Abstract: This is the age of communication technology. Effectively data communication is a big aspect for the business development. The concept of Virtual Local Area Network (VLAN) technology holds the potential for harmonizing many of today�s organizational and managerial changes with the structural and technological developments in the network. Despite the promise of this vision, VLAN implementation must solve the real-world problems in order to be financially justified. Organizations those have deployed or are planning to deploy the large numbers of switch ports, dividing the network into the smaller segments to increase the bandwidth per user, can make a very strong case for the VLAN implementation in order to contain the broadcast. This study tries to present an effective solution which will increase the performance of a Local Area Network (LAN). In the real-world, there is a lot of transmission impairments are occurred which hampering the data transmission processes. Collision domain is one of the major problems which decrease the performance of a network. The proposed network tries to reduce the collision domain using the VLAN and also implements the Spanning Tree Protocol (STP) which manages the broadcast storms. For an efficient data transmission purpose, the network administrator needs an effective solution which is scalable and easy to mange depends on the network architecture.