh Beautician Hair Saloon & Spa. At that time people was unknown about the features of spa. As a result the growth rate was very low. But after that many enterprises like harmony spa, persona spa and so many came in Bangladesh and the growth rate is increasing. Now it is cover 28% growth rate in economics.

As we want to expand our business in the hospitability and beauty sector, we have to work hard to create demand among the people of Bangladesh. As our target market is both male and female, we have to create demand to them by providing available supply of latest services.

Trends in spa:

|Targeting men and women |K |Growth in med spas (spa) |
| |E | |
| |Y | |
| | | |
| |T | |
| |R | |
| |E | |
| |N | |
| |D | |
| |S | |
|Local sourcing | |Search for beauty |
|Fast service | |Scientific proof |

Business model

Spa business is very rear in Bangladesh two or three company currently providing this service .but we are trying to do this business in some different way, it will not be the conventional way of providing this service we also include some new and interesting service with this service, it will be include every thing from the hair cutting, make up, and some different therapy. Present Day Spa offers therapeutic massage services, body treatments, facials and anti-aging treatments. Services are provided by licensed therapists and aestheticians who are independently contracted and paid on a commission basis. The upside of the commissioned employee is that there is very little overhead without sales; employees only make money when the business makes money. We also offer a full retail line that complements the services menu. Products included are high-end cosmetics, creams, candles, and other beauty products. Our company will be full retail service, the premier element to our financial plan is initiating, maintaining, and improving the factors that create, stabilize and increase our cash flow. Because of the commission structure of our contractor payments, our variable costs will exceed fixed costs for all years of this plan, which should help stabilize the cash flow - we only pay commission when we make a sale. We will surpass the break-even point by month four, and end the first year with a net profit margin of almost 11%. By quickly repaying our loan while increasing sales, and managing costs, we will increase the net worth of the business substantially in the first year, and continue increasing it for the foreseeable future.

Marketing and sales strategy

Marketing strategy: Marketing strategy is one of the major parts of any kind of business. We also follow this strategy very seriously, but we are not following this strategy only we also want to be cost focus, product and cost differentiation will be our main competitive strategy.

• Local Advertising & Seasonal Promotions: -

Local newspaper advertising, local fliers, grand opening party kick-off and promotion for first 30 days. Continue regular advertising and plan for seasonal events like Christmas, Valentine's, Mother's Day, and New Year's.

• Local Networking: -

Charities, women's groups, country clubs, wedding planners.

• Health Care Referrals:

Work current contacts and create new contacts with health care providers, especially chiropractors. Also, become a Provider with health insurance companies that offer Alternative Care to their members. Most people don't know that massage therapy is usually paid by insurance when billed correctly and when prescribed by a physician. Now a days Spa already has practice management software to handle medically billable massage. When the insurance does not cover the entire amount of a service the client will pay the difference. A list of acceptable insurance company plans will be maintained and those clients will be able to handle massage therapy through their insurance. Any opportunity to convince allopathic physicians - MDs - to see massage as having long-term healing benefits for their patients will also be taken, since they hold to key to having massage paid for as "medically necessary." The client will also help drive that with the physicians if they are properly educated.

• Hotel Referrals: -

Hotels that do not offer their own spa services will send their guests to our spa or use our out-call spa services. Prior to opening, I will make contacts with managers and concierges at local hotels to ensure they are aware of the services available. Promotions will be offered to professionals in these industries to create buzz and build relationships.

• Online Website: -

our spa will show up on every major search engine and in the phone directory. The website will have a full menu of services and eventually have the ability to schedule appointments on-line. The spa software we are using will allow a user to see the schedule and make and appointment without making a phone call.

• Location traffic:

It is imperative that we be located in a high-traffic strip mall that is high-end, modern, and clean. We prefer locating near a complementary business like a nail or hair salon that does not offer any massage or facial treatments:

Sales strategy:

If, as it has been said, the top three items which determine success in business are location, location, location, then a busy location at in a thriving residential community represents our top marketing strategy. With the owner focusing on the sales, marketing and management and delegating the massage and aesthetician therapies to employees--business profitability potential is exponentially maximized over a one or two person operation by a direct care-giver without any marketing, management or sales background.

