As an aspiring salon owner, you need to create a good, realistic and workable hair salon business plan both to launch and grow your business smoothly and successfully.
What is a hair salon business plan?
In its simplest form, it is a written document that details your plans for opening and running your new beauty salon. As such it should contain an executive summary, business overview, branding and marketing messages, location specifics, financial statements and sales projections. Now continue reading to learn how to write your own hair salon business plan. Read my review of the best business plan software Live Plan
Why you need to create a business plan
Often you’ll be asked to write a business plan to present to lenders and investors who are considering financing your salon venture. Also, entrepreneurial assistance programs and SBA business counselors will ask you to prepare and present your business plan.
Lenders will focus on your the sections with your financial statements and projected sales to determine if they believe your enterprise is viable and likely to succeed before they grant your loan application. They want to be assured of repayment of their funds.
In contrast, business counselors and other entrepreneur organizations want to get to know your business model and help you to think through your plans on paper before you launch your salon, which saves time, money and your sanity.
In fact, I think the most valuable aspect of writing a hair salon business plan is to force you the aspiring entrepreneur to thoroughly think through each aspect of your new venture.
Many times while writing my business plan for a new venture I intend to launch, I have discovered major strategies and tactics that needed to be modified. I was glad to have discovered them on paper instead of in real life because I saved time money and frustration and avoided risking business failure – and embarrassment too!
Set your salon up for success with an LLC – Limited Liability Company for 10% discount at Legalzoom with promo code BEST4B18
What does the business plan need to contain?
Here are the items every hair salon business plan should contain:
- Executive summary
- Branding statement
- Marketing plan
- Advertising campaigns
- Financial statements including details on startup costs, sources of funding and sales projections.
- Contingency plans
- Competitive analysis
How to write a business plan
Here are the steps on how to write a business plan for your hair salon. Your plan will contain your business goals, how you plan to reach these goals and demonstrate how you understand hair salon industry and intend to make your salon be competitive in your market area.
Business plan summary
Sometimes called the executive summary this first section of your plan should include in a concise few paragraphs your intention and goals for your first five years in business. Be sure to add information about your location, overall costs, projected sales revenue and branding message.
Here’s where you will provide information about the hair salon specifics such as your menu of services, retail products for sale and your point of difference that sets you apart from the competition and is also in demand in your market area. Include details about why you have chosen this specific location and your target customer demographics such as age, income level and buying motivation.
Mission vision statement
A good business plan includes a mission statement that is a summary of the purpose of your salon so that readers will be able to understand why you want to open your hair salon. The statement will also act as a guidepost as you grow your business to be sure that you’re aligning with your core purpose. Additionally, many entrepreneurs find that reading their vision statement regularly is both motivating and empowering.
Market research and competitor analysis
This is the section that details your target audience and why they will become your salon clients instead of your competition’s. Included in this section a detailed competitive analysis of other salons in your area, their strengths and weaknesses, pricing and locations and compare to your proposed new salon location.
Gap analysis is a marketing term that refers to studying the existing businesses and determining the gap that you will intend to fill with your new business.
Now that you’ve shown in the above market research and competitive analysis section why your salon is needed and how you will separate yourself from your competition, this is the detailed actions you will take to gain new customers and market shares such as advertising, events, publicity and online activities.
Make a list of the client benefits that you will target in your advertising and marketing both online and offline. Your list may include statements such as; salon with day care services provided free, hair replacement services for cancer patients, dedicated men’s only space and other.
Detail your marketing activities and tactics such as website development, search engine marketing to be found when local searches, online advertising and social media, sales events and print advertising. You can also include details on your exterior and interior signage and decor since this is an important part of the salon experience.
Provide financial information including your estimated budget of sales and expenses, financial projections for your first five years, anticipated liabilities of loans and leases, profit margin estimates and a schedule of your break-even date. That is the date when you have paid off your set up costs and your sales have increased to the level that you can begin to make profits.