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How to Write the Perfect Salon Business Plan in 6 Steps

Discover how to craft a winning salon business plan in just six steps! Boost your salon's success with expert tips, market analysis, and strategy insights.

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As a salon owner, having a well-thought-out business plan is essential to the success of your business. A salon business plan outlines your business goals, market analysis, marketing strategies, financial projections, and other key details, serving as a roadmap that guides you through the process of starting, running, and growing your salon. In this article, we’ll go over the key elements of a salon business plan and provide tips on how to write the best business plan for salons in 2023.

How Much Does It Cost to Run a Salon? 

Before you start writing a salon business plan, it’s important to get an idea of the startup and ongoing costs. As we discuss in this article , the costs of starting a salon range from $62,000 for an existing salon to $90,000 for a new operation. With some of the expenses, you’ll incur one-time costs – other expenses will be ongoing such as supplies and inventory. Here are some of the typical costs associated with starting a salon: 

Existing Salon 

When you buy an existing salon, be it a hair salon or nail salon, you save on the costs of buildout, salon equipment , and salon marketing, assuming the salon already has some of these elements in place. Here’s what you can expect to pay for the following:

• Rent deposit: $4,500
• Buyout of current salon: $10,500
• Leasehold improvements: $15,000
• Equipment: $10,000
• Initial supplies: $8,000
• Initial inventory: $4,000
• Certifications and licenses: $4,000
• Marketing: $5,000
• Legal or consulting fees: $1,000

Grand total: $62,000

The upfront costs of building out a brand-new salon, marketing it to local clients, and getting the business up and running will likely exceed those of buying an existing salon. Here are the typical expenses you can expect to incur for a new salon:

• Buyout of current salon: $0
• Leasehold improvements: $35,000
• Equipment: $25,000
• Marketing: $8,000

Grand total: $89,500

You may also want to budget for the following:

• If you need a loan or financing to cover startup costs, expect to pay interest rates of 1.25% to 10%.
• Salon insurance ranges from $50 to $1,000 per month.
• Salon booking software and a point of sale (POS) system range from free to $500 per month. GlossGenius starts at an industry-low $24 per month with low payment processing fees and includes a website, a branded card reader, and other extras.
• A salon website can cost you thousands, but with GlossGenius, it’s included free! Beautiful and customizable, your website is packed with scheduling features and is easy to navigate, helping to increase bookings and future appointments.

How Profitable Is Owning a Salon?

If you owned a salon during the pandemic, no doubt you experienced your fair share of struggles between lockdowns, closures, and reduced business hours. According to Statista , the U.S. market size of beauty salons dropped from $69 billion in 2019 to $42.3 billion in 2020. Fortunately, things are beginning to look up for hair, skin, nail, and other types of salons, with the market valued at $53.6 billion as of 2022.

You can take advantage of the comeback by approaching your salon startup with a solid plan in place, a realistic budget, and a marketing strategy. A beauty salon business plan can help you identify any questions , opportunities, and potential roadblocks so you can have the best chances of getting funding, earning a return on your investment and achieving profitability. The more you control your expenses and market your business successfully, the more profitable you will be – so be sure to take your time creating a salon business plan for your needs.

6 Steps to Writing a Hair Salon Business Plan

The business plan is the most important document for any salon owner. It’s a formal, written plan that describes the future of your business and how you intend to achieve it. A good business plan will help you stay on track, get funding if you need it, and avoid costly mistakes as you navigate through choppy waters in this industry. 

We know what you’re thinking – that a business plan is a monster of a document that will take a ton of time to create. But, it doesn’t have to be. In fact, you can pare it down to one page and still have an effective, clear document that outlines everything you (and any other interested parties) need to know about your new salon. Below are six steps to writing a salon business plan that will ensure your success.

Here are six steps to creating your salon business plan:

• Create an Executive Summary
• Map Out Your Branding Vision
• Research Your Industry
• Create a Client Acquisition Strategy
• Management and Operations
• Financial Planning

Let's dive deeper into each one.

1. Create an Executive Summary

The executive summary is the first section of your business and management plan and provides a brief overview of your salon business. This section should include your mission statement , business objectives, target market, products and beauty services, and financial projections. It should be concise, engaging, and compelling to grab the attention of potential investors, lenders, or partners. It also serves to clarify your goals so you can come back to them anytime you need a refresher or wish to update this information.

Your executive summary is just that: a summary. This means you do not have to get into every detail in this section; you’ll provide a more complete analysis in the individual sections of your business plan. Here are some key elements to include in the executive summary:

• An opening “hook.” The first sentence or two of your executive summary needs to draw in the reader; otherwise, your business plan might not get the attention it deserves. Grab your audience’s attention by sharing a compelling fact about your company, a memorable story related to your industry, or some other well-crafted description of your business that will make your business plan stand out.
• Summary of your business. Describe what your company does, what services and products you will offer, who will run the company, and other high-level details.
• Market analysis. Briefly describe the market landscape for your own salon to show there is a proven need for your services. Be sure to address who your competitors are, any advantages you have compared with others, and any research you’ve conducted to demonstrate there is a demand for your services in the area. 
• Products and services. Highlight the specific services your salon will offer, any products you will sell, and any other information showing that your salon will fill the need you’ve described in your market analysis summary – and how you’ll do it better than the competition.
• Financial information and projections. Give your reader an overview of your business financials, including any current sales and profits, the funding amount you’re looking to acquire or any funding you already have, and your projections for growth.
• Future plans. Tell your reader exactly how you plan to use any funds you acquire and how their investment could pay off. Imagine where you want your business to be in a year, five years, and so on. Make it clear how funding will help you get there.

2. Map Out Your Branding Vision

Branding isn’t just about creating a unique identity for your business; it’s also about helping people connect with that identity and remember your name anytime they need your services. Branding helps both current clients and new customers recognize who you are and why they would want to seek out your salon. In your business plan, be sure to map out your branding vision by including:

• A description of your salon business. Describe who you are and what you do.
• Your mission and vision statement. Briefly summarize why your salon should exist, its primary objective, and how you plan to achieve your goals.
• An overview of your products and services, your pricing strategy, and any unique features or benefits that differentiate your salon from others in the market. Discuss the specific services you will offer and their price points, plus any product lines you will carry, such as hair care products, makeup, or skincare.
• A description of the target audience and customer demographics. Include relevant research on your market and the people who will buy what you’re offering.

3. Research Your Industry

This section should include a market analysis that provides an in-depth look at the salon industry, including trends, customer demographics, competition, and opportunities. It should also identify your target market and describe how you plan to reach them. This section should demonstrate your knowledge of the market and your ability to capitalize on it, with details on:

• The industry and trends. Provide an overview of the salon industry with relevant statistics, especially those that pertain to your area of expertise and geographic location.
• Your competition. Conduct a competitive analysis to gain insights into your competition, their marketing strategies, and the services and products they offer. The goal is to show how you will capture market share using stronger business strategies that set you apart from your competitors.
• Market segmentation. With market segmentation , you break down a larger target market into a smaller group of customers you plan to serve. Demographics such as age and income, geographic location, lifestyles or psychographics, and behavioral factors like price sensitivity or product loyalty are just a few approaches to market segmentation that you can consider for your business plan.
• SWOT analysis. The SWOT analysis is a way to assess your strengths, weaknesses, opportunities, and threats. It's an effective method for identifying your business strengths and weaknesses as well as external factors that may affect the success of your salon business.

4. Create a Client Acquisition Strategy

The client acquisition section of your salon business plan should describe how you plan to attract and retain customers as a hairstylist . It should outline your advertising and promotional strategies, such as social media marketing , SMS marketing , email marketing, and referral programs. This section should also discuss your sales strategy, including how you plan to increase sales and generate revenue.

• Description of marketing channels and tactics . Outline the different channels you will use to generate leads, such as social media, blog articles, emails, and text messages. 
• Sales forecasting and projections. Discuss how you will convert leads into clients, nurture them through the pipeline, and retain a loyal clientele. Include a realistic estimate of the quantity of goods and services you can sell within the forecast period (for example, monthly, quarterly, and annually). For a salon business, it’s helpful to determine the customer lifetime value of your typical client as well as the customer acquisition cost. You can then break down this number for the forecast period to determine the costs and sales projections.
• Customer acquisition and retention strategies. Include which strategies you will use and the associated costs, such as pay-per-click (PPC), search engine optimization (SEO), and paid ads on social media. Describe how you will retain customers – for example, through loyalty programs and responses to feedback and reviews on social media and Google. ‍
• Pricing strategy. It’s critical that you price your services and products competitively to drive revenue and profits. Detail the pricing strategy you plan to implement based on your buyer persona and competitive analysis. The strategy could be based on a variety of factors, but geographic location and local competition will likely be the biggest factors dictating your salon pricing strategy.

5. Management and Operations

The management and staffing section of your salon business plan should describe the organizational structure of your salon, including the roles and responsibilities of each staff member. It should also discuss your hiring and training practices, employee benefits , and compensation plans. This section should demonstrate your ability to attract and retain a skilled and motivated team, with information on your:

• Organizational structure. Spell out who runs the show and who reports to whom.
• Management team and staff. If you plan to hire a manager , look for someone who has experience in the industry and understands what it takes to run a salon. This person should also have good people skills and be able to work well with others.
• Business operations and processes. Consider which other support personnel you will need, such as an accountant and a dedicated marketing specialist. Don’t be a hero; you can’t do it all alone. ‍
• Legal and regulatory requirements. Include information on any legal advice you will employ to stay compliant with local, state, and federal guidelines.

Note that with GlossGenius, you can manage your team and collaborate with them to make your operations run more smoothly. Our software helps you delegate, mentor, and partner with others based on customizable permissions that let you grant as much or as little access as you wish. Easily manage your scheduling, booking, commissions, and reporting from one intuitive dashboard.

6. Financial Planning

Financial planning is a crucial section to include in any salon business plan. A cash flow forecast shows the anticipated amount of money coming into the business, as well as what you will spend on expenses. It also projects growth over time, which allows you to make predictions about future revenue and expenses so that you can better plan for them in advance.

The best way to get started with your financial projections is by creating an income statement (also called a profit and loss statement), which breaks down all income sources by category (e.g., retail sales and commissions), along with their associated costs (e.g., salaries). This will help provide insight into where your profits are coming from as well as areas where they could improve. Here are some key areas to cover in your salon business and marketing plan:

• Revenue and expense projections. Your revenue projections should consider the number of clients you expect to serve, as well as the average price per service. Your expense projections should reflect all costs associated with running your salon, such as utilities, rent, and supplies.
• Capital requirements and funding sources. Detail how much money you need to start and run your small business, including all costs associated with opening the salon. Describe the funding sources that you intend to use for starting your salon business, whether from personal funds, salon loans , or investors.
• Break-even analysis and profitability projections. A break-even analysis is a financial tool that shows how much revenue you need in order to cover your fixed costs (rent, utilities, etc.) and variable costs (such as salons supplies and staff wages). Profitability projections show how much profit you expect from your salon business for each year of operation. This is based on your estimates of revenue and expenses. You can use this information when seeking funding from investors or lenders.
• Financial ratios and metrics. A financial ratio is a measurement of the relationship between two numbers, usually expressed as a percentage or a fraction. For example, the working capital ratio compares your current assets to liabilities; this metric allows you to measure liquidity. Include the appropriate ratios and metrics in your business to demonstrate your company’s financial health.

A well-written salon business plan is essential for the success of your business. It provides a roadmap for achieving your business goals, attracting investors, and securing funding. By following the tips outlined in this article, you can write the best business plan for your salon and ensure your salon’s success!

As you’re creating your salon business plan, remember to start your free trial with GlossGenius and give yourself the best chances for success. From salon management to payment processing, we’ve got your new salon covered – making it easier to get up and running sooner rather than later.

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BUSINESS STRATEGIES

How to create a hair salon business plan

• Nirit Braun
• Sep 12, 2023

When setting up your own hair salon, one of the most important initial steps is crafting a well-thought-out and detailed business plan. Consider it your styling guide for success in the hair and beauty industry. This document isn't just about the right cut and color it's your roadmap to achieving your salon's objectives, whether you specialize in trendy haircuts, stunning makeovers or relaxing spa treatments.

Your hair salon business plan will help you navigate the ever-evolving world of starting a beauty business , helping you start a business with confidence.

