Beauty Salon Business Plan Template
Written by Dave Lavinsky
Beauty Salon Business Plan
You’ve come to the right place to create your beauty salon business plan.
We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their beauty salons.
Below is a salon business plan example to help you create your own beauty salon business plan.
Executive Summary
Business overview.
Major Lengths Beauty Salon is a newly established hair and beauty bar located in Glendale, Arizona that is founded by Jenna Diaz, a local hair stylist and aesthetician that has worked in the industry for over 15 years. Jenna’s knowledge in hair, nail, and facial trends have made her a popular stylist in the community. As her client list continues to grow, Jenna realizes that it’s time for her to open up her own salon.
Major Lengths Beauty Salon will be located in Glendale’s upscale district in a 5,000 square foot retail space. The area is highly trafficked with middle to high income residents who spend on luxury items such as cars, clothes, jewelry.
The beauty salon will offer haircuts and treatments, facials, manicures, and pedicures. Major Lengths will also carry a large selection of hair and beauty products that will be available for purchase. Jenna will have a loyalty program where the top clients will receive discounts on their service as a thank you for remaining loyal and referring other potential clients to the salon.
Product Offering
The following are the services that Major Lengths Beauty Salon will provide:
- Color Treatment
- Healthy Hair Treatment
- Nail Services
Customer Focus
Major Lengths Beauty Salon will target the male and female adult population of Glendale, although the majority of clientele will be women. They will be middle to high income and working in a variety of industries, such as medical, legal, business, education, or other white collar professions. The salon will target stay at home mothers as well who enjoy a day of pampering.
Management Team
Major Lengths Beauty Salon will be owned and operated by Jenna Diaz, a local Arizona hair stylist and aesthetician. Her years of experience and in the industry have allowed her to meet the following talented individuals.
Jenna has recruited a talented nail technician and aesthetician from her previous salon to join her at Major Lengths. Jenna regards them as the best in the industry and knows that their quality of work is up to her high standards. They also have a loyal and large list of clients that will likely follow them to the new salon.
While the three of them will be in charge of their respective department, Jenna will be the head manager to oversee the entire operation of the beauty salon.
Success Factors
Major Lengths Beauty Salon will be able to achieve success by offering the following competitive advantages:
- Latest hair and nail trends
- Modern and comfortable environment
- More selection of each service offered than any other salon in town
- Major Lengths Beauty Salon offers the best pricing in town
Financial Highlights
Major Lengths Beauty Salon is seeking $100,000 in debt financing to open the beauty salon. The funding will be dedicated towards securing the retail space and purchasing the salon furniture, equipment, decorations, opening inventory, and working capital. The breakout of the funding is below:
- Beauty salon build-out: $30,000
- Opening inventory, furniture, equipment, decorations: $40,000
- Three months of overhead expenses (payroll, rent, utilities): $15,000
- Marketing costs: $5,000
- Working capital: $10,000
The following graph below outlines the pro forma financial projections for Major Lengths Beauty Salon.
Company Overview
Who is major lengths beauty salon.
Major Lengths Beauty Salon is a newly established hair and beauty bar located in Glendale, Arizona. The company is founded by Jenna Diaz, a local hair stylist and aesthetician that has dedicated her career to making women look and feel their best. Throughout her years in the beauty industry, Jenna gained extensive knowledge in hair, nail, and facial trends as well as how to give exceptional customer service to all of her clients. Jenna realizes that men and women invest a lot of time and money into their appearance and she takes extra care to ensure her clients not only feel special, but walk away with their desired result.
Major Lengths Beauty Salon will be located in Glendale’s upscale district in a 5,000 square foot retail space. The area is highly trafficked with middle to high income residents who spend on luxury items such as cars, clothes, jewelry. Some of Arizona’s most expensive homes are within a 15-mile radius from the location. The salon will be decorated with a contemporary style, have modern furnishings, and include a welcoming waiting and reception area, large hair styling room, and separate areas for facials and nail services.
Major Lengths Beauty Salon History
Major Lengths is owned and operated by Jenna Diaz, a local hair stylist and aesthetician who has made her career working in the beauty industry for the past 15 years in Glendale. She has gained extensive knowledge through her continuing education and industry seminars. Jenna has a long list of loyal clientele who will follow her to her new salon. Aside from her beauty salon knowledge and expertise, Jenna has taken local business courses to learn salon management and leading a small team of stylists, manicurists, and aestheticians.
Since incorporation, Major Lengths Beauty Salon has achieved the following milestones:
- Registered Major Lengths Beauty Salon, LLC to transact business in the state of Arizona.
- Has obtained the necessary salon permits and licenses for the state of California.
- Has a lease contract in place for the 5,000 square foot beauty salon.
- Has developed the complete list of salon services and products.
- Has developed the beauty salon’s logo and branding image.
- Began recruiting a team of stylists, manicurists, and nail technicians.
Major Lengths Beauty Salon Products
The following will be the services Major Lengths Beauty Salon will provide:
Industry Analysis
The Beauty Salon industry is expected to increase in size by 2.5% over the next five years. Demand for industry services mirrors broader economic performance, as economic growth boosts consumer spending on personal care products and services. Specifically, new products and services have favorably contributed to industry revenue growth over the majority of the past five years.
