And you new salon business plan will be your best companion on it.
You can keep your plan at a high level in your plan but, again, you’ll need to break it down even more thoroughly in a separate document with exact financial targets to meet by a certain point in time.
You need to break down this dark cloud into achievable milestones and goals. Then go tackle them one-by-one.
Let’s take the problem example above – that women in your area have too little time to get all the beauty services they’d like. Your salon solution could then be something like.
Salon Business Plan Doc
Let’s go through what the most common ways are for a salon to make money. I’ll then give an example of how you can outline your salon revenue model in your salon business plan.
It doesn’t matter how good you are at your craft if people don’t know your salon exists.
Not having a business plan for your salon would be like building a house without any drawings. This is obvious when you’re thinking about a house but for some reason it’s often de-prioritized or forgotten by salon owners which, unfortunately, is the main reason salons go bankrupt.
These will be important numbers to know as you’re choosing the location of your salon and crafting your plan and salon concept.
Epiphany Male Room is the only salon to have professional salon services for men in a male environment. Epiphany the Salon offers a full line of Bettiva products noted for their commitment to the environment. As a concept salon for Bettiva, Epiphany is allowed to carry products other Bettiva salons do not. The front of the salon is committed to being a strong retail center, inviting shoppers to interact. The target is 35% retail sales to service dollar sales. Epiphany is the only area salon to be online and fully automated. Epiphany will have the most aggressive marketing campaign of any other area salon.
- Salary based at $9.25 hourly for this full-time position. This is also a stipend position paid bi-annually based on 80 hours per year with staff and co-associate training and development. The pay for the stipend is derived from average weekly pay over a 6-month period.
- Bonus program. Productivity bonus of 2% for each department hitting 100% of service goal or 1% bonus for 80% reach of goal.
- Individual retail sales commissioned at 10%.
- Paid vacation. One week paid after 2 years service. Two weeks paid after 5 years service.
- Health insurance, 50/50 pay after 90 days.
As our client base builds in the local market, targeting marketing to the tourism trade will bring new opportunities. Bettiva already offers products on airlines. This could be carried through with lodging businesses. Still another opportunity involves providing custom packages for special groups. "Sweet Sixteen" parties, stress-relieving treatments that travel to corporations or participate with the American Cancer Society program "Look Good, Feel Good," teaching cancer victims how to address hair loss.
When completed, it will be the best for the industry in this area and it will safely grow the business 10% annually. Although in the past, I have experienced up to 30% in a year. 10% is conservative and steady.
Vision and Mission
Refer to projected income based on salon productivity. In reality, a salon should base maximum productivity at 80%. This is realistic in theory and application. It should be noted that rent is a fixed number annually based at $40,200.00 or $3,350.00 monthly. These projections do not include the nail department or the skin department. This sheet is the male room, the salon and the retail center.
The mission to build this environment must be one which is having fun doing business by sharing the passion for cosmetology combining technology, art, and science. Placing the clients' needs first, to be creative, productive, and profitable is a balancing act. An act that creates harmony and a sense of well being. It is your personal responsibility to commit to this process.
The marketing plans are presently in the development stages. Bettiva is playing an important role in this area of business. Strategy can be defined as the science of planning and directing large-scale operations, specifically of maneuvering forces into the most advantageous position prior to taking action. It is this area of business I enjoy the most. It is creative and easily measured. More time is needed for proper planning. We have already budgeted this area to 3% of total revenue.
Only by identifying who your potential customers are, and focusing on their needs and requirements, can your salon hope to be successful.
If your business is located on a major transport route used by pedestrians and others, then you may benefit from being a visible presence. A high end salon target market would be working professionals, for example.
Prices always need to be set at an appropriate level so that your customers can afford them, while also balancing up your budgetary requirements, and your profit margins.
It can also be very difficult to retain customers if you put prices up too quickly in the wake of realizing that they were too low when you started.
What You Will Learn?
Carrying out some hair salon market segmentation will allow you to refine your marketing strategies, and streamline your business plan to ensure that your salon is successful.
Making sure you are targeting the right age group within your salon is critical, as this will also impact the design and the services you offer within your salon.
How you set your prices will depend on how accurately you have gauged your target market. It will also be a central factor in how potential customers view your salon and whether or not they will give it a try.
In developing your income statement, you need to devise assumptions. For example, will you serve 20 customers per day or 50? Will your average price point be $50 or $100? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
- How big is the salon business (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your salon. You can extrapolate such as figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The customer analysis section of your salon plan must detail the customers you serve and/or expect to serve.
Appendix
- Make sure all of your clients are thrilled with your services
- Keep your salon clean at all times
- Provide excellent communications with current and prospective clients
- Embrace new technology, particularly social media to engage your clients and get them to return to your salon
- Focus on growing revenues, but also on profits, by keeping a close eye on costs
- Hire the right team, train them well and treat them well so their performance is strong and they are loyal to your business
Think about ways you will outperform your competition and document them in this section of your plan.
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their salons. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a salon business plan template step-by-step so you can create your plan today.
Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes products they can purchase from supermarkets and other retailers both offline and online. You need to mention such competition to show you understand that not everyone in your target market frequents a salon on a regular basis or at all.
This section outlines the key employees and any plans to hire more employees.
A Cut Above is the most exclusive hair salon in the East Denver area. We pride ourselves in providing top-of-the-line salon services so our customers can feel confident about themselves and look amazing while doing it.
- Expenses
- Rates for services
- Simulate multiple scenarios (Great, average, and poor)
- Identify your assumptions
Your executive summary is such an essential part of your business plan it is well worth it to revise it multiple times.
Established salon executive summary
Your goals show your reader what your plans are to expand or create sustainability for your salon.
We are asking for a $50,000 initial investment to purchase specialized equipment and a quality facility. We project $125,000 in sales the first year at a 30% margin. We then expect sales to increase 50% in year 2, and 15-25% each year until year 5. Given these projections, we would plan to pay $10,000 back year 1 and $20,000 back year 2 & 3, with interest.
Your goal with your executive summary is to lure your reader into reading the entire business plan. This means it needs to be only essential and exciting information, so your reader gets an understanding of your business and is excited about your potential.
Our premium salon services will go above and beyond what our competition is offering and what our customer is expecting. Giving them an exciting and satisfying salon experience.