The hair salon industry is growing fast. There are over 80,000 salons and barbershops in the United States. The combined annual revenue comes out to around 20 Billion dollars. It is a great time to become a salon owner. Opening up your own business can be challenging and confusing. These tips will help you get your salon business open and running efficiently in no time.
The Many Steps You Will Need To Take To Start Your Business
There are many steps to open a salon and business. Some are more fun, and others are more boring, like business paperwork, but all are very important to your salon’s success. Here are the most significant steps you will need to take to start your business.
Build Your Salon Business Plan With Ease
A salon business plan is a report that outlines the goal and intentions of your business. The business plan lays out the company’s intents and purposes and decibels how and why these goals are attainable. The business plan will include the history of the person or organization trying to attain those goals. Having a business plan is essential to securing a business loan from a bank. Additionally, the business plan will lay out everything you will need to operate your business and provide a long term game plan for your salon. Your business plan will lay out several years ahead and outline the steps you will take to grow your business.
Getting Your Business Plan Started
First, your business plan shouldn’t be any greater than twelve pages long. You will also have financial documents that will also need to go with the business plan. You will need to outline qualitative goals and quantitative intentions in each section. When writing your business plan, you will want to outline any bumps that may come up in the road and how you will overcome the roadblocks. Keep your document brief and use visuals when feasible. In addition to assisting you in securing a loan, a good business plan can help lead you to success. To guarantee your success, frequently evaluate your salon’s ability to reach the business plan’s goals and intentions and track your financial development on a monthly, quarterly, or yearly basis.
Use Your Resources
Lean on your peers for help during this time. Find a business mentor that will help you through the start of your salon. If you feel overwhelmed, there are plenty of resources online like business plan templates you can purchase. Also, there are people whose careers are helping get businesses started. If it’s within the budget, you can hire a professional to help you with all of your documentation and requirements.
Some of the elements of a solid business plan as it mainly pertains to spas and salons:
Tips For The Cover Page
Your business plan’s cover page will need to have all of your contact information and state your salon or spa name. It will need to include your name, phone number, and address. If you have a partner, their contact information will need to be on the cover page as well. The next page after the cover page should include a table of contents for ease of references, and it will make your presentation look professional and clean.
The Executive Summary
This portion is a summary of your business plan and will need to include your company profile. It will also need to have your goals across the next three to five years. It shouldn’t be any longer than one page and should include 6-10 goals.
Company Description & History
In this area, you will need to layout information regarding your spa or salon. The description should include the products and services you will be providing and why your salon or spa will stand above the others in the area. Try to describe whatever will make your salon business different. Dive into specifics about the salon location, why you chose that spot, the parking details, and even the traffic patterns. Describe the region’s past and demographic, touch upon the market your business will serve, and why your business will benefit the surrounding community.
Mission Statement
A mission statement should include each component of the salon operation, including client assistance, employments, managing inventory, and marketing. The mission statement is also the right place to describe which software you will use to run your salon or spa; the software can include helpful features for booking appointments, marketing components, inventory management, as well as financial planning and budgeting.
Management Plan
Precisely describe your organizational, administration, and employment procedures. The management plan will need to cover the owner’s position, obligations, and payment for stylists, receptionists, and management.
Market Analysis
Before you open your business, you must do research on the industry and your local market. The local chamber of commerce is a fantastic place to go to start this process. They will have great resources for you. Next, analyze your local competitors to see how they are operating and where their revenue stands. Jot down some things you don’t want to do and great ideas from other salons you can implement into your salon.
Your Marketing Plan
The beginning part of your marketing plan section should describe how your salon will be in the market. For instance, you should highlight whether you are a high-end salon focusing on upscale services or if you will be more of a family-friendly salon that does a little bit of everything. It’s essential to break down the demographics like age, gender, and other specifics about your projected clientele. Outline the wants and needs of your desired customer base. Your next step will be to describe how you will attract those customers and their wants and needs. Whether it be marketing through social media, ads in the paper, or promotions.