Online platforms such as Instagram and Facebook have provided a convenient and low-cost marketing strategy for many stylists and technicians to garner new clientele. Higher service prices and increased consumer spending on high-margin merchandise and services have also fueled revenue growth, as operators capitalize on rising per capita disposable income. Continued growth in household income over the outlook period is expected to drive consumer spending and boost demand for premium personal care services. Moreover, equipped with larger budgets, consumers will likely continue to favor professional salon products and services, such as hair coloring services, over less expensive alternatives sold at drugstores and supermarkets. Environmental sustainability concerns are expected to become more prevalent over the next five years, leading salons to offer a wider array of eco-friendly products that appeal to trending consumer preferences. Specifically, nontoxic products will likely benefit industry revenue, staff and patrons. This growing niche will likely drive hair salon revenue over the coming years.
Customer Analysis
Demographic profile of target market.
The precise demographics for Glendale, Arizona are:
Customer Segmentation
Major Lengths Beauty Salon will primarily target the following customer profiles:
- Stay at home mothers and fathers
- Working professionals
- College students
- Retired females
- Mothers with adult or teenage daughters
Competitive Analysis
Direct and indirect competitors.
Major Lengths Beauty Salon will face competition from other companies with similar business profiles. A description of each competitor company is below.
Hair Xtreme
Hair Xtreme is located on the west side of Glendale and is owned by a local hair stylist with over 30 years of experience. Hair Xtreme specializes in haircuts and hair coloring services as well as hair color correction. The owner is also certified in Balayage highlighting by the prestigious L’oreal SOHO Academy. Hair Xtreme Beauty Salon was established to create a higher level of service in the Glendale community and has amassed a large clientele. The salon is regarded as the go-to salon for anyone looking for extreme color or haircut transformation. The pricing of services are on the higher end of the spectrum and caters to the community in the middle to higher income range.
Hair Xtreme Beauty Salon’s full list of services include haircuts, balayage, ombre, highlights, color retouch, hair treatments, and special occasion styles. The salon is open Tuesday through Saturday and is by appointment only.
The Complete Package
The Complete Package is not only a hair and nail salon in Glendale, but also provides massage treatment, eyelash extensions, and body treatments. The salon is moderately priced and leans to be more affordable to target the population who doesn’t spend lavishly on beauty services, but also occasionally like to get pampered. Owned and operated by a mother and daughter team of hair stylists, The Complete Package is located in a small retail shopping center in the middle of the city. The salon has been in operation for over 20 years and was founded by Kate Beneducci. She was able to bring The Complete Package into operation due to her experience and background in cosmetics, marketing, and management. Every single stylist is a certified cosmetologist and are all required to attend a mandatory training every year to learn the latest techniques.
The Complete Package’s full list of salon services include hair, makeup, eyelash extensions, and nails. The full list of spa services include waxing, facials, microdermabrasion, massage, and body treatments. The salon regularly posts promotions to increase customer loyalty. The Complete Package is open daily by appointment and is able to take walk-ins Friday through Sunday.
Fringe Beauty Salon and Spa
Fringe Beauty Salon and Spa is located on the west side of Glendale, Arizona and was established in 2013 as a premier beauty salon. Fringe caters to the higher income clientele and their pricing is the most expensive in town. The owner relocated to Glendale to start her own beauty salon after working in the beauty industry in New York and Los Angeles for many years. She did hair and salon services for many celebrities and has been known to be the stylist for awards shows such as the Emmys and Oscars.
As a Glendale native, she relocated to her hometown to provide a higher quality of salon services to the community. The full list of services for Fringe Beauty Salon include haircuts, hair treatments, hair color, balayage, ombre, special occasion, manicures, pedicures, massage, facials, eyelash extensions, waxing, and makeup.
With a luxury atmosphere and relaxing spa environment, Fringe Beauty Salon and Spa is frequently booked for those wanting a full day of pampering.
Competitive Advantage
Major Lengths Beauty Salon will be able to offer the following advantages over their competition:
- Friendly and knowledgeable staff who are all trained and experienced in the latest hair and beauty trends.
- Complete list of beauty salon services intended to provide a full day of pampering and relaxation.
- Casual and comfortable environment with a luxurious feel.
- Major Lengths Beauty Salon offers the best pricing in town for the high quality of services provided. Their pricing structure is the most cost effective compared to the competition.
Marketing Plan
Brand & value proposition.
Major Lengths Beauty Salon will offer the unique value proposition to its clientele:
- Complete list of beauty salon services all provided by trained and knowledgeable hair stylists, manicurists, and aestheticians.
- Pricing is affordable and moderate so customers perceive value when visiting the beauty salon.
Promotions Strategy
The promotions strategy for Major Lengths Beauty Salon is as follows:
Website/SEO Marketing
Major Lengths Beauty Salon has hired an advertising firm to develop their branding image and logo. They will also develop the hair salon’s website. The website will include a full list of services, pricing, and pictures. The advertising company will also manage the company’s website presence with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Glendale beauty salon” or “beauty salon near me”, Major Lengths Beauty Salon will be listed at the top of the search results.
