hairdressing salon business plan

February 27th, 2024
Business Tips

How to Write a Hair Salon Business Plan

Are you thinking about opening your own hair salon? Or maybe you already have a salon and are thinking about opening another location?

Well, when it comes to opening a new salon business, knowing how to write a hair salon business plan can make or break your success. The good news is—we’re here to help.

In this article, we’ll go over the ins and outs of creating a hair salon business plan. This includes everything from market analysis and financial projections to your goals for the future. Having a plan will help you obtain funding and stay on track as you grow.

Let’s get started.

Do I Really Need to Write a Business Plan for a Hair Salon?

You wouldn’t drive from San Francisco to Boston without either a GPS or a map, right? So, you shouldn’t run a business without a plan either.

A hair salon business plan is a roadmap for your beauty business. Whether you have two chairs or 200, it’s essential for your ongoing success.

In fact, opening or expanding a business has a lot more at stake than a drive across the country. You may have saved or taken out a loan to start your salon. And you likely have employees or contractors who are dependent on your business sense, too.

A business plan gets you organized when you’re first starting out or opening a new location. Plus, it keeps you on track as you grow. You can reach or exceed your goals, but you must know what they are first. And you need to have a detailed set of strategies to use along the way.

Let’s go back to our road trip metaphor.

Suppose you want to get from California to Massachusetts. First, you figure out how many miles or hours the journey will take. Then, you divide that by how many miles or hours you can comfortably drive in a day. That’s how many days it will take. Finally, you plan overnight stops along the way for each of those days to make the drive doable.

A salon business plan isn’t much different. You probably have goals for things like:

How much gross income you want to bring in
How much profit you want after overhead and labor
Ideal business model structure (e.g., booth rent vs. commission)
Services you would like to offer clients
Places where you’d like to open additional salons

Without a specific business plan for how to make them happen, those are just pie-in-the-sky dreams. You need a more granular approach to turn them into a reality.

For instance, how much money do you need to make each month to reach your desired net profits? If that’s how much you need to make each month, what do you need to make daily, assuming you’re open five days per week? How many chairs do you need to have? At what capacity do you need to operate?

Not to mention, you’ll almost certainly need a formal business plan if you want to get financing for your salon. Salon equipment and real estate can be quite expensive. A bank may loan you money to get set up, but only if they see you have done your homework first.

Lenders don’t want to back a business that is more likely to fail than to succeed. And new hair salons have an average success rate of 50% in the first three years of operation.

That means half of those businesses will fail. Most fail not because of a lack of talent or ambition but because the owner doesn’t know how to properly run a business. You can be the best hairstylist in the world. But if you consider things like business accounting and marketing, you will likely lose more money than you are bringing in every month.

Do you want to be in the 50% of new salons that thrive? Keep reading to learn the step-by-step method of developing a business plan for your salon.

Owning a Hair Salon: Your Launch Guide

hair stylist at salon front desk on laptop

How to Write a Hair Salon Business Plan: Step by Step

Below you’ll find information on each section commonly included in a business plan. But first, here’s a tip to help you make the most of these categories.

Use the SMART method for setting goals. What are SMART goals ? They are:

Specific – highly detailed, not vague
Measurable – able to be quantified with hard numbers and actionable items mapped out to achieve the goal you’ve set
Achievable – doable within the framework of your business model
Relevant – related to your salon today, not somewhere else or too far in the future
Time-bound – tied to specific dates for end goals and milestones

Any time you set a long-term or short-term goal, ask, “Is it SMART?” If not, dig deeper to get the details you need to make it work.

Executive Summary

Think of the executive summary as the introduction to your salon business plan. It gives brief information about:

The purpose of your salon and who it will serve
Your business objectives (offer something novel, expansion, etc.)
How your salon will be different from your competitors
Why you think the business will perform well

For instance, you could talk about how you plan to open a salon in a busy urban area to cater to downtown employees. Your client demographic is primarily white-collar workers aged 25 to 45.

