What is one critical element to address when creating a business plan for a salon?
To help prospective salon owners create a business plan, we asked entrepreneurs and established salon owners for their best advice. From planning your equipment needs to identifying funding sources, several tips may help you create a business plan for a salon.
Here are nine elements to address when creating a salon business plan:
- Plan Your Equipment Needs
- Identify the Organizational Structure
- Know Your Audience
- Incorporate Tech Into Business Processes
- Determine Hiring Needs
- Conduct a SWOT Analysis
- Find a Source of Funding
- Keep Your Paperwork Organized
- Consider Your Review Strategy
Plan Your Equipment Needs
When you're creating your business plan for a salon, the critical element to keep in mind is the equipment you'll need to run the salon. The Lash and Sugar company focuses on lash extensions, but also extends into waxing and tanning. The type of equipment and safety measures needed for all those vary, so don't forget to include them when budgeting and planning the business strategies as well. You want to make sure that you're not overextending yourself. Your finances must be accounted for and have the ability to withstand any sort of maintenance, upgrades, or restocks that your equipment might need.
-Vanessa Molica, The Lash Professional
Identify the Organizational Structure
Ensure that you clearly address the management plan of your business. Identify the organizational structure you will use for your business, as well as the staffing strategy you have selected. In this section of the business plan, you should also list and explain the different roles of respective staff members, including owner, manager, front office staff, hairdressers, nail technicians and other service providers. Their compensation and benefits should also be highlighted.
-Joe Flanagan, VelvetJobs
Know Your Audience
The most critical element in any business plan is to understand who you are going to serve. This includes understanding the demographic of your area, who is already in your market, and what their offerings are. Are there other salons close by? What makes you different? What do you want to be known for? Understanding the competitive landscape is key!
-Adam Garcia, The Stock Dork
Incorporate Tech Into Business Processes
Many people overlook the importance of technology in a salon. From the point of sale system to the booking system, to the website, technology plays a pivotal role in the success of a salon. As someone who gets their hair cut regularly, I think it is important to create a business plan around trying to bring the best technology into the salon. There is nothing better than having a seamless experience of booking and purchasing your haircut.
-Chris Gadek, AdQuick
Determine Hiring Needs
The salon owner should determine if they will hire stylists or charge booth rent as a revenue source. If the owner hires stylists, they will be responsible for payroll and ensuring that they are gainfully employed. They may also be responsible for supplies needed for the stylists to conduct business. If the salon will allow booth rentals, the stylists can be treated as independent contractors and can also supply their own products. Booth rentals can create multiple sources of income streams, depending upon the space available, and the owner does not have to provide clients for the stylists.
-Annette Harris, Harris Financial Coaching
Conduct a SWOT Analysis
One critical element every salon business plan needs is a SWOT analysis. This analysis will help you detail your business's strengths, weaknesses, opportunities, and threats. Carefully considering each of these will give you a deeper understanding of where your business is strong and where you need to work to improve. This insight can benefit new salons because they can be realistic about what improvements they need to implement.
-Courtney Buhler, SugarLash PRO
Find a Source of Funding
Whether you seek a typical bank loan or borrow money from friends and family, you must first determine how much money you need to get started. Most likely, you'll be employing a mix of funding approaches, including your own money and bootstrapping. Whatever option you choose, it's critical to know where the money is coming from.
-Eric Rohrback, Hill & Ponton
Keep Your Paperwork Organized
When creating a business plan, take into consideration the paperwork and files. Have your documents ready and contracts signed. There is a lot of machinery that goes into running a salon, so having all documentation will keep the timeline moving, especially if you have large shipments. Also, have a lawyer dedicated to your business to help keep everything organized.
-Jason Wong, Doe Lashes
Consider Your Review Strategy
Small businesses, especially brick and mortar stores, live and die by reviews. A solid business plan should address how you plan to collect and leverage reviews and outline steps to request, reward, and show off customer reviews. It should also include how many reviews you need in order to overtake your closest competitor on places like Google My Business, Facebook, etc.
-Quincy Smith, ESL Authority