Are you terrified at the very idea of writing a salon business plan?
It’s normal to feel daunted. Your beauty skills might be off-the-scale and you’re a gutsy entrepreneur, but writing business documents is probably not what you do every day. If you’ve never written a business plan before – don’t stress. We’ve built a comprehensive step-by-step guide that will help you every step of the way.
Whether you’re starting a new salon or giving your existing one a makeover, your business plan will guide you to success.
You probably already figured this out – writing an effective business plan is not a quick and easy process. Like most worthwhile endeavors, it takes effort. But the time you invest now (including the agony of answering some very challenging questions) will help prove that your concept can work. Your salon is far more likely to succeed once you’ve been through the business planning process. So, let’s get started.
What is a salon business plan?
A salon business plan is a blueprint and roadmap that explains your ideas and how you’ll get them to succeed. Whether it’s a hair salon, nail salon, barber or spa, you need a business plan to get all those ideas organized and down on paper.
Your salon business plan is essentially a detailed description of your vision, how the business will operate, and what you’ll do to bring it all to life. It describes your target customer, competitors and financials. Going through each step ensures you don’t overlook any detail in planning your salon’s success.
Why do you need a salon business plan?
- Confirming to yourself that your plans make financial sense
- Securing a bank loan, business partners, investors and a lease
- Convincing talented prospective stylists and managers to join your team
- Demonstrating your concept is desirable and unique in the market
- Mapping out the steps to make sure your salon is profitable
- Keeping you focused on achieving your vision
- Ensuring you’ve considered all regulations
- Delivering a blueprint for salon operations
Key ingredients of a salon business plan
Whether you’ve written a hundred business plans or this is your first one, it’s always helpful to use a template designed for your industry as a starting point. Here’s an overview of everything to include in your salon business plan:
- Executive summary
- Company description
- Market analysis
- Marketing plan
- Operations plan
- Financial analysis and projections
1. Executive summary
The executive summary introduces and outlines your entire vision. It should capture attention, sell your dream and entice your reader to explore the rest of the plan. Consider it a sales pitch. Go light on the detail, you’ll address that later. Some people never make it past the executive summary, so you’ll need to convince them that your concept is worth their time to keep reading. It’s a good idea to write this section last when you’ve got all the details down and it’s easier to pull out the key highlights.
You should include:
- Your mission statement and core values
- Overview of your salon concept and why it’s going to succeed
- Rundown of who will bring it all to life, and how
- Forecast costs and anticipated return on investment
2. Company description
The company description introduces the basic information about your beauty salon and outlines the vision for the customer experience.
Detail the legal structure of the business. Whether you choose to be a sole trader, partnership or a limited liability company, it’s a good idea to seek legal advice.
If you’re starting a new salon, give an overview of the capital required. Save the detail for the financial analysis section.
Sell your reader on why your salon will succeed with an evocative and compelling description of your main ideas. Approach it as if you were telling a friend about a new beauty business you just visited that knocked your socks off. Describe it with enchanting adjectives to bring it all to life. Include details on:
- Unique features (like specialist treatments, free wi-fi or latest techniques)
- Service offering (from hair coloring to manicures)
- Atmosphere (from exclusive pampering to family-friendly)
- Ambiance (lighting schemes, furnishings, music)
- Related services (memberships, classes, beauty products)
- Size and capacity
- Operating hours
Floor plans and architectural renders can bring your concept to life. If you don’t have these, include a mood board to demonstrate your vision, and get ideas by doing online research.
Spend time researching ideas and developing your salon name, logo, values and personality. You need a brand image that stands out and connects with your target audience. It will be critical to your success.
If you have a rockstar team of stylists at the ready, highlight their skills and experience. Include a resume-style summary for key management. If you’re yet to appoint your staff, include a plan for how you will attract and retain the best team through your leadership, policies and culture.
3. Market analysis
This section details your target audience, proposed location, and competitive environment.