Your unique selling proposition , or USP, is what makes the salon special. Say it’s that it will offer 20 and 50-minute appointments to fit into standard lunch breaks. Additionally, you’ll have 10-minute appointments for fast services during coffee breaks.

Customers can get a quick trim on their fringe or ends. Beard and mustache trims are another rapid service you will offer. Everything can be booked and paid for online to streamline the process and get customers in and out in a jiffy.

Maybe after work hours, your salon will be open for more traditional appointments. And you’ll have more quickie services available for businesspeople going out at night. They can get an updo, blowout, or style refresh before a date. On Fridays, you’ll offer manicure services too.

In your business plan, you’d want to outline howyour USP will help your salon be successful. For our example, you might say you believe the salon will do well financially because of three factors:

The area is currently underserved by hair salons.
You are catering to the needs of businesspeople in your locale.
You hired an experienced stylist who’s bringing their clients with them.

You don’t have to get into a ton of detail yet. This is a proverbial bird’s eye view of your business proposition. You could, however, outline a rough roadmap of how you envision your business will start and where you see it going in one year and five years.

For instance, perhaps you plan to start with one location and 10 chairs. Five years from now, you want to open two additional locations. At that time, you will add new services like brow waxing and makeup consultations.

You can mention market analysis in this section, too. Market analysis looks at competition and consumer needs in your niche. However, there will be a place later in your business plan to address this in more detail.

Remember, your executive summary is an investor or lender’s first impression of your salon business. Therefore, you want to make it shine.

Company Description

This section goes into detail about the structure of your company. How long have you been in business? Who are the owners and managers?

You’ll also want to review how many employees or contractors you plan to have. Will they be employed under W2 status, or will they contract as 1099 workers?

Will hair stylists pay you a fee for the use of a chair? Will your salon take a cut of their fees? How will tipping be structured?

For example:

Our salon is a startup organization that is not yet in business.
It is co-owned by two stylists who participate 50-50 in leadership.
There will be 10 chairs in total in the salon.
Eight contract stylists will be working as 1099 independent contractors.
Contract stylists will pay a monthly chair rental fee and a percentage of their billables to the owners.
All tips will go to the employed stylists, with a percentage going to a shampoo assistant.
Contract stylists make a commission on products sold in the salon.
You will also have two paid receptionists who will be W2 employees.

You will go into more detail about financials in the Services and Pricing section. But this section should give readers an understanding of the basics of your planned salon operations.

You can also include funding or investing requests in this section. Again, you will have further opportunity to dive into financials later. But touching on what you need to open or expand gets readers primed as they go through the next four sections.

Market Analysis

The market analysis section of your business plan is another area where you can wow readers and make your salon stand out. It answers the question, “Why you, and why now?”

Remember, you don’t want to fit in with all the other salons in the area. Instead, you want yours to be unique .

Your hair salon might be unique because of its business model, like the hypothetical one described in the executive summary. Or it could be you have a string of well-known stylists.

Perhaps you offer extra luxury services and product lines. Maybe you offer great prices. It could be the whole vibe of your salon that’s one of a kind. Maybe it’s a retro nod to the ‘70s or a high-tech glimpse into the future.

You don’t want to pitch your salon with a kitchen sink-style of features. After all, when you appeal to everyone, you really appeal to no one. But you can list several unique attributes that will give you a competitive market edge.

In this section, you’ll show what the current market is like in your location. How many other salons are within a mile or two? Who do they cater to? Is there a gap you can fill to capture more market share?

Be realistic. If everyone who comes through your door is on a tight budget, you can’t offer $300 color jobs. You need to match your services to your demographics.

If you’ve ever sold a real estate property, you’ve done something similar to a business market analysis. You or your agent prepare “comps” or comparables. The comps show how your property is special, while reviewing what the rest of the area has to offer.

Whether your salon is brand new or you’re opening a new location for your existing salon business, you may need to conduct market research. You can do this on your own or hire a consultant to do it for you.