Ready to kick things off? Begin making a website with Wix .

Benefits of a hair salon business plan

A well-structured business plan is vital for a number of reasons. Below is a breakdown of the top benefits for you to bear in mind.

Getting investors interested: Your well-thought-out business plan isn't just for show; it's what can help you woo investors and raise money for your business . It shows them you've got a plan, clear goals and a vision for profitability. In other words, it makes them more likely to open their wallets and invest in your salon dream.

Figuring out what you need: Writing a business plan forces you to think about everything you'll need to run your salon smoothly—from supplies and equipment to staff. By the end, you'll have a good handle on your startup and operating costs. Don't forget to factor into this the cost of opening a business, starting an LLC for example.

Drawing up your game plan : Think of your business plan as your playbook for success. It lays out the steps to make your salon thrive, helps you set achievable goals and gives you a roadmap for reaching them. Plus, it's got your back when it comes to handling challenges, with strategies to tackle whatever comes your way.

Outshining the competition : While creating your plan, you'll dive deep into your salon's market and competitors. That research helps you understand your customers, spot industry trends and figure out how to stand out from the competition.

Running a smooth ship : Your business plan isn't just about the big picture—it's also about the nitty-gritty details. It helps you plan things like where your salon should be located, how it should look, what equipment to get and how to manage your staff effectively.

Playing it safe: In the financial part of your plan, you'll lay out your salon's expected income, expenses, and profits. This not only helps you see if your business will make money but also prepares you to make smart financial decisions. Plus, it's your insurance against unexpected bumps in the road.

Read more about how to start a service business .

6 steps to creating a hair salon business plan

Let's dissect the key components of a hair salon business plan:

Executive summary

Business and domain names

Market analysis and research

Operations plan

Marketing and advertising plan

Financial plan

01. Executive summary

The executive summary is a concise overview of your entire hair salon business plan. It provides a snapshot of your business concept, strategies, financial projections and objectives. While it appears at the beginning of the plan, it's often written after the rest of the plan is complete to ensure all crucial details are included.

To write a clear executive summary for a hair salon business be sure to introduce your hair salon, detailing the services you offer and the unique value proposition that sets you apart in the industry. Then clearly state your short-term and long-term business goals. These should be specific, measurable, achievable, relevant and time-bound (SMART).

Remember to highlight what differentiates your hair salon from competitors, whether it's your exceptional stylists, innovative services or a specific niche you cater to. Als, provide a brief overview of the target market you're aiming to serve and the market demand for your services.

Offer a glimpse of your projected financials, including expected revenue, expenses and profitability within a specified timeframe. Additionally, include how much investment you're seeking or have secured to launch and grow your hair salon business.

Example of an executive summary for a hair salon business

"EleganceTresses Salon is poised to transform the hair care experience in the city. With a mission to blend style and artistry, we offer a range of premium hairstyling and beauty services that cater to a diverse clientele. Our SMART objectives include becoming the go-to destination for modern hair transformations, increasing customer retention by 20% in the first year and expanding our salon footprint to two additional locations within three years. What sets us apart is our team of master stylists, led by industry veterans with over 15 years of combined experience. We're seeking an initial investment of $250,000 to support salon setup, staff training and salon marketing initiatives . Our projected revenue of $500,000 in the first year, coupled with strategic partnerships, positions EleganceTresses Salon for rapid growth and profitability."

02. Business and domain names

Naming your business is crucial, as it will become an integral part of your brand identity. A memorable and relevant name enhances brand recognition and establishes trust with your customers. A business name generator can provide inspiration for a beauty business name that resonates with your salon's concept and values.

For more inspiration:

Nail business names

Beauty business name ideas

Selecting and registering a suitable domain name is equally important. Ensure your domain name aligns with your salon's name or services as this consistency makes it easier for customers to find you online.

Opt for a domain name that is simple to spell and remember and avoid using complex words or excessive characters. As part of this, if feasible, incorporate relevant keywords in your domain name to improve search engine visibility. Finally, check domain registration platforms to confirm your chosen domain name's availability.

Learn more about registering your business , which you’ll want to do once you’ve landed on a business name and a legal structure.

03. Market analysis and research

The market analysis and research section of a business plan is essential for understanding the competitive landscape and consumer preferences in the hair salon industry. This information forms the foundation of your business strategy.

Define your target audience based on demographics, lifestyles and hair care preferences.

Evaluate competing salons' offerings, pricing, location and customer reviews to identify gaps and opportunities.

Research industry trends, emerging styles and customer demands to align your beauty business ideas and services with current market expectations.

04. Operations plan

The operations plan details the practical aspects of running your hair salon. It covers location selection, salon design, equipment procurement and staffing.

Location: Describe how you'll choose a high-traffic, accessible location that caters to your target audience.

Interior design: Highlight your salon's ambiance, decor and layout to create a welcoming and appealing environment.

Equipment: Specify the types of equipment and products you'll use to provide top-notch services.

Staffing: Detail your staffing needs, including hairstylists, receptionists and other support roles and outline their qualifications.

Operation plans example:

"Our salon will be strategically situated in a bustling shopping district, attracting both locals and tourists. The interior design will exude contemporary elegance, featuring comfortable seating, modern decor and ample natural light. We'll invest in premium hairstyling equipment and a range of high-quality products to ensure exceptional services. Our staff will consist of experienced stylists specializing in diverse hair types and styles."

05. Marketing and advertising plan

The marketing and advertising plan outlines how you'll promote your hair salon, attract customers and build brand recognition. This can include marketing campaigns tailored to different customer segments, such as bridal packages, seasonal promotions or loyalty programs. Be sure to highlight how you'll utilize social media, a business website and online advertising to engage with customers and showcase your services.

Example of a marketing plan

"Our marketing strategy entails a mix of social media engagement and influencer partnerships. We'll leverage platforms like Instagram and Pinterest to showcase before-and-after transformations, share hairstyling tips and engage with our audience. Collaborating with local boutiques for joint promotions will enhance our visibility while offering special packages for bridal parties will establish us as a bridal hair expert."

Need some help building up your brand? Get inspiration from these beauty logo ideas and use Wix’s free logo maker to create your own, plus check out this guide on how to make a barber logo .

06. Financial plan

The financial plan section of your business plan provides insights into the financial aspects of your hair salon business. It will need to include a rundown of your initial expenses such as salon setup, equipment purchase, interior decor and initial marketing efforts.

After this, you'll need to estimate projected revenue based on services offered, pricing and anticipated customer volume. At the same time, document ongoing costs, including rent, utilities, staffing salaries, product replenishment and marketing expenditures.

Then lay out the initial investment you'll need and potential sources of funding, such as personal savings, loans or investors.

It’s also important to project when your hair salon is expected to become profitable based on revenue growth and expense management.

Example of a financial plan

"Startup costs are estimated at $120,000, covering salon setup, equipment and marketing campaigns. We project an annual revenue of $300,000 within the first year, with a steady increase of 15% in subsequent years. Operating expenses, including rent, staff salaries and product inventory, are projected at $180,000 annually. We anticipate becoming profitable by the end of Year 2."

Got another business idea in mind?

Still trying to decide on the best type of business to pursue? Check out the guides below and read about more service business ideas .

How to start a nail business

How to start an online business

How to start a consulting business

How to start a fitness business

How to start a fitness clothing line

How to start a makeup line

How to start a candle business

How to start a clothing business

How to start an online boutique

How to start a T-shirt business

How to start a jewelry business

How to start a subscription box business

How to start a beauty business

How to start a trucking business

How to start a construction business

How to start a landscaping business

How to start a food business

How to start a food prep business

How to start a vending machine business

How to start a contractor business

How to start a virtual assistant business

How to start a homecare business

How to start a coaching business

How to start a handyman business

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Want to create another type of business plan?

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A Comprehensive Guide to Writing a Hair Salon Business Plan

• July 31, 2023
• For Salon Owners

If you’re thinking about starting a hair salon, it’s crucial to have a solid business plan in place. A hair salon business plan will help you make informed decisions and give you a clear roadmap to success. Plus, having a well-researched and detailed plan can help you secure funding from investors and grants.

In this guide, we’ll go over why having a hair salon business plan is so important and give you some tips for creating one that covers all the bases.

What to Keep in Mind Before Writing a Hair Salon Business Plan

When you’re planning to open your hair salon , there are a few important things to keep in mind to make sure everything goes smoothly. To ensure nothing gets forgotten or left out, download our step-by-step guide to opening a salon – you’ll have all the information you need in one place.

The Ultimate Checklist You Need to Open Your Salon

Get Trafft’s FREE & PRINTABLE step-by-step opening a beauty salon checklist every salon owner needs.

Bonus: Discover 5 essential steps to building a successful beauty salon

Now, let’s take a closer look at one of the most important factors to think about when writing your hair salon business plan:

Unlocking success: Uncovering your salon’s Unique Selling Proposition (USP)

Your salon’s unique selling proposition (USP) sets it apart and gives it a competitive edge. It’s the unique element that makes customers choose your salon over others. To identify your USP, ask yourself:

• What unique services or treatments do your salon offer?
• Do you specialize in a specific niche or cater to a particular target market?
• How do you provide an exceptional customer experience?

Boldly highlighting your USP in your hair salon business plan will attract attention and demonstrate your salon’s unique value proposition.

Investing wisely: Researching and budgeting for essential hair salon tools and equipment

Having the right tools and equipment to run a successful hair salon would be the most important. Each item plays a crucial role in delivering quality services.

Furniture: What theme will you have, and what setup do you need to get your salon started?

Business space: Renting vs. buying?

Staff: How many hairdressers do you need, and how much will their salary be?

Booking software: What booking software will you use to help automate the booking process?

Research the market, compare prices, and create a budget for acquiring your tools and equipment. Outlining your hair salon business plan’s estimated costs and specific equipment will showcase your preparedness and financial planning.

The client connection: Building and nurturing a loyal customer base

Keeping your customers happy is key to running a successful hair salon business . You can do this by offering personalized services, loyalty programs, and referral incentives. It’s also important to show your appreciation by giving special discounts and really listening to their needs.

Building trust with your customers is key to keeping them coming back. If you focus on providing exceptional service, you’ll have a loyal customer base in no time!

Beyond aesthetics: Designing a hair salon that blends style and function

When you’re putting together a business plan for your hair salon, remember to include a section about creating a cool and functional space.

The design and layout of your hair salon play a vital role in creating a welcoming and functional space. Consider the salon’s ambiance , layout efficiency , and comfort for clients and staff. You want it to look great, but also be practical for your team to work in and for clients to move around comfortably.

Make sure to cover all the important details and show that you’re prepared and strategic in your planning. And don’t forget to include an executive summary – this part is key for investors and lenders to get a quick overview of your hair salon business.

How to Write a Hair Salon Business Plan?

Every hair salon business plan should always include:

• Executive summary
• Company description
• Market analysis
• Competitor analysis

Operation strategy

• Marketing plan

Staffing and management structure

Financial projections and budgeting, risk analysis and mitigation plan, executive summary of the hair salon business plan.

When you’re putting together a hair salon business plan, it’s a good idea to save your executive summary for the end . That way, you can include all the important details about your business. The executive summary is basically a big-picture overview that you’ll share with potential investors and lenders. You’ll want to include stuff like your goals, strategies for success and growth, financial projections, and an analysis of your competitive advantage. Anything that might catch the eye of a potential funding source should be in there.

For example, did you know that the global beauty market is worth a whopping $511 billion ? And just last year, the Beauty and Personal Care industry brought in $564.40 billion in revenue. Experts think that the industry will keep growing at a rate of 4.76% per year from 2022 to 2026.

When you write your executive summary, it’s really important to show that your ideas are feasible and effective . A well-crafted summary can grab an investor’s attention by showing that you’ve done your homework and that your hair salon has real potential.

It’s also super important to write a great hair salon description. That’s your chance to make a great first impression and really show off what makes your hair salon special. Try to capture the essence of your hair salon in a way that really grabs people’s attention.

Painting a compelling hair salon description

When you’re describing your hair salon, start by giving the reader a feel for the place. Is it cozy and intimate or modern and trendy? Make sure to let them know about all the hair and beauty services you offer, especially any unique treatments or techniques you specialize in.

