How to Create the Ideal Salon Business Plan for Your Salon

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The beauty and salon sector is quickly expanding, with a large number of new customers joining every year at a pace of 15-20% every single year.

This is huge news.

Because of its developing trends, capabilities, and outstanding services, it is no longer a controversial topic in the country. It is expected to increase at a moderate rate, with current estimates of USD 950 million rising to USD 2.68 billion by 2020.

Consumer demand for innovation, unique services, flexibility, and other attributes is increasing as technology advances and everything becomes digital. Salons are always evolving, and they face stiff competition from mobile-enabled home service business models. Nonetheless, salons are focusing on data analytics and getting to know their consumers in order to deliver the best service possible.

People have a strong desire to go to a salon and try on cosmetics and beauty products. The Indian beauty care market is expected to play a major role in the expansion of the Indian wellness industry, which includes salons, cosmetic products, and cosmetic treatment centers.

The sector definitely has a lot of potential. But starting a business based purely on statistics and expecting to turn it into a profitable venture is like shooting an arrow in the dark and hoping for a bullseye. Let’s try and understand the scope of the business on a more micro level.

Salon Industry In India

The beauty salon sector is projected to be worth approximately 10,000 crores, according to a survey. This simply goes to show that the salon sector is not only booming, but also has an impact on people’s lives by making them aware of the need for personal grooming.

The Indian salon business is coming up with novel techniques to suit this increased demand while maintaining international standards. Are salons profitable though? Let’s take a look.

According to one research from 2017, two-thirds of hair and beauty firms made over 99k in annual revenue. The majority of salons made between 50,000 and 99,000 in revenue, while 27 percent made between 100,000 and 249,000.

Salons can make an average profit margin of 8.2 percent, which is higher than the 7.7 percent average for all businesses.

Well-managed salons can earn significantly more than this average. A profit margin of 10% is usually the minimum goal, though it might be higher depending on how well you handle your salon’s finances.

Types of Salons In The Beauty Industry: Choosing The Right One

It’s difficult to keep track of all the treatments offered in the beauty industry because it’s become so large. Many independent salons specialize in a limited number of services, ranging from nail art to tanning, and even the largest spa salons are unlikely to have a single employee who can do everything.

The following are some of the most common salon services:

·        Hairstyling, Coloring, and Cutting

·        Waxing and other hair removal methods Nail treatments

·        Treatments for the face and skin

·        Tanning & Massages

·        Aromatherapy is an example of complementary care.

The scope of salon services is always developing and changing. So, if you appreciate the idea of a simple job that requires you to constantly upgrade your skills, it can be a fantastic fit for you.

High Street Salons

High street salons are what most of us think of when we think of hair and beauty salons, with their eye-catching posters, strong logos, and large windows.

Spa Salons

They are located inside many self-contained spa complexes, such as hotels or country clubs, and often provide a high-end service. The major focus here is on creating a premium experience for customers, so they feel taken care of right from the time they step into the salon.

Mobile Hair Salons

Operating a mobile hair salon might be a low-cost method to get started in a company. It can also assist you in catering to consumers who have mobility challenges or other commitments that make going to a salon for a haircut difficult.

Mobile Beauty Salons

Mobile beauty salons, which include bridal makeup, nail treatments, and a variety of other services, have many of the same advantages and disadvantages as mobile hair salons.

So let’s get down to how a business plan would assist you?

·          A business plan will assist you in determining what services you want to provide, where you want to take your salon’s growth, who you want to cater to, and who you’ll be competing against.

·          It is essential if you are looking for funding from investors, banks, or other lending organizations, as well as government subsidies.

·          It will help you increase your salon’s efficiency by providing better control and direction, as well as allowing you to make more educated decisions.

·          A well-developed business plan can also help you secure the financing you need to expand to other locations as your salon business grows and attracts clients.

This is a thorough, comprehensive guide to assist you in the creation of a salon business plan. It will teach you the basics of how to construct a salon business plan in the simplest way possible.

The Business Plan for your Salon Business

Writing a well-structured salon business plan is critical to ensuring your salon’s success in this competitive industry. A business plan for your salon will help you get there, whether you’re seeking to acquire business financing for your salon or trying to expand or reinvent your salon business.