Word of Mouth/Referrals
Jenna Diaz has a long list of loyal clients that have been with her for decades. They will follow her to the new salon and will receive additional clients from their referrals.
Social Media
Once the branding and logo is finalized, Jenna will use social media to her advantage and create social media business pages on all of the popular social media platforms. She will commit to posting daily to increase the list of followers and use it to regularly engage with customers.
Print Advertising
Major Lengths Beauty Salon will invest in professionally designed print ads to display in local magazines and hand out flyers to local businesses.
The pricing of Major Lengths Beauty Salon will be moderate and on par with competitors so customers feel they receive value when purchasing their salon services.
Operations Plan
The following will be the operations plan for Major Lengths Beauty Salon.
Operation Functions:
- Jenna Diaz will be the Owner and Manager of the beauty salon. She will order salon inventory and products, oversee staff, payroll, and manage customer service.
- Melanie Brooks – Head nail technician that will oversee the nail department.
- Fiona Adams – Head aesthetician that will oversee the facial and massage departments.
- Jenna has hired third party companies to manage the bookkeeping, accounting, tax payments, insurance, and legal requirements.
Milestones:
Major Lengths Beauty Salon will have the following milestones complete in the next six months.
8/1/202X – Finalize retail space for beauty salon
8/15/202X – Begin build-out of beauty salon to include stylist stations, facial and massage rooms, and nail service area
9/1/202X – Order opening inventory
9/15/202X – Begin marketing campaign
9/22/202X – Hire staff of hair stylists, nail technicians, massage therapists, and aestheticians
10/1/202X – Major Lengths Beauty Salon Grand Opening Event
Major Lengths Beauty Salon will be owned and operated by Jenna Diaz, a local Arizona hair stylist and aesthetician. Jenna has made an impressive career helping women achieve their desired look and feel. As an Arizona native, Jenna has attended the local beauty college and attends industry trade shows and training seminars annually. She has amassed a large and loyal clientele and has even done hair treatments, cuts, and facials for local celebrities and sports personalities. Jenna is committed to establishing a beauty salon in her hometown of Glendale and making it a place where the women and men flock to when they want the latest hairstyle, manicure, or facial.
While the three of them will be in charge of their respective department, Jenna will be the head manager to oversee the entire operation of the beauty salon. She will also outsource a third party insurance company, CPA, and attorney to take care of her insurance, legal obligations, and tax filings. Jenna will also employ a part time bookkeeper to handle her day to day accounting and payroll of staff.
Financial Plan
Key revenue & costs.
The revenue drivers for Major Lengths Beauty Salon are the sales from hair services, nail services, massages and facials.
The cost drivers will be the overhead costs required to staff the beauty salon. The expenses will be the payroll cost, rent, utilities, salon inventory, and marketing materials.
Funding Requirements and Use of Funds
Major Lengths Beauty Salon is seeking $100,000 in debt financing to open the beauty salon. The funding will be dedicated towards securing the retail space and purchasing the salon furniture, equipment, decorations, opening inventory, and working capital. Jenna will need to allocate funds for the first three months of payroll and operating expenses as well as spend approximately on branding and marketing. The breakout of the funding is below:
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Beauty Salon Services Sold Per Month: 300
- Average Revenue per Month: $20,000
- Beauty Salon Lease per Year: $110,000
Financial Projections
Income statement, balance sheet, cash flow statement, beauty salon business plan template faqs, what is a beauty salon business plan.
A beauty salon business plan is a plan to start and/or grow your beauty salon. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your beauty salon business plan using our Beauty Salon Business Plan Template here .
What are the Main Types of Beauty Salons?
There are a number of different kinds of beauty salons, some examples include: Beauty salon focusing strictly on hair styling, beauty salon offering hair removal services, skin care services, nail services, tanning services, or massage services, and beauty salon offering products.
How Do You Get Funding for Your Beauty Salon Business Plan?
Beauty salons are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. This is true for a business plan for a beauty salon or a hair salon business plan.
Why do You Need a Business Plan Template?
If you’re looking to start a beauty salon business or grow your existing salon business, you need a business plan. A hair salon business plan template will help you raise funding, if needed, and plan out the growth of your beauty salon in order to improve your chances of success. Your salon business plan is a living document that should be updated annually as your company grows and changes.
Where Can I Get a Beauty Salon Business Plan PDF?
You can download our free beauty salon business plan template PDF here . This is a sample beauty salon business plan template you can use in PDF format.
Related Sectors and Templates
Beauty Supply Store Business Plan Template Spa Business Plan Template Nail Salon Business Plan Template
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 Salon Business Plan FAQs
What is the easiest way to complete my beauty salon business plan, where can i download a beauty salon business plan pdf, 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?
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
How to Write a Beauty Salon Business Plan: Complete Guide
- November 1, 2024
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.
Beauty Salon Business Plan Template (Download)
Get a professional business plan and get funding for your business.
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?
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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