What makes your hair salon stand out? Maybe you have an amazing team of hair stylists who are passionate about what they do. Or maybe you use eco-friendly products that your clients love. Whatever it is, make sure to highlight those special qualities that make your hair salon one-of-a-kind.

Keep your description short and sweet, but make sure to get your message across . Let your excitement for your salon shine through in every word you write.

Market analysis, target market, and industry trends

Before opening your hair salon, it’s a good idea to figure out what your potential clients are looking for. Take a look at your competition and see what they’re offering – that way, you can find a way to stand out in the local market.

Don’t just think about age and gender when it comes to your target customers; you should also consider their interests and what motivates them . Knowing what makes them tick can help you create marketing messages that really speak to them.

If you’re not sure where to start with market analysis, Coursera has a great article that can give you some helpful tips.

To really set yourself apart from other hair salons in the area, it’s important to do a deep dive into your competition. Find out what they’re doing well and what they could improve on, and use that information to make your own hair salon even better.

Now comes the thinking part of analyzing the market and industry trends . This step is essential for your hair salon business plan. You want to understand who your ideal clients are so you can tailor your salon’s offerings and marketing strategies to their needs and desires.

Analyze your competition and how you can excel

When you’re checking out your competitors, don’t just glance at their website and social media pages. Take a deep dive into their customer reviews too, so you can really see how people feel about them. This will give you a better idea of their brand and what they’re doing well or not so well. Look for opportunities where you can stand out from the crowd by offering unique services or top-notch customer care .

It’s super important to keep on top of what’s happening in the beauty industry too. Keep your eyes peeled for new players and trends to stay ahead of the curve.

Running a successful hair salon is all about being organized and efficient. This means hiring talented stylists , giving them the support they need through training and a positive work environment, using a reliable scheduling system , and keeping your inventory in check. Try to build strong relationships with your suppliers too, so you always have the supplies you need on hand.

Here’s how to optimize your operations and what aspects to include when writing your hair salon business plan:

Staffing and Training:

• Hire skilled hair stylists and provide comprehensive training.
• Foster a positive work environment for teamwork and motivation.

Appointment Management:

• Use a reliable scheduling system such as Trafft to minimize wait times.
• Utilize software for automated reminders and calendar management.

Inventory and Supplies:

• Maintain an organized inventory and restock as needed.
• Establish relationships with reliable suppliers.

Salon Maintenance:

• Keep the salon clean and maintain equipment.
• Pay attention to health and safety regulations.

Client Management:

• Provide exceptional service and track preferences.
• Collect and respond to client feedback.

Workflow Optimization:

• Streamline processes for maximum efficiency.
• Update workflows based on feedback.

Maintaining a competitive pricing

Developing the right pricing strategy is crucial for your hair salon’s financial success. Here’s how to create a hair salon pricing approach that maximizes profitability while staying competitive.

• Know your costs: Calculate all expenses, including rent, utilities, supplies, and staff wages, to determine the minimum price per service.
• Research the market: Analyze competitor pricing and industry standards. Consider your unique selling points and target market when setting prices.
• Tiered pricing: Offer different service packages at various price points to cater to different budgets and attract a broader customer base.
• Add-ons and upselling: Recommend additional services or products during client consultations to increase the value per transaction and boost revenue.
• Monitor and adjust: Regularly review your pricing strategy based on market trends, customer feedback , and financial goals. Make necessary adjustments to remain competitive and profitable.

By implementing a well-designed hair salon pricing strategy, your hair salon will cover costs, generate revenue, and deliver value to your customers.

Marketing and advertising plan

To create a winning hair salon marketing plan :

• Set clear marketing goals : increase brand awareness, drive foot traffic, and boost online bookings .
• Explore marketing channels : social media (Facebook, Instagram), local newspapers, and radio.
• Craft a compelling message : highlight unique selling points (exceptional customer service, talented stylists, latest trends).
• Embrace digital marketing : create a user-friendly website , showcase services, feature testimonials, and allow online bookings.
• Leverage social media : engage with the audience, share styling tips, and promote special offers.
• Consider partnerships : collaborate with local businesses, influencers, or complementary salons.
• Measure and track : monitor campaign success, track website analytics, and gather customer feedback.
• Optimize and refine : use data insights to improve marketing strategies over time.
• Position your hair salon as the go-to destination for hair styling services in your local market.

There are plenty of great hair salon marketing ideas you can put into practice to ensure your salon gets maximum exposure.

Don’t forget to include details about employee and management structure in your hair salon business plan. For your hair salon to really take off, you need a strong leadership team to steer the ship. Look for people who have the right experience and know-how and are just as passionate about the salon biz as you are.

When you talk about your team, really hype up their qualifications and skills. Let people know about their deep knowledge of the industry and how they’re total pros at handling day-to-day operations. Be sure to explain their specific roles and how their expertise is going to help make sure your hair salon is running smoothly.

If your team members have some special training , like in hair reconstruction, definitely mention it. It’ll help set your salon apart and make it even more legit in people’s eyes.

So, before you start your hair salon business , you need to figure out how much money you’re going to make. This includes everything from what services you’ll offer to how much you’ll charge. Take a look at what other salons in your area are doing and what your potential customers are willing to pay.

Next, you have to think about expenses . Rent, utilities, employee salaries, inventory, marketing, and other costs all add up. Make a list of everything and estimate how much they’ll cost you on a monthly or yearly basis.

One thing you don’t want to forget is your breakeven point . This is the number of services or products you need to sell to cover all your expenses. It’s important to know this so you can set realistic goals and measure your financial performance.

Creating a budget is key to having a solid financial plan. Think about where you want to put your money, like marketing, equipment upgrades, staff training, and supplies. Make sure you don’t overspend and stick to your budget.

Oh, and don’t forget about technology! Setting up a reliable booking system can make your life a lot easier and keep your clients happy. There are some great options out there, like Trafft . So, keep that in mind when you’re making your budget.

Why Trafft?

Let’s paint a picture: You’re opening a hair salon;  your dream, finally taking shape. That’s thrilling, right? But hold on! It’s also daunting . The appointments, the management, the scheduling – it’s a tangled web.

Enter Trafft . It’s your new best friend, your invisible manager. Here’s why :

• 24/7 availability: Trafft handles your bookings, 24/7. Sleep easy knowing your customers can book anytime, from anywhere.
• No double-booking disasters: Trafft’s smart system prevents overlaps. Say goodbye to scheduling stress!
• Payments made painless: With integrated payment solutions, money matters are managed.
• Your salon, your rules: Fully customizable settings mean Trafft adapts to your salon, not the other way around.

Now imagine: A salon where you’re the stylist, not the secretary . Free from phone tag and double-bookings. A salon where customers conveniently book and pay, then arrive to a smooth, streamlined operation. That’s not just any salon. That’s a Trafft salon .

So why not turn your dream salon into a reality? Get Trafft . It’s not just software. It’s the helping hand your business deserves. Embrace the efficiency. Enjoy the ease. Experience Trafft . Your future self will thank you.

If you’re running a salon, you need to be aware of the potential risks that might come your way and tackle them head-on. These risks could be industry-specific or internal, like staff turnover or not complying with regulations. So, make sure to cover the details of how you plan to tackle these issues and include them in your hair salon business plan.

The plan could involve smart marketing or offering new services to deal with downturns, complying with regulations to avoid legal issues and negative feedback, and investing in staff training to make sure your clients are happy. And don’t forget to keep reviewing and updating your risk analysis and mitigation plan to stay on top of any challenges.

By being proactive and staying ahead of the game, you’ll be able to keep your salon business strong and overcome any obstacles that might come your way.

FAQ on Hair Salon Business Plan

What is a hair salon business plan.

A hair salon business plan is like a roadmap. It guides the direction and future of your business. It explains things like what services you’ll offer, who your customers are, and how you’ll make money. It’s basically your playbook for running the salon and attracting clients.

How important is a business plan for a hair salon?

Oh, it’s super crucial. Not having a plan is like driving with a blindfold on. It’s a tool to attract investors, secure loans, and understand your business better. You’ll be less likely to overlook important details, and you’ll have a clear vision to work towards.

What should a hair salon business plan include?

Your business plan should cover several key areas. Think of your services, target market, marketing plan, financial projections, and operational strategies. Also, don’t forget a solid competitive analysis. This way you know who you’re up against and can work to stand out.

How detailed should the hair salon business plan be?

Your business plan should be as detailed as possible. The more detailed, the better. It should cover everything from your business name, location, services, and pricing, to how you’ll advertise. Think about it as your salon’s blueprint.

How to do market research for a hair salon?

Start by looking at other salons in your area. What services do they offer? How much do they charge? Who are their clients? Online reviews and social media are good places to gather intel. Also, consider conducting surveys or focus groups to understand customer needs better.

How to calculate the financial projections for a hair salon?

First, you need to estimate your startup costs, like rent, equipment, supplies, etc. Then forecast your sales – how many clients will you serve daily, weekly, monthly? What will be the average spend per customer? Don’t forget about ongoing costs, like salaries, utilities, and marketing.

What are the funding options for starting a hair salon?

There are several ways to fund your salon. You can use personal savings, secure a bank loan, find investors, or even crowdfund. Each method has its pros and cons. It’s about finding what suits your situation best.

How to develop a marketing strategy for a hair salon?

Start by identifying your target clients. What social media platforms do they use? What magazines or blogs do they read? Tailor your marketing efforts to reach them. Consider loyalty programs, referral incentives, and special promotions. Remember, word-of-mouth can be super powerful in the beauty industry.

How to tackle competition in the hair salon business?

Differentiate yourself. Maybe it’s offering unique services, creating a distinctive salon experience, or focusing on superior customer service. Constantly keep an eye on what competitors are doing, but don’t just copy them. Build your own unique brand identity.

How to update a hair salon business plan?

Your business plan isn’t set in stone. As your salon evolves, so should your plan. Regularly review it, see what’s working and what’s not. Make adjustments as necessary. It’s a living document that grows with your business.

Final Thoughts on Creating an Effective Hair Salon Business Plan

Congratulations! You’ve reached the end of this ultimate guide to creating an effective hair salon business plan. Following the steps outlined in this guide, you have the knowledge and tools to write a comprehensive hair salon business plan that positions your salon for success.

Remember, a well-written plan is more than just a document. It’s a roadmap that guides your hair salon’s growth and is a valuable tool for attracting investors, lenders, and stakeholders.

Throughout this guide, we’ve explored essential elements such as understanding your target market, analyzing competition, developing a strategic marketing plan, establishing efficient operations, and setting a profitable pricing strategy. We’ve also emphasized the importance of financial planning, risk analysis, and creating a solid management team.

As you embark on your hair salon venture, stay focused on delivering exceptional customer service, staying abreast of industry trends, and continuously refining your strategies based on market feedback. With dedication, proper planning, and a passion for beauty and style, your hair salon can thrive in the competitive beauty industry.

• Jovana Smoljanovic Tucakov

Jovana Smoljanovic Tucakov is a Content Marketing and SEO Specialist who uses both words and data to communicate a message and deliver value. With more than 5 years of experience in digital marketing and content production in the IT industry, she loves identifying and solving the readers’ pain points and creating targeted content.

Curious about the human mind and emotions, especially those that drive consumer behavior. Likes fitness, food preparation, board games, reading (both for pleasure and learning), and binge-watching Netflix.

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How To Create A Hair Salon Business Plan in 2024 (with Template)

Starting any kind of business comes with inherent risks.

Many fail in the first year due to mismanagement of finances, lack of brand awareness, or for shifts in the market.

If you’re going to pick a business to get into, it’s never a bad time to open a hair salon . In 2018, hair salons brought in over 46 billion dollars in revenue in the United States. That’s a little less than the entire GDP of the country of Costa Rica.

Needless to say, there’s a lot of opportunity in the hair salon industry. If you’re ready to grab your piece of that 46 billion dollar pie, then you’re going to need a business plan.

Here’s a complete guide to creating a business plan for your new hair salon:

Step-By-Step Instructions to Writing Your Hair Salon Business Plan

A business plan is a crucial step to starting any business. Creating one is an opportunity to put your thoughts, ideas, and goals down on paper and mold them into something more tangible.

