Finally, you want to actualize your dream of opening a salon, congratulations! However, don’t let the excitement make you forget to start by creating a business plan. It doesn’t matter how skillful you and your team are; even the most promising business goes south without a business plan. Also, writing a business plan will help you organize your fantastic projects, ideas, and know-how together. Writing down your goals will enable you to think through the challenges you might not have critically thought about and come up with solutions. Notably, even if you are already running a salon, having a set of goals is crucial if you think of successfully renovating your business. Writing a business plan will act as a guiding path to a successful venture. In this article, we will provide a step-by-step guide on how to write an effective salon business plan.
Part 1: Come up with an Executive Summary
An executive summary is the most crucial part of your business plan. It showcases your intentions and the direction of your salon and makes the first impression on any potential investor. This section should be concise and brief, giving the most crucial details. Also, it should be written as the last part as it describes the whole plan in detail. In the section, include:
- Business introduction
- Market Opportunity
- Salon services
- Marketing and sales strategies:
- Financial projections:
- Call to action to investors
Part 2: Identify and Analyze Your Target Market
Identifying the people you want to target for your salon business is crucial. A beauty salon can go as wide as offering services to all age groups and genders. It entirely depends on the services you want to provide. Your target audience includes college students, working class, brides, and children. However, some salons are specific and only handle female hair and nails. While some only handle nails and massages. Hence, first, know the services you want to offer before identifying the target market. Also, the target market helps you understand how broad your market is and how to frame your advertisement content.
Identifying your target audience goes hand in hand with your salon’s growth. Hence, strategically list down each service you will be offering and determine who will be the target audience.
Here’s a checklist to make sure you’re going the right way about it. Here are steps to help you analyze and identify your target audience:
Identify the type of people who will associate with your services. For instance, if your salon offers dryer services, you can get a lot of working-class women.
- Also, identify whether your services are more inclined to a particular demographic, i.e., millennials only, or if you are good with every demographic.
- Also, ask your target clients what they like most and make adjustments to meet their needs.
Tip: In the beauty industry, you must keep up with trends. Hence, be on the onlook out of what your target audience likes every season.
Part 3: Salon Description
In this section, you must give your salon’s mission statement, history, and uniqueness. Foremost, a robust mission statement can connect to clients, ensure it is inspirational, and has a touch of emotional appeal. The mission statement should communicate your core values. It also guides employees, who should know and believe in it to help you achieve your purpose. In addition to describing your salon, write what makes it unique.
Complete all the details; write about why your salon stands out from competitors and how it will appeal to the target audience. Why did you choose that particular location? How will you serve the community? Where do you see your salon in the next five years? When discussing the history, indicate the inspiration behind starting the salon and the vision.
Part 4: Describe the Market Analysis
The market analysis helps salon owners identify their competitors and know how to outshine them. Here, mention your competitors and indicate their strengths and weaknesses. Show how you will utilize the disadvantage to your advantage. Also, show what makes you stand out from the competitors and identify the market trends and how to capitalize on them.
In addition, understand how you will position your salon after learning about your competitors. Remember, the brand and organization of your salon also matter a lot when it comes to being unique. A thorough market analysis is what you need to be one step ahead; the data gathered provides invaluable insight that you can use to grow your business.
Part 5: Describe the Structure and Management Plan
Before starting a business, being specific with the business structure is crucial. Indicate whether you will run the business alone or with a partner. You can involve a lawyer to help you make a more informed decision. Your structure will also determine financial projections, how you pay employees, or whether you will work as co-owners. When it comes to management, you also need to be precise. Answer the following questions:
- Will you run the salon solo or with you have partners?
- How many people will you employ?
These questions will help you know how the salon will operate. Also, as you plan the structure, think about who you will hire;
- How many people will you need?
- What will be the qualifications?
- What will their daily operations be in the salon?
Part 6: Describe Your Products and Services
A salon is known to offer a variety of services. In this section, list all the services your salon will offer. Indicate all the unique benefits you will be offering. Also, indicate service plus price and note the percentage of the revenue these services will generate. If you decide also to sell products like combs and earrings, have a list of the products, their prices, and the profits you will make from each sale.
Part 7: Identify Strategies for Advertising and Marketing
Think of strategies to position your salon in the market that interest people as the new salon on the block. For instance, you can do videos before and after and share them on social media platforms; you can also post pictures of finished services and share them. In addition, your existing audience can be the perfect people to spread the word about your salon. Remember, the aim is to increase visibility, reach, and awareness. Also, have a way of retaining existing clients. Here is a simple marketing guide for your salon business:
- Ensure your salon is listed in online directories; it should be found online.
- Go to the next step and have a website for your business.
- Have a social media presence, and keep it active by posting regularly high-quality images. Ensure that you connect with your community and give immediate feedback.
- Look for businesses to partner with, for instance, those offering spa treatments and coupons to clients who visit both.
- Also, offer discounts, offers, and other promotional methods.
Tip: You can offer bonuses to returning customers or referral points when they recommend others to retain clients.
Part 8: Put Together a Financial Plan
Most people are hesitant when it comes to making lengthy financial statements. But guess what? It is a very crucial segment. Foremost, you do not have to overcharge clients to make profits; instead, you need to be reasonable and offer high-quality services; this way, your salon will always have clients, and you will always have profits. Hence, write a detailed financial plan to help you understand monthly and yearly financial projections. Also, if you take a loan, indicate a plan of how you want to invest it and how you will repay it. Use the following sample to provide a financial plan for your salon:
- Sales projections for the first five years – Foremost, identify the prices you will charge for your services. Then, estimate how many services you can perform in a week. Then, use the data you get to develop a five-year projection. You can go the extra mile and use barcode projections.
- Expenses budget – Note down areas you will be spending your money, like rent and hair products. Then, do a five-year projection.
- Profit and loss margins – Estimate sales projections and budget analysis to get the profits or losses. Be as realistic as possible to avoid projecting over.
- Cash flow statement – Show the cash flow in and out for a month and then a year. Include cash flow from clients, loans, taxes, personal funds, or even loan repayments used in the salon.
- Break-even analysis- Show when you foresee your salon breaking even in the first five years. Notably, this happens when all your expenses are covered, and all your sales surpass the expenditure of the costs. After breaking even, your salon business starts making profits throughout.
Conclusion
After writing a well-thought-out business plan, now go ahead and open your salon. A business plan will also make you believe in the business, and you will be able to convince clients to be part of your community. Remember, your business plan should act as your guiding light. Always refer to it, see whether you are achieving your marketing goals, and constantly update it based only on the relevant aspects.
