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Ready to write your salon business plan? According to IBISWorld, there are over 40,000 salons in Canada, so it’s essential to set yourself apart from the competition with a solid strategy and a business plan that does it justice.
A salon business plan can help you achieve your objectives, stay focused and put the best chances of success on your side. Here’s how to create a salon business plan that will help you get off the ground.
Why do you need a business plan for your salon?
A salon business plan is an in-depth strategic and operational roadmap that breaks down your concept and how you’re going to turn it into a reality, from brand positioning to financial forecasting and more. When done well, a beauty salon business plan serves a few important purposes:
- It can help you secure funding as you get your new salon up-and-running.
- It serves as a North Star when you’re making decisions such as how to spend your marketing budget or which location to choose if plan A doesn’t work out.
- It’s a living document that is meant to be revisited and evolve with your business as you define and optimize your goals, according to the BDC.
What are the benefits of a salon business plan?
Without an effective business plan, it’s unlikely you’ll get access to funding, as lenders and investors will ask for one to understand your business and its path to profitability. In 2024, Canadian banks lent close to $295 billion in credit to small- and medium‑sized enterprises, according to the Canadian Bankers Association. A business plan with in-depth research and clear financials is essential if you want to be one of them.
Even if you don’t plan on asking your bank for money, having a well-written salon business plan comes with several benefits:
- Market positioning: It helps you position your salon within the local landscape so you can stand out against your competition. For example, while doing market research, you might discover a need for an affordable salon that caters to students and decide to fill that gap.
- Financial health: Exercises like analyzing the size of the market in your area, figuring out your exact startup costs and determining your break-even point (the stage at which revenues equal costs) can support the financial health of your salon. Doing this before you spend any money helps prevent early cash flow issues.
- Decision-making: You need to hire stylists. How will you pay them? Thanks to your salon business plan, you already have an idea of the right compensation structure for your business, such as renting booths to help cover the costs of your lease.
How to write your business plan in 7 steps
From your executive summary to your market analysis, the seven steps below cover what you need to include in your business plan to communicate your vision effectively and successfully open your doors.
1. Executive summary
An executive summary serves as your salon business plan’s overview. Think of the summary as a clear, concise preview for the reader of what’s to come. Your executive summary should include the objectives of your salon and your mission statement, as well as a few highlights from the different sections of your business plan. Use it to paint the big picture and break down your business’ unique selling point (USP) and keys to success.
Here are a few elements to include in a strong executive summary:
- Hook: How will you capture the attention of your audience right from the get-go? A memorable anecdote such as a client transformation story or a compelling fact about your company grabs attention.
- Short business summary: Include a few high-level details about who you are, what you do and who you will serve, whether you’re the first dog-friendly salon in your area or you’re opening a high-end salon as a former celebrity stylist.
- Brief recap of market analysis: Pull some stats about your potential market and any key advantages you have over competitors. For example, you can identify the number of office jobs in the downtown core and say you’ll be offering 45-minute blowouts with a subscription model to target professionals in the area.
- Signature products and services: Will you be specializing in colour services for blondes or selling a non-toxic line of hair products? List the top products and services that make you different from the average salon.
- Financial projection highlights: Include an overview of your financial projections, including your sales and profit forecasting, to show you’ve done your research and know your path to profitability.
- Future goals: Where do you want to be in five years? Maybe you want to turn your salon into a national franchise or expand your offerings to include brow and eyelash services.
2. Company description
Think of this section as the “who, what, when, where, and why” of your salon business. This is where your unique values, concept and customer experience of the business clearly come through.
For example, Winnipeg’s Good Fortune Barbershop is an inclusive, cruelty-free, LGBTQ+ owned and operated company. “After working together in barbershops for over seven years, we realized we knew what we wanted to do differently, and we knew what was missing in the culture of barbershops. We saw the gap. We would have people coming in saying they feel uncomfortable going to other places,” co-owner Sam Rivait told Square.
If you specialize in a certain cut or you plan to be more upscale vs. everyday, write out how your salon fits into one of these categories. If sustainability is important to you, describe your energy-saving workflows and eco-friendly products.
