Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your beauty salon, you will need to prepare a solid business plan.
In this article we go through, step-by-step, all the different sections you need in your business plan for a beauty salon. Use this template to create a complete, clear and solid business plan that get you funded.
For more information on beauty salons, make sure to read our guides below: How To Build a Financial Model For a Salon? How To Open a Beauty Salon In 11 Steps How Much Does it Cost to Start a Beauty Salon? 7 Strategies To Increase Your Beauty Salon Sales & Profits 10 Salon KPIs you Should Track and How to Calculate Them
The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.
If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.
Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.
The purpose of a business plan is to secure funding through one of the following channels:
This section should not exceed 1 to 2 pages and provide a brief outline of the objectives and purpose of your business, market analysis & marketing strategies, company structure & key people, financial plan, and financial ask.
Here is an overview of the different points you must address in your executive summary:
Introduce your company and briefly describe your business model. For example, you may provide specialized beauty services only (such as skin care only, or manicure & pedicure only, etc.) or a full-service beauty salon (where you provide all types of possible services related to overall beauty including hair care, facial, skin care, manicure & pedicure, nail care & nail art, etc.).
Again, if you are offering a full-service beauty salon with a specific focus on something like skin care while the remaining services are auxiliary services, mention that, too. Also, provide a brief idea of what problem you are trying to solve.
Provide a deep market analysis that backs your decision to open a beauty salon. The market analysis will include information like who your competitors are, your strengths and weaknesses, your target audience and their beauty needs, etc.
Mention your key partners and why you have selected them along with their relevant industry experience. Also, speak about your staff requirements and the management hierarchy.
How much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? It is ideal to include a chart depicting your key financials such as revenue, gross profits, and net profit
What loan/investment/grant are you seeking? How much do you need? How long will this last?
This is the section where you will describe your beauty salon business in detail. Try to answer the following questions concisely:
Include as many questions as possible to create a convincing overview to keep your potential investors and lenders hooked.
Let’s now look at the different sub-sections that you must include:
If you are yet to open your first beauty salon business, you may not have a business history to share. However, you can share your training and past industry experiences. You can even demonstrate your passion and interest for the beauty or wellness industry.
This is also where you should explain why you decided to create this business today. Did you find a gap in the market? Is there a lot of demand for manicure and pedicure treatments but few salons to accommodate customers?
Or are you trying to open a new format of beauty salon, offering a unique experience and treatments to your customers, effectively differentiating yourself from your competitors in your area?
This section must include the following information:
Provide a thorough description of your business model so that the potential lenders and investors can make financial assessments and projections.
Give here an overview of your target audience. For example, answer the following questions:
Your beauty salon will primarily be a service-oriented business. However, that doesn’t mean you will not (or you cannot) sell related products. Outline your products and services in this section. Something like this will suffice:
| Haircare | Nails | Skin & Face | Products* |
|---|---|---|---|
| Colors | Sculptured nails | Body waxing | Makeup |
| Curling | Polish | Facials | Hair & skin oils |
| Cuts | Pedicures | Eyebrow shaping | Texturizers |
| Waving | Manicures | Eyelash perm | Skin |
| Shampoo | Freckle bleaching | Moisturizing creams | |
| Waving | Acne treatment | Cleansers |
* merchandising
Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?
Download an expert-built 5-year Excel financial model for your business plan
Download an expert-built 5-year Excel financial model for your business plan
It is vital that you demonstrate a deep market knowledge to your potential investors and lenders. For example, if you are offering expensive haircare or skincare procedures in a low-income or middle-class area, you may run into losses.
Similarly, if you are not following the latest hairstyles and trends, or if you don’t offer a wide range of facials, skincare services, you may find it difficult to attract customers.
If you are offering haircuts and hair makeup, you must be aware of the latest trends. Similarly, there may be new types of facials and acne treatments available that people may be looking for. Fashion is always a time-bound thing, and so is hairstyle.
For example, if you are offering skin care services like facials, you may want to offer services like:
The objective of the competitive analysis of your business plan should establish that starting a beauty salon in your area makes sense.
For example, there might be few competitors despite a lot of demand. Or, for example, existing competitors might not be adapted to the latest customer trends, effectively losing business to newcomers.
In your competitive analysis, try to include the following information:
Along with the competitive analysis, you must also perform a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Here you must provide the following information:
Both competitive analysis and SWOT analysis can help you to come up with innovative marketing strategies that you can use to gain new customers and even chip off your competitor’s customer base.
This is the segment where you provide a detailed analysis of your target audience. The analysis must include things like:
You can add more questions if you need to complete your customer or target audience study. The best way to get the answers is to conduct direct surveys and interact with your potential customer base. However, you will also find some data from competitive analysis.
A complete understanding of your target audience can help you develop sales and marketing strategies that can beat your competitors and give you an edge.
This is the section of your beauty salon business plan where you should outline your customer acquisition strategy: how do you plan to attract new customers?
Try to answer here the following questions:
Let’s expand a bit on a few questions below:
A few marketing channels that beauty salons typically use are:
You need to use all marketing channels. You can focus on a few (2 to 3 is more than enough). However, make sure that you include social media marketing as one of the options because it can help you to connect and continuously interact with your customers. In addition to that, social media can help you to go viral.
Also, do not forget to provide a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing can lead to investors losing confidence.
In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.
A few examples of USPs are:
Download an expert-built 5-year Excel financial model for your business plan
Download an expert-built 5-year Excel financial model for your business plan
You must address 2 things here:
Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and technical knowledge of salon managers that you intend to hire to oversee your beauty salon business.
Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeed in their previous roles.
It is also important that you explain how their experiences and qualifications help you in implementing the beauty salon services you are proposing.
Even if you haven’t already hired anyone, it is important that you provide a chart of the organizational structure of your company. Typical roles for a beauty salon may include: salon managers, hair director, hairstylists, cosmetologists, pedicurist, aesthetician, massage therapist, electrologist, makeup artist, salon/shampoo assistants, receptionists, etc.
The financial plan is perhaps, with the executive summary, the most important section of any business plan.
Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your beauty salon is an attractive investment.
There should be 3 sections to your financial plan section:
In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.
If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.
Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a beauty salon, startup costs are all the expenses you incur before you start to receive customers and make money.
Startup costs vary based on a number of factors such as the location and size of your salon, the quality of the equipment, design and furniture, whether you rent or buy the space, etc.
On average, beauty salons cost anywhere from $63,500 to $179,000 to start depending on whether you plan to lease the commercial space or buy it. Indeed, if the latter, you would have to take a loan and make a substantial deposit upfront instead.
| Startup cost | Amount |
|---|---|
| Lease Security Deposit or Loan Down Payment | $10,500 (leasing) – $100,000 (buying) |
| Building Improvements & Renovation | $5,000 – $25,000 |
| Beauty Salon Furniture & Equipment | $27,000 |
| Essential Supplies | $20,000 |
| Other (POS, licenses, etc.) | $1,000 – $7,000 |
| Total | $63,500 (leasing) – $179,000 (buying) |
Download an expert-built 5-year Excel financial model for your business plan