Financial Plan
The Financial plan is the part that can start to get confusing. If you aren’t great with numbers or feeling lost, this might be a great time to reach out to a local CPA to help you through this portion. To secure a business loan from a bank, you will need to have an in-depth breakdown of all the financial information involved. You will need to include the start-up budget, Profit and loss statement, projected cash flow, business ratio, balance sheet, and break-even analysis. To explain how you came up with these figures,, you’ll need to provide data and research. Make sure to be precise and clear about the numbers.
Diving into the Numbers
To start the financial section of your business plan, you will need to layout the cash you have to invest in your new business. The more money you have, the better chance you will have to secure the loan at a low-interest rate. Remember to be cautious with your cash because you will also be purchasing permits, equipment, and any repairs you need to complete at your new space. It’s best to leave some of your cash out of this equation. Pay attention to changes or improvements you want to be made to your salon and add that to your budget. Having a saving plan in your financial plan will let the lender know you are responsible and will be able to hold your own for any reason.
The Profit and Loss Statement
The P&L document previews your salon’s production monthly, quarterly, and annually by planning sales, expenses, and obligations. This important document should describe the managing expenses to operate the salon and the income-based on both retail purchases and services like hair color, cuts, etc. Notate all costs that will create income, such as the cost of products, the commissions you will pay out, retail sales, and sales tax for the retail. Next, notate all operating expenses like rent payment, utility bills, insurance, Interest charges, payroll, marketing fees, etc.
Break-Even Analysis
A break-even analysis is an analysis to decide how revenue collected matches the expenses connected with operating a business. It transpires at the time when the planned and variable costs cross with income. In this portion, you may need to think about graphing out your conclusions.
Cash Flow Statement
To come up with a cash flow document, you’ll use many of the same numbers and figures you used for the profit and loss document. The most significant difference is that you’ll also include the money that goes in and out, not just sales profits and business costs. For instance, you’ll consist of loan payments, the number of personal funds you will put into and take out of the business, the taxes, and other cash that isn’t generated or spent as part of your main salon operation.
Balance Sheet
A balance sheet covers spending and revenue that the profit and loss statement did not include. It’s a financial snapshot that involves assets, contracts, and money at any provided time. It helps to explain that the P & L defines financial performance over some time, like a month, quarter, or year. The balance sheet will instead provide the information for a specific moment in time. Usually, it’s the conclusion of the month, quarter, or year.
Business Ratio
The business ratio evaluates the percentage of sales and growth, and obligations from one year to the next. Bankers and investors use this to assess a company’s financial state. Banks will most often look at signs, such as sales and net revenue inclinations, as well as the debt associated.
Appendix
This portion is voluntary but helps add information such as resumes, licenses, and contracts. If you’re not sure where to add a specific asset that you feel might help obtain the loan, the appendix is where you should add it.
File Your New Salon Business With The State
The next step in your new business journey is to file your business with your state. Every state will require different information to open a business or salon. It is best to go to your state website to see the business requirements and documentation they need to file your new business.
Decide How You Want Your Salon Taxes Prepared
Now that you are a business owner, you will need to decide how you would like to prepare your taxes. Filing your taxes as a business owner will be different than as an employee. There are more steps and write-offs involved. Taxes can be confusing, so finding a trusted CPA in your area can help you understand the different ways of filing your taxes correctly and qualifying write-offs.
Secure A Location
Finding the right salon business location may sound like a big task, that’s because it is! Your salon location will be an essential part of your business success. Having a salon in a busy strip mall will increase the foot traffic in and out of the salon. If a space like that is not available, finding a fantastic location and excellent business marketing can also increase your salon’s traffic.
Plan Your Salon Design And Style
Get a vision for your salon to look and vibe. Pinterest is great for salon inspiration pictures. Every salon has a different vibe. Make sure the style you chose is within your budget and attainable. Many projects for your salon or business can be DIY’d.
Purchase Your Salon Retail And Back Bar Products ASAP
Salon retail, color, and back bar items can take a while to ship out. You’ll want to get these salon products ordered as quickly as you can so they are there when you open your business. Take time to research the different product lines you can carry and pick the one that best suits you and your new salon.