Your company description should also include information about your business model, including how you plan to structure your team and generate revenue. Let’s say that you are opening a blowout bar with a focused service list and a retail sales strategy. Employing stylists and offering a generous commission on retail product sales might make sense for you. It will help maintain a consistent customer experience since you’ll have more control over training and service quality with employees versus freelancers who rent booths. And it will support your business goals by encouraging product sales to boost the average ticket.
3. Market analysis
A market analysis looks at the size of the market both in volume and in value, the competition, and the economic environment in terms of barriers to entry and regulation (this can be done qualitatively and quantitatively).
Give readers a snapshot of local demand to help them understand the market you’re aiming to capture and how you’re going to capture it. Show that you know your stuff by providing insights and trends into the beauty industry along with your market analysis and tying them back to what makes your salon stand out. This may include:
- Demographics: Statistics Canada’s Census Profile can help you understand who lives in your city or in a specific neighbourhood when you enter a postal code. This includes age, marital status and income data. If you’re going for a higher-end price list, demonstrate how your choice of opening your doors in an affluent neighbourhood is a strategic one.
- Salon industry data: Industry reports from sources like IBISWorld and the Square Future of Beauty 2025 report can help you gain insights about shifts in consumer behaviour and broader beauty industry projections and tie them back to your business. For example, according to Square’s Future of Beauty 2025 report, over half of Canadian consumers enjoy interacting with salon technology like automated appointment reminders (62%), mobile apps (53%), automated payments (53%) and automated appointment scheduling (52%). If you’re a tech-forward salon, these are strong insights to include.
- Complementary businesses in the area: Other types of businesses that serve your target audience can be a good source of qualitative insights. For example, if there is an infrared fitness studio popular with Gen Z and millennials nearby, dig into the business’s social media accounts and online reviews to understand what customers love about it. Identify themes and opportunities to tap into and highlight, like a focus on holistic wellness or a cost-effective subscription model.
- Demand for specialty salon services: Google Trends can help you see what kind of specialized salon services people are searching for, from keratin treatments to non-toxic hair colouring services. This can help you anchor the demand for your services in your salon business plan.
Then, provide a competitive analysis of your market and location. You’ll want to include who has the biggest market share, how close your other competitors’ salons are to yours, and what advantages you’ll have over the competition. Factors like branding, pricing, service list, customer experience and online reviews can help clarify where you stand and where you can fill gaps.
Finish this section with a SWOT analysis that will expand further on what your business does well and what might threaten your success. A SWOT analysis is a process used to identify:
- Strengths – What does your business do well? What’s your competitive advantage? What resources do you have?
- Weaknesses – What might limit your ability to gain the competitive advantage? Where can you improve? What inhibits your sales?
- Opportunities – Are there changes in the market? Are there new industry trends you can take advantage of?
- Threats – What obstacles do you face? If you’re a salon that plans to make a lot of money on keratin treatments but Magic Sleek is on the rise, you should plan for that.
4. Salon services
Your salon services section is important because it defines your core revenue streams. It should show what you’ll offer to clients and how it influences choices like pricing and staffing.
Start by highlighting the strategy behind your unique service mix:
- Core offerings like haircuts and colour services.
- Specialty services like hair smoothing treatments.
- Add ons that boost ticket size, like hair masks.
Include all prices and approximate service durations, since timing can affect your operations and revenue potential. A hair extension appointment is a high-ticket item, but it can also take several hours, which means you’ll likely need to balance it with faster-turnaround services like blowouts to make the most of your team’s time.
You can also cover retail products in this section, and talk about how they support your broader business goals and vision. Maybe you only use and sell products made in Canada, which reinforces your brand’s focus on supporting local business and encourages like-minded customers to purchase hair products from you instead of buying them elsewhere.
Next, discuss product sourcing and vendors. Will you buy from wholesalers like Salon Centric Canada or work with distributors or an existing salon network?
