How To Create A Hair Salon Business Plan in 2024 (with Template)

Starting any kind of business comes with inherent risks.

Many fail in the first year due to mismanagement of finances, lack of brand awareness, or for shifts in the market.

If you’re going to pick a business to get into, it’s never a bad time to open a hair salon. In 2018, hair salons brought in over 46 billion dollars in revenue in the United States. That’s a little less than the entire GDP of the country of Costa Rica.

Needless to say, there’s a lot of opportunity in the hair salon industry. If you’re ready to grab your piece of that 46 billion dollar pie, then you’re going to need a business plan.

Here’s a complete guide to creating a business plan for your new hair salon:

Step-By-Step Instructions to Writing Your Hair Salon Business Plan

A business plan is a crucial step to starting any business. Creating one is an opportunity to put your thoughts, ideas, and goals down on paper and mold them into something more tangible.

Creating a business plan might feel like a daunting task, but it doesn’t have to be if you break it down into smaller steps like these:

1. Write your executive summary

The executive summary is the first page of your business plan and acts as a first impression. Get it right, and people will dig in with enthusiasm. Get it wrong, and you may not get a fighting chance.

At its core, the executive summary elaborates on the focus of your business. It tries to sum everything in a page or less. At a minimum, it’ll include:

• Mission statement
• Ownership structure
• Product and service descriptions
• Business plan summary

In plain terms, it says what you hope to achieve, who’s involved, what makes your salon unique, and what value you’ll bring to your customers.

2. Company description

It may feel like you’re repeating yourself from here on out, and you will be to a degree, but it’ll be to bring context to all the details that will follow. You’ll be reiterating the points from your executive summary, but further elaborate to give the reader the juicy details.

With the company description, you’re wanting to provide a snapshot of what people would see if they walked into your salon. You’ll offer up some crucial details like the registered name of the business, history of the company, name of key employees, and your location. In addition, you’ll answer some important questions such as:

• Are you explicitly cutting hair? Or are you offering hairstyling services as well?
• How about conditioning treatments, blowouts, and hair extensions?
• Will you stop at head hair, or will you offer waxing, eyelash, and eyebrow treatments as well?
• How about products? Will you sell your styling creams, sprays, and shampoo?

Again, the more detail here, the better because you’re trying to sell an image of the salon at its best.

3. Business goals

Every company, big or small, should have goals. Ideally, they should be specific goals. SMART goals even. SMART stands for specific, measurable, attainable, relevant, and time-bound. A SMART goal for opening and running a hair salon might be:

“Host a grand opening event over the July 4th weekend that adds 150 people to our email newsletter.”

That’s a short-term goal that’s specific and measurable because you’re measuring email captures. It’s time-bound because of the July 4th date, and it’s relevant and attainable because it helps with marketing efforts and isn’t a farfetched number like 10,000 sign-ups on an open weekend.

In the business goals section, you’ll want to spell out what you’d like to accomplish in the near term and in the long term as well. If you’re seeking investor capital or outside funding, you’ll also explain what exactly you need the money for and how and when you’ll plan to recuperate those funds. This could include expanding locations or service offerings, for example.

4. Business management structure

This one is a bit more straightforward because it’s black and white. Your business management structure is something you’ll likely set and forget since it won’t change much. Here, you’ll add a breakdown of who the owners are, what experience they have in the industry, and what legal structure you’ve adopted (LLC, S Corp, etc.).

You’ll also want to outline how many employees you’ll have to start, ownership percentages, and the duties and responsibilities of each role. Getting this sorted out is not only good for investors, but for you as well since it’s possible you’ll have disputes over these decisions later.

5. Product and service offering

In the previous steps, you’ve alluded to what makes you unique and what services you’ll offer, but now it’s time to get even more detailed. It’s not enough to say you’ll offer blowouts, hair coloring, and sell hair products. Tons of salons do that. You want to impress people with how you’ll differentiate yourself.

To illustrate the point, here are some ways a salon could differentiate itself:

• Using all homemade organic products that you can’t find anywhere else
• Bringing in wine from a local vineyard to offer for free to salon patrons
• Offering same-day in-home appointments
• Providing free headshots with all appointments

The possibilities are truly endless. Here’s also where you’ll get into pricing, profit margins, and how you’ll receive and possibly distribute the products you’ll use at your salon.

6. Marketing plan

With a new salon, you’ve got to get the word out as soon as possible to bring customers in. Your marketing plan will explain exactly how you’ll build brand awareness. It may even talk about your grand opening.

You’ll need a section on how you’ll develop customer loyalty as well. Will you leverage mailing lists? How about frequent buyer incentives? The more concrete your marketing plan, the more confidence you’ll gain from investors, banks, and employees.

7. Business financials

A good hair salon business plan will provide all the numbers you need to ensure you have the runway to launch and sustain operations while bringing in new customers. It’ll show investors the starting financial health of your business and how you plan to reinvest funds back into the business and repay debts.

Here, you’ll include net profit margins, current liquidity, and accounts receivable turnover ratios. Those specifically tell investors how much profit you’ll keep, how easily you’ll be able to repay debts, and how often you’ll collect on your own debts.

8. Future financial projections

Your goals would ideally be aggressive, but realistic. While you may not create more business plans for your salon, you’ll want to keep up with creating monthly and quarterly financial reports.

They’ll outline expenses, revenue, profit, and provide confidence to your leaders and your investors that things are on track.

9. Appendix

Last, but not least, you’ll include an appendix section for the stuff that doesn’t fit elsewhere. For a salon, this could mean licenses, permit history, contracts, leases, resumes for key employees, credit history, and anything else that comes to mind.

Summary

Starting a salon is an exciting adventure that’ll be filled with both ups and downs. The ups will come and go, but being prepared for the down moments is important. That’s where a business plan comes in handy.

JD Spinoza

JD enjoys teaching people how to use ZoomShift to save time spent on scheduling. He’s curious, likes learning new things everyday and playing the guitar (although it’s a work in progress).