Creating a business plan might feel like a daunting task, but it doesn’t have to be if you break it down into smaller steps like these:

1. Write your executive summary

The executive summary is the first page of your business plan and acts as a first impression. Get it right, and people will dig in with enthusiasm. Get it wrong, and you may not get a fighting chance.

At its core, the executive summary elaborates on the focus of your business. It tries to sum everything in a page or less. At a minimum, it’ll include:

• Mission statement
• Ownership structure
• Product and service descriptions
• Business plan summary

In plain terms, it says what you hope to achieve, who’s involved, what makes your salon unique, and what value you’ll bring to your customers.

2. Company description

It may feel like you’re repeating yourself from here on out, and you will be to a degree, but it’ll be to bring context to all the details that will follow. You’ll be reiterating the points from your executive summary, but further elaborate to give the reader the juicy details.

With the company description, you’re wanting to provide a snapshot of what people would see if they walked into your salon. You’ll offer up some crucial details like the registered name of the business, history of the company, name of key employees, and your location. In addition, you’ll answer some important questions such as:

• Are you explicitly cutting hair? Or are you offering hairstyling services as well?
• How about conditioning treatments, blowouts, and hair extensions?
• Will you stop at head hair, or will you offer waxing, eyelash, and eyebrow treatments as well?
• How about products? Will you sell your styling creams, sprays, and shampoo?

Again, the more detail here, the better because you’re trying to sell an image of the salon at its best.

3. Business goals

Every company, big or small, should have goals. Ideally, they should be specific goals. SMART goals even. SMART stands for specific, measurable, attainable, relevant, and time-bound. A SMART goal for opening and running a hair salon might be:

“ Host a grand opening event over the July 4th weekend that adds 150 people to our email newsletter.”

That’s a short-term goal that’s specific and measurable because you’re measuring email captures. It’s time-bound because of the July 4th date, and it’s relevant and attainable because it helps with marketing efforts and isn’t a farfetched number like 10,000 sign-ups on an open weekend.

In the business goals section, you’ll want to spell out what you’d like to accomplish in the near term and in the long term as well. If you’re seeking investor capital or outside funding, you’ll also explain what exactly you need the money for and how and when you’ll plan to recuperate those funds. This could include expanding locations or service offerings, for example.

4. Business management structure

This one is a bit more straightforward because it’s black and white. Your business management structure is something you’ll likely set and forget since it won’t change much. Here, you’ll add a breakdown of who the owners are, what experience they have in the industry, and what legal structure you’ve adopted (LLC, S Corp, etc.).

You’ll also want to outline how many employees you’ll have to start, ownership percentages, and the duties and responsibilities of each role. Getting this sorted out is not only good for investors, but for you as well since it’s possible you’ll have disputes over these decisions later.

5. Product and service offering

In the previous steps, you’ve alluded to what makes you unique and what services you’ll offer, but now it’s time to get even more detailed. It’s not enough to say you’ll offer blowouts, hair coloring, and sell hair products. Tons of salons do that. You want to impress people with how you’ll differentiate yourself.

To illustrate the point, here are some ways a salon could differentiate itself:

• Using all homemade organic products that you can’t find anywhere else
• Bringing in wine from a local vineyard to offer for free to salon patrons
• Offering same-day in-home appointments
• Providing free headshots with all appointments

The possibilities are truly endless. Here’s also where you’ll get into pricing, profit margins, and how you’ll receive and possibly distribute the products you’ll use at your salon.

6. Marketing plan

With a new salon, you’ve got to get the word out as soon as possible to bring customers in. Your marketing plan will explain exactly how you’ll build brand awareness. It may even talk about your grand opening.

You’ll need a section on how you’ll develop customer loyalty as well. Will you leverage mailing lists? How about frequent buyer incentives? The more concrete your marketing plan, the more confidence you’ll gain from investors, banks, and employees.

7. Business financials

A good hair salon business plan will provide all the numbers you need to ensure you have the runway to launch and sustain operations while bringing in new customers. It’ll show investors the starting financial health of your business and how you plan to reinvest funds back into the business and repay debts.

Here, you’ll include net profit margins, current liquidity, and accounts receivable turnover ratios . Those specifically tell investors how much profit you’ll keep, how easily you’ll be able to repay debts, and how often you’ll collect on your own debts.

8. Future financial projections

Your goals would ideally be aggressive, but realistic. While you may not create more business plans for your salon, you’ll want to keep up with creating monthly and quarterly financial reports.

They’ll outline expenses, revenue, profit, and provide confidence to your leaders and your investors that things are on track.

9. Appendix

Last, but not least, you’ll include an appendix section for the stuff that doesn’t fit elsewhere. For a salon, this could mean licenses, permit history, contracts, leases, resumes for key employees, credit history, and anything else that comes to mind.

Starting a salon is an exciting adventure that’ll be filled with both ups and downs. The ups will come and go, but being prepared for the down moments is important. That’s where a business plan comes in handy.

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Related articles.

Hair salon business plan: a complete guide

Learn how to build a hair salon business plan, from budgeting to deciding upon your ideal client, logo, and more.

Table of contents

If you landed on this page, you are likely about to start your journey as a new hair salon owner. We welcome you, dear beauty entrepreneur, to the world of cash flow statement, market analysis, business management, and marketing strategy.

Having your own salon is a wild ride, and we at Appointible want to help you start on the right foot (aka, beauty salon business plan).

In today’s article, we will present a hair salon business plan outline, from defining your services to growing a healthy business.

We also support the idea that a beauty salon business plan should be rich but straightforward enough that salon owners can see clear, actionable steps; thus, we include things like tools and resources and leave others out, such as an executive summary.

Step 1: Define your hair salon services

The first step in building a business plan for your salon starts with defining your services. You may already have an idea of the hairstyles and services you want to offer, but it’s essential to consider some critical factors before finalizing your offerings.

Some of these factors are easy to understand, while others may require more attention, so in this section of the article, we will go through each of them.

List what you know how to do (and what you don’t)

Start by creating a list of all the hair styling services you can provide. List what hair-cutting styles and hair-care services you can perform. Consider all your certifications, work experience, and others to build your list.

Then, list the hair and beauty services that you lack the knowledge to perform. It can be that you miss the required qualifications or is just out of practice; either way, list them as things you can’t offer at your new salon.

If there are gaps in your knowledge that you want to cover, mark them distinctively, as we will come back to courses, training, and certifications later in this article.

Decide if you will hire employees.

Deciding whether you will hire employees – and how many – depends on your budget as much as on your business goals. We already discussed in Appointible  how to assess if you need to hire employees  for your salon business, so be sure to check that one out.

Nonetheless, a more minor salon may only require a couple of employees, such as a stylist or assistant. In contrast, a larger hair salon business may need a bigger team to manage multiple services, as well as tasks such as cleaning, reception, and marketing.

Take a peak at competitor salons.

When it comes to listing your hair salon services, your local competition is a great place to start. Start by analyzing what different hair cutting, hair care, and beauty services the competition offers, as it will give you an idea of what the local market expects from a hair salon.

This step of your beauty salon business plan should start from your immediate competition – neighborhood or city – but not leave out important salons from other parts of the state or country.

Keep up with industry trends.

It’s crucial to stay up-to-date with the latest trends in the hair industry to give your salon a competitive advantage. Following trends not only ensure that your business remains relevant but it also helps attract and retain clients.

Consider subscribing to trade magazines and blogs that cover the latest news and developments in the hair industry. This comprehensive list of beauty blogs ( https://bloggingtips.com/best-beauty-blogs/ ) from Blogging Tips gives an idea of where to start. Attending conferences, trade shows, and workshops is also an excellent way to learn from other professionals and get insights into the newest techniques, products, and services.

This knowledge can help you tailor your offerings to meet the changing demands and preferences of your clientele.

Why Appointible?

• Personal booking website
• Access appointments from any device
• Send SMS & email reminders
• Take before & after photos
• Multi-location business support
• Sing up and get started today!

Step 2: Create a detailed financial plan

Now that you have a clear idea of your target market, what services you will provide, and a general idea of at what price point, it is time to start building a financial plan for your hair salon.

Needless to say, you will need much more than a business bank account and card to call it a day and claim you have a financial plan in place. Let’s see in this step of the article how to effectively create a solid financial plan for your hair salon business.

A: Calculate your beauty salon budget

As we discussed previously in the article  top 10 habits of successful businesses , a budget is telling your money where to go instead of wondering where it went. This mentality of always being equipped with a proper budget will go a long way on your road to success.

Here are some of the budget lines you might consider when you write a business plan.

For courses and certifications

Earlier in this article, we had you write all the hair services you feel confident (or have the certification for) providing, as well as identify the gaps in your knowledge and what courses and learning paths you should take.

This is the moment of your salon business plan where your list of services and connect them to what courses and certifications you will need to invest in – whether for you or for employees.

Pro tip: plan ahead and save some recurring budget for learning for you, your stylists, and even your management team – some courses can be related to marketing, productivity, or other admin-related fields.

For a Hair salon business license

All legal business entities must have their respective licenses. Business licenses need to be paid and applied for, so the best way to deal with it is to contact a professional specialized in the beauty salon industry or approach the competent local chamber and institutions.

As licenses vary depending on location and specific services you offer, we can’t provide an exact figure. Prepare a budget line for an expense of around $500.

For Utilities and rent

Another important budget line for a hair salon business plan is the cost of utilities and rent. Rent will likely be your largest recurring expense, so it’s important to budget accordingly. You should research the average rent costs in your area and factor that into your budget, but you can expect to pay around $1000 to $2000 on rent alone.

Additionally, you’ll need to consider the cost of utilities such as electricity, water, and gas. To save on utility costs, consider investing in energy-efficient appliances and lighting and making sure your space is well-insulated. You wouldn’t believe how much these savings slowly add up in your finances.

For Hair salon equipment and supplies

You’ll need to purchase equipment such as chairs, styling stations, hair dryers, and shampoo bowls, as well as supplies such as hair products, towels, and cleaning items. Create a list of all the salon equipment and supplies you will need, and then run market research.

Ideally, run a search on wholesale beauty e-commerce, such as www.salonwholesale.com . Alternatively, network with a local community of hair stylists and salons to get an idea of there are local suppliers that offer more competitive prices.

For marketing efforts

Marketing is a crucial aspect of any successful business, including a hair salon. It’s important to allocate a budget for marketing efforts to reach prospective customers as well as retain existing clients. Think of social media, website development, ads in local outlets, etc.

To save on marketing costs, consider using free marketing channels such as social media and email marketing. You can also create your own marketing materials using free online design tools such as Canva.com or Visme.co .

For Hiring hair stylists

If you plan to hire hair stylists for your salon, you’ll need to factor in the cost of hiring and onboarding new employees. This can include expenses such as job postings, recruiting fees, and training costs.

When budgeting for hiring, consider the average salary and benefits for hair stylists in your area. You may also want to factor in the cost of providing employee benefits such as health insurance and paid time off.

To save on hiring costs, consider using free job posting websites or social media to advertise open positions. You can also offer referral bonuses to current employees to incentivize them to refer qualified candidates.

It’s important to have a clear understanding of your staffing needs and to create a hiring plan that aligns with your business goals. This will help you avoid overstaffing or understaffing your salon and ensure that you have the right team in place to provide high-quality services to your clients.

B: Calculate your rates and prices

Once you have a clear understanding of your salon’s expenses, it’s important to calculate your rates and prices in order to generate revenue and make a profit.

When setting your rates and prices, consider factors such as your expenses, your target audience, and your competitors’ pricing. You should also consider the value of your services and the quality of your customer experience.

Here are some steps you can take to calculate your rates and prices:

Run a break-even analysis: This is the point at which your salon’s revenue covers your expenses. To calculate your break-even point, divide your total expenses by the number of services you expect to provide each month.

Research your competitors’ pricing: Research the pricing of other salons in your area that offer similar services. This will give you a sense of the market rate for your services.

Set your prices: Once you’ve determined your break-even point and researched your competitors’ pricing, you can set your prices. Consider pricing your services slightly above the market rate to reflect the quality of your salon and the value of your services.

Review and adjust your pricing: It’s important to regularly review your pricing to ensure that it aligns with your expenses and your business goals. You may need to adjust your pricing over time as your expenses or market conditions change.

Step 3: Build your brand and target market

Building a strong brand is essential for any successful hair salon business. A strong brand helps to create a loyal customer base and can differentiate your salon from competitors. Here are some steps you can take to build your brand and target market.