Document your plans for inventory management. Square inventory management tools support both back-bar and retail inventory management thanks to real-time stock tracking and daily alerts that let you know when it’s time to reorder certain items. You can get in-depth stock reports that can help you make smarter decisions, like looking at product usage to prevent over-ordering or coaching your team on the best practices to avoid waste.
5. Marketing plan
A salon marketing plan will help you increase brand visibility when you first open up your doors, as well as acquire new customers and retain current ones. Here’s what it should include:
Positioning statement
A marketing plan should start with a positioning statement that explains how you want customers to perceive your brand. To write a strong positioning statement, include the following:
- A description of how your salon is different than others
- How your brand or product benefits customers in ways that set you apart from your competitors
- The segment or category in which your company competes
- Compelling evidence and reasons why customers in your target market can have confidence in your differentiation claims
Target market
Your target market is the group of people that are most suited to your products and services. It’s essential that you understand them by analyzing your offerings, doing research, assessing your competitors, and creating customer profiles based on your market research findings.
For example, you might have two core ideal customers: A high-earning professional who fits hair appointments during their lunch break and a millennial mom who cares about wellness and sustainability. Fleshing out their values and priorities, pain points and motivators, and their habits and behaviours when seeking personal care services will provide the foundation needed to strengthen your marketing efforts.
Pricing
Lay out your pricing strategy. It should take into account your business goals and what pricing looks like in the market. Look into what nearby salons charge for similar services. Will your brand position itself as affordable, mid-range or premium?
Think about how pricing could play into your competitive advantage. Offering a slightly better price than the competition can be a strategic choice, provided that you still make a healthy profit when you account for costs like product usage and your team’s time. Or you could go with tiered pricing depending on the level of seniority of stylists and colourists.
Promotions
You’ll need a promotion strategy so new customers know you exist. Your strategy should be based on who your target customer is, how they make purchasing decisions and where they hang out online.
- Website: A website is key, as are profiles on review sites like Yelp and Google. With Square Online, you can build a professional, mobile-friendly website in minutes, complete with the ability to add online booking through Square Appointments and an online store if you want to sell products through your site.
- Search engine optimization: You can personalize your site to match your brand and connect it to your Google Business Profile to update your holiday hours, respond to reviews or add new photos of your salon to boost your visibility in search results. Search engine optimization (SEO) efforts such as including keywords like “hair salon in [city]” on your homepage can also help people find you when they look for salons.
- Social media presence: Document which social media platforms you’ll focus on and how you’ll use them, from sharing before-and-after transformation videos on TikTok to leveraging local hashtags on Instagram or posting in local Facebook groups.
- In-person marketing: On-site marketing tactics can also help draw in customers. A sign with a QR code in the waiting area can send people to your booking site to purchase more services and schedule their next visit. Referral cards by the front desk can incentivize customers to tell others about your salon, and a poster featuring your holiday blowout package can turn walk-ins into regulars.
Retention strategy
Attracting customers is one thing, but getting them to return is also crucial for the long-term health of your salon. Launching a loyalty program is a proven way to drive repeat business with industry leaders saying it boosts repeat visits (84%), leads to increased order size (83%) and drives ROI (82%), according to the Square Future of Beauty 2025 report. Your business plan should include the specifics of your customer rewards program, whether you want people to earn points based on visits or total spend.
Your retention strategy should also cover how you plan on nurturing relationships with your community. With Square Marketing, for example, you can set up automated email or SMS campaigns to target customers with exclusive offers like a birthday freebie or a discount code to repurchase their favourite shampoo to keep your business top of mind for customers.
6. Financial plan
The goal of your financial plan is to determine how your business will afford to achieve its strategic goals and objectives. It should answer two fundamental questions: How will your salon make money and what kind of profit can you expect after all expenses have been covered?
Include a breakdown of all revenue streams, from retail sales to membership packages, and what percentage of total revenue you expect each stream to generate.
