How to Create a Salon Business Plan: Considerations, Steps and Templates

A well-structured business plan is an important part of any business, but it is of particular value for salon owners. With a business plan for your salon, you’ll know exactly what you need to do to run your business and how you’d like it to progress over time.

Your salon’s business plan is more than just a blueprint for how you will run your business, though. It is also the planning step necessary to take your ideas forward into a working business.

Building a business plan can be straightforward, but it requires a lot of different information that you need to gather and think through. Whether you choose to make a traditional business plan or a lean business plan for your hair salon, here’s what you need to know.

How To Start a Salon: 3 Considerations To Keep in Mind

Before you start a salon, there are several questions you’ll want to consider. For example, you need to think about how much it costs to run a salon, how much revenue vs. profit you can expect, and why it’s important to have a strong business plan in place before you open your doors.

What is the startup cost for a salon?

The startup cost for a salon can vary depending on the market. It’s important to perform a market analysis to see how much other salon owners are paying for rent or property near you. You will also want to look at other factors, such as the cost of filing taxes, buying furniture for the salon, and buying products.

If you buy an existing salon, you may save yourself some time and money. With a hair salon that’s already up and running, you won’t have to build it out (in most cases). Additionally, you may already have some customers ready to use your services since you are taking over a salon that is already in operation. That’s great for reducing your marketing expenses.

The average cost to start a salon when buying one already in use is approximately $62,000. A new salon will cost slightly more because you will need to add in additional costs for marketing and the buildout of the salon itself. The average cost for a new salon is approximately $89,500.

How profitable is owning a salon?

The profitability of your salon will vary based on many factors ranging from the number of people working there to the amount of products you can sell. In 2023, the market size for skin, hair, and nail salons in the United States reached $69 billion. The value of salons continues to grow, too, as people in the country continue to look for hair, skin, and nail services. The average salon has an annual net profit margin of 8.4% after considering expenses such as paying employees and buying products. In revenue, the average earnings are $278,000 for beauty salons, $273,000 for hair salons, and $199,000 for nail salons.

Why do you need a salon business plan?

The future of your business depends on having a clear vision for how you want it to launch, grow, and thrive. This document can take some time to write, but within it, you’ll be able to establish your mission statement, make financial projections, and define your executive summary in a way that will give you an overview of how your salon will run and the goals you have for it in the future.

7 Steps To Help Create the Perfect Business Plan for Your Salon

Now that you have a basic understanding of why a business plan is important to your business, you may wonder how you can make one. There are many different business plan arrangements, but most of them will have the following seven sections.

Executive Summary

The executive summary is the first section of your salon or spa’s business plan. It contains important information about your business, such as your mission statement, as well as interesting facts about your business that will help it stand out. The executive summary works as a hook or introduction to the entire business plan, so it doesn’t have to be too long. Think of it as a summary of everything else to come within the rest of the business plan.

Company Description

To develop a business plan in the beauty services industry, you will want to create a description of your company. In it, you should describe what your business plans to offer others and go into detail about the products and services you and your stylists will provide. You may also want to show what sets you apart from competitors at this stage.

Market Analysis

A market analysis is another section to include in your business plan. It will describe current market conditions and talk about the local competition. Essentially, this section is there to address the competition, how you’re going to separate yourself from the competition, and that there is a demand for your services in the region. For example, if you offer waxing services and brow lamination but no other local business does, those services will set your brand apart and help you bring in new customers.

Marketing Strategy

You can include your marketing strategy in your business plan, too. Your marketing strategy may be as simple as listing your salon in a local newspaper or a more complex SEO campaign. Some top tips for creating a marketing strategy include optimizing your website and content with local SEO, setting up a website that showcases your stylists and salon services, and collaborating with popular influencers to get the word out about what your salon and spa has to offer. A good marketing strategy will reflect positively on your business and could help you get investors involved—if you want investments as a part of your financial strategy.