The more populated the area in which you operate, the more complicated market research is likely to be. If you’re in a suburb or rural community, there may only be a few hair salons to compete with.

Don’t forget to include how your USP and ability to fill a need relates to industry trends. Let’s use the example above. There is a current national trend towards more online conveniences for salon customers. So, offering online payments and booking is going to help you stay at the front of the curve.

Also, employees are feeling busier than ever these days. They struggle with work-life balance. And many are returning to the office after working remotely for several years.

Your salon leverages this trend as well by providing stress-free quick appointments that fit into work breaks. Workers can get their hair done over their lunch hour and make better use of their personal time after work.

If you have an existing business that you’re expanding, you can survey your clientele. Maybe you’re going to a second location because it’s underserved. Or perhaps you’re adding more services because that’s what clients want.

It’s great to be able to give objective data that says there’s a need for your services.

Hair Salon Industry Trends for Growing Your Salon Business

Marketing Strategy

How do you plan to promote your new salon or additional location? That’s the focus of this section of the plan.

Some common salon marketing methods include:

SEO website
Social media accounts
Paid advertising
Loyalty programs
Cross-promotion with other businesses
Flyers in area office buildings
Bulk mailings with coupons
Free makeovers
Local news editorial coverage
Online review platforms

An SEO (search engine optimized) website is a great place to start promoting your business. You can add other components later. An optimized website is set up to rank higher on search engines like Google and Bing.

How do you improve a website’s SEO?

Use keywords related to your exact services that clients would search for when looking for a hair salon.
Be sure to mention your location multiple times on the website, including your state and local landmarks.
Add a blog for value-added content with links to authoritative sources.
Get your salon mentioned on other websites and in social media mentions.

This section overlaps with your market analysis. You’ll be using your unique selling proposition to focus marketing campaigns. Every marketing effort is an opportunity to promote what makes your salon stand out.

Talk about how you plan to cement the two cornerstones of a healthy salon business:

Repeat customers who book appointments regularly
New customers who keep things fresh and balance natural attrition

How to Design and Roll Out a Beauty Salon Rewards Program

Management and Organization

Here’s where you can go into more detail about your salon’s company structure and staff payment plan. You can include elements like credentials here, particularly if you or a manager have a business background or education.

Don’t simply list how you plan to pay workers. Explain why this is best for your salon business’s long-term financial health.

Are you and any other owners taking a salary? What corporate structure are you using (LLC, S corp, etc.)? Your state may determine how you want to set this up.

Speaking with an accountant can clarify questions for you, especially about taxes.

stylist and client choosing hair dye color from a book

Services and Pricing

This section of your hair salon business plan outlines the meat and potatoes of what your salon will offer. It is essentially a menu of all the services and treatments you provide. It also includes prices for each.

You can mention why you chose the pricing model you did. For example, if you’re serving affluent clients in a resort area, you can justify charging a little more. Or you might do group pricing because you serve a lot of bridal parties.

Don’t forget to add any products you plan to sell. Why is carrying these items beneficial to your business?

Financial Projections

Financial projections are the nuts and bolts that lenders want to see. They’ll also keep you on the right path as you grow your salon.

You’ve already outlined your services and pricing. Now, it’s time to do the math and calculate what that means in terms of income.

Answer these questions first:

What do you expect your salon to gross (total income) in a year?
What are your overhead expenses (rent/mortgage, staff, utilities, wholesale supplies, etc.)?
What portion of your expenses are due to payroll?
Do you have to make capital purchases for equipment? Will these be paid with a lump sum, financing, or rental payments?
What is the net profit you expect (gross income minus overhead and expenses)?
Where do you predict expenses or income will change over the next few years?