Define a good mission statement.

A mission statement is a clear and concise statement that defines the purpose and values of your salon. It should communicate the core values of your salon and what makes it unique.

To create a good mission statement, ask yourself the following questions:

What do you want to achieve with your salon?

What values do you want to communicate to your customers?

What makes your salon unique?

Once you have answered these questions, you can use them to create a clear and concise mission statement that reflects your salon’s values and purpose.

Define your hair salon’s ideal clients.

Defining your ideal clients is an important step in building your brand and targeting your marketing efforts. Knowing your ideal clients helps you to tailor your services and marketing messages to their needs and preferences.

To define your ideal clients, consider factors such as age, gender, income level, and lifestyle. You can also consider the types of services and products that your ideal clients are likely to be interested in.

With a defined ideal client, you can create marketing messages and promotions that resonate with them and attract them to your salon.

Define your hair salon’s name.

Choosing a name for your hair salon is a vital part of brand-building – so much so that we wrote an entire article on  picking a name for your hair salon . In short, your salon name should be memorable and reflect your salon’s values and purpose.

When choosing a name, consider factors such as: What do you want your salon name to communicate to your customers? Is the name easy to remember and pronounce? Is the name available as a domain name and social media handles?

We highly advise you to read through the article above, as you will surely come out with a name fit for successful businesses.

Step 4: Pick your salon location

Location is the most important aspect of any real estate deal, whether you are renting a place for your new business or buying a house.

Choosing the right location for your hair salon is crucial to the success of your business. Here are some steps to help you pick the perfect location:

Understand the local market and competition.

Researching the local market and competition will help you understand the demand for beauty services in the area and identify potential competitors.

Consider factors such as population demographics, income levels, and the proximity of other hair salons. Look for gaps in the market that your salon can fill or areas where you can differentiate yourself from the competition.

Pick a location with your target clients in mind.

Time to refer to the part of your beauty salon business plan where you defined your ideal client. Look for a location that is easily accessible and convenient for your target clients. For example, if your target clients are busy professionals, you may want to choose a location near office buildings or shopping centers.

Align with your brand.

Your salon location should align with your brand and communicate the values and personality of your salon. For example, if your salon is focused on eco-friendly and sustainable practices, you may want to choose a location that is environmentally friendly or close to parks and nature reserves.

Choose the right salon size.

Choosing the venue size is another make-or-break point when it comes to location. Consider factors such as the number of chairs you need, the size of your waiting area, and the size of your backroom for storage and supplies. A larger salon may allow you to accommodate more clients, but it may also come with higher overhead costs, as well as potentially looking “empty.”

Ultimately, choosing the right location for your salon requires careful research and consideration. Take the time to evaluate your options and choose a location that will help your salon thrive.

Step 5: Craft a marketing plan for your hair salon

A well-crafted marketing plan is essential to help you promote your hair salon, increase service sales, and keep existing customers coming back. Here are some tips to help you create an effective marketing plan.

Share your work online.

We could name this section “create a social media presence.” However, if there is one thing you should be working on systematically in social media is sharing your work. Yes, indeed, you would also benefit from a website, but social media is hands down the best place to show actual clients hair cuts and their feedback.

Share before and after photos, and short videos of the end result of a client’s hairstyle, ask for 5-star reviews, and more. Aim to share your work at least every second day on social media.

Continuously launch new promos.

Offering promotions and discounts is a great way to attract new customers and encourage existing ones to come back. Consider launching different types of promotions, such as referral discounts, seasonal discounts, or loyalty programs.

Keep your promotions fresh and exciting to encourage repeat business. For example, offer a discount on new services or products you introduce or host a giveaway for a free hair care package.

Build a text message marketing routine.

Text message marketing is an effective way to communicate with your customers and keep them informed about promotions, new services, and other updates. Collect your customers’ phone numbers and build a text message list to reach out to them.

Send regular updates to your text message list, but be sure not to overdo it. Limit the frequency of your messages and offer valuable content such as special promotions or early access to new services.

Step 6: Pick a dedicated booking system

Choosing the right booking system is essential for running a successful hair salon. So much so that we dedicated an entire step in your salon business plan to it; a reliable booking system can streamline your operations, help you manage appointments, and keep your clients happy.

Pen and paper can only do so much for your salon business, and free services, such as Google Calendar, are simply not fit for the job. Here are some of the things you will get to do once you pick an online appointment scheduling software for your hair salon:

You will receive appointments 24/7

With appointment scheduling software, you can get clients any time of the day, any day of the week. Working hours will become a thing of the past when it comes to selling your services.

You will boost your marketing strategy.

An appointment scheduling software can help you integrate your marketing efforts seamlessly. With automated emails and SMS reminders, you can promote your services, offer discounts, and send personalized messages to your clients. This way, you can stay top-of-mind with your customers and ensure that they keep coming back to your salon.

You will reduce the admin workload

Gone are the days of answering endless phone calls, jotting down appointments, and dealing with booking conflicts. With an online booking system, you can automate your scheduling process, send automatic appointment reminders, ask for confirmations, and more, freeing up time to focus on growing your business.

You will seamlessly manage your staff.

With a booking system, you can assign staff members to specific services, manage their work hours, and monitor their performance. You can also give your stylists access to their own calendars, which will allow them to see their schedules and manage their bookings.

An appointment scheduling software for salons looking to grow in 2023

Appointible is a powerful appointment scheduling software that is specifically designed for the hair and beauty industry. With Appointible, you can manage your salon’s bookings, staff schedules, and customer data all in one place. Appointible offers a range of features, including online booking, automated reminders, staff management tools, and an analytics dashboard, to help you streamline your salon’s operations and grow your business.

Create a free account with Appointible  and elevate your salon business plan.

Step 7: Your salon’s growth

If you followed the previous steps correctly, your hair salon is now up and running smoothly. However, you may wonder how to keep your salon growing and thriving in the competitive market. That’s why we dedicated this section to showing you the different paths for salon growth.

Horizontal salon growth

One way to grow your salon business is through horizontal growth. This means expanding your services, hiring more stylists, opening new locations, and so on. If you plan to expand horizontally, it’s important to reflect that in your branding and salon size from the outset.

For example, if you plan to have a bigger salon and offer more services, invest in the necessary equipment and create a marketing plan to attract new customers. This way, you can make sure your salon is ready for growth when the time comes.

Vertical salon growth

Another way to grow your salon is through vertical growth. This means specializing in a select number of services and aiming to become the best in the industry. By focusing on quality over quantity, you can charge higher prices and keep payroll, supplies, and overhead costs to a minimum.

To achieve vertical growth, you need to build a strong reputation and brand identity around your specialty services. This might include targeted marketing campaigns, creating a niche social media presence, and offering exceptional customer service.

No matter which growth path you choose, it’s important to research your options, plan carefully and stay up-to-date with the regulations in your area. Continuously review your efforts and tweak your strategies as needed to ensure your salon continues to grow and succeed.

We hope this article has been helpful in guiding you through the steps of opening and growing a successful hair salon business. Remember to stay dedicated, maintain a strong brand, and always put your customers first. Good luck in your journey to success!

Get Appointible now.

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Home >> #realtalk Blog >> Manage a business >> How To Write a Salon…

How To Write a Salon Business Plan

By Shannon Mulligan

So you’re thinking of opening a salon business—congrats! Gearing up to owning your own business is a huge step.

But if you’ve never owned a salon before or are simply looking to give your existing business a refresh, you’re probably thinking, “Where do I even start?”  Well, the first step is to write a salon business plan.

What is a business plan for a salon?

A salon business plan is a written document that covers your business goals and how you’re going to reach them.

Every business plan looks different. But for a salon, your business plan will likely include details like who your target customer is, where your salon is going to be located , what salon services you’ll offer, and more. 

Why you need a business plan for your salon

As a salon owner, the thought of writing a detailed business plan might immediately put your stomach in knots. But we promise that the time and effort you take to put a business plan together for your salon will pay off in spades.

Here are some reasons why you should have a business plan for your salon.

To prove your salon business is a good—and profitable—idea

As entrepreneurs, we often have a million great ideas.  But a new business is a big commitment and investment.

Your decision to launch a salon is most likely a great one. But a business plan doubles as a gut check to make sure that you have a solid plan in place. This way, you can open your salon doors with confidence knowing that you’re almost guaranteed to be a success.

To help you reach your short and long-term salon goals

What are your business goals? What steps do you need to take to reach them? How long will it take to reach those goals?

A well-written business plan answers these questions and more. It’s essentially a roadmap that answers all and helps outline how you’ll reach your business goals. Then as you open and grow your business, you can look back and make sure you’re on track!

To help you get funding (and other loans)

Banks and investors often want to see a business plan before they provide you with funding. Having a business plan shows that you’ve done your research, have a plan in place, and that you’re less likely to be a risk.

Even if you don’t need a loan or an investment, financial products like credit cards can be hard to come by if you don’t have a business plan.

To determine your revenue and labor costs

Salons often need multiple stylists and administrative staff. Depending on your goals and the size of your salon business, a business plan can help you determine how many employees you need to hire and train to serve your customers.

Without forecasting your labor costs, you can find yourself with too many customers and not enough workers—or vice versa.

Things to consider before you start writing a business plan for your salon

Before you can start writing your business plan, it’s time to do a bit of brainstorming and research. There are some key questions you’ll want to ask yourself before you start putting pen to paper.

• Where will your salon be located?
• What experience do you have that will help you grow your business?
• Are there similar salons in your area?
• Is there something that will make your business stand out from other salons?

Once you’ve spent some time thinking about these factors, it’s time to get writing.

How to write a salon business plan in 7 steps

Here’s a simple step-by-step breakdown of how to write a business plan and the important tidbits you need to know as you get started.

1. Executive summary

The first thing anyone will read in your business plan is the executive summary. Think of it like an elevator pitch. It’s a brief summary that covers all the most important details so the reader wants to learn more about your business.

As a general rule, your executive summary should cover:

• A short overview of your business venture
• Your salon mission or vision
• Your short and long-term business goals
• Highlights around why \ your salon will be successful

2. Company overview and description

This section should be an overview of your company and what makes it unique. Who are you? What do you do? Why do you do it?

Don’t be afraid to dive into your background and the circumstances that led to you wanting to start your salon business. This is your opportunity to tell your story and share what makes you and your business special as an entrepreneur.                                                                                                                     

3. Market analysis

There are almost a million salons in the US—and that only covers hair salons. The thing about salons is that they can be similar and still be successful. But it’s important to understand how your particular salon will stack up. A market analysis looks at all the competing salons in your region—and beyond—to help you understand your positioning in the market. This then influences everything from your pricing strategy, your service offering, or even your location. 

For example, in your market analysis, you might find that you fall into the category of a premium salon, which means you’ll need to target a more affluent market. Or you might find yourself looking in an oversaturated area, so you’ll want to choose a location with less competition.

4. Salon business offerings

Not all salons are alike. For example, your salon may specialize in blowouts. Or you may have a full-service nail salon. 

Before you open, you should have a clear understanding of the services and products that your salon business might offer. Think of this section of your business plan as a menu of services that your potential customers can choose from.

5. Salon operations and management

This is where you’ll talk about the operational side of your business. Some things to think about around salon management might include:

• Will you rent out chairs to stylists or will you hire them as employees? 
• What will your business hours look like?
• How will you schedule salon appointments ?
• What overhead costs will you have?
• What salon management software will you use?

6. Marketing and public relations (PR) strategies

As much as we wish customers would appear out of thin air, for the most part, you need to drum up excitement for your business. That’s marketing. 

In the marketing section of your business plan, you’ll want to Include details such as your brand messaging, how you’ll reach potential customers, and what marketing and PR investments you plan to make.

7. Financial projections

Calculating your financials isn’t the most glamorous part of owning a salon business, but it’s one of the most important.

When writing a business plan, you need to review your short- and long-term financial projections. This is essentially an estimate of how much money you expect to spend and make over the course of the next few years. 

The goal is to show that you’ll have a profitable business. And if not, it allows you to tweak your business strategy so you can create a financial plan that you feel comfortable with.

Free salon business plan template

Need some help getting started? 

We’ve put together a free template that covers all the basics. Use this as a starting point, so you know that your business plan is comprehensive and includes everything you need ahead of opening day.

