Introduction

As a passionate beauty professional, we know you’re excited to open the doors of your new salon. But before you start shopping for equipment and reaching out to potential clients, you’ll need to outline a business plan. We know, we know; developing a plan might sound daunting, but we’re here to help. This step-by-step guide will help you figure out the specifics, including how to build your team, find a space, and fund your dream business. Plus, once you’ve hashed out the details, you’ll have a better understanding of your ideal client, and how to best serve them with appropriate pricing, service menu, and more. Ready to get started? Let’s work through your business plan together. First, download your business plan template, found in the next activity in this learning path, then read on to create your customized business plan.

Executive Summary

This is where you provide an overview of your business – who is your ideal client? What services will you offer? What makes your business stand out from the competition? You’ll want to answer these questions in your executive summary, the section outlining the specifics to come. This is the perfect opportunity to organize and pitch your ideas concisely, so it can be understood by any reader. As the owner, your executive summary will likely include your reason for opening a studio, your target market, and your projections for success. If you’re looking to get funded, your summary should be compelling enough to catch the attention of a potential investor, convincing him or her to continue reading your business plan.

Company Description and Market Analysis

In the company description, you’ll go into more detail about your soon-to-be business. Here, you’ll outline the problems you plan to solve, define your typical client, and specify your competitive advantage. What makes your business stand out in a crowd of competitors? Do you have talented stylists? Do you have a unique menu of services? Do you offer special amenities? Getting specific with your business’s advantages will help guide everything from marketing to décor to pricing. The market analysis, on the other hand, describes your approach to your industry and specifies your target market. Do you plan to offer a variety of services to a broad audience? Or will you serve a specific niche? For example, if you are located in a college town, you might offer services targeted to a younger demographic. If you are located in a retirement community, you may want to offer special packages for older clients. Be very intentional with the type of client you want to attract. This is your chance to familiarize yourself with the competition to help make informed decisions about how to operate your own salon, especially with location and pricing. That being said, market research doesn’t end once you’re open. Continuing with it will help your business evolve and continue to stay ahead of the competition. Before you open, you should research and start using a salon management software so you have the data necessary to run your business efficiently from the get-go.

Organization and Management

The organization page will specify the legal structure of your business. Visit the IRS page on business structure to review your options. Be sure to consult legal counsel or your local government website to determine the best fit for you. The management section of the plan will discuss how your staff will be structured. It will also outline who will be responsible for what; a visual aid like an organizational chart is a helpful way to do so. For this section, consider including:

  • The number of staff needed to effectively run your business
  • Whether or not you need to hire a manager
  • Whether you will hire employees, independent contractors, or both
  • Who will have keys to the business
  • How you will pay your staff
  • If you will offer staff incentives (bonuses, benefits, free or discounted services, etc.)

Service

This section includes a description of your services with more detail than in the executive summary. A few topics to include:

  • Your menu of services
  • How clients schedule appointments
  • What inventory and products you plan to sell
  • How your salon collects revenue
  • Patents and licensing

Marketing and Sales

The marketing section helps to answer the question, “How will you attract and retain clients?” This is especially important; without a marketing strategy, no one will know your business exists. This part of the business plan may include options like:

  • Print advertising
  • Paid online marketing
  • Sponsored social media posts
  • Networking opportunities and events
  • Partnerships with other local businesses

The sales portion outlines the journey of a single client. Here, you should include every way a customer discovers your business and pays for a service, including:

  • In-person discovery
  • By word of mouth
  • Through your website
  • On social media
  • Via a branded app

Include the sales cycle for your business, outlining the customer journey from initial discovery to appointment. Make sure you write out all of the potential sales touch points here.

The salon management software you choose can make a big difference in the effectiveness of your marketing and sales efforts. Does your software allow clients to schedule your services through online channels like Facebook and Google? Does the software put your offers directly in front of your target customers?

Financial Projections and Funding

Outlining your finances will help manage spending, and if needed, convince investors to fund your business. In many ways, this is the most important part of your business plan. Menus/service descriptions and marketing strategies are important, but none of it is possible without finances.

Create a timeline of financial considerations to take you through the next five years. Don’t forget:

  • Start-up costs, including licensing, decor, signage, marketing, sales inventory, hardware and software
  • Fixed costs, like rent, employee pay and other recurring payments that won’t change much
  • Variable costs, such as future advertising and inventory
  • Income projections based on payment type (online versus in-studio)
  • A breakeven analysis (how many clients you need to cover expenses)

Include considerations that will affect your financial projections such as: 

  • Service prices
  • Realistic revenue goals
  • Maintenance costs
  • Taxes
  • Rent and utilities
  • Materials and merchandise

In the funding section you’ll specify what assistance you need, how long you need it, and how you plan to use it to a bank or investor. You’ll want to be as detailed as possible so they are completely assured your business is a good investment – which of course it is!

Conclusion

A detailed business plan serves two major functions: it’s a guide for getting your dream business up and running as well as a way to secure the funding to make it happen.

Think of this plan as a way to gather everything you need to succeed before taking the plunge. Finding the perfect location, determining your pricing, choosing salon management software, securing funding – a business plan includes it all.

Once you officially open your doors, your business plan will serve as an important guide and continue to evolve as your business does.

Congratulations! Good luck and know that MINDBODY is always here to help!