You want to make your business plan financial projections look truly professional. So, break them down into these categories:

Sales forecast – total sales expected over the next several years
Expenses budget – all the costs you need to operate
Profit and loss (P&L) statement – a 12-month summary of revenue versus expenses
Cash flow statement – how cash moves in and out of your business, including monthly payments
Projected balance sheet – items that aren’t in your P&L, like interest debt, equity, and other factors that affect the net worth of your business
Break-even analysis – what you need to earn (at least) to make your expenses and start turning a profit

A certified public accountant (CPA) can help you put together this part of your business plan for a reasonable fee. It’s well worth it if it helps you obtain investors or bank funding.

How You Can Start Writing a Hair Salon Business Plan Right Now

Ready to get started on your hair salon business plan today? Use these tips right away to make it both convincing to lenders and helpful as an internal roadmap:

Write a mission statement. To write a solid executive summary, it’s helpful to first compose a mission statement. This delves into why you want to open your business in the first place. Some people include this in their executive summary. Others keep it private and use it as an inspirational jumping-off point.
Include milestones in your financial projections. These are points where you will examine progress and see if you’re on target. Be ready to course correct if you’re not hitting your goals.
Compile an appendix. It’s a good idea to include an appendix in your business plan with copies of extra materials. This is an ideal place to include photos of your salon, certifications, licenses, and financial documents. It will keep everything organized for you and make you look more professional to lenders.
Enlist help. If you have questions about certain sections of your salon business plan, consider consulting with the appropriate professionals. Paying a one-time fee to an attorney or CPA can save you money and headaches down the line. You could even consider hiring a business manager to deal with office and financial issues.
Research your competition. If you’re not sure what services to offer or how you stand out, do some in-person recon. Visit competitor salons and check out influencers on social media. How can you align with service gaps and trends to make the most of your business?
Explore salon management software. Salon management software can save you a lot of time and make your job a lot easier. For instance, you can use it to quickly and easily generate reports to keep a pulse on your performance. It’ll also help you with other tasks related to your financial success. The best salon management software can automate appointments, keep track of inventory, and assist with marketing.

Learn How to Manage a Hair Salon Business with SalonBiz

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How to Write Hair Salon Business Plan

Passionate about hair styling and cutting?

If yes, you might have thought of starting your own hair salon business.

But it takes more than just an artistic talent to give cuts that suit different hair types and styles. It also requires a solid business plan in place to make it thrive, as there are 952,909 hair salons in the US.

Need help getting your plan? Not to worry; we’ll help.

This hair salon business plan will help you get started and guide you every step of the way, from crafting your business idea to evaluating your salon’s financial success.

Ready to begin? Let’s dive right in!

Why you need a business plan for your hair salon

Hair salon business plan is a professional, living document that outlines your business ideas, goals, and strategies to achieve them.

Whether you’re starting a new salon or aiming to expand an existing one, you’ll need a business plan. It serves as a strategic roadmap for your entrepreneurial journey.

Here are several key reasons why having a hair salon business plan is essential:

Clarifies your vision & mission

Once you’ve decided to start or grow your hair salon, writing a business plan helps you think about all the details of your business. It outlines your business concept, vision, mission, and its core values. Also, it enables you and your team to understand your business’s purpose and ensures everyone is aligned.

Attracts investors to raise funding

Investors often request to see your business plan before investing in your business. At that time, a good business plan helps you demonstrate your business strategies, realistic financial forecasts, and potential for success. Also, it shows your idea is viable and convinces them to raise funding.

Helps reach your business goals

A well-thought-out business plan allows you to consider your short-term goals and long-term objectives. It also summarizes the strategies & steps to reach them, as well as how long it will take to achieve those goals. Further, with specific benchmarks and milestones, you can measure progress and keep track of your goals.

Determines your financial needs

A business plan helps you estimate the funding required for your salon. It includes detailed financial projections and clarifies how much money you’ll need to raise and how you’ll use those funds in different areas. This means you can ask for realistic funding needs to grow your business.

