All salon owners must have a good salon business plan.
There’s no getting around that.
Poor planning is the number one reason hair and beauty salons fail.
We all know this. But how come so many salon owners start their salon business without a salon business plan?
Creating a salon business plan may seem like a daunting task. Salon owners I meet procrastinate over their business plan because of the idea that a salon business plan needs to be a massive, 50 page, document with a lot of details.
But it doesn’t.
It can be one page.
In fact, a one-page salon business plan is in most cases more helpful and effective than an old school 50 page document.
And, assuming you’re clear on where you want to take your salon business, you can create it in just a few hours.
In today’s article, I’ll show you exactly how you can create a focused and powerful salon business plan. You’ll also be able to download a salon business plan PDF and Doc template at the end of the article to get you started.
Are you ready?
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What is a Salon Business Plan?
A salon business plan is a summary of how your salon business will function and clarifies why it will be successful. It provides a roadmap with goals and milestones to lead your salon to success.
Why do You Need a Salon Business Plan?
The primary reason you need a salon business plan is for you to get in control of your beauty business and to enable the right decisions upfront. A well-laid-out plan gives you a clear path to follow as you set out, while it also helps spot weaknesses in your salon business early. You also need a salon business plan to communicate with others. If you need to raise money, the bank or investor will want to see your salon business plan before issuing any funds.
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.
But don’t worry.
Today you’ll learn how to write a salon business plan using the free template you can download at the end of this article.
You Get What You Measure
We’ll soon go over all the parts we need to define as part of your plan. But as we do this, we also need to make sure we have ways to measure the results.
If you don’t have a way to track and measure how your business performs vs. the goals and assumptions you define as part of your plan, you’ll operate blind, and you will not take the actions you need to get your business to the place we are trying to define with the plan.
This is why you should invest in powerful salon software that offers rich support for reporting and tracking the key targets you have set for your business.
The below video walks you through what reports look like in Mangomint – the software I recommend if you’re serious about your business.
Having access to this data in a simple way will be a game changer to the success of your plan. You can learn more about Mangomint and if it is right for you here.
How do I Write a Business Plan for a Salon?
There’s 10 critical components that should be included in any salon business plan:
|1. Salon mission statement
|A short summary of why a salon exists, what the goal of the salon is and how this goal is achieved.
|2. Problem the salon solves
|The unresolved problem that your customers face that your salon will be addressing.
|3. Solution the salon offer
|How your salon business addresses the problem and create value for your clients.
|4. Salon revenue model
|The different income streams (ways of making money) your salon will have.
|5. Salon expenses
|All costs associated with starting and running your salon.
|6. Target client & market
|Your ideal salon client and size of the local market.
|7. Salon competition
|Competitor salons in your area and their activities.
|8. Salon marketing activities
|How you will attract new clients to your salon and get your exiting ones to come more frequently and spend more at each visit.
|9. Salon employees, partnerships and their roles
|Your salon staff and business partners that will help you achieve your plan and their roles.
|10. Major milestones
|Critical achievements and targets that you need to complete or reach by a specified time for your salon to be successful.
This table will give you an overview of the components you’ll need in your plan. I’ll go through each one in detail in this article.
You can choose any format you want to write your plan in. A regular Microsoft Word document is a common document, but you could also do it in Excel or Power Point.
Keep Your First Salon Business Plan to One Page Only
I’d strongly encourage you to try and fit your business plan onto one page. At least for your first plan.
You’ll need a separate Excel spreadsheet for your financial budget and detailed milestones. But keeping the overall business plan on one page will make this the most helpful salon business plan you can create.
Complexity means distracted effort. Simplicity means focused effort.Edward de Bono
If you can keep the plan to one page, you’ll:
- Have it ready (fast): Some salon owners take months to write their salon business plan when using the traditional big document model.
- Keep it focused: A heavy document with a lot of details will distract your focus. A one-page plan on the other hand, will keep the few key things you need right in front of you. So that you can dedicate your attention to what will have the greatest impact.
- Keep it up-to-date: To be successful today, you need to be fast and agile. Having a 50 page document to update every time you make changes to your plan will make it impossible to maintain it.
- Make it easy to communicate: People are increasingly busy. In particular, investors if that’s who you’re going to share your plan with. Most of them will love it if you can convey what your business is about in just one page. I say most of them. Still, some institutions will require a multi-page plan, but you can deal with that when needed.
The Salon Business Plan Outline
We’ve arrived at the exciting part.
It’s time for you to start drafting your salon business plan. During the rest of this article I’ll walk you through each heading in your salon business plan outline. I’ll explain what each part is and also provide an example for each one that you can adapt to fit your plan.