Download your free salon business plan template here.

Business tools as sharp as your shearing scissors

Once you have a salon business plan, it’s time to make a plan for hiring and managing your employees. Homebase is the all-in-one employee management tool loved by 100,000 + salons and small businesses. 

With Homebase, you can:

• Schedule employees for your salon in just a few clicks.
• Track employee hours and run payroll from one app.
• Stay on top of employee compliance and labor laws with expert HR guidance.

Salon business plan FAQs

Why should you create a business plan for your salon even if you aren’t looking for financing.

A business plan is more than just a document to help you secure financing for your salon business. It can help you organize your business strategy and outline the steps needed to reach your business goals.

What is the best way to create your salon business plan?

The best way to create your salon business plan is by following these steps:

• Write an effective executive summary.
• Create a company overview and description.
• Conduct a thorough market analysis.
• Outline your services and business offerings.
• Decide how you want to manage your salon business.
• Make a plan for marketing your business.
• Put together your financial projections.

You can also use our free salon business plan template to get started.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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Beauty Salon Business Plan Template

If you want to start a beauty salon business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their beauty salons.

Below are links to each section of an example beauty salon business plan template:

Next Section: Executive Summary >

Beauty and Hair Salon Business Plan FAQs

What is the easiest way to complete my beauty salon business plan.

Growthink's Ultimate Salon Business Plan Template allows you to quickly and easily complete your salon or beauty bar business plan.

Where Can I Download a Beauty Salon Business Plan PDF?

You can download our  beauty salon business plan sample pdf  here.

Our beauty salon business plan PDF template is a free resource to help you get started on your own business plan. This is a business plan template you can use in PDF format for a beauty bar or salon.

What Is a Salon Business Plan or Beauty Bar Business Plan?

A business plan provides a snapshot of your salon as it stands today, and lays out your growth plan for the next five years. It explains your business’s goals, business model, the type of services you will offer (beauty services, spa services, nail services, skin care services and/or hair salon services), management team, target market, and a marketing plan for the many ways you can reach new and existing clients. It also includes market research to support your plans and allow you to find the perfect salon location.

A comprehensive financial plan is also key to include so you can show investors the potential viability of your business.

Why Do You Need a Business Plan for a Beauty Salon?

If you’re looking to start a beauty bar or salon or grow your existing business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your new salon in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

What Are the Sources of Funding for a Beauty Salon?

With regards to funding, the main sources of funding for a new beauty salon are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional salon business plan. Such a plan will give them the confidence that you can successfully and professionally operate your own business.

The second most common form of funding for any type of salon is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. 

This is all true for a new salon business plan or a plan to grow an existing salon business.

BEAUTY SALON BUSINESS PLAN OUTLINE

• Beauty Salon Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Beauty Salon Business Plan Summary

Other Helpful Business Plan Articles & Templates

500+ business plans and financial models

How to Write a Beauty Salon Business Plan: Complete Guide

• December 29, 2023
• Beauty & Wellness

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your beauty salon, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your business plan for a beauty salon . Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for your beauty salon?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write your beauty salon’s executive summary?

This section should not exceed 1 to 2 pages and provide a brief outline of the objectives and purpose of your business, market analysis & marketing strategies, company structure & key people, financial plan, and financial ask.

Here is an overview of the different points you must address in your executive summary:

Business Overview

Introduce your company and briefly describe your business model. For example, you may provide specialized beauty services only (such as skin care only, or manicure & pedicure only, etc.) or a full-service beauty salon (where you provide all types of possible services related to overall beauty including hair care, facial, skin care, manicure & pedicure, nail care & nail art, etc.).

Again, if you are offering a full-service beauty salon with a specific focus on something like skin care while the remaining services are auxiliary services, mention that, too. Also, provide a brief idea of what problem you are trying to solve.

Market Analysis

Provide a deep market analysis that backs your decision to open a beauty salon. The market analysis will include information like who your competitors are, your strengths and weaknesses, your target audience and their beauty needs, etc.

People & Management

Mention your key partners and why you have selected them along with their relevant industry experience. Also, speak about your staff requirements and the management hierarchy.

Financial Plan

How much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? It is ideal to include a chart depicting your key financials such as revenue, gross profits, and net profit

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How long will this last?

2. Beauty Salon Business Overview

This is the section where you will describe your beauty salon business in detail. Try to answer the following questions concisely:

• Why do you want to open a beauty salon and what problem will your beauty salon solve?
• How big will be the facility and how many appointments will you serve daily (approximate value)?
• Will you have standard operating hours or extended business hours?
• Where is the location and why did you select that location?
• Will you provide only services, or will you sell products, too?

Include as many questions as possible to create a convincing overview to keep your potential investors and lenders hooked.

Let’s now look at the different sub-sections that you must include:

a) History of the Project

If you are yet to open your first beauty salon business, you may not have a business history to share. However, you can share your training and past industry experiences. You can even demonstrate your passion and interest for the beauty or wellness industry.

This is also where you should explain why you decided to create this business today. Did you find a gap in the market? Is there a lot of demand for manicure and pedicure treatments but few salons to accommodate customers?

Or are you trying to open a new format of beauty salon, offering a unique experience and treatments to your customers, effectively differentiating yourself from your competitors in your area?

b) Beauty Salon Business Model

This section must include the following information:

• Are you building your beauty salon from the ground up or are you purchasing an existing one?
• Will you allow advanced bookings through channels like a website or a mobile app, or will you allow walk-in customers or both?
• Will you focus only on services, or will you sell beauty products, too? 
• If you want to sell products, too, how do you intend to upsell them?
• Will you offer home visits, and if so, what will be the area of operation for that?
• Do you intend to extend your services into spa, bridal & wedding makeups, full body massage, etc?

Provide a thorough description of your business model so that the potential lenders and investors can make financial assessments and projections.

c) Target Audience

Give here an overview of your target audience. For example, answer the following questions:

• Will it be a unisex beauty salon or a gender-specific beauty salon?
• Is there a specific age group that you are targeting?
• What is the average disposable income of your target audience?
• How frequently do your target audience visit beauty salons?
• How much do they spend per month / per year in beauty treatments on average?

d) Beauty Salon Products & Services

Your beauty salon will primarily be a service-oriented business. However, that doesn’t mean you will not (or you cannot) sell related products. Outline your products and services in this section. Something like this will suffice:

e) Legal structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

Beauty Salon Financial Model

Download an expert-built 5-year Excel financial model for your business plan

3. Beauty Salon Market Analysis

It is vital that you demonstrate a deep market knowledge to your potential investors and lenders. For example, if you are offering expensive haircare or skincare procedures in a low-income or middle-class area, you may run into losses.

Similarly, if you are not following the latest hairstyles and trends, or if you don’t offer a wide range of facials, skincare services, you may find it difficult to attract customers.

a) Market Trends

If you are offering haircuts and hair makeup, you must be aware of the latest trends. Similarly, there may be new types of facials and acne treatments available that people may be looking for. Fashion is always a time-bound thing, and so is hairstyle.

For example, if you are offering skin care services like facials, you may want to offer services like :

• LED light therapy (to deal with bruising & acne)
• Intense pulsed light treatment (deal with facial pigmentation)
• Hollywood lift (a non-surgical skin-tightening for sagging skin), etc.

b) Competitor Analysis

The objective of the competitive analysis of your business plan should establish that starting a beauty salon in your area makes sense.

For example, there might be few competitors despite a lot of demand. Or, for example, existing competitors might not be adapted to the latest customer trends, effectively losing business to newcomers.

In your competitive analysis, try to include the following information:

• Number of competing beauty salons or full-service beauty salons in your area
• Their target audience
• The list of products and services they are offering
• The number of stations each salon has
• Their marketing strategy
• Their strengths and weaknesses
• Their reputation as a brand

Beauty Salon SWOT Analysis

Along with the competitive analysis, you must also perform a SWOT analysis . SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Here you must provide the following information:

• Strengths : Examples – you may have years of industry experience, or you may be a celebrity hairstylist or aesthetician, or you may be offering unique services that no other competing beauty salon is offering
• Weaknesses : Examples – you may not have enough experience with Millennials, or you may not have enough funds for sufficient inventory, etc.
• Opportunities : Examples – unlike your competitors, you may be offering a full-service beauty salon experience with all services related to hair, skin, nails, and face under a single roof
• Threats : Examples – the emergence of new beauty salons that can possibly take a slice of your potential customer base or existing beauty salons reducing their prices to counter your presence

Both competitive analysis and SWOT analysis can help you to come up with innovative marketing strategies that you can use to gain new customers and even chip off your competitor’s customer base.

d) Customers

This is the segment where you provide a detailed analysis of your target audience. The analysis must include things like:

• Demographic distribution of your target customers (you can find data at census.gov )
• Average monthly family income (this will give you an idea of the spending capacity)
• The frequency of beauty salon visits (this will give you a fair idea of the number of customers you can expect in a month)
• Current hair, nail, & beauty trends in the location you want to operate in and the factors that influence those trends
• What channels do the customers use to share the end results of their beauty salon visits? For example, people may post their new hairstyle or nail art on Instagram & Facebook, but share their salon interaction experience on Twitter
• Things that your target audience like and dislike about the existing beauty salons (this will tell you what you must do and things you can do to improve their experience)
• What is the average amount they spend per visit?
• Do they engage in beauty-related activities at home? (This will tell you whether you can sell products such as hair oils, skin lightening creams, etc.)
• Do they like to use coupons and gift cards? (If yes, you may open a separate revenue stream by offering such products)

You can add more questions if you need to complete your customer or target audience study. The best way to get the answers is to conduct direct surveys and interact with your potential customer base. However, you will also find some data from competitive analysis.

A complete understanding of your target audience can help you develop sales and marketing strategies that can beat your competitors and give you an edge.

4. Beauty Salon Marketing Strategy

This is the section of your beauty salon business plan where you should outline your customer acquisition strategy: how do you plan to attract new customers?

Try to answer here the following questions:

What are your Unique Selling Points (USPs)?

• What marketing channels will you use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?
• Will you offer gift cards to open an upfront revenue stream?
• Will you sell products? If yes, how do you intend to upsell them for revenue maximization?

Let’s expand a bit on a few questions below:

What marketing channels do Beauty Salons use?

A few marketing channels that beauty salons typically use are:

• Google My Business listing
• PPC ads and social media ads
• Social media promotions and user engagement on platforms like YouTube, Facebook, Instagram, Pinterest, Twitter, TikTok, etc.
• Email marketing
• Print ads, flyers, hoardings & billboards, etc.

You need to use all marketing channels. You can focus on a few (2 to 3 is more than enough). However, make sure that you include social media marketing as one of the options because it can help you to connect and continuously interact with your customers. In addition to that, social media can help you to go viral.

Also, do not forget to provide a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing can lead to investors losing confidence.

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

• We are a full-service beauty salon offering services like haircare, bridal makeups, manicure & pedicure, skin treatments & facials, & body massage under a single roof because potential customers dislike the idea of hopping from one door to another to get all their needs fulfilled
• We are a full-service beauty salon with a focus on manicure & pedicure treatments
• We use only 100% organic and natural haircare products to prevent side effects usually caused by chemically heavy cosmetic beauty products
• We will use our proprietary range of hair care and beauty products that will not be available with any other competing beauty salon

5. Management & People

You must address 2 things here:

• The management team and their experience/track record
• The organizational structure: what are the different teams and who reports to whom?

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and technical knowledge of salon managers that you intend to hire to oversee your beauty salon business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeed in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the beauty salon services you are proposing.

Organizational Structure

Even if you haven’t already hired anyone, it is important that you provide a chart of the organizational structure of your company. Typical roles for a beauty salon may include: salon managers, hair director, hairstylists, cosmetologists, pedicurist, aesthetician, massage therapist, electrologist, makeup artist, salon/shampoo assistants, receptionists, etc.

6. Beauty Salon Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your beauty salon is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to open a new salon, renovate your salon, etc.)
• The 5-year financial projections

Historical Financials (if any)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

Beauty Salon Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a beauty salon, startup costs are all the expenses you incur before you start to receive customers and make money.

Startup costs vary based on a number of factors such as the location and size of your salon, the quality of the equipment, design and furniture, whether you rent or buy the space, etc.