Reduces potential risks

While preparing a business plan, you can identify the potential risks and challenges that your salon might face. By knowing these threats earlier, you can develop effective strategies and contingency plans to mitigate them. This ensures your business is safe and improves your chances for success.

Now that you know the importance of having a business plan, let’s explore how to create a successful business plan for your salon.

How to write the perfect hair salon business plan in 8 steps

here is the simple step by step guide on how to write hair salon business plan.

1. Executive Summary

An executive summary is the first and foremost section of a business plan that provides a high-level overview of your hair salon business.

In fact, it might be the only section that potential investors or stakeholders will read and get a better idea of your business, including its concept, core values, objectives, and growth plans.

If your plan summary isn’t interesting or compelling enough, they won’t read it any further. So, ensure you keep this section simple, crisp, yet effective.

While writing an executive summary , consider including the following key elements:

A quick overview of your salon
Mission-vision statement

Target market

Unique product or service offerings
Marketing strategies
Financial highlights

Though it is the first section of your salon plan, it’s typically written at the end once all the other sections are drafted. This is so because it summarizes all the most important aspects of your business.

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2. Business description

As you will provide a quick business overview in the executive summary, this section will expand on it and give detailed information about your salon.

So, here, explain your salon concept in detail and give readers a better understanding of your business, including what your hair salon business is all about.

For instance, you may ask yourself a few questions to plan this section:

Where it’s located & why did you select that place?
What’s the legal structure (e.g., sole proprietorship, LLC, corporation)?
When and why did you start the hair salon business?
Who are the owners or partners?
What type of hair salon do you operate?
What business milestones have you achieved till now (if any)?

In addition to that, you may highlight your salon’s short-term goals and long-term objectives that every potential investor or lender needs to know.

3. Market analysis

The market analysis section presents your external business environment. Generally, it involves in-depth research of the specific industry or sector in which your business intends to operate.

This means you’ll need to conduct comprehensive market research and analytical work to start a successful salon venture.

It also helps you get valuable insights into the salon industry, market size & growth potential, target customers, market demand, competitors, and opportunities.

Here are a few essential components that you may include in your market analysis:

Here, you may provide details of the target market you serve or expect to serve. This will help you identify your target customers and create a buyer’s persona, along with the psychographic and demographic details.

Competitive analysis

It’s a very important aspect of market research that helps you identify and analyze all other salon businesses nearby. It will cover direct and indirect competitors, including their strengths & weaknesses, and explain your competitive advantages .

Market trends

As a salon owner, you know that the hair salon industry is dynamic and continuously growing. So, you’ll have to explore the current and emerging trends (technological advancements, adoption of sustainable products, etc.) in the indus try and explain how your business will cope with them.

4. Organization and management

The organization and management section introduces the key personnel responsible for running the salon, including the salon owner, managers, hair stylists, and other staff members.

You may start by describing their roles and responsibilities, educational qualifications, industry experience, and expertise that help you grow your salon.

Then, consider discussing the employee benefits, compensation plans, and business operations, as well as outline the organizational structure, including reporting lines and how decisions will be made.

Furthermore, try to highlight advisory board members (if any) and explain how they can contribute to the salon’s overall success.

If your team is lacking and you’re planning to hire, mention whom you’ll hire and clarify how they will manage day-to-day operations, what type of work experience you’ll need, and how you’ll address training practices.

5. Services and products

As the name suggests, this section illustrates all the different types of services or products your salon will offer to its customers.

For instance, you may include a wide range of services, such as haircuts, styling, coloring, hair treatments, manicures, pedicures, etc. Also, describe each service in detail, along with the pricing plans, techniques used, and expected results.

For easy understanding, you may take the below as a reference to craft your offerings:

Platinum Hair’s Services

1. Haircuts: Classic Haircut

Price: [$40] per session

Description: A timeless haircut tailored to your preferences, ensuring a polished and stylish look.

Specifications:

Suitable for: All hair types
Duration: 45 minutes

2. Coloring Services: Highlights

Price: [$110] per session

Description: Partial or full highlights, to add dimension and brightness to your hair, enhancing its natural beauty.