Don’t just read through this part. Get a pen and paper out and jot down all ideas that come to mind. You’ll find these notes helpful later.
1. Salon Mission Statement
A salon mission statement is a short summary of why your salon exists, what the goal of the salon is and how this goal is achieved. It is the first thing you and other people who read your plan see and should be clearly visible at the top of your one-page salon business plan.
Everyone who work with and for you should understand and embrace your salon’s mission. It unites your salon team.
What is a Good Mission Statement of a Salon?
A good salon mission statement should capture the unique essence of why your salon exists. It sets the direction of your salon business. It should be the north star you look at when making all decisions for your salon. It’s typically one paragraph with one or two sentences.
It’s not easy to write a salon mission statement. Or, it’s easy to write it, but it’s not easy to boil down the overall essence of your salon in a couple of sentences. If you want to dive deeper into how to write a truly inspiring salon mission statement, I suggest you read my separate article about it here.
Salon Mission Statement Example
“Our mission is to provide a friendly, personalized service through a team of highly skilled and creative professionals. Teamwork is our most valuable asset which ensures our clients are always number one, and we strive to exceed your expectations”.
This is just one example to get your thinking going. To get more inspiration on how you can craft your salon mission statement, I’ve created a list of mission statements used by salons today. Not all are perfect, but you’ll find some highly inspirational ones in there.
2. Problem the Salon Solves
All successful businesses exist to address a problem that other people have. For example, I’ve written this blog post because I know there are people like you who need to get a business plan written for their salon but do not know where to start.
But what problem does your salon solve?
This is worth taking a few moments to think about. Because if you don’t have an obvious problem to solve, this is a sign of weakness in your plan. And that you need to adapt how you plan to approach your salon business.
It for sure doesn’t mean that there’s no room for your new salon. It just means you must re-focus your salon on a specific client segment or niche.
Nailing down what your clients’ problems are upfront can guide your salon to success you wouldn’t have been able to spot otherwise.
Example of Problem a Salon Can Solve
“Women have less and less time to spend on theirselves. At the same time, the demands they place on their appearance continuously to go up. They want that healthy looking hair, perfect brows and nails that look stunning every day. But there’s just not room in their calendar to fit all these appointments in.”
If your salon is based in a business district in a city area, this could very well be a problem that a big part of your potential clients faces.
What would you say is the problem people face in the area where your salon is (or will be) located?
3. Solution the Salon Offers
Now that you know what problem your clients face, it’s time to work out how you’re going to solve the problem. The solution is what you’ll offer in your salon and how you’ll offer it.
The Salon Offer
Your salon menu is of course at the core of your offer. The services you have on your menu should be inspired by your clients’ problems that you’re trying to solve. For salon service ideas you may want to add to your salon price list you can check out my other article here.
Retail products is another part of your offer that should complement the services in a way that helps address your client’s problem.
How You Provide the Service and Products
Your solution is not only about the services and products you provide but also how you provide them. What’s the experience you offer in the salon? How are you pricing your services? Do you need to book in advance or do you offer drop-in? Do you sell retail products online?
It could be that your service menu is identical to other salons in your area. But if you’re offering a different experience, at a different price, you can still fill a gap in the market and address a problem that people have.
Example of Beauty Salon Solution
Let’s take the problem example above – where 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 the below:
“We offer set packages of hair cut & color with waxing and nail services included. You’ll receive all services at the same time so that you get everything done in under 90 minutes.”
Being Different through Customer Experience
I just want to reinforce that how you offer your service does not necessarily need to be in a completely out-of-the-box and new way for you to stand out. It can be by simply doing things better than what your competition is doing.
For example, by placing a bigger emphasis than anyone else on the customer experience. That people feel better treated and have a higher level of customer service than they get anywhere else. In my opinion, this is probably the best way to differentiate yourself today.
The software you use can play a big role here by automating some while still keeping it personal. Like when we allow all our clients to text us at any time. This direct access is very valuable to clients but a mess if we don’t have the right technology to support it.
We run this with the two-way texting feature of Mangomint. It allows us to have client text at any time and messages can be directed within the team and you get a full overview of all client communication (like all automated reminders as well as when people in the team jumps in).
This is just one example of how you can use technology to ramp up your client service level and stand out in your area. Mangomint is quite unique here with several features designed to improve the experience you create with clients. If client experience is important to you and your business, you can learn more about how they do it here.
4. Salon Revenue Model
Your salon needs to make money..
..or it will not exist very long.
