Secret #2: How to Write a Business Plan for a Salon


I’ve read a few articles recently suggesting that new start-up businesses should do away with ‘traditional’ business planning in favour of a “Just Do It” approach to business. This is part of a larger pool of business advice surrounding the general concept of action being better than sitting down and thinking about things, researching and planning. The theory being that this could possibly lead to  the phenomenon of “over analysis” and therefore inaction.

Rarely do I come across a new business idea or concept that I disagree with so completely! To be fair, when you look in to these ideas more, they are really aimed at lean startup operations such as online businesses. There is an argument that new businesses involved with such cutting edge, brand new technology may struggle to use pre-existing data to base projections on. However, for any type of service provider competing with other similar businesses for customers, planning, although at first glance not the most exciting thing in the world, is essential.

“Failure to plan, is planning to fail”

– Alan Lakein

 Why Should You Write a Business Plan?

If you are reading this, then I presume that you either have your own business and are curious to learn how to improve or grow your business or you are starting out on your salon business journey. A business plan is an essential tool when you are starting out in business and an extremely valuable tool when you are already in business – even when you have been in business for years. Business plans have previously been likened to having a map before setting out on a long journey. However, a really effective business plan should actually be more like your GPS navigation system in your car – or a Sat Nav for our UK readers.

First let’s look at why your salon business plan is like a map.

You’re already setting out on a journey by starting a business. When you start out on any journey it helps to have a map or directions to where you are going. A basic business plan should help you know where you are heading on your business journey. This is why people compare it to a map, but there is a better way . . .

 Better to have GPS Navigation than a map.

Let’s face it, we’re in the 21st Century, so wouldn’t you rather have GPS Navigation than a simple map? I think a great business plan is more like GPS because not only does it help you to know where you are going, it also tells you when you are going to get there, what your progress is like, whether you need to adjust course and should someone throw up a roadblock or other unexpected situation, it can help you navigate around the problem to get back on track.

 “Lack of planning contributes to 80% of business failures.”

– Source: BBC News

Who is a Business Plan For?

This is another point on which different advisors and authors tend to disagree. Some will say that a business plan is simply written for people you want to invest in your business or your bank manager so that you can get a loan. Others suggest it is little more than a formalised process of making sure your idea has merit and verifying that your business stands a chance of being successful.

Your business plan for salon should serve both the above conditions, but also a lot more. A business plan should be for you and – if you have one – your business team and employees, so you all know where you’re going, what it’s going to take to get there, how well you’re doing at any stage and – to carry on the map analogy – when you actually get to your destination. A business plan shouldn’t be something only you create once when you are starting out. It’s a valuable tool that should be addressed every year you are in business and particularly when you are embarking on any strategic improvement such as an expansion, relocation or even just a change in product lines.

Your business plan for your salon should be a real document, not a collections of notes, or worse, a series of thoughts in your head. You should be able to physically hand the document to someone who will be able to follow it through and understand what you are building and where you are heading. Who exactly might be interested in reading your business plan?

Well it’s true that the vast majority of formal business plans are for the purposes of gaining some form of investment. This could be in the form of a business loan from a bank, investment from a private individual, friend, family member or contact or it could be to secure big money from an investor or venture capital company. However, business plans in general should be as much for you as they are for anyone else. In general you can think of your business plan as being for both External and Internal purposes.

External – Formal or not, your business plan can be read through by investors, bank managers, advisors, partners, friends etc. Write down all your thoughts, ideas and reasonings so that others can follow them through. If you have ignored any factors, over looked something or mis-calculated in your forecasts, someone in this group will notice and point this out to you. Far better to make a mistake at the business planning stage than when you put real money, risk and effort in place.

Internal – For yourself, your managers and your team. As we have already said, your business plan is your GPS navigation for your business. It should tell you where you are going, where you are now, how you are getting on and whether things in the real world are matching your plans. If not you can make adjustments and get back on track. You might want to remove some of the more detailed forecast calculations if you are making your plans available to your team, but this is a great way to involve everyone and gain their buy in and their confidence. They will see that you have thought about things clearly moving forward and you have a plan of how to get your destination.

So What IS a Business Plan for a Salon?

There are of course books and books filled with advice on writing business plans. It’s an important area that I’ll cover in more depth in coming months, however today I want to cover the main elements of what really makes up a business plan, the fundamentals, to get you started straight away.

