Are you planning to open your first salon?
Are you planning new investments for your business?
You will surely need a Business Plan; with this guide, we will give you all the tips to compile the action plan for the success of your salon!
What is a Business Plan, and why is it important to understand the feasibility of your project?
The Business Plan is a summary document divided into several sections, the basis of every new business project.
It is a descriptive document intended to explain your business idea to lenders.
It is also an operational plan; each Business Plan must outline the project’s initial phases and the resources needed to maintain them.
The Business Plan is extremely flexible and adaptable to any context, market, and type of business.
Starting a business without having prepared this document first is a bit like thinking of building a house by randomly putting bricks.
Business Plan for hairdressers: the general lines
There is no single business plan model.
There are no predefined formats for a Business Plan: you are free to fill it in as you wish, as long as you are clear, concise, and exhaustive.
Remember that you need to convince other people to invest in you.
Start with a table of contents so readers can get to the point right away and focus on the information that matters most to them.
This document section is also called Elevator Pitch: elevator in American English means elevator.
Sometimes the success of a project is decided in a short trip between the branches and offices of a bank.
Don’t underestimate the summary and summary sections – your lenders may not have more than a minute in the elevator to read your Business Plan.
The various sections of a hairdressing business plan
The first sections following the summary are descriptive.
Discuss your business idea, values, positioning, services offered, and competitors.
Once you have outlined the general lines, you need to go even more specific.
Describe the structure of the company, the human resources behind the project, the objectives you have set for yourself, and the strategies you will implement to achieve them.
The first part of the document, therefore, serves to convince investors of the validity of your business idea.
Suppose this part has bad writing. If the idea is not considered valid, the document is thrown away. Otherwise, your lenders will also read the last part of the Business Plan, the economic-financial one.
The last sections, therefore, consist of budgets relating to asset estimates, investment plans, and profitability prospects.
What is your business idea?
At this point, you may be wondering what you will have to write in your Business Plan: let’s see how to build a Business Plan suitable for your sector step by step.
Leave some space for the summary, which you will complete once you have written all the sections, and start with a brief general introduction of your business, a summary of everything that you will explain in detail point by point in the different areas of the document.
What type of salon are you in? In which market do you want to compete? What is your ranking?
Briefly describe your business in a few sentences.
Let your potential investors know your vision and your mission, that is, your goals (more in terms of positioning and quality of service rather than in economic terms) and the benefits that your business can bring to your customers, to your sector, and the socio-economic context to which it refers.
Each section of the Business Plan is increasingly detailed and concrete.
List the services and the offer at the base of your mission; talk about your price list, the products you sell, and everything that may be of interest to your future customers.
Complete this initial part of your hairdressing business plan with your goals in terms of turnover, market share, or positioning.
How do you intend to start your business?
Once the objectives have been made clear, all you have to do is indicate the strategies to achieve them: list the first concrete steps to open your salon.
Define the roles: before getting to know the company, investors need to know who the entrepreneurs are behind the project.
Talk about yourself and your past experiences, and you can also readjust your curriculum vitae into a presentation cover letter and insert it in the Business Plan.
Then talk about your idea of a salon: where you intend to set it up, the furniture, and the division of spaces.
Write with how many collaborators you intend to leave and the plans for hiring personnel based on the achievement of economic and customer objectives.
What will you offer your customers?
It is one of the most important sections of your Business Plan: the products and services you will sell will define your offer to the customer and, therefore, your positioning.
Write down everything you will sell in the salon, starting with the main categories, such as hairdressing services and product sales.
Write in detail all the types of processing you will offer in the price list, indicating the sale price to the public.
Don’t forget to include any special services you may offer, such as home or off-site work for weddings or important ceremonies.
What is your competitive environment?
Up to now, you have limited yourself to talking about yourself, your salon, and your customers. Still, like any company operating in the free market, you will have to fight against other competitors in your area, more or less direct.
All this is in an ever-changing socio-economic context.
In this central section of the Business Plan, you have to dwell on market analysis, with a current overview and, above all, hypothesizing its evolutionary trends.
We are talking about hypotheses because we live in an era of great uncertainty; whoever drew up their Business Plan just before February 2020 knows it well.
Before talking about your sector in a strict sense, you must analyze the general context and the consumption trend that concerns the economy as a whole, even those that, at first glance, do not directly impact you.
Think of the closures and restrictions of the last two years; although hairdressers have suffered less than bars and restaurants, the reduction in social life has certainly affected the consumption of salon customers.
Once you’ve talked about the general context, talk about your competitors.
Start from those closest physically or in terms of positioning to the most distant ones in terms of offer and type of business, such as home hairdressers and supermarkets that sell hair products.
What is your target clientele?
First, focus on your target customers.
Since you are a hairdressing salon, you will certainly be targeting clients, even if you could still dedicate yourself to services for male clients.
Then you have to understand what type of customer you are looking for.
It will depend on the prices in the list, the type of service offered, the location of the salon, or the type of communication you will use to promote your business.
We, therefore, advise you to fill in one or more buyer personas, real customer files in which you will talk about the types of people your salon is aimed at.
In these cards, starting from that of your main target, you will create an example profile for the various types of customers of the salon.
How do you plan to conquer the market?
The first months of the show’s opening will be very difficult because you will clash with established competitors with loyal clientele.
Readers of the Business Plan who could finance your business expect a good strategy from you to conquer the market.
Explain the marketing strategies in detail.
Talk about your pricing strategy (lower prices than competitors to attack the market or higher than average prices to look for a better positioning?) And above all, how you intend to develop the communication of your salon.
In the beginning, word of mouth will not be enough; you can focus on traditional media such as posters, newspapers, radio or social networks, and digital marketing.
All these options will form the strategic part of the Business Plan.
The essential budgets for a solid and reliable hairdressing business plan
For all of your company’s economic and financial projections, The business strategy for hairdressers must convert all of the qualitative information into quantifiable data.
Investors need to know if, when and to what extent your salon will be able to maintain good capital and financial stability (balance between investments and financial resources, full solvency of payment obligations), and if it will ensure good profitability (even if revenues are greater than costs, lenders may prefer investments with better returns or less risk).
Investors will derive this information from the budgets they find in your document.
Budgets are forecast accounting documents: in a self-respecting Business Plan, investment, income statement, cash flow, and balance sheet budgets can never be missing.
Investment budget
The investment budget is the sum of all the initial investments in the company’s life: from goodwill to expenses for property and equipment.
They also include intangible assets such as trademarks or research and development expenses.
To give lenders a wider time frame for their assessments, the first three years after the company’s foundation, or at least those years.
This information is useful for identifying the break-even point, the break-even point between costs and revenues.
Budget of the income statement
In the income statement budget, you will estimate all costs and revenues for at least the first three years.
The accuracy of these estimates will depend on the forecasts and strategies you described earlier in the qualitative sections of the Business Plan.
Thanks to the income statement budget, your investors will understand your salon’s profitability level.
Balance sheet budget
With the balance sheet budget, they will understand if they can finance a business with good asset security.
This accounting document provides for a division between investments of capital (active) and sources of financing (passive). If your assets are based on solid foundations such as equity and long-term funding, your company will enjoy an excellent balance sheet.
To understand if, on the other hand, you will be able to support short-term expenses, that is, payments to suppliers and interest on debts, your investors will evaluate the financial budget, or cash flows, with all the monetary income and expenses estimated month by month.