On average, beauty salons cost anywhere from $63,500 to $179,000 to start depending on whether you plan to lease the commercial space or buy it. Indeed, if the latter, you would have to take a loan and make a substantial deposit upfront instead.

Beauty Salon 5-Year Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model as part of your business plan for your beauty salon.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 15%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of customers over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of customers as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information on how much it costs to start and run a beauty salon in the US, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your beauty salon. Now that we have explained what your beauty salon is about, what’s your strategy, where you go and how you get there, this section must answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations and design of the salon? Or will it cover mostly the cost of the salaries the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our beauty salon financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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Hair Salon Business Plan Sample

AUG.14, 2013

Hair Salon business plan for starting your own business

A hair salon is a business that never goes into loss. As long as the people are living on earth, they will need to go to hair salons and get their hair done. If you plan to start your own hair salon business, you need a business plan hair salon. The first and crucial thing is to get an idea of how the business work and what do you need to start it. You need to set up a hair salon business consultants that provides all services, and high customer satisfaction by providing excellent services.

To start a hair salon that provides an amazing atmosphere at an affordable price-value relationship, you need a business consultant service .  If you do not know how to write a hair salon business plan, we have provided a detailed business plan to start a hair salon so that you can avoid any inconvenience in making a plan for yourself. You will find many samples of a business plan for a hair salon, but you need to choose the one that suits you the best.

Also, if you’re looking for a business plan for a barber shop , a business plan for hair extensions shop , a hair removal business plan , an airbrush tanning business plan , salon and spa business plan , or even a center reiki business plan , this template can help you!

Executive Summary

2.1 the business.

The Cute Cut Hair Salon will be registered in New York, USA. The business will offer the services that will enhance our customers’ appearance and their mental relaxation. Instead of competing with other hair salons in town, we mainly focus on providing services to the customers who cannot afford those luxury salons.

2.2 Management of Hair salon

Cute Cut Hair Salon will be managed by Mike himself. To assist him, we will have three managers who will be trained for a month and a half before starting their jobs. In starting hair salon business plan, Mike will work with a small team comprising of a few hairstylists, managers, accountants, helpers and a guard. He will ensure the quality of work regularly.

2.3 Customers of Hair Salon

Customers are the backbone of every business. If you know the right audience for your business, you will be able to achieve your target. You will get the idea of how to run your business if you understand your customers. The main customers for the hair salon business consultants will be the following:

• Women and men who are looking for hair treatments.
• Children of age 15 and above.

Our best business plan for a hair salon includes all the hair removal treatments we mainly offer to women.

2.4 Business Target

In our business plan for hair salon pdf, we have mentioned our main goal. Our main goal is to provide high-quality services to our customers by using safe and good quality products. Our primary target is to become the popular and most loved hair salon by people within the next 3 years of our launch. We aim to recover the investment within the next two years. Our secondary target is to increase the net profit every month.

Company Summary

3.1 company owner.

The owner of the Cute Cut Hair Salon will be Mike James. Mike had a dream of starting his own business since he was a teenager. He wanted to set up a business that helps people of all ages.

3.2 Why the Hair Salon is being started?

When Mike was asked why he is interested in starting a hair salon business plan, he said he wanted to help people who cannot afford expensive hair treatments. Moreover, his idea of setting up a hair salon business plan is based on the fact that this kind of business never goes into loss. He believes that his business can attract more customers because his salon uses all the new techniques and equipment. With constant hard work, he can now start his hair salon and fulfil his dream.

3.3 How the Hair Salon will be started?

To start a hair salon business plan, you need the right techniques and ideas. Before starting a hair salon, you need to consider these essential steps:

Know About Industry Experience

Before entering into the world of entrepreneurship, gain some experience in the relevant industry. For example, before starting your salon, it is preferred to work in some salons. If you get your feet wet by working in other salons, you will get enough experience of how things work.

It will allow you to see how the business work daily.

Create A Business Plan

A business plan helps in planning everything for a business. It will tell you how you will earn money, what type of customers your business is trying to attract, how are you going to manage the expenses and finances, and other daily operations.

The business plan will also help you to make important decisions that will affect your business.

Set Your Budget

To get an idea of the kind of salon you want to start, you will have to set up your budget first. First, get set with your expenses and finances as hair salons expenses can vary. They depend on the location and size of your business. For example, if you are setting up a salon in your home, you will have to bear fewer expenses. But if you want to start a hair salon in a commercial area, you may end up spending thousands.

Target Customers

Determining your target customer is a vital step in starting a business. Many business decisions depend on the type of clients you want to attract. Before finalizing anything, research the area you are planning to open a salon. If that area has plenty of people who want affordable yet modern hair solutions, set up your salon accordingly.

Find A Suitable Locatio n

Depending on the type of business and services you are providing, find a suitable location for your hair salon. Find a location that is centrally located, and it should also be easy for your target clients to access.

Obtain Permits

Once you have decided on the location for your salon, you will need to get a building permit, business permit, and all other legal documents.

Stock The Inventory

To run your business, you will at least need chairs, washing stations, hair tools, and other styling products. You can also connect with brands that will attract your target customers to offer their types of equipment at your hair salon.

Hire a Team

Depending on the size of your business, hire a team accordingly. It should have at least two hairstylists who can entertain the customers. The stylists should have a friendly nature and they should be experienced as well.

To open a hair salon, you need to decide which hair services you are going to offer. The services that you plan to offer also depend on the size of your salon, and the equipment that you have. It will also determine how many hairstylists you need and the number of chairs you want in the salon.

There are several services that a hair salon offers. You need to narrow down the services you are going to focus on. This business plan for hair salon will give you a detail about the services.

Our services include the following:

Hair Styling & Haircuts

The basic service that Cute Cut hair salon is providing is hair cutting and styling. Some hairstylists can cut all types of hair for all men, women, and children. After cutting hair, drying it, and styling it is also offered in our hair salon.

Hair Coloring

Hair coloring is another service offered at Cute Cut hair salon. Before coloring the customer’s hair, our stylist discusses all the risks with the customer because coloring can sometimes go wrong.

Hair Extensions

Over recent years, the trend of hair extensions has gained popularity among people. As long hair is in fashion again, and more people are attracted to hair extension treatments. Stylists at Cute Cut Hair Salon are well-trained and experienced in hair extensions treatments.

Conditioning Treatments

These include deep conditioning treatments. The basic conditioning treatment is done to provide moisture to the hair. It adds protein to hair and makes them shiny and smooth.

The other one is specialty conditioning that is customized according to the customer’s hair.

Marketing Analysis of Hair Salon

Great service.

Great service. Good turnaround time and quality work. Thanks!

To make your hair salon business consultants successful, you need to keep an eye on the market trends as well. If you run a complete analysis of the market, you will get an idea about many things. Understanding the trends and variables will help you in making decisions for your business. The goal of this market research is to understand and get a general idea of the overall market around your salon and how you can adjust to that ecosystem.

5.1 Market Trends

Over the past five years, the hair salon industry has grown at an incredible rate. People are now more attracted to advanced hair treatments such as permanent hair, facial and massage etc. The hair salon market in 2019 was $144.48 billion. And by the end of 2026, the market is expected to grow by around $217.25 Billion.

5.2 Marketing Segmentation

If you know exactly what type of business is a hair salon, you can easily understand its market segmentation. There are many business plan examples for hair salon and each of them includes market analysis of hair salon.  To estimate the startup cost for hair salon, you need to make a complete analysis of market segmentation for it.

The most important part of any hair salon business plan is to have an idea of the expected marketing segmentation. Here is the market segmentation that will be facing our hair salon:

UK Start-Up Visa Business Plan

5.2.1 women.

80 percent of our services will be offered to women who are interested in hair cutting and treatments. Cute Cut Hair Salon also offers skincare and nail care treatments to its customers.

Some of our services are for men as well. We have hair stylists who are experienced in cutting men’s hair.

5.2.3 Children

We have a friendly staff who treat children with great care and affection. We offer haircutting for children.

5.3 Business Target

• Building a trustworthy relationship among customers
• Providing high-quality services to customers
• Arranging the best interior to impress the customers
• Making an excellent customer care service for our loyal customers
• Recovering the initial investment within two years of launch
• Increase the revenue every year

5.4 Product Pricing

The prices of the services that a Cute Cut Hair Salon provide are comparable to other salon services. We will try to provide better services and customer care to our clients. We will satisfy our customers by providing exceptional services to make as much profit as possible.

Marketing Strategy

In any hair salon business plan template, the financial plan for hair salon should be well-formed. No business can grow and become successful without a marketing strategy. No matter how many excellent services you offer, if you do not have customers, it is all in vain. The more people know about your salon, the more they reach out to you.

Nowadays, the best way of marketing is social media marketing. Social platforms are strong, and they are accessible to everyone. A good thing about social media marketing is its low cost. You can reach out to millions of people with online marketing. All the hair salon business models explains the importance of social media marketing and how you can use them to reach out to people. Along with that, you need a competitive analysis to make a strategy that will make your business successful.

6.1 Competitive Analysis

• People are not satisfied with the services provided by hair salons in that area.
• The hair salons and spas in that area are too costly. And these services are not good enough as compared to their price.
• Most salons do not offer basic services to people.

6.2 Our Strategy

• We will associate our hair salon with community events and charity.
• We will use social media platforms to advertise our hair salon.
• We will make our online presence so that we can reach out to more and more people.
• We will use the advertisements channels in the area to reach out to the people.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan

When you are starting a hair salon business plan, you need to make sure that the staff should work as a team. In the hair salon business consultants examples, you will find out that the environment of the hair salon depends on the number and type of staff which should be determined in the initial stages.

To start a hair salon business plan, list down all the expenses. It includes the rent of hair salon building, the cost of equipment and the employee’s salary.

7.1 Company Staff

Mike James will be the owner and CEO of the Cute Cut Hair Salon business plan. His team would include:

• 1 Social Media Marketer
• 3 Hairstylists
• 1 Accountant

7.2 Average Salary of Employees

Financial plan.

Proper planning and execution of the finance help you to maintain a stable budget for the upcoming entire year. To start a hair salon, you need to make research on how much does it cost to open a hair salon. To run a smooth and successful hair salon, you should have a strong hair salon financial plan.

• Money is needed to make the interior of the salon.
• The cost of chairs, mirrors, and hair styling tools.
• The salary of employees.
• The cost of buying hair products.
• Bonds, securities, registration costs, and insurance.

8.1 Important Assumptions

8.2 break-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5  Projected Balance Sheet

8.6  business ratios.

• Is owning a hair salon profitable? If you’re wondering is owning a hair salon profitable, the answer is yes! It’s a highly profitable business with very lucrative rate of return.
• How much does it cost to run a salon monthly? If you want to know how to start your own hair salon and how much would it cost, consult the business plan above.
• How do I start my own hairdressing business? For starting a hair salon business plan, just follow the steps we mentioned in this template.
• What is a business plan for a salon? A business plan just like this free business plan template for hair salon details how a hair salon business consultants is started and maintained to yield profit.

Download Business Plan for a Hair Salon Sample in pdf

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How to write a business plan for a beauty salon?

Creating a business plan for a beauty salon is an essential process for any entrepreneur. It serves as a roadmap that outlines the necessary steps to be taken to start or grow the business, the resources required, and the anticipated financial outcomes. It should be crafted with method and confidence.

This guide is designed to provide you with the tools and knowledge necessary for creating a beauty salon business plan, covering why it is so important both when starting up and running an established business, what should be included in your plan, how it should be structured, what tools should be used to save time and avoid errors, and other helpful tips.

We have a lot to cover, so let's get to it!

In this guide:

Why write a business plan for a beauty salon?

• What information is needed to create a business plan for a beauty salon?
• What goes in the financial forecast for a beauty salon?
• What goes in the written part of a beauty salon business plan?
• What tool can I use to write my beauty salon business plan?

Understanding the document's scope and goals will help you easily grasp its structure and content. Before diving into the specifics of the plan, let's take a moment to explore the key reasons why having a beauty salon business plan is so crucial.

To have a clear roadmap to grow the business

Small businesses rarely experience a constant and predictable environment. Economic cycles go up and down, while the business landscape is mutating constantly with new regulations, technologies, competitors, and consumer behaviours emerging when we least expect it.

