The Perfect Business Plan For Salon And Spa

A salon business plan helps you communicate with others. Whenever you need money to open a salon, the bank or investor will want to see a business plan before they lend you any money.

According to the forecast period from 2022 to 2030, the global spa and beauty salon market will grow by 6.1%, reaching US$ 251.7 billion.

Isn't this encouraging news for people who want to start their own salon and spa business?

Awareness of skincare, hair care, and personal care has been at its peak in the past few years due to the high influence of social media, eCommerce, and internationalization. Therefore, the Beauty & Personal Care industry is one of the fastest-growing consumer markets.

The shift in the market encourages people to take care of their skin, hair, and bodies. The salon and spa business is a steady and profitable business. But, if you do not have proper planning, it is impossible to juggle all the aspects of your business, such as marketing, sales, and accounting.

It is a crucial step to create a road map for your salon that helps your salon to be successful in this highly competitive market. It is imperative to have a business plan for your salon, regardless of whether you want to secure a loan for your company or expand or reinvent your business.

Salon business plans are necessary for you to get control of your beauty business and to make the right decisions early on. In addition to providing a clear path to follow, a well-written plan will enable you to identify weaknesses in your salon business.

A salon business plan helps you communicate with others. Whenever you need money to open a salon, the bank or investor will want to see a business plan before they lend you any money.

There are several aspects to keep in mind while preparing a salon business plan such as finance, licenses, revenue, marketing, etc.

You can follow these 8 steps to write a successful salon business plan. 

1. Salon Mission Statement - You need to know the vision, and mission of your salon business and note them.

A salon's mission statement talks about the reasons for the salon's existence, its goal, and how it plans to achieve it. It should be visible at the top of your one-page salon business plan and should be the first thing you and other people see. Everyone who works for and with your salon must understand and embrace it.

What is a meaningful mission statement?

The mission statement of a salon should capture the essence of the salon's purpose. Whenever you make decisions about your salon, you should keep it in mind. The mission statement guides your entire salon business. It usually consists of one or two sentences in one paragraph.

Examples

Here are a few examples that give you an idea of how a salon's mission statement must look and what it should include.

Firstly, Rocket City Styles, a salon located in Madison, AL. The salon offers hairdressing, hair extensions, and nail art services. Other services include shampooing, conditioning, blow drying, and experts in hair coloring and styling.

“To serve customers with integrity by being loyal to them, the company, and ourselves. To provide superior customer service consistently with a happy and relentless attitude while standing within an affordable budget for families.”

Retouch Salon

“It is our goal to exceed your expectations. Come experience a family atmosphere where you come as guests and leave as friends. Our staff is highly trained with diversity in all aspects of Hair, Waxing, and Massage. We keep up with the latest trends in our industry by continually attending hair shows and education classes throughout the year. Come let us pamper you and provide you with quality services.”

Every business is set up to serve the burning demands of its target audience. The ultimate goal of any business whether small, medium or large is to sell a product or a service that serves a customer's demands.

<a></a>Examples

While on a road trip, you will find small mechanic shops on the side of the road without any other shops. It might be a very small business, but it serves the burning need of travelers who may find themselves in a last-minute emergency with their vehicles.

Now it is time to figure out what needs your salon serves.

This process is one of the most significant steps in setting up your business. Take the time to identify the specific on-demand services that your salon is ready to offer.

In case your list of services that are in demand is unclear, your entire business plan might face problems in the future.

Therefore identify your niches such as hair, skin, nails, makeup, etc, and the sub-niches such as hairdressing, hair styling, skin transformation, nail art, bridal makeup, etc.

This gives a clear picture of your business and target audience.

Here’s an example for you to understand the niche better.

“NEKAIRAH BEAUTY is a full-service hair salon in New York, NY, committed to bringing out the extraordinary in you!

Our services include:

• Hair coloring
• Hair color corrections
• Balayage
• Haircuts
• Blowouts

In the above example, Nekairah Beauty is crystal clear about its target audience and the demands of the market. They are categorized as a hair salon, which signifies their niche as a provider of hair-related services. Further, they offer 5 services that make it clear which problems they want to solve.

In the above example, Nekairah Beauty is crystal clear about its target audience and the demands of the market. They are categorized as a hair salon, which signifies their niche as a provider of hair-related services. Further, they offer 5 services that make it clear which problems they want to solve.

Once you are done preparing the list of services in demand that your salon is ready to serve, now you must understand how you will serve them. What kind of services will you offer and how will you offer them to meet the needs of your target group is the next big question that must pop up.

What is the salon's offer?

The menu you display for your clients is exactly what you offer them. The salon offer must include the following.