Specifications:

Duration: 150 minutes
Styles Available: Partial, Full, Balayage

If you’re running a hair salon that offers a great selection of products, like, hair care products, skincare items, or beauty accessories), mention them as well.

This will help investors better understand how you plan to satisfy all your customer’s needs & preferences and what value your salon brings to the market.

6. Marketing and sales strategy

Your marketing and sales strategy decides how you plan to draw new customers and retain existing ones for your hair salon.

A well-written sales and marketing plan can help you keep track of the marketing budget and maximize ROI while developing online and offline marketing or external promotional campaigns.

Consider including the below information in this section:

Unique Selling Proposition (USPs)

You may define your unique selling points to distinguish your salon business. For example, consider presenting holistic hair care services, sustainable & environmentally friendly products, and highly skilled stylists.

Online advertising

Using online channels such as social media platforms, email marketing, and professional branding can help you target certain audiences and build trust among them. You may also create visual ads and content to showcase all your offerings.

Partnerships or collaborations

You may partner with local businesses to expand your brand’s visibility and reach a wider audience. This will draw new customers and increase your growth opportunities.

Workshops and events

You may organize workshops or events at your salon and invite the local community to explore your space. Ask them to engage in live demonstrations of hairstyles and treatments. Also, don’t forget to collect their feedback and preferences.

Discounts or rewards

Giving special discounts helps you attract new clients and retain existing ones. So, try to offer discounts to the new consumers or introduce a loyalty program to reward regular clients.

7. Financial projections

A financial plan is the most crucial aspect of the hair salon business plan. It offers a comprehensive overview of your financial projections for the first 3-5 years.

However, the startup financial plan includes several critical statements and reports, such as income statements, cash flow statements, and balance sheets.

For your hair salon financial plan, consider providing detailed financial projections, including sales forecasts, revenue projections , initial startup costs, funding requirements, break-even analysis, or even sensitivity analyses for different scenarios.

This will help you demonstrate the long-term growth and profitability of your salon and allow potential investors or financial backers to make informed decisions.

8. Appendix

In the appendix, you may attach any supporting documents that might complement your business plan.

It includes market research data and surveys, licenses & permits, equipment leases, salon layouts, resumes of executive members, and many more.

In short, you can place additional information or attachments that don’t fit into specific sections, but readers might use them for reference.

Download our free hair salon business plan template

So, prepared to draft a hair salon business plan but need more assistance? Well, here you go; download our hair salon business plan template pdf now and get started.

This expertly crafted template has been designed with hair salon businesses in mind. With step-by-step guidance and examples, this template assists you in developing your own plan.

Import data into your editor and start business plan writing.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Now that you have a detailed hair salon business plan outline, it’s much easier to kickstart your plan writing process.

However, preparing a comprehensive business plan from scratch can be an intimidating and daunting task. But not to worry; Upmetrics could be a great companion here!

It’s a modern business plan software that enables new entrepreneurs and small business owners to create investment-ready plans quickly and efficiently.

From easy-to-follow guides and 400+ business plan examples to financial forecasting software, Upmetrics offers valuable resources to streamline the entire business planning process.

So, wait no longer; start preparing your plan!

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Frequently Asked Questions

What financial projections are most important for a new salon.

The following are the most important financial projections for a new salon:

Sales and revenue forecasts
Profit and loss statement
Cash flow projections
Balance sheet
Initial funding needs
Break-even analysis
Loan repayment plan

How often should a hair salon business plan be updated?

It’s necessary to review and update your hair salon business plan regularly, at least once a year, or more often whenever there are significant changes in the business environment or market.

What are the essential elements of a salon business plan?

While writing a comprehensive business plan for your salon, consider including the following essential elements:

Executive summary
Business overview
Market analysis
Products and service offerings
Marketing and sales strategy
Management team
Operations plan
Financial projections

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more