Executive Summary

The first page of your business plan should include your salon or spa’s name, address, proprietors’ names, phone numbers, email addresses, and all other contact information. You might have to include a table of contents after the cover page for easier reference. It also makes the presentation appear more professional and well-planned.

This section serves as a summary of your business strategy, and it should include information about your company and its goals for the next 3 to 5 years. It should be no longer than a page long and contain six to ten clearly stated objectives.

Define Your Company – What Does It Stand For

You would add information about your salon or spa, the basic commodities and services it offers, and how your business differs from other salons or spas in your area in this section. Take the time to write out what makes your company stand out. Identifying this could help you stand out from the crowd and gain an edge over your competitors.

Explain the business location, the rationale for choosing that site, the parking problem, and even the traffic patterns in detail. · Explain the area’s history and demographics, as well as the market your salon or spa caters to and how your salon or spa will benefit your consumers and the surrounding community.

Mission Statement

A salon mission statement is a brief overview of why your salon exists, what its aim is, and how it plans to achieve it. It should be the first thing you and those who read your salon business plan see, and it should be prominently displayed at the top of the page.

The objective of your salon should be understood and embraced by everyone who works with and for you. It brings your salon’s staff together. Here’s how to write a mission statement that’s just perfect.

·        Value – What is the market value of your salon? How can it benefit your customers?

·        Why should people visit your salon because of your inspiration?

·        Always keep in mind that your mission statement should sound believable and logical.

Make it explicit and concise by stating all of your short-term goals as well as the timeframe in which you aim to achieve them.

Market Analysis

Analyzing and identifying a target market for your salon is crucial since it is linked to its expansion and outreach.

A beauty salon can cater to people of all ages and genders. Working professionals, college students and teenagers, homemakers, brides-to-be, and even children can all be part of your target audience. And each group will necessitate different services. As a result, establish a list of each segment of your target market and the services they would demand. Steps in identifying and analyzing your target market:

·  Discover who you think would be the most interested in your salon’s services. For example, if your salon provides low-commitment (temporary) coloring services, you may see a lot of millennial visitors.

·   Find out if your services are more suited to a specific demographic, or if you’re comfortable working with folks from many walks of life.

·   Keep up with the latest salon trends to find out what’s popular and what’s not.

·    Look into the minds of your target customers to find out exactly what they want or prefer, and tailor your salon to meet their needs.

Competitor Analysis

With such high market demand, multiple powerful rivals develop. And we don’t want your salon to be lost in the midst of all the others, do we? Keep your clients close but your competition closer, as the saying goes. You can evaluate your competitors by doing the following:

·        Check out what other salons in the area are doing well and what they are doing poorly.

·        Get a basic sense of the prices of the treatments offered by your competitors’ salons. This aids in the pricing of your salon’s services.

·        Evaluate what they could do differently to better their condition, and incorporate it into your business purpose plan to prevent suffering similar difficulties.

·        Request that your salon fix these market flaws.


Your salon will create both revenue and expenses. Your salon’s business plan should reflect your larger cost pools. Let’s have a look at some of the possibilities.

The following are the most significant monthly expenses for a salon:

·        Wages

·        Bills for rent and utilities

·        Purchases of goods

·        Marketing \Insurance \Education

The actual prices will vary from salon to salon, based on the location, amount of employees, and business model chosen.

Cost Of Starting A Salon

The following are some of the most common costs associated with opening a salon:

·        A security deposit

·        Purchasing the former salon owner

·        Improvements to the leasehold

·        Equipment for the salon

·        Basic inventory and supplies

·        Licences and certifications

·        Marketing for the opening of a salon

·        Insurance for the salon and legal fees

“In the busy business districts, wages will be the largest cost element (40 %), followed by rent (25 %).” The salon’s profit margin goal is 20% of total revenue.”

Marketing your salon

It makes no difference how skilled you are if no one knows about your salon. Marketing is crucial to any business, and that applies to salons as well.

However, marketing includes much more than actions that bring in new customers to your salon. It can have an impact on all seven strategies to expand your salon business.

The salon marketing activities you choose to employ are determined by the issues your salon faces. You should concentrate on this if you need to quickly create a salon customer. You should concentrate on getting your current clientele to visit more frequently if you want to grow your business.

