Writing a Salon Business Plan: Insight From an Expert Business Planner
Writing a salon business plan can be a daunting task! Planning and executing a new salon business takes a lot of thought and consideration. Most of us get caught up in the perfect decor or fantasizing about the salon culture we will create…but those things are just pieces of what really makes a salon thrive.
Hi there, my name is Susan Wos, as the owner of Salonspa Connection, I have seen many successes and several salon failures. Creating a roadmap, outlining what success means to you and navigating the challenges of salon ownership is an absolute must when buying an existing salon or opening a salon from scratch.
I was fortunate enough to connect with expert business plan writer, Joanne Seery, of Serious Business Solutions. Joann not only writes business plans, she also offers coaching to set salon owners up for long term success.
We collaborated on this post to help you understand what writing a salon business plan (or spa and barber plans)needs to have and when is the best time to reach out for help. If you are in need of help, after reading this blog, I encourage you to reach out to Joann for tips on writing a salon business plan and the best ways to ensure long term success.
She also offers a free course- “Planning for business success” that is an excellent jump start to reaching salon ownership dreams!
The Complexities of Salon Ownership
Hello, Joann, thank you for joining me today! What inspired you to chat with me about writing a salon business plan?
“I just returned from getting my hair colored and as I sat in the chair, I realized how complex being a salon or spa owner was.
Most entrepreneurs understand they will need a business plan to apply for a loan, secure commercial space, or even lease equipment, but there is additional value in having a well- crafted business plan. A business plan is critical for every business, particularly for a salon or spa owner.”
I totally agree, unfortunately about ½ of salon owners and salon suite renters don’t write a business plan. What do you feel are the most important components of writing a salon business plan?
Write a plan for success: Setting salon owners up to thrive
Mission: Have a detailed description of your salon/spa concept and unique selling proposition. Staying true to this mission will help with your marketing, pricing and even hiring your employees or selecting the right people for rentals.
Industry Insights and Trends: There are always changes in the salon and spa industries. Not only will this help attract and retain clients, but it will also impact budgets and operations. Is there a need for new equipment or additional training? Keep an eye out for fads and trends- stay focused on core business services and grow from there.
Marketing and Sales Strategy: Set a budget and a plan for attracting and retaining salon clients. This should include social media, customer retention and loyalty or referral programs. Reviewing this plan to identify what is working and what needs to be changed will help keep costs down and effectiveness high.
Salon Business Operational and Financial Planning
Operational Plan: The salon and spa layout and design will help identify staffing and equipment needs. Suppliers and vendors need to be vetted and are an important resource for the salon and spa. Have contingency plans in place for the unknowns and delays that might happen.
Financial Plan: Everything a salon and spa does has a cost associated with it. Understanding your costs will help you develop and sustain a budget. The financial plan will tell you when you can hire that next person, or piece of equipment. Review your cash flow, and profit and loss statements on a regular basis to make sure you are on track.
A business plan serves as a roadmap for your salon or spa’s success. It helps the owner make informed financial decisions. It should be comprehensive and realistic. The real value of the plan is when the owner regularly revisits and updates the plan using the information to operate a successful business.
How do you write a business plan for a salon? There are several templates that you can purchase for writing a salon business plan. Even when using a template, there is much research that will still need to be completed.
Researching the industry trends, competition, getting the real costs from vendors, payroll and understanding your profit margins is critical to making sure the business plan is effective in using it to make informed future decisions.
Hiring a business plan writer is a great way to ensure you have covered everything you need in order to qualify for financing and get the best roadmap to success.
These are great tips! But what about profitability?
How much profit should a salon make?
That will really depend on the type of salon you want to operate, the service provided and management. A great profit margin to shoot for is 30%, most salons operate around 10% profitability. Aim high but keep in mind, a salon business has many ups and downs- your ability to ride the wave is what will make the difference in profitability.