• Our services are framed around the problems you decide to solve.
• The prices for each service.
• Do you have any packages or combo offers if any?
• Information about retail products indirectly helps the client solve their problems.
• How do you offer your products and services?
• Your solutions extend beyond services.

It also includes :

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; What makes you unique?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; How to gain customer satisfaction?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; What measures do you take to enhance the salon experience of your clients?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On what basis do your prices justify the services offered?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Are there any pre-booking appointments available?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; What payment modes are accepted?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Are there any retail products that your brand sells online?

●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; How different are you from your local competitors?

You must take some time to analyze the above questions and draw answers from your offer.

<a></a>Example

AYUR HAIR CARE is a hair salon that offers ayurvedic hair care solutions.

The demand for organic hair care solutions is identified. Women in 2022 want to avoid chemicals and shift towards natural solutions that are sustainable and reasonable.

In this case, the AYUR HAIR CARE Hair salon offer must look like this:

"We offer 100% chemical-free, Hair deep cleaning, Hair regrowth, and scalp treatments. You can opt for a monthly subscription @Rs. 1999 and get all three services and enjoy your hair care day with us!”

Every business that offers an amazing product or service aims to earn revenue. At the end of the day, the goal of any business is to make money out of its offers or products.

Once you are clear on the problems and solutions you offer your clients, you must focus on monetizing your services. You must set a revenue model. It helps you make profits and guides you in managing your money.

What is a salon revenue model?

The salon revenue model describes how the salon generates revenue.

A salon's revenue sources (such as services and retail sales) are included in this analysis, as well as what value the salon provides (e.g. hairdressing), how they price that value (for example, your color service price), and who pays for it (for example, the target client group for the salon).

<a></a>How do salons make money? &nbsp;&nbsp;&nbsp;&nbsp;

The primary source of income for hair salons is service revenue. According to the latest statistics, it is said that the average revenue of a salon situated in the US accounts for 92% of its revenue from its services and the remaining from retail sales.

But there are many other ways in which a salon can make money!

Here are a few ideas to increase your salon revenue:

You can affiliate with brands and promote and recommend their products.

You can offer an online course about your niche to your audience.

You can offer certification programs such as hair styling, makeup, ayurvedic hair care, etc.,

<a></a>What are the different types of revenue models?

There are several revenue models that a salon could adopt to generate income. Here are a few types mentioned below.

Fee-For-Service Model

It is the traditional form of salon revenue model where clients pay for the services they receive. Clients can choose their preferred services because the services are unbundled.

For example,

RNZ Salon offers hair cuts, eyebrow trims, hair styling, waxing, etc., services.

A client wants only a haircut that costs Rs. 699/-. And therefore, the fee for the haircut will be charged to the client.

Subscription model

The subscription model is a game changer for OTD platforms like Prime, Netflix, Hotstar, etc. In the same way, salons can also create a subscription revenue model. You can group certain services and create a subscription model pricing them according to market standards.

Clients can walk in at any time during the month and take advantage of services based on their subscriptions. This model creates a path to increase revenue as it provides recurring income for the salon.

For example,

Here the RNZ salon pools a few services and creates a subscription model.

“You can enjoy a haircut, waxing (Hands &amp; Legs) along with an eyebrow trim at Rs. 1999/- per month. The busy ladies in town can get everything done under one roof quickly.”

Production Revenue Model

This model applies to salons that sell or resell products to their clients. If your salon has a brand that manufactures the products and sells them to your clients as well as other customers using a website and social media marketing, you can generate higher revenue.

For example,

RNZ salon has an online store where it sells hair oils, shampoos, conditioners which comes under its own product line.

Prepare the right mix:

A revenue model must not have one single source of income. It must be a combination of several methods. The salon business must be dependent on one source. Therefore you need to analyse and frame your revenue model based on the products and services offered.

A business cannot function without incurring expenses. Therefore to run a successful salon business you must analyze the probable expenses. You must prepare a list of expenses that you will incur to run and maintain the business smoothly.

<a></a>Types of salon expenses

Firstly, there are 3 types of costs that you incur in a salon Business.

<a></a>One-time investment/ Initial setup cost

The initial cost which is necessary to start your salon business is a one-time investment. For the same, capital needs to be raised.

The initial costs that might incur are:

Property Purchase Cost or Rent deposit or Lease Amount (Depending upon the option that you choose to acquire or rent the infrastructure of your salon)

Salon equipment (Hood dryers, Heat lamps, Blow dryers, Hair straighteners, Hair curlers)

Furniture (Salon chairs, Carts, trolleys, Lighting)

Inventories (Shampoo, conditioners, face packs, hair coloring supplies

Licenses and certifications from authorities

Pre-launch marketing

Legal charges

Salon Insurance

<a></a>Monthly fixed expenses

Certain expenses are recurring every month and are called fixed expenses. These are mandatory expenses to be paid whether your business is making profits or losses.

Here is a list of mandatory expenses that are fixed in nature.

Rent

Wages or salaries of employees

Electricity and water bills

Maintenance charges

Insurance

<a></a>Variable expenses

Variable expenses are expenses that are affected by other factors and may vary from time to time.

<a></a>Example

For example, you own a hair salon. Here, shampoo is one of the most significant items. Therefore, it is necessary to restock it when there is a high demand for your services. It is not always possible to know the quantity needed because it can change due to the demand for the service, among other factors.

This is a variable expense for your salon business. Here is a list of a few variable expenses for a salon.

Hair care supplies (shampoo, conditioner, etc).

Skincare supplies

Retail products

Operational expenses

How does a salon make money?

Fixed and variable expenses are to be deducted from the total revenue earned by the salon. The remaining money is the profits earned.

For example,

Salary represents the majority of the costs (45%), followed by rent to be paid (25%), then other expenses (10%), and 20% is the profit margin for the business' total turnover.

Total Revenue 10,00,000

Salary (4,50,000)

Rent (2,50,000)

Other expenses (1,00,000)

Profits 2,00,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Your expenses also depend on other factors:

The location of your salon business.

The expert employees in their work

The number of employees

The business model

The next step in your salon business plan is to identify your target audience. Check out this blog to learn more about it.

<a></a>What is the target audience?

A group of people willing to buy your products or services is the target group or target audience. Based on the target audience, you can focus on who you want to serve.

<a></a>Who is your target audience?

The set of people you would want to serve as your clients is your exact target audience.

<a></a>Example

As previously mentioned, AYUR HAIR CARE is a hair salon. Therefore, the target audience of this salon would be people who are seeking scalp/hair treatments, hair regrowth solutions, etc.

<a></a>How do you identify your target audience?

You must understand the locality and the number of people who would need your services. Your target groups are based on age, sex, location, the standard of living of the people, etc.

You must perform basic market research to identify your target audience. You cannot sell your services to everyone on earth.

For example,

CAR’s FASHION is a car accessories business. They cannot sell their products to everyone, because everyone might not own a car or not be interested in fancy accessories. Therefore their target group would be people who own a car and are excited to decorate them with fancy accessories.

So,

Most likely, CAR FASHION targets people who fall into these categories.

Age - 25 - 35 Years

Sex - Male/ Female/ Others

Location - Metropolitan cities

Type - Car decor enthusiasts

So don't sell your services to everyone. Focus on your target audience and market only to them. The more targeted, the better.

What is the number of salons in the area where you own your salon (or plan to open one)?

The more salons there are, the tougher the competition will be, relative to the number of people living or working there.

Although fierce competition may seem overwhelming, it does not mean you cannot succeed.

However, you should closely examine your competition.

You must have a deep understanding of certain aspects such as

What services do they provide?

How are their salons placed?

Is that salon located in many locations?

Once you are clear with what your competitors do you can draw your unique qualities that stand out from the rest. Once you have that, you can take your share.

Bringing something no one else is offering in the area will attract new clients who were not previously attracted to salons. Therefore, you could even make the pie of customers wider.

Philip Kotler says, “Marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value.”

. Philip Kotler says, “Marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value.”If you do not market your salon business, how do you expect people to know your salon’s existence? You need to make sure that you are creating a marketing strategy that attracts clients and gradually creates trust in your salon business.

Your marketing strategies must be a reflection of your goals and the challenges you are facing in your salon business.

For example,

AYUR HAIR CARE is lacking in retaining old customers, so it has to build a marketing strategy specifically for that purpose.

<a></a>Marketing Techniques

You need to make sure you understand the different aspects of marketing ideas before choosing the one that works best for your salon business.

<a></a>Create a Google My Business Account.

The first thing that your potential clients might do is search for a salon near them or search for the most popular salon in their cities, etc. If your salon name is not shown on the list then there is no way that they can choose your salon.

Therefore this is the first and foremost step in your marketing journey.

<a></a>Create your salon business Website!

A spa and salon website should be your priority if you do not have one yet. A well-designed spa and salon business will help to create the right impression with new clients.

A salon website helps you get more attention and creates a sense of trust among the online audience. You can drive traffic from here and convert them into clients or customers. It is the most convenient one-stop online place to showcase your services, offers, products, special occasions, brand stories, etc.

You can check the web hosting options available on the market and buy a domain name for your website. It involves a cost charged on a monthly or yearly basis to your business. In return, the investment attracts clients and builds goodwill.

You can also share your website details with your clients to receive feedback, testimonials, ratings, etc.

<a></a>Include an Online appointment feature.

If you choose a website builder who knows how to build a spa and salon business website, you'll ensure your site is professional looking. In addition, the site will have all the features you need.

You can offer appointment booking calendars on your website to allow customers to book appointments online without calling your business number.

This makes the entire process accessible for your clients to book an appointment anytime.

<a></a>Utilise Social Media Marketing strategies.

Having a social media marketing strategy in place is incredibly helpful today. Visuals and videos help you showcase your business expertise through social media marketing programs, allowing you to reach out to new customers and generate leads.

You must select the right platforms and post content, educate your audience, share your successes and showcase your services.

Social media marketing is one of the most effective ways to attract clients today. You should therefore keep an attractive feed that reflects your salon's vision and looks good on screen.

<a></a>Boost Your Spa and Salon Business With Google Ads

Your business must appear when someone searches for spas and salons in your area. At the same time, there may also be other spa and salon websites that come up in their search results. You may want to include paid Google ads or search campaigns on your business website to ensure it stays at the top of search results.

<a></a>Organise spa and salon events throughout the year.

Creating or enhancing events around occasions and festivals can be an effective tool for increasing business.

The Diwali festival, for example, is a suitable time to promote makeup services and styling, and Mother's Day is a great time to showcase new products.

Getting involved in your local community, clubs, social gatherings, festivals, and other vital events can be a fantastic idea.

The new year may be a good time to launch a promotional campaign that offers discounts on spa and salon services.

<a></a>Example of a Hair Salon Marketing Plan

“AYUR HAIR CARE is a hair care salon that sells its own product line. Therefore, we chose Instagram marketing to grow an organic audience and sell our products. Also, as our salon is in a metropolitan city, women hardly have time to take care of their hair due to their schedules. Therefore, we offer a subscription model with a 30% discount.”

Define the roles of employees &amp; partnerships

Some form of collaboration with other people or organisations will certainly be part of your salon operations. In this section of your salon business plan, you must reflect on these factors. Clearly define each person's role in your business.

Have you decided whether to open your salon all by yourself or with a partner?

To launch your salon business, do you need to hire key people?

Does your salon operate as a franchise?

Example of Salon Employees &amp; Partnership Section

“AYUR HAIR CARE is owned by Rajesh and Ram. It will continue to operate with 5 employees from the start. One being a hairstylist, two being scalp treatment experts, and one hair care consultant”.

Setting up a new salon from scratch is not as simple as it seems. It involves a lot of things when setting up.

There are many things you need to do to become a successful salon owner. You need to obtain the required salon licences, purchase salon business insurance, find a salon location, purchase salon equipment, market yourself to new salon clients, etc.

If you are a beginner, the entire process seems overwhelming. The number of tasks to be managed seems endless. And therefore you must break down the tasks into smaller goals that must be realistic and achievable.&nbsp;

You may feel stressed out if you set an unrealistic benchmark and it could damage your management process.

Therefore creating a realistic goal or planner is highly recommended for your salon business to run smoothly. You must create a blueprint of all tasks and have a backup plan for every emergency.

This entire goal-setting process is time-consuming. You will gain more confidence when approaching investors by presenting your entire plan with realistic goals. Also, it acts as a road map for you to take action accordingly.

Goals for your salon business may include financial goals, sustainable goals, number of reviews, results of marketing campaigns, etc.

It completely depends on the mission and vision of your salon business.

You can use something as simple as a book and pen to frame your goals or create an Excel sheet and note down your goals and timelines accordingly. You can choose the option that works best for you.

<a></a>Example

You can create a simple goal-setting planner in the way shown below.

You can add to the list as you plan to achieve your goals.

A business plan is a crucial step while starting a salon business to set up various factors such as marketing, finance, etc.,

Salon business plans must primarily include a mission statement, revenue models, marketing strategies, goals, etc.,

Before framing the business plan, in-depth market research and analysis must be conducted regarding all aspects of it.

Along with the business plan, the execution of each task matters to running a successful salon business.

You must follow these 8 steps to frame your salon business plan. Make sure to keep it simple if you are a beginner. Try to create goals that are achievable and realistic to make your salon business run smoothly.

The salon business plan gives you a road map and a clear picture of what actions need to be taken at every step of your business.

Lastly, never forget to have backup plans in case your original plan fails.