  • Google should be able to find your salon. Make sure your company is listed in internet directories to appear in digital searches.
  • For a better consumer experience, create a website or a mobile application.
  • It’s usually a good idea to advertise your business across all social media platforms so that your customers (and other potential clients) can get to know you on a more personal level.
  • Follow other local small businesses to stay in touch with your business community. To enhance your credibility and cultivate brand awareness, actively communicate with your target market and share behind-the-scenes content (such as before and after images of clients’ haircuts).
  • Offer coupons and vouchers in collaboration with other businesses that may serve the same customer as a salon.
  • Another important strategy is to begin quietly. And by low-key, we mean giving your customers “first-service” discounts.
  • To attract clients, keep service rates lower than the other salons in the neighborhood.
  • You can eliminate the discounts once you’ve created a rapport with your clients and they trust you with the quality of your service. It’s also critical to optimize the discounts so that you don’t lose all of your money, but we’ll get to that in a minute.

After you start acquiring clients, it’s also critical to ensure maintaining the greatest level of service quality. Remember that your clients will continue to wear your advertisements after they leave your salon.

Significant Milestones And Strategic Goals

It is not a simple task to start a salon business. There is a great deal that has to be done. You must obtain the necessary salon licenses, purchase salon business insurance, locate a salon space, purchase salon equipment, and advertise yourself to potential salon clients.

You must break down this ominous cloud into attainable milestones and objectives. Then take them one by one.

You’ll either get stressed out or start procrastinating and not get anything done if you don’t break down these large undertakings into smaller tasks.

Financial Plan

This is the most difficult phase of drafting a salon business plan since you must be exceedingly cautious while balancing your revenue and expenditure budgets.

You don’t want to frighten or lose your clients by charging excessive fees for services, but you also don’t want to go bankrupt and drown in debt. Not to mention, saving money on cosmetics may have an impact on service quality. Hair must be cut, not prices!

As a result, you must have a well-thought-out financial strategy for your salon. Writing a detailed financial strategy will allow you to have a rough sense of how your salon will perform month to month and year to year.

How Do Salon Owners Make Money?

The income of a salon owner is shaped by a range of factors, including the amount of money generated. What is the extent of your expenses? What amount of money do you want to put back into your company? How much work are you prepared to perform on your own? What do you wish to pay your employees?

It all relies on how the company is set up. We frequently hear from salon owners who are struggling to make ends meet, and it’s not a pleasant situation. On the other side, we hear about salons that are doing exceptionally well and whose owners are unsure about how much to pay themselves.

Interesting facts about the beauty salon industry

Industry revenue in the United States was 46.5 billion dollars in 2019. There are around 80,000 businesses in the industry. Japan is the second-largest source of income in the Salon market (after the United States).

In the United States, the top 50 popular beauty salon owners generate around 15% of their income. Approximately 30% of income is generated by the top 50 barbershop businesses. Beauty salons generate about 95% of the income in the US hair and beauty salon business. Barbershops account for the remainder.

The size of a general establishment’s premises might range from 1,000 to 1,500 square feet. Assistants, colorists, and hairstylists are frequently needed in beauty salons to aid with drying and washing.

They can also give services such as skincare, nail care, and aesthetic treatments. Another source of revenue is the beauty salon sector and hair specialty goods. Product margins are often higher than service profits.

The running costs, which include labor and rent, might be as high as 80% of income. Salon owners work as part of the staff in independently operated salons.


We’re absolutely thrilled! You’re about to embark on an exciting journey that’s sure to test your skills and push your boundaries. Your new salon business strategy will be your finest ally in this adventure. Thank you for taking the time to go through this salon business plan guide — We understand it was long, but it’s surely going to help you in the long game.

Plus, if you’ve stayed here this long, you’re probably patient enough to know that this is going to take time and effort, but you’ll be sticking through it – which is a great skill for any entrepreneur.

Salon owners who plan ahead are much more likely to succeed, so this was time well spent on your part. We’ve attempted to make this tutorial the most useful resource possible for those of you who are about to write a salon business plan, and truly hope you’ve found it useful.

This post is also available in: English


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