Design And Order Your Salon Business Cards
Salon business cards can take up to 2 weeks to process. Order your business cards early, so they are in on time. Search on the internet to find which company you want to use for your business card. You will want your business cards to stand out and attract customers to your new salon.
Inform Your Clients Of Your New Location
Make sure to inform your current customers of your new business adventure and recent salon change. You will want to send them the further salon location information a few times to ensure they know where to go. A great rule of thumb is to text your clients the day before their appointment to remind them of the new salon location.
Enroll In A Salon Online Booking System
Having a salon online booking system is essential in 2021 for salon business. These systems are the staple to new salon owners’ success. Start on the right foot with an online booking system to keep you organized and your salon business running smoothly.
Build A Salon Website
Your salon’s website should be a direct reflection of your salon’s style and vibe. When you build out your business website, you will want to make sure it includes your salon’s name, address, philosophy, and staff. Many companies allow you to build a website for free.
Build A Marketing Strategy
Being strategic about your business marketing can increase your revenue significantly. If you are new to marketing, check out FULLY BOOKED CHAIR to learn how to get your business booming and grow your clientele exponentially.
Tips On How To Efficiently Run Your Salon Business
Now that your salon is up and ready to go, the next step is to manage it and keep it running smoothly. These tips will help you obtain your goals and build toward your new salon’s success.
The Importance Of Salon Recruitment
Salon recruitment is a lengthy but essential process in your business. Recruiting the right stylist will be crucial to the success of your salon. Set up a stable recruitment process so that you can go back to it when there comes a time that you need to fill a chair. Use marketing strategy to recruit the best stylists in your area to your salon.
Planning Your Salon Budget & Targets
Planning and balancing your business budget is a vital part of your success as a business owner. Having a budget will assist you in keeping track of your spending and where your money is going. You will be able to make decisions to cut a certain amount of money in some areas that are not necessary. Studying your spending and budget is key to your salon’s success and longevity of your business.
Sit Back And Watch
A great way to understand your salon’s dynamic is to sit back and watch how things operate. Work alongside your employees to get a good understanding of their day-to-day practices and how they use them. Having a good understanding of your employee’s wants and needs will help you provide them with the best salon home. You will also observe changes that you will need to make and the best way to go about making them. Keeping a close eye on your salon’s operations will be extremely important.
Bring Your Business Vision To Life
The heart of your success will always be your initial vision for your salon business. Come up with a mission statement and put it somewhere you will see every day. Make sure to keep those goals you have written down somewhere to reference frequently. Achieving those goals will fill you with the utmost pride and joy. Your happiness will drive the success of your salon business. It’s important to stay true to who you are and what your goals are.
Take Time For One On One Salon Meetings
Taking time to schedule one on one meetings with your staff monthly and communicating your vision and goals for their success and your salon’s success will be critical. Hearing their ideas and concepts will help you shape your business to be successful for you and your stylists. Salons can fill with drama quickly, so taking time to squash that will help keep your salon a happy and joyful place to work.
Check And Business Balance Your Procedures
Get the core procedures you want to have in place at your salon and write them down. Make sure to post the salon guidelines where they will be visible to all of your staff. Find the things that are important to your business, and don’t let them stray away.
Design A 90-Day Plan Of Action For The Salon
Having a 90-day plan of action will help you stay on track and have a great plan in place. Be as specific as you can in the details and what you want to accomplish. Always put a purpose to why you are doing this and what result you’re anticipating seeing. This plan can help you stay on track and produce an impression on both the employees and the salon’s revenue.
Host Salon Team Meetings
Team meetings will be imperative to the salon’s success and morale, and having a meeting once a month is a great staple to implement in your salon. These meetings will be the glue that holds your salon together. Outline what you want to accomplish in each meeting, and maybe even take the time to host a HANZO class to provide your stylists’ education and build their confidence and skills.
Use Social Media To Your Advantage
Social media is so powerful in today’s age. Use your new salon’s social media to build a clientele and referrals. Be strategic about your posting. Check out our blog on Social media tips and tricks here.
Written By: Catie Delahanty