Pricing-strategy: price is one of the major factor for any kind of product, we will try to minimize service charge, our main pricing strategy will be cost leadership .because now a days two or three company is providing this service .and they are charging high amount of money so that customers are paying high amount of money. If we can charge lower amount of money then it is possible for us to skim a good number of customers. We have much number of customers but for the high price of the service our customer are not going to take the service for that reason we have a great opportunity to capture the market. It is a great opportunity for our company if we can charge fewer amounts of money and giving quality service than we can grave market easily, so we will charge less money then the other company is taking for the same service. After giving all the expense if our company can earn 20% profit margin it will a great achievement for our company.
Projected Profit and Loss:

Because we are paying our service-provider on commission, our variable costs will exceed our fixed costs. This keeps our overhead low, and means we paying only for hours when they actually provide services. Keeping such a large pool of reliable massage therapists and aestheticians as we are recruiting will keep us from losing business with no-shows, especially since we will schedule our contractors, as much as possible, for full days or half-day, rather than individual appointments.

Fixed expenses are the customary: rent, electric, advertising, insurance. There are four main areas of income: massage, aesthetician retail and out call. Massage and aesthetician services are tk 4000 per service minimum, with 45% of that going to the service provider. The basis for the sales projections is a conservative estimate of 7 services per day the first month in business and 53 services per day by the end of the first year. At 53 services per day we would still only be operating 75% to capacity with 7 treatment rooms operating 7 days a week, 8-10 hours per day.

On retail products, the gross margin is consistently 50% across the board. The retail lines go in conjunction with the spa services as an extension of the spa experience. The more customers, the more retail sales that will be driven. These high-end cosmetics and spa products are hard to find items that generate repeat purchases.

Production and operating requirements

First of all we are going to rent a space above 2500 square feet. An attractive place is very important for our business, it should be a good place and transportation system should be very convenient. Availability of resources: Like: electricity, water supply, gas supply and so on. Security is also important to maintain our business. People should come our shop with a less effort, and we are going to introduce new system in giving the service. for the young girls we will give some discount if they can bring their other friend as well to our shop , and after some days if we can sees that they are our loyal customer we are going to take extra care of her, we are going to that person a member ship card if the person is coming again to our shop she will get some extra discount, as well as in our shop a restaurant will be in the one corner they can eat as well when customer are waiting for the service. And one corner of our shop a cosmetics gallery will be and the price will be less then the other shop is giving, people can also buy some cosmetics from our shop. In our shop a play room also is concluded, when a mother comes with her child she can give the child for playing and she can take services so that a mother will be more comfortable when staying in our shop. So she may be frequently coming to our shop with out thinking about her child because the child will be under the care of us, so our service design will be a packed by some other facilities. We hope it will make our business more competitive other company.

Management and Personnel requirements
For running the Spa business we need some professional employees as followings:
1. Manager
2. Accountant
3. Receptionist
4. Computer operator
5. Body massage specialist
6. Worker
7. Gate keeper

Responsibilities of employees:
The main responsibility of all employees is to serve people effectively and efficiently. The manager will take the major decision for the organization and control the employees. The accountant will keep the record of all financial matter. Our receptionist will cordially receive the customers.
The body massage specialist will serve the customers and provide them better quality body massage. Our computer operator will keep record of all customers. He will keep record of our valuable customers so that we will be able to find out our loyal customers as well as our new customers. Our worker will work hard for advertising our organization and provide better service to the customers.

Background/ Experience and skills of employees:
For selecting these people we have some requirment.This are as bellow: All the employees need to have a good background of Spa knowledge. We need well qualified employees to run the business. For the post of manager and body massage specialist we need at least 3-4 years experienced employees. They need to have a good skill on body massage and other treatments.

Costs:
We will pay smart salaries to all the employees.