In this dynamic context, it's essential to have a clear roadmap for your beauty salon. Otherwise, you are navigating in the dark which is dangerous given that - as a business owner - your capital is at risk.

That's why crafting a well-thought-out business plan is crucial to ensure the long-term success and sustainability of your venture.

To create an effective business plan, you'll need to take a step-by-step approach. First, you'll have to assess your current position (if you're already in business), and then identify where you'd like your beauty salon to be in the next three to five years.

Once you have a clear destination for your beauty salon, you'll focus on three key areas:

• Resources: you'll determine the human, equipment, and capital resources needed to reach your goals successfully.
• Speed: you'll establish the optimal pace at which your business needs to grow if it is to meet its objectives within the desired timeframe.
• Risks: you'll identify and address potential risks you might encounter along the way.

By going through this process regularly, you'll be able to make informed decisions about resource allocation, paving the way for the long-term success of your business.

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To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your beauty salon's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your beauty salon business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your beauty salon's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

Whether you are a startup or an existing business, writing a detailed beauty salon business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your beauty salon has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for a beauty salon, let's take a look at what information is needed to create one.

Need inspiration for your business plan?

The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.

Information needed to create a business plan for a beauty salon

Drafting a beauty salon business plan requires research so that you can project sales, investments and cost accurately in your financial forecast, and convince the reader that there is a viable commercial opportunity to be seized.

Below, we'll focus on three critical pieces of information you should gather before starting to write your plan.

Carrying out market research for a beauty salon

Carrying out market research before writing a business plan for a beauty salon is essential to ensure that the financial projections are accurate and realistic.

Market research helps you gain insight into your target customer base, competitors, pricing strategies and other key factors which can have an impact on the commercial success of your business.

In particular, it is useful in forecasting revenue as it provides valuable data regarding potential customers’ spending habits and preferences.

You may find that customers prefer organic, natural beauty products, and may be willing to pay a premium for them. Additionally, research might reveal that customers might be looking for more affordable, quick treatments that can be done in-salon, such as express facials or microdermabrasion.

This information can then be used to create more accurate financial projections which will help investors make informed decisions about investing in your beauty salon.

Developing the marketing plan for a beauty salon

Before delving into your beauty salon business plan, it's imperative to budget for sales and marketing expenses.

To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.

Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.

By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.

The staffing and capital expenditure requirements of a beauty salon

Whether you are starting or expanding a beauty salon, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.

Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.

A beauty salon might incur staffing costs such as wages for a hairdresser, a beautician, and a receptionist. Additionally, they might have to purchase equipment such as hair clippers, hair dryers, and salon chairs. They may also need to purchase products such as shampoos, conditioners, and styling products.

In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.). 

Once you have all the necessary information to create a business plan for your beauty salon, it is time to start creating your financial forecast.

Need a solid financial forecast?

The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.

What goes into your beauty salon's financial forecast?

The objective of the financial forecast of your beauty salon's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for a beauty salon are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for a beauty salon shows how much revenue and profit your business is expected to make in the future.

A healthy beauty salon's P&L statement should show:

• Sales growing at (minimum) or above (better) inflation
• Stable (minimum) or expanding (better) profit margins
• A healthy level of net profitability

This will of course depend on the stage of your business: numbers for a startup will look different than for an established beauty salon.

The forecasted balance sheet of your beauty salon

The projected balance sheet of your beauty salon will enable the reader of your business plan to assess the overall financial health of your business.

It shows three elements: assets, liabilities and equity:

• Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
• Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.

Analysing your beauty salon projected balance sheet provides an understanding of your beauty salon's working capital structure, investment and financing policies.

In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).

They can also use your balance sheet to assess your beauty salon's liquidity and solvency:

• A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
• A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.

The cash flow forecast

As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your beauty salon has enough cash to operate.

As you can expect showing future cash flows is the main role of the cash flow forecast in your beauty salon business plan.

It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:

• Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
• Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
• Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers

Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

Your beauty salon business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The initial financing plan, also known as a sources and uses table, is a valuable resource to have in your business plan when starting your beauty salon as it reveals the origins of the money needed to establish the business (sources) and how it will be allocated (uses).

Having this table helps show what costs are involved in setting up your beauty salon, how risks are shared between founders, investors and lenders, and what the starting cash position will be. This cash position needs to be sufficient to sustain operations until the business reaches a break-even point.

Now that you have a clear understanding of what goes into the financial forecast of your beauty salon business plan, let's shift our focus to the written part of the plan.

The written part of a beauty salon business plan

The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.

Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.

The written part of a beauty salon business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

The executive summary, the first section of your beauty salon's business plan, serves as an inviting snapshot of your entire plan, leaving readers eager to know more about your business.

To compose an effective executive summary, start with a concise introduction of your business, covering its name, concept, location, history, and unique aspects. Share insights about the services or products you intend to offer and your target customer base.

Subsequently, provide an overview of your beauty salon's addressable market, highlighting current trends and potential growth opportunities.

Then, present a summary of critical financial figures, such as projected revenues, profits, and cash flows.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Lastly, address any funding needs in the "ask" section of your executive summary.

2. The presentation of the company

As you build your beauty salon business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.

Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.

When describing the location of your beauty salon, you may emphasize its accessibility to potential customers. It could be located in a bustling area with plenty of foot traffic, as well as near public transportation hubs. You might also highlight the local amenities, such as shopping centers, restaurants, and entertainment venues, to demonstrate the potential for your beauty salon to draw customers from the surrounding area. Additionally, the local demographics could be a selling point, as you may be able to point to high incomes and a high concentration of people with disposable income as an indication of the potential success of your beauty salon.

Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.

It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.

3. The products and services section

The products and services section of your beauty salon business plan should include a detailed description of what your company sells to its customers. 

For example, your beauty salon may offer haircuts, hair coloring, and makeup services to its customers. Haircuts allow customers to obtain a new look that can help them to feel more confident and attractive. Hair coloring services can help customers to change their hair colors to better match their skin tone or to try a different look. Makeup services can help customers to enhance their facial features and to achieve a desired look.

The reader will want to understand what makes your beauty salon unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When outlining your market analysis in the beauty salon business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.

The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.

To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your beauty salon, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.

Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your beauty salon targets. Explain how your products and services are tailored to meet the unique needs of these customers.

For example, your target market might include young professional women. These women typically have a higher disposable income and are willing to invest in their personal beauty and appearance. They might look for services such as manicures, pedicures, facials, and hair care.

In the competition subsection, introduce your main competitors and explain what sets your beauty salon apart from them.

Finally, round off your market analysis by providing an overview of the main regulations that apply to your beauty salon.

5. The strategy section

When writing the strategy section of a business plan for your beauty salon, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.

The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.

The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers. 

The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.

The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.

Your beauty salon could face the risk of theft. For instance, expensive equipment or products may be stolen, leaving your salon out of pocket and unable to operate. Additionally, you could face the risk of damage to your property. For instance, a fire or natural disaster could cause significant damage to your buildings, equipment, and products, making it difficult for you to continue operating.

6. The operations section

The operations of your beauty salon must be presented in detail in your business plan.

Begin by addressing your staff, specifying the main roles and your recruitment plan to support the anticipated growth. Outline the qualifications and experience needed for each role and discuss your recruitment strategies, which may involve using job boards, referrals, or headhunters.

Next, clearly state your beauty salon's operating hours, allowing the reader to gauge the adequacy of your staffing levels. Additionally, mention any considerations for varying opening times during peak seasons and your approach to handling customer queries outside regular operating hours.

The key assets and intellectual property (IP) required to run your business should also be highlighted. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, ensure they are well-documented in this section.

You may have key assets such as staff and equipment, which could be seen as intellectual property. Additionally, the beauty salon may also have a unique name, logo, or slogan that is associated with the business, as well as a unique selection of services and treatments that could be seen as part of the salon's intellectual property.

Finally, provide a comprehensive list of suppliers you intend to collaborate with, along with a breakdown of their services and main commercial terms, such as price, payment terms, break clauses and contract duration. Investors often seek insight into the reasons behind your supplier choices, which may include a preference for higher-quality products or established relationships from past ventures.

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we discussed earlier in this guide.

Now that you have a clear idea of what goes into a beauty salon business plan, let's look at some of the tools you can use to create yours efficiently.

What tool should I use to write my beauty salon's business plan?

In this section, we will be reviewing the two main options for writing a beauty salon business plan efficiently:

• Using specialized software,
• Outsourcing the drafting to the business plan writer.

Using an online business plan software for your beauty salon's business plan

Using online business planning software is the most efficient and modern way to create a beauty salon business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your beauty salon's business plan

Outsourcing your beauty salon business plan to a business plan writer can also be a viable option.

Business plan writers are skilled in creating error-free business plans and accurate financial forecasts. Moreover, hiring a consultant can save you valuable time, allowing you to focus on day-to-day business operations.

However, it's essential to be aware that hiring business plan writers will be expensive, as you're not only paying for their time but also the software they use and their profit margin.

Based on experience, you should budget at least £1.5k ($2.0k) excluding tax for a comprehensive business plan, and more if you require changes after initial discussions with lenders or investors.

Also, exercise caution when seeking investment. Investors prefer their funds to be directed towards business growth rather than spent on consulting fees. Therefore, the amount you spend on business plan writing services and other consulting services should be insignificant compared to the amount raised.

Keep in mind that one drawback is that you usually don't own the business plan itself; you only receive the output, while the actual document is saved in the consultant's business planning software. This can make it challenging to update the document without retaining the consultant's services.

For these reasons, carefully consider outsourcing your beauty salon business plan to a business plan writer, weighing the advantages and disadvantages of seeking outside assistance.

Why not create your beauty salon's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a beauty salon business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my beauty salon business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating a beauty salon business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
• A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
• A business plan has 2 main parts: a financial forecast outlining the funding requirements of your beauty salon and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your beauty salon business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

• How to write a business plan to secure a bank loan?
• Key steps to write a business plan?
• Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing a beauty salon? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Small Business Trends

How to create a business plan: examples & free template.

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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Biden's new student-loan forgiveness plan just began its 30-day public comment period — and anyone can tell the administration what they think of the relief

• The public now has 30 days to comment on Biden's new student-loan forgiveness plan.
• It's the next step in implementing a broader version of debt relief for borrowers.
• The proposals include relief for those with unpaid interest, along with those in repayment for 20 years.

The public has one month to tell President Joe Biden what they think of his new student-loan forgiveness plan .

After announcing details of Biden's second attempt at student-debt relief last week, the Education Department formally published the draft text of the new rules on the Federal Register on Wednesday. The publication of the rules officially kicked off the 30-day public comment, set to end on May 17. Comments can be submitted to the Federal Register here , which the Education Department will then review.

The draft text currently consists of nine rules "that permit separate and distinct types of waivers using the Secretary of Education's longstanding authority under the Higher Education Act," the Education Department said in a Tuesday press release.

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The rules address distinct types of borrowers that would qualify for relief under this new plan: those whose balances have grown due to unpaid interest, those who would be eligible for relief under certain repayment plans but have not yet enrolled, those who have been in repayment for at least 20 years, and those who have attended programs that left them with too much debt compared to post-graduation earnings.

The Education Department also said a separate rule to address relief for borrowers experiencing financial hardship will be released in the coming months.

"These historic steps reflect President Biden's determination that we cannot allow student debt to leave students worse off than before they went to college," Undersecretary of Education James Kvaal said in a Tuesday statement. "The President directed us to complete these programs as quickly as possible, and we are going to do just that."

The department aims to begin implementing relief as early as this fall. Still, as Business Insider previously reported , legal threats to the relief could imperil the department's timeline. While lawsuits have yet to be formally filed against Biden's administration, Missouri's Attorney General Andrew Bailey wrote on X in response to Biden's relief proposals: "See you in court."

And some experts said a conservative Supreme Court could likely rule like they did with Biden's first debt relief plan, striking it down .

"The administration is certainly still facing a very skeptical Supreme Court," Cary Coglianese, an administrative law professor at the University of Pennsylvania, told BI. "Even though it's a different statute, it's still a skeptical Supreme Court. It's still a pretty big program even though it's a smaller one."

Following the public comment period, the Education Department will review comments and could choose to adjust their proposals based on the feedback they receive. It will then finalize the rule and move toward implementation.

Watch: Why student loans aren't canceled, and what Biden's going to do about it

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