Who are your ideal customers? What are they looking for? Maybe they are fashion-conscious male and female office workers aged 25-40 who have high disposable incomes, work within 10 minutes of your venue, want fast appointments and help with their styling choices. Be as specific as you can and be clear on why they would choose you over other offerings in the area.
If you’re opening a new salon, you might not have chosen your exact location when you’re writing your business plan. Totally normal. Just describe the area you’re targeting and how it aligns with your target audience’s demographics. Highlight growth in the local economy, major infrastructure and things that will drive visitation to your salon.
How many other salons are there in the area? How are they faring? What makes you stand out? Why will customers choose you?
4. Marketing plan
Your salon marketing plan details how you’ll promote your salon before and after opening. It needs to be a comprehensive plan showing how you’ll grow your business. Consider using digital marketing, advertising, promotions, partnerships and events to reach your target audience and encourage them to become customers:
- Advertising: social media, digital display ads and newspaper ads
- Social media: a solid social media presence is a must. Set up Instagram and Facebook at a minimum
- Reviews: 91% of customers read online reviews to choose their salon. Set up your accounts on Google My Business, TripAdvisor and Yelp so that you can keep track and respond to reviews
- Website: with 93% of customers searching online before choosing local businesses, a website is essential
- Email marketing: use creative contests to build a database of email addresses so you can send updates and offers to customers
- Letterbox drop: in this digital age, old-school techniques like this can still work to reach your local audience
- Loyalty programs: create membership programs with exclusive deals and events to retain your existing clients
- Partnerships with local businesses: for example you could offer discounts and promotional deals through big local employers
- Sponsorship of local charities or community organizations
- Events: hold regular events that draw in crowds, like beauty training or wedding group makeovers
- Digital signage: there’s no better way to grab your customer’s attention. Digital signs boost average daily sales by 30% because they drive foot traffic and temptingly showcase your service offerings
5. Operations plan
The operations plan details how you’ll run your salon. By systemizing your operations, things will run more efficiently. Your operations plan can become the blueprint for staff training and an operating manual followed by all employees.
- List of positions, roles and responsibilities and pay rates
- Number of people needed for each position
- Recruitment plan and interview process
- Onboarding and ongoing training plans
- How you plan to be an employer of choice that retains great staff
Daily operating summary:
- Describe the daily routine of the salon
- Show that management is running a tight ship
- Include ordering, receiving, waste management, safety, cleaning and maintenance processes
List of suppliers:
- Your salon equipment is critical to the success of your salon, so list your supplier’s credentials to show you’ve chosen reliable partners
- Describe your required standards and what will trigger the need for replacement
Customer service standards:
- Have policies for establishing customer service standards so your customers have a consistently positive experience
- Include how you’ll deal with customer complaints
- Salon management software
- Digital signage to easily run special deals and advertise your services. Choose a system with reporting and analytics to track the effectiveness of your promotions.
6. Financial analysis and projections
You’ll need to show your start-up costs, anticipated revenue and expected expenses. Be realistic – there’s no point exaggerating the potential to secure investors if you can’t pull it off. It’s a good idea to get an accountant to help you complete this section. Try to find someone familiar with the specifics of salon finances. Include:
Detail the capital you’re looking to secure and how you plan on spending it. There will be lots of expenses as you set up your salon, so add all costs including equipment, furniture, legal fees, supplies and payroll
Have your accountant prepare a projected profit and loss statement using educated guesses. A break-even analysis will show what monthly revenue you need to cover costs. A cash-flow study should demonstrate how the salon will generate enough income to support itself.
Make sure to present your business plan professionally. Hire a graphic designer or DIY on Canva.
If you share your business plan with potential investors, be sure to have them sign a confidentiality agreement, especially if you don’t want anyone to copy your innovative concept.
Know your plan inside out so you’re ready to answer every curve ball question thrown your way.
Good luck with everything!
You’ll invest a pile of time and effort in creating your salon business plan, but it’ll be well worth it in the long run. Your final document will give you (and your investors) confidence that your dream of running a successful salon is achievable.