Most business books will tell you that your business plan needs to follow something close to the following format:

    • Executive Summary
    • Business Overview/Company Description
    • Market Analysis
    • Strategy
    • Resources
    • Financials and Forecasts
    • Risk, Opportunity and Sensitivity
    • Conclusion
    • Appendix

This is all absolutely true. If you are writing a formal Business Plan for funding or investment you will need to ultimately follow this format, but I find it really helps to understand the very real core of what your business plan is aiming for, rather than focus on all those complex headings from the start.

The fundamental aim of your whole business plan is really to answer these five questions:

    • What are you offering?
    • Who are you offering it to?
    • Who are your competitors?
    • What things do you need to do to get there?
    • How much money do you want to make?

I could be wrong, but I bet if you sat down and thought about your salon you would be able to answer the above 5 questions, far more easily than you would the formal business plan headings above. Go ahead, give it a try now. It should only take you 15 minutes to write something down – you might need to show some form of working out for point (5), but we are not looking for detailed spreadsheets right now, write down whatever comes to mind.

Are you Done? Great . . . you now have the foundation of your business plan!

Don’t believe me? OK . . let’s look at them again:-

What are you offering? – forms the basis of the Business Overview section

Who are you offering it to? – forms the basis of the Market Analysis section

Who are your competitors? – forms the basis of the Risks, Opportunity and Sensitivity section

What things do you need to do to get there? – becomes the Strategy section

How much money do you want to make? – ends up as the basis of the Financials and Forecasts section.

Once you have these basic ideas and information for each of these simple questions, starting to create a more structured business plan doesn’t seem quite so daunting.

Ongoing Business Plans

Most people associate writing a business plan only for starting something new, whereas if you understand the basic principle of a business plan being more for guidance – back to the GPS navigation analogy again – then you’ll see there is real value in always having a business plan to work to. No matter what stage your business is at, there are seldom times when everything is just exactly the way you want it. You rarely find a business owner claiming that they have exactly the right number of existing customers and new customers, that their profits couldn’t be higher or their costs lower, that they have no staff issues and their premises and equipment are all in perfect working order.

If you have a particular project in mind, why not write a business plan around it. You might be planning a refurbishment, changing product lines, hiring new staff, opening an additional branch or expanding the one you have. Plan it out as we have suggested above, you don’t need to prepare a formal one – unless you will be looking for funding of some sort – but answer the 5 key questions and then spend some time turning that in to a document that you can follow, show to others and monitor to see how you things are going.

Even if you are not making any significant changes to your business, follow this exercise anyway. Just cover what small things you would like to achieve in the next year. Write things down in a format you can follow so when things get busy day to day, you have your GPS business plan to remind you where you are going and what you are aiming for.

The Final Forgotten Stage

There is a crucial final stage to any business plan that is commonly overlooked even in the most formal plans. This is not a section that you need to include in your business plan itself, but I would say it accounts for a significant proportion of the success of any business plan. This is called the Review stage.

So you have written out your business plan, whether it was because you were starting out, making big changes or just setting yourself a path for the coming year. Keep checking your business plan to make sure you are on track, make adjustments where necessary, but when your new business has been open for a while, or your major changes are complete or the timeframe you defined has expired make some time to review.

Grab yourself a tea, coffee or class of water – leave the wine for now – sit down somewhere calm and go through your business plan. Are you exactly where you were aiming for? Did some things work better than others? Did you have to make any adjustments at any point? Write these things down and then add them to business plan itself so you will be able to look back in the future. Then guess what you should do next . . . .

. . . write another plan! Use the lessons learned from the plan you just reviewed to make your new plan even more effective. As you repeat this process you will build up valuable information covering what your plans were and how things worked out. This will allow you to target any area of your business in your next plan and be confident that your plans will become a reality.

If you would like a sample business plan for a salon, we are working on one right now, but we didn’t want to rush it. I wanted to give you the BEST sample business plan for salon or spa that we could, so we are taking our time over it and checking all our details and information. Whether you are looking for a business plan of a beauty salon or you are thinking of opening a hairdressing salon then we suggest you enter your email below and as soon as it is ready we will send it to you.

Image by: SalFalko

This Post Has 2 Comments

  1. Iam a full time mum to two beautiful little toddlers who is hoping to set up as a mobile beutition and make up artist . I have found “salon business secrets” tips fantastic and really inspiring.thanks kelxx

    1. Thanks Kelly – Really glad you are finding the info useful. Best of luck with setting up as a mobile make up artist and beautician, if there is anything else you are struggling with, have a question about or anything else that I might be able to help with please do let me know.


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