How many people we needed in short term and long term:
In short term we need 15 people to start the business. They are as followings:
1. Manager (1)
2. Accountant (1)
3. Receptionist (1)
4. Computer operator (2)
5. Body massage specialist (10)
6. Worker (3)
7. Gate keepers (2)
For long term running the business we will hire a large number of employees. But at present we are concentrating on opening the organization. Whenever we will get a large number of customers that time we will increase the number of employees.

Intellectual property

We are going to operate a new spa in our country. For this reason we need to register our organization first. Registration is the most important part to start spa business. We are not going to innovate products so for present situation we don’t need to go for patent. We need to build up our own brand name. Our company name is “THE SPA”. We have to collect a trade license on that name.

In our spa these facilities are available: ✓ Personal Care, Beauty & Services/Barbers, Beauty Salons & Spas/Beauty Salons

✓ Personal Care, Beauty & Services/Barbers, Beauty Salons & Spas/Bridal Hair & Beauty Services

✓ Personal Care, Beauty & Services/Barbers, Beauty Salons & Spas/Bridal Mehndi (Henna)

✓ Personal Care, Beauty & Services/Barbers, Beauty Salons & Spas/Day Spas

✓ Personal Care, Beauty & Services/Barbers, Beauty Salons & Spas/Facial Treatments

Our company logo is:

[pic]

Regulations/Environmental issues

It is necessary for all health spas to comply with the basic health and safety regulations, but they should also pay attention to treatment specific requirements, especially in relation to surgical type procedures. All practitioners will have to be suitably qualified, which will have the impact of increasing staff costs.
Insurance will have to be maintained and all necessary employment law provisions complied with. As the workforce is likely to be largely part time and possibly even self-employed, attention will have to be paid to ensure that the correct taxes and paperwork requirements are complied with.
The issue of environmental factors has only just been added to the analysis in a bid to recognize how important this factor can be to the success of a business. Traditionally, in the pestle analysis, a company would consider the environmental issues with which it must comply. In the case of a health spa, this is largely likely to be in relation to dangerous substances such as massage oils and cleaning chemicals.
However, a slightly different approach which the analysis reveals is that the environment could, in fact, bring opportunities to a health spa company with a growing demand for organic and natural products. Many consumers will pay a premium for natural products and, as such, being seen to be environmentally friendly will not only ensure regulatory compliance, but may also encourage more customers at a higher value.

Critical risk factor analysis

SWOT analysis for the spa business:
[pic]
Strength: ▪ Existence of natural resources and natural products.

▪ High level of professionalism

▪ Variety of treatment procedures

▪ Low prices comparing with other competitors

▪ Well decoration with lots of equipments

▪ Skilled manpower.

Weakness: • Badly maintained environment, lack of green places. • lack of open space • Huge cost in interior decoration. • Providing a low quality service of entertainment

• Weak local infrastructure

Opportunities: ➢ Increasing of demand on the local market

➢ Increase of interest for the traditional treatment

➢ Modern people are very much beauty conscious

➢ Increase of the facilities for wellness and treatment

➢ Increase the number of specialized spa around Dhaka.

Threats: ➢ Decrease of the purchasing power

➢ Similar offer from different institute

➢ Increase of the competition on local market

➢ Old style and out-dated management system

➢ Lack of partnership between private and public sector in developing spa.

PEST analysis of spa business:

A pest analysis is one of the most popular and effective methods of analyzing the external macroeconomic factors that could impact on a business within a specific industry. Commonly, a pest analysis will be used alongside other analyses that focus on internal factors. The combination of the pest analysis with other factors will allow a company to create a strategic management plan of how to move its business forward in a way that maximizes the opportunities available to it, externally. A pest analysis comprises of six factors, namely political, economic, socio-cultural, and technological. This is particularly true for services relating to health and fitness such as the health spa analyzed below.

[pic]

Pest Analysis - Political
Political issues as part of the pest analysis include all sorts of factors that normally derive from the government in the form of policies or legislation. For the purposes of the pest analysis of a spa, there is little in the way of trade restrictions and tariffs to be concerned about. Many employees within the organization are part time workers. Different political situation may affect on our business. If the government impose a high tax it may impossible to survive. Registration procedure as well as government rules and regulations can be obstacle for a spa business.