How much money does it cost to open a salon? This will vary depending on the type of salon, location, equipment and services offered.
How much money do I need to start a salon suite? A salon suite can be a less expensive, reasonably priced way to start your business. Usually the costs associated with a salon suite is your business license, cost of goods sold such as shampoo and conditioner, and personal supplies as well as the rent for the space. Additional costs are insurance, and marketing.
How do salons get financed? A salon gets financed through an owner’s personal investment, family members or traditional loans from the bank.
What do I need to start a salon? The first and most important step in starting a salon is being clear on your vision of the salon you want to operate. What services are you going to offer? Think about the type of clientele do you want to attract? Once you have a clear understanding of what your salon business will look like, then you can start doing the research to build the business plan and conduct the research.
Understanding Your Business Plan Writing Options
Can I write a salon business plan for free? Yes – there is great information from the Small Business Administration. You can download information on the SBA website for free. The SBA also has low cost workshops online or check out your local Small Business Development Center for in person classes.
Can I have someone write a salon business plan for me? Yes – there are professional business plan writers that you can hire to write your business plan. You will need to share with them information about your business so they can tailor the plan to your specific salon.
How much do salon business plan writers cost? The cost will vary depending on the business plan writer and how much experience they have in writing plans as well what type of salon you have. Companies like Fiverr can cost a few hundred dollars, and experienced writer can cost a few thousand dollars.
Why is writing a salon business plan a good idea? A business plan is a road map for your business. It is the opportunity to set goals and milestones for your salon and to review what is actually happening. It will allow the owner to make informed decisions and make sure they are operating a profitable business.
Who needs a salon business plan?
Every salon, new to business and as well as seasoned salon owners can benefit from having a solid business plan.
What are the most important parts of writing a salon business plan? The most important parts of the business plan is making sure the information is accurate and timely. Everything in the business plan is compiled in the financial statements.
The numbers have to be real. The true value of the plan is when the owner reviews what they thought was going to happen and sees what is actually going on. Adjustments sometimes need to be made to keep the business from moving in a positive direction.
Are business plans just used to start a salon? No. The real value of having a business plan is when it is reviewed on a regular basis to see what is working or what needs improvement. I suggest doing this monthly or at the very least quarterly. Are you staying on budget? If not, where is there a discrepancy and why. Are you reaching your sales goals? What changes are going on in the industry or the economy? Reviewing the plan allows for the owner to be proactive instead of reactive.
What do I need to start a hair care business?
Starting a hair care business or a product line involves a lot of time, effort, research, product development and planning. First, you need a viable product to sell that proves to be something consumers or salon professionals want to use.
Production is an important piece of starting a hair care business- you need to decide how and where you will manufacture your product. Distribution of a hair care line comes next- who is your ideal consumer and how will you reach them? Think through marketing, costs and hire a great business plan writer in order to get the funding needed for a large scale operation.
All About Salon Proposals
What is a salon proposal?
A salon proposal describes an intent to purchase or take over an existing business or submitting a well written business plan to investors or financial institutions.
How do I write a salon proposal?
To write a letter of intent or a salon proposal you will need a letter of intent The letter to buy a salon should contain:
- Proposed closing date
- Purchase price
- Due diligence
- Seller covenants
- Confidentiality agreement
- Seller representation and warranties
- Governing law- which state the transaction will take place
- Termination agreement
- Non binding legal purchase details
- Anything else pertaining to the specific buyer or seller needs for this specific transaction
To write a salon proposal to investors or financial institutions to obtain funding, you should have a thorough business plan, written by an expert or with guidance from people with ownership experience in the salon industry.
Conclusion
Well, thank you Joann for this valuable information! I know I learned a ton and I am thrilled to be connected with someone who can help those who are interested in opening a salon. Please reach out to Joann via email Joann@seriousbusinesssolutions.info if you have any questions for her or are interested in having her write your salon business plan!
Yours in service,
