How to Write a Profit-Making Salon Business Plan

Just as no two businesses are the same, neither are business plans. If you’re starting a salon, your approach to writing one will be very different from a retailer or a restaurant’s. A salon business plan doesn’t just set the course for success, it’s a resource for potential investors, co-founders and partners and a reminder of why you’re doing what you’re doing. The document should be updated over time, taking into account new trends, challenges and competitors.

For business owners in the early stages of opening shop, and entrepreneurs gearing up for expansion, here’s how to create a salon business plan that will serve you for years to come.

Executive summary

An executive summary acts as an overview to kick off the business plan. It’s a clear, concise preview of what’s to come, painting a picture of the next five years and drawing your reader deeper into the document. The one thing every executive summary should include is your mission statement.

As a summary of every other section within your plan, it’s only normal that to find that you keep coming back to this part to make changes and add things.

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Company description

Your company description describes the “who, what, when, where and why” of your new salon. Readers should be able to get a sense of how it will take shape and what unique selling propositions it has. It should detail:

  • Your services and products
  • The location and physical space
  • The management team
  • The employees
  • How your salon will distinguish itself from others
  • Your mission and how you plan to achieve it

Salon Services

You listed all your services in the previous section, but here’s where to include the specific details. Each service should be described in terms of the process, the equipment required, the products needed and the source of those products.

This section is perfectly suited to outline how you’ll run your inventory management. As an element of supply chain management, this includes aspects such as controlling, overseeing and ordering inventory, storing it and tracking the amount of products for sale. Finding the balance between thrift and sufficiency will be one of your main focuses as a small business, and inventory management will help you out.

Market Analysis

It’s important to show that you know your stuff, especially when speaking to potential investors and partners. The market analysis details insights into the competition, your forecasted (and historical) growth and trends in the beauty