But there are many ways that a salon can make money and profit – it’s not just about service sales (even if that’s typically the bigger part of it).
How you generate income should be summarized in the salon revenue model section of your business plan.
I’ve created a separate article for you where I go through what the typical salon revenue model looks like here. In the same article, you’ll also find 6 different revenue models that you can implement to grow your business further.
Let’s go through the most common ways salons make money. I’ll then give an example of how you can outline your salon revenue model in your salon business plan.
How do Salons Make Money?
Salon’s primary income comes from service revenue. For the average US hair salon, this accounts for about 92% of the income generated. On top of that, a small portion of income is generated from retail sales (8%).
But there are several other ways a salon can make money: service revenue, retail sales, and professional education – just to name a few.
Overview of the common income streams for a hair salon
Example of a Salon Revenue Model
Let’s continue to use the salon located in the busy business district also in the example.
“The beauty salon will make money by offering full service packages to business women working in the area with high income but limited time. Retail products will be part of the pre-defined packages and make up 25% of total salon turn over. The services packages will be offered on a subscription program or sold separately at a premium price.”
Membership & Subscription Revenue Model
Subscription-based programs for salons and spas, like in the example above, are growing in popularity. It can create much more stability in your business as you know what income you’ll have in the months ahead.
If you’re already using Mangomint, it’s easy to set up multiple membership programs like this (see screenshot below). Just define what should be included and how often your client should be charged. So you cannot blame not offering this on technology anymore 🙂
5. Salon Expenses
Your salon will generate not only income but also expenses. Your bigger cost pools should be reflected in your salon business plan. Let’s look at some examples of what they could be.
Monthly Salon Expenses List
The biggest monthly expenses a salon has are:
- Rent and utility bills
- Product purchases
The exact costs will vary from salon to salon depending on location, the number of staff, and the business model you choose.
Tip: To estimate what your salon insurance cost will be you can read my salon owner’s guide to insurance costs here.
Salon Startup Cost List
Common costs when starting a salon are:
- Rent deposit
- Buying out previous salon owner
- Leasehold improvements
- Salon equipment
- Initial supplies and inventory
- Certifications and licenses
- Salon launch marketing
- Legal fees and salon insurance
For a more detailed picture of salon startup costs, you can read my article where I walk through all the costs of starting a salon here.
Given salon equipment can be high, I’vs also put together a list of hair salon equipment that you’ll need when you open a hair salon here.
Another resource you may find helpful is also my list of salon software and other tools you may need to start your business.
Example of Salon Expenses Description
“Wages will be the biggest cost element (40%) and secondly the rent (25%) in the busy business district. Salon profit margin target is 20% of total turnover.”
6. Target Salon Client and Market
Do you know how many people live or work in the area where you salon is (or will be) located? And do you know how many of those that fit in the relevant target group for your salon?
These will be important numbers to know as you’re choosing the location of your salon and crafting your plan and salon concept.
It’s impossible to please everyone. If you try to make your salon relevant for everyone you’ll end up not being relevant for anyone. So define who your ideal salon client is and estimate what the size is of that market.
That is, how many people fall in to your client category and how much are they ready to spend on beauty services. This will make up your target market.
When you speak to everyone, you speak to no oneMeredith Hill
Example of Target Market for a Salon
I’ll continue to use the same example salon as before.
“The salon offers express beauty package services to business women, aged 24-55, working in the financial district. There are 5’000 women in the target group that are working on walking distance of the salon. The women spend on average $100 per month on beauty services. The total relevant market is estimated to $6 million per year.“
7. Salon Competition
Do you know how many other salons there are in the area where you have your salon (or are planning to open a salon in)?
The more salons there are in the area compared to the people living or working there, the tougher competition will be.
But fierce competition doesn’t necessarily mean it’s impossible for you to be successful.
You’ll, however, need to study your competition closely. What services do they offer? How are their salons positioned?
When you’re clear on what your competitors are doing, you can define what should be your unique points of difference. Armed with that, you can take your piece of the pay. Or even make the pie of customers bigger if you’re bringing something that no one else is offering in the area that will attract new clients who were not previously going to salons.
Example of Salon Competition Study in Your Plan
“There are 5 other beauty salon in the area. Two hairdressers, one barbershop, one nail salon, and a spa. However, no one offers the complete services packages that we will offer. Given the search for convenience and fast services is high, we expect we can take one third of the market over the coming two year. As total market is $6 million, this would mean $2 million market for us.”
8. Salon Marketing Activities
It doesn’t matter how good you are at your craft if people don’t know your salon exists.
But where do you start? There are so many salon marketing activities you could put in place.
