How to Write a Salon Business Plan

A salon business plan isn't paperwork. It's one argument made nine different ways, and the argument is that your chairs will be full.

Everything in the document either supports that or pads it. I think a lot of first drafts carry more padding than proof, and that's what I'd cut first.

First, know which plan you are writing

There are two, and if you write the wrong one, you've wasted a month.

The lender's plan is the one you need if you're asking a bank, the SBA, or an investor for money. It's long, it's formal, and it's mostly about whether you can repay. The Small Business Administration lays out nine standard sections, and it's worth following that order.

The owner's plan is the one you need if you're funding this yourself. It can be one page. Nobody's grading it. Its only job is to make you answer questions now that would otherwise ambush you in month four.

I think you should write the second one even if you need the first. That's where the thinking happens.

The nine sections, in salon terms

1. Executive summary. One page, and you write it last. What the salon is, where it is, who it serves, and why it'll work. If a lender only reads this page, it has to carry the whole argument.

2. Company description. The problem you solve for a specific person. Not "we do hair." Something closer to: the only salon within twenty minutes doing corrective color, in a town where every existing salon is a blow-dry bar. Specific beats broad here, and it's also the part most owners write vaguely.

3. Market analysis. Your town, your competitors, your client. How many salons are already there, what they charge, what they don't offer. So walk in and look at their price lists. This is the section lenders use to decide whether you've actually studied the place or you just love the idea.

4. Organization and management. The legal structure, who owns what, and who runs what. If it's just you, say so, and say what you've done before. A license and ten years behind the chair is a credential, and it belongs here.

5. Services. Your menu, your prices, and the reasoning behind them. Include what you won't do, too. A salon that says no to one thing reads as more credible than one claiming to do everything.

6. Marketing and sales. How strangers will find you and how they turn into bookings. I think this is the section that most needs to be specific, and it's the one that decides whether the rest happens. More on that below.

7. Funding request. How much, what for, and over what period. Break it down instead of giving one round number. To a lender, "$85,000" can look like a guess, and "$85,400, itemized" looks like a plan.

8. Financial projections. Three to five years of income, expenses, and cash flow. This is where plans die. That's below too.

9. Appendix. Your lease, licenses, quotes, floor plan, resume, and anything you said above that you can prove.

Getting the marketing section right

Most salon plans write this section as a list of intentions. We'll use social media. We'll do a grand opening. We'll run promotions.

But none of that is a plan, because none of it says how a stranger finds you or what it costs to get her in the chair.

The version that reads as real answers four questions. Where does a new client in your town look for a stylist, and are you there? What's the first thing she sees? What does it cost you to get one new client through the door? And how many of those come back a second time?

That last number is the one that turns a marketing budget into a business. A salon that keeps most of its first-timers needs a fraction of the spend of one that doesn't, and a lender who's financed salons before knows it.

The financial section, honestly

Be careful with any national average for what a salon costs to open. The number depends on your lease, your build, and whether the space was a salon before, and those three swing it more than everything else combined.

What you can do is build the number from your own quotes, and you do it in two parts.

What it costs to open. Deposit and first rent, build and plumbing, chairs and stations, backwash units, dryers, initial color stock, retail stock, software, insurance, licenses, signage, and the website. Get real quotes. Then add a contingency, because the build will find something.

What it costs to run, per month. Rent, utilities, insurance, software, card fees, stylist pay, color and back bar, retail restock, and marketing. That total is your monthly nut, and I think it's the most important number in the document.

Now here's the arithmetic a lender is doing while they read, and you should do it first.

Illustration only. Substitute your own rent, ticket, and chair count. The method is the point, not these figures.

Six services a day across four chairs sounds easy in a spreadsheet. But remember this is break-even, so you haven't paid yourself anything yet. Whatever you need to live on sits on top of it.

So run the same table at half that volume. If the answer at half volume is that you close in month five, say so in the plan and show what you'd do. A lender who sees you've already thought about the bad case trusts the good case more.

What gets a salon plan declined

The projections only go up. Real months don't.

No named competitors. It reads like you haven't visited the street.

Stylists assumed rather than recruited. If your plan needs four stylists on day one, a lender wants to know who they are and whether they've said yes.

No cash buffer. New salons take months to fill, and a plan with no runway is a plan that needs everything to go right immediately.

A marketing line of "social media" with no cost and no target.

The one-page version

Funding it yourself? The SBA calls this a lean plan, and one page will do. Just answer nine things, a sentence each.

Who exactly is your client? What do you offer her that she can't get nearby? Why does she pick you? Where does she find you? What does it cost to open? What does it cost each month? What's your average ticket? How many services a day cover the nut? And what do you do if you only hit half?

If you can answer all nine in a sentence, you understand the business. If any answer needs a paragraph to sound convincing, that's the part that isn't thought through yet.

If you are opening a salon suite

A suite is a smaller version of the same document, and the money section gets simpler and stricter at the same time.

Simpler, because your fixed costs are mostly one number: the suite rent. Stricter, because there's only one chair and it's yours. There's no second stylist to cover a slow week.

So the break-even math tightens to a single line. Suite rent plus product plus software, divided by your average ticket, is how many clients a month you have to see before you earn a dollar. A lot of stylists moving into a suite have never written that number down, and it's the whole decision.

And there's one more thing a suite plan needs that a salon plan doesn't: how your existing clients follow you. Naming the number of regulars who'll move with you is the difference between a plan and a hope.

The part to get right

I'd write the money section first, before the mission statement, before the logo, before the name. If the arithmetic works, the rest of the plan is describing something real. And if it doesn't, you've found that out for the price of an afternoon instead of a lease.