List your salon startup costs. These are the one-time expenses you’ll need to open your doors. This might include:
- Leasehold improvements such as flooring, lighting and mirrors
- Equipment like styling chairs, dryers and wash stations
- Initial product inventory
- Licences, permits and insurance
- Branding and signage
- Marketing materials and website setup
Next, estimate ongoing monthly expenses. These might include:
- Rent
- Utilities
- Staff wages
- Supplies
- Product restocking
- Software subscriptions
A break-even analysis can clearly show how much revenue you need to justify your spending, and how many clients you need to serve each month to stay profitable. For example, if your total monthly expenses are $6,000 and your average service price is $60, you’ll need around 100 client visits per month to break even. From there, you can set realistic goals for growth and profit.
Your burn rate, which is your monthly net cash outflow, should be easy to figure out once you’ve listed out all costs and recurring expenses. Use it to calculate your cash runway, which is how long you can sustain operations before running out of money. Let’s say that you have $50,000 in your bank account and your burn rate is $5,000 a month. Your cash runway is $50,000 divided by $5,000, which means you have a cash runway of 10 months. Including this information shows that you’re prepared for slower periods.
Next, showcase a profit-and-loss model (as well as the cashflow you’ll need) and how you’ll manage a balance sheet. This can give lenders the confidence that you truly understand your margins and will be able to repay financing. It also provides a foundation for measuring future performance, as you can compare real numbers against your initial benchmarks as your salon grows.
Lastly, discuss your funding options. Are you self-funded, applying for a loan or looking for a strategic investor? Your funding approach determines how quickly you can grow the business and yield profits.
7. Organization and management
Map out how your salon will run day-to-day, who will help you manage it and how you’ll leverage technology to succeed.
You’ll need to determine the legal structure of your business, which is also referred to as a business entity. The form of business you choose helps to determine the income tax return form you have to file, so it affects your business’s bottom line. Types of entities include sole proprietorship, partnership or corporation.
You should also plan out your business’s organizational structure and how many team members you plan to start with. Include the bios and background of your management team, which builds trust and credibility and shows why they’re the best people to make your salon successful. Write down the rest of your personnel needs, from stylists and colour experts to front desk staff.
Next, mention your compensation model and how it affects your operations and bottom line, whether you go with a commission, hourly or booth rental structure, or a hybrid model that combines elements of each.
This section should also include your technology needs. Scheduling and managing your appointments is a critical component to the success of your business. When assessing scheduling software, look for a solution that:
- Integrates with your POS system so you can pull up appointments and take payments in a centralized place.
- Syncs with your calendar so you’ll never miss an appointment.
- Works in multiple locations and with various employees so you can expand your salon with ease.
- Lets clients book 24/7 so you’ll never miss an opportunity to gain new business.
- Allows for a prepayment option to reduce no-show appointments.
- Has convenient rescheduling to ensure a great customer experience for your clients.
How to write a salon business plan FAQs
How much does it cost to open a salon?
According to BusinessDojo, it can cost anywhere from $70,000 to $210,000* to open a mid-market salon, but this range can vary based on factors like your location, salon type and size.
How profitable is owning a salon?
According to IBISWorld, the Canadian hair salon industry has been growing at an annual compound rate of 5.4% over the past five years, reaching an estimated $5.8 billion in sales revenue in 2025. This steady growth shows that salons can be profitable with the right approach. While the profit potential of a salon depends on factors like its branding, location, business model and the effectiveness of its marketing strategy, a strong salon business plan can help set the right foundation for success.
What do you need to open a salon?
To open a salon, start with a business plan to determine how you’ll turn your vision into a profitable reality. Your salon business plan should highlight your unique positioning in the market, include financial projections, and map out details like your marketing plan and organizational structure.
How do you open a salon in Canada?
To open a salon in Canada, you’ll need a strong concept and strategic market positioning to stand out from the competition, as there are over 40,000 salons in the country, according to IBISWorld. A salon business plan can help you put together a winning plan.
Can a business plan help with funding or investors?
Yes, a well-written salon business plan can help you secure funding and investors as long as it paints a clear, compelling picture of your business and its road to profitability. Make sure it includes key sections like an executive summary, company description, market analysis, salon services, marketing plan, organization and management and financial plan.