The choice of salon marketing activities to implement depends on the challenges your salon face. If you need to build salon clientele fast, you should focus on that. If you need to get your existing clients to come more often, you should focus on that.
In this section of your business plan, you need to make those choices and decide on the activities you need to do to set your salon up for success.
Let’s go through what you should consider and an example of what this could look like in your salon business plan.
Picking the Salon Marketing Activities to Focus on
Now that you know who your ideal client is and how many there are in your area. It’s time to lay out the marketing activities that you’ll focus on.
There are A LOT of things you can do regarding marketing. I have curated a list of the most effective salon marketing activities you can implement here.
But you cannot do all of the salon marketing ideas in this list.
Instead, pick 5 now.
And make sure you can do them well.
You can always come back later to try out more things. I would however be surprised if your salon marketing plan doesn’t include creating your salon brand, building a salon website, and a social media strategy for your salon
But hey, you decide 🙂
Example of a Hair Salon Marketing Plan
“Our salon will not be located on the high street with a lot of people walking by and noticing us. This is why are marketing effort will be focused on running targeted Facebook advertizing to women working in the area with an attractive intro offer. We’ll also focus on local PR in the area as well as our salon Instagram where we will promote the salon in partnership with local activities.
9. Salon Employees & Partnerships and their Roles
Are you starting your salon alone or together with a partner?
Do you need to hire key people to help you launch your salon business?
Is your salon part of a franchise?
It’s quite likely that your salon will depend on other people and organizations in some way or form. This is what you should reflect in this section of your salon business plan. Remember to specify what the role is of each person involved in your business.
Example of Salon Employees & Partnership Section
“The salon will be owned by John & Lisa and will operated with four employees from start: two hair stylists, one nail technician, and one aesthetician specialized on skin care services. The salon will also allow for booth rentals and allow two stylists to rent a chair when the salon has opened. A highly skilled and motivated salon team will be at the core of the business which is why we will invest over 4% of net sales in team capability.”
10. Major Milestones and Salon Business Goals
Setting up a salon business is not a small project. A lot of things need to be done.
It’s frankly overwhelming to think about all the things you need to do next. It’s like a big dark cloud of things that needs to get done. But where do you start?
You need to break down this dark cloud into achievable milestones and goals. Then tackle them one by one.
If you don’t break down these massive projects into smaller tasks, you’ll either get stressed out or start to procrastinate and not get anything done instead.
This is why you need to outline your major milestones and goals.
It’s an exercise that will take a bit of time, but it’s also the most important one. It will help you significantly as you get started, and it will give confidence to investors or other people looking at your salon business plan that what you’re setting out to do is realistic.
Your milestones can be a mix of financial goals and specific activities you must complete by a certain time. Try to include all the bigger things that need to be done from now until your salon is up and running and is meeting your break-even target.
You can make this as sophisticated as you want. I would encourage you to get quite detailed here with specific and concrete steps outlined in an excel file. However, for the sake of the business plan, you can keep it to a bullet-point list of the major achievements and goals.
Salon Milestones Example
- Obtain all required salon licenses by May 1st
- Secure startup funding by May 15th
- Identify a salon location by June 1st
- Register the LLC by June 15th
- Complete salon renovation work by July 15th
- Get first paying customer by July 15th
- Hire first employee by August 1st
- Make first $3,000 in sales by September 1st
- Reach break even target by January 1st
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.
Download Your Free Salon Business Plan Template
You now have all the theory you need to create the most helpful salon business plan for your business. I know it’s been quite a long read, but you must get this right. I hope you feel that this was the best investment of your time today.
But it’s time to move to action now.
It’s time for you to create your salon business plan.
You can download the lean salon business plan template I’ve created for you using the link below. This give’s you a straightforward and simple one-page business plan format that you can edit in Word.
If you prefer to use your Word text editor to create the plan, I’ve created a template you can use.
Salon Business Plan PDF
Download my simple one-page salon business plan template in PDF version.
Salon Business Plan Doc
Download an editable Microsoft Word document version of the salon business plan.
I’m so excited.
You’re embarking on an adventurous journey now.
And your new salon business plan will be your best companion on it.
Congratulations on taking the time to go through this salon business plan guide – it was long, I know. But maybe the most important thing you did today.
Salon owners that plan ahead are significantly more likely to see success, so this was well-invested time on your side. I’ve tried to make this guide the best possible resource for you that are about to create a salon business plan, and I hope you’ve found it helpful.
If you did, you would make my day if you wanted to share it with your friends using the social media buttons on this page.
Any questions, just let me know in the comments box below.
All the best with your new salon business plan!