Pest Analysis - Economic
The pest analysis then goes on to look at the economic impact on the spa industry. Key areas for the pest analysis include inflation rates, interest rates and general economic conditions. Spas are usually considered luxury products; therefore, when there is an economic downturn, the number of customers is likely to reduce. Where individuals have less disposable income due to high inflation levels, they will be less inclined to spend money on luxuries. The current economic climate is relatively weak and individuals are not feeling sufficiently wealthy to spend large amounts of their income on health spa treatments. In Bangladesh the purchasing power is very low. So we need to provide our services at a low cost.

Pest Analysis - Socio-cultural

When conducting a pest analysis on spas, the area of socio-culture presents a much more positive outlook. This part of the pestle analysis considers demographics such as age and wealth as well as issues including career aspirations and general interest in health issues. In this case, the health spa industry is doing extremely well. With a growing number of young women carving lucrative careers, there is an increasing demand for health spa facilities. Not only are greater numbers of younger individuals earning good wages, but the grey pound is also increasing in strength. There is a growing demand from older people for health spa treatments and an increasing ability by these individuals to be able to afford such treatments. These changing demands have led to substantial diversification and new opportunities within the health spa industry such as health and fitness weekends and sports therapy.

Pest Analysis - Technological
On the face of it, technological developments may not appear to be particularly relevant to a health spa business. However, in conducting a more detailed pest analysis, it becomes clear that the health spa industry as it stands has relatively high barriers to entry by virtue of the level of expertise and technology required.
As established in the earlier part of the pest analysis, consumers are becoming more demanding and experimental in the area of health and beauty. As such, there is a growing need for health spas to ensure not only that they have the latest technology, but also that staff members are suitably trained to use such equipment. Whilst basic health spas may find that they are not prohibited from entering the market by virtue of their lack of technology, the pestle analysis in relation to socio-cultural issues has shown that in order to establish a truly competitive position, companies will have to offer the latest technology and a wide range of options.

The five forces analysis:

• The threat of the entry of new competitors:

Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will fall towards zero (perfect competition).The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and non-performing firms can exit easily. Now days there are many new spas are operating their business. Many medium entrepreneurs are willing to open a spa business.

• The intensity of competitive rivalry:

For most industries, the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. The visibility of proprietary items used by a company which can intensify competitive pressures on their rivals. Competitive rivalry is likely to be based on dimensions such as price, quality, and innovation. Technological advances protect companies from competition. This applies to products and services. Companies that are successful with introducing new technology are able to charge higher prices and achieve higher profits, until competitors imitate them. In sap business now a days there are many competitor. If we want to survive in this particular industry we need to maintain our quality as well as low price.

• The threat of substitute products or services:

The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives. Though there are several spas are operating their business so customer has much option. They can easily go for different institute for taking services. Some factors that can affect the business. They areas followings: ➢ Buyer propensity to substitute

➢ Relative price performance of substitute

➢ Buyer switching costs

➢ Perceived level of product differentiation

➢ Number of substitute products available in the market.

➢ Substandard product

➢ Quality depreciation

• The bargaining power of suppliers:

The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for unique resources. The supplier may create problem for our business. They can increase the prices of the product or may delay supply of product.

• The bargaining power of customers:

The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes. In our country the purchasing power of people are very low. For this reason they may switch if they get the same product on a low price. If the market is competitive than buyers get full right to bargain for low price.

Mitigation processes of risks:

✓ Try to minimize the cost so that people will get facilities in a low amount of money.

✓ Create a guerilla marketing plan to achieve success,

✓ Create a long lasting relationship with customers.

✓ Provide good quality of services.

✓ Immediately see the exact contents required in your own business plan

✓ Properly present your plan in the exact format banks prefer and support for loan and overdraft applications

✓ Easily prepare accountant endorsed financial forecasts and plans, and eliminate potential errors

✓ Learn profit improving strategies from a plan specifically developed for a real day spa business

✓ Save time and money because you can start your own plan right now based directly on an industry standard and complete business plan.

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Acknowledgement…...

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