Management Plan

Depending on the size of your salon, you may want to include a management plan in your business plan. A management plan discusses your company’s operations and structure. In other words, it focuses on the people who will be in charge of your salon and its services. For example, you may have a CEO, general manager, and floor manager. You could have a marketing team or an IT department. Every salon is different, depending on its size and plans for growth.

In your management plan, formalize the future operations of your business, discuss what your goals are, and be clear about who will be responsible for the everyday objectives of the business.

Financial Plan

A financial plan is one of the most important chapters of your business plan. The financial plan focuses on multiple aspects of the money that will come into or flow out of your business.

When you create a financial plan, the goal should be to create a roadmap for how your business will grow. That plan might include getting investors or using revenue to invest in a marketing campaign. It could include current budgets, projections, and expenses, such as the cost of buying products and how often those expenses are expected to occur.

A clear financial plan will help you keep your company solvent and position it for positive growth.

Appendix

The last section of a business plan is its appendix. The appendix includes important information that will support any claims you made throughout other sections of your business plan. For example, you may want to include copies of important legal documents, market research reports, visual aids such as flow charts or graphs, endorsements from other business owners or past clients, financial information, or your organizational chart.

If you plan to seek out investors or want to use your business plan to get capital from a bank, you should make a thorough appendix. An appendix is designed to be clear to read and sort through, so the audience (such as potential investors) can easily find the details they need to make decisions about working with your salon.

Free: Salon Business Plan Template

With a better understanding of the different parts of a business plan, you can start drafting your own. If you’re unsure where to start, you can get going with this helpful salon business plan template, which goes over the basics you need in your first business plan.

Keep in mind that a template is not customized for your business. You’ll need to go through each section and answer key questions thoroughly. And, you may want to speak with an attorney or other legal professional to ensure you cover every part of the plan you’ll need in your respective state.

Here’s an outline of a free salon business plan you can use to get started.

Executive Summary

• Include the local problem that your company will resolve.
• Include the solution to the problem, such as your salon’s services.
• Discuss the market, including who you will market your products and services to within the local area. For example, you may market to women, men, or both.
• Go into detail about the competition. There are an abundance of salons and competitors in the market, and knowing how you will set yourself apart from that competition and thrive in this market is key.
• Be clear about why your salon is going to be the one to beat in your local area. Discuss what you plan to offer that makes you unique.

Expectations

• Forecast the future of your business. Most small businesses take time to become profitable, but you should indicate what your financial projections are based on your estimates.
• Discuss financing and what you need to have to help you get started. For instance, you may need investors to provide $50,000 to help with initial operating costs, but you may be investing $35,000 of your own money. You’ll want to make it clear in your business plan to ensure you have your financial ducks in a row.

Opportunities

• Talk about the problems that you have in your local market. Maybe the salons nearby don’t offer services such as braiding or barbering. Ensure you show that the problem you’re solving is worth solving.
• Discuss the solution you have to offer the people you will help in the community. For instance, you can show that you’re a full-service salon while others only offer one or two types of beauty services.
• Describe your market, its size, and its segments. You need to do some market research to know if there is a potential customer base for what you’ll be offering.

Competition

• Describe the alternatives people have to your services in your area. Will your clientele be a captive market, or will they have the potential to go elsewhere?
• Be clear about the advantages you offer to your clients. And go over some keys to success within your business, such as your location compared to other salons or the convenience of your open hours.

Company

• Describe the ownership and structure of your business.
• Add details about your management team and personnel. You can include information on anticipated growth as well.

Financial Plan

• Go over the key aspects of your financial plan. For example, if your salon will use a full-commission model, include that information in the document.
• Show how you plan to bring in revenue. Renting booths and selling products are both common.
• Add projections about the potential profits or losses based on the market’s conditions.
• Go over financing issues. For example, if you want investors to provide you with $50,000, you should describe how you plan to use the money.
• Add any financial statements you have to show how you use money year over year.

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Once you have your business plan in place, it’s time to start opening your business’s front doors. Handle the ins and outs of working with clients with the right tools to capture leads, respond to inquiries, and assist with coordinating appointments. Podium’s med spa marketing and reputation management software takes the stress out of running your salon or spa. Watch a demo to see more.