HOW TO WRITE A BUSINESS PLAN FOR YOUR BEAUTY SALON
If you want to establish a beauty salon business or grow an existing one, or if you want to get financing for your beauty salon business, the business plan is a must in these cases.
The purpose of your Executive Summary is to quickly capture the reader’s attention. Explain the type of beauty salon you own in your current position; for example, are you a startup, do you have a beauty salon with existing clients and revenues that you want to increase, or do you own a chain of beauty salons?
The second step is to provide a summary of each of your plan’s future components. Give a quick summary of your beauty salon business, for example. Discuss the kind of beauty salon you own. Provide information about your competitors. Provide an outline of your target audience. Give an overview of your beauty salon’s marketing strategy. Determine who the important members of your team are, and how many employees are working in your business. If the business hasn’t started yet and you are applying for the loan, mention how many employees you will hire in this business and how you will pay the loan amount in a given time.
In addition to outlining the sort of beauty salon you run or want to start, the Company Analysis section of your business plan should offer background information about your company. For example, you may run a business in one of the following categories:
- A beauty shop that focuses solely on hair styling
- Beauty salon offering hair removal services
- Beauty salon offering skincare services
- Beauty salon offering nail services
- Beauty salon offering tanning services
- Beauty salon offering massage services
- Beauty salon offering products
- Combination of the above types
In this part, you must answer some of these questions about your existing or new beauty salon:
- When and why did you start your beauty salon?
- What achievements have you made thus far? Milestones might include sales targets met, new beauty salon openings, and so forth.
- What is your legal framework? Is it a sole proprietorship? Describe your legal framework in this section.
You must offer an overview of the beauty salon industry in this section. While this may appear to be needless, it serves several functions. To begin, researching the beauty salon business will educate you. It aids in your understanding of the market in which you operate. Secondly, market research may help you enhance your approach, especially if it identifies market trends. For example, if there was a trend for a special type of hair or beauty treatment, make sure your plan included offering such services. The third reason for conducting market research is to demonstrate to readers that you are an authority in your industry. You accomplish this by performing beauty salon market research and adding it to your plan.
Some of the questions which needs to be answered in the industry analysis section of your beauty salon business plan are:
- What is the size of the beauty salon industry (in dollars)?
- Is the market falling or rising?
- Who are the main competitors in the market?
- Who are the market’s main suppliers?
- What are the current industry trends which are affecting the industry?
- What is the industry’s projected growth rate over the next 5 – 10 years?
- What is the size of the relevant market? That is, how large is your beauty salon’s potential market? You may estimate such a figure by determining the size of the country’s market and then applying that amount to your local population.
The customer analysis portion of your beauty salon plan must include information about the clients you serve and/or expected to serve in the future. College students, sports fans, soccer mothers, techies, teenagers, baby boomers, and so on are examples of consumer segments. As you would expect, the client segment you select will have a significant influence on the type of beauty salon you are running. Clearly, baby boomers would want a different ambiance, price, and product options, and would respond to marketing campaigns differently than teenagers.
Make an effort to segment your target consumers based on their demographic and psychographic traits. Include a description of the ages, genders, localities, and income levels of the clients you want to serve in your demographics.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most beauty salons serve consumers who live in the same city or town, such demographic information is easily available on government websites.
Psychographic profiles describe your target customer’s interests and demands. The better you understand and articulate these demands, the better you will be able to attract and retain customers.
Your competitive analysis should identify both indirect and direct rivals before focusing on the latter. Other beauty salons are direct competitors. Indirect competitors are alternatives to purchasing from you that are not direct competitors.
This includes items such as hair dryers, nail paint, files, and other items that people may buy from supermarkets and other merchants both in-store and online. You must highlight such competition to demonstrate that you recognize that not everyone in your target market visits a beauty salon on a regular or frequent basis.
In terms of direct competition, you should list the other beauty salons with whom you compete or will compete in future. Your immediate competitors will most likely be beauty salons near your area. You must also provide an overview of the businesses of your competitors including their strengths and weaknesses. It is hard to know everything about your competitors unless you have already worked for them. However, you should be able to find important information about them, such as:
- What kinds of customers do they cater to?
- What kinds of services do they provide?
- Which products do they provide?
- What are their price options?
- What is their unique selling point?
- What are the flaws in their businesses?
Consider your responses to the last two questions from the perspective of your customers. And don’t be hesitant to stand outside your competitor’s salons and ask customers as they leave what they like and dislike about them. This section is specified where you have to write about how you will surpass your competitors in terms of services and prices. The final component of your competitive analysis should include a list of your areas of competitive advantage. As an example:
- Will you give high-quality beauty salon services?
- Will you offer any beauty salon services that your competitors do not?
- Will you make it simpler or faster for buyers to purchase your products?
- Will you improve your customer service?
- Will you lower your prices?
A marketing strategy has traditionally included the four Ps: Product, Price, Place, and Promotion. Your marketing plan for a beauty salon business plan should include the following:
Product: Reiterate the sort of beauty salon that you documented in your Company Analysis in the product area. Then, describe the exact services you will provide
Price: Write down the prices you intend to charge and how they compare to those of your competitors. Essentially, the menu items and services you offer and their pricing are presented in the product and price sub-sections of your marketing plan.
Place: Your beauty salon’s location is referred to as its place. You must explain how the location of your beauty salon is impacting your success or how it will impact you in the future.
Promotions: The promotions area is the final component of your beauty salon marketing plan. You will have to document how you will drive customers to your location in this section. You might want to think about the following promotional methods w
- Making your beauty salon’s front store more attractive to passing customers.
- Creating and promoting your website.
- Marketing on social media (advertising and organic posts).
- Publicity in local newspapers and magazines.
- contacting local blogs and websites.
- Collaborations with local groups.
- Advertisement on local radio.
- Local venues with banner advertising.
Evaluate your beauty salon’s Unique Selling Proposition (USP), which should explain why clients should pick you over competitors. Make sure that your unique selling proposition (USP) is represented in your marketing.
Your goals were stated in earlier sections of your business plan but your operations plan describes how you would accomplish them. Your operations plan should be divided into two components, as shown below.
Everyday short-term process comprises all of the duties required in running your beauty salon, such as servicing customers, acquiring supplies, keeping the salon clean, and so on.
Long-term objectives are milestones that you aim to reach. These may include the dates on which you aim to service your 1,000th customer or exceed $X in revenue. When you want to launch a new salon branch.
A competent management team is required to demonstrate your beauty salon’s capacity to flourish as a business. Highlight the histories of your key individuals by showcasing the skills and experiences that demonstrate their capacity to grow your salon.
You and your team members should ideally have firsthand experience in the beauty salon industry. You must include your experience and skills in this section.
While it is not required to include this in your business plan, you should utilize this time to consider the management style you will employ in running your beauty salon. In general, your personality and background will play a significant role in choosing which management style is best for you. You have the choices from Participatory Style, Dogmatic Style, and Mentor Style.
Your three-year financial statement should be provided monthly for the first year and then yearly in your financial plan. Your income statement, balance sheet, and cash flow statements are all part of your financial statements.
Income Statement: an income statement which is commonly called Profit and Loss statement or P&L. It shows the revenues of your beauty salon and then subtracts your costs to show whether you are getting profit or not.
While making your income statement, you need to develop assumptions. For example, how many customers you will serve per day? Will it be under 50 or more than 50? How much your prices will change during the time period of future projections? Will sales grow by 5% or 10% per year? As you can feel, your choice of assuming the growth of your beauty salon will largely impact the financial forecasts so it is necessary to conduct extensive research to root your assumptions into reality.
Balance Sheet: It includes more information to simplify the key items you need to know about to show assets and liabilities in the balance sheet. For instance, if you spend $50,000 on building your beauty salon then it will not provide you immediate results in terms of generating profits. Basically, it is an asset that will help you to generate more profits for the coming years.
The cash flow will help you to conclude how much cash you need to grow or start your business by making sure that you don’t run out of cash. Many business owners don’t realize that you can generate profit but still can go out of cash and eventually into bankruptcy. For example, let’s suppose if a company approached you with a contract of $50,000 to provide beauty salon services to their employees. Suppose the contract costs you $30,000 to fulfill their needs. In most cases, you will have to pay that $30,000 now for the supplies and employee salaries, etc. But let’s say that company didn’t pay you for the next six months. During the time of those six months, you can go out of cash.
While developing your Income Statement and Balance Sheet make sure to include important costs needed to start or grow your beauty salon. Some of the examples of these costs are:
- Construction and design fee of your beauty salon.
- Cost of buying equipment including washing equipment, chairs, and furniture for your beauty salon.
- Salaries of the staff
- Insurance of the beauty salon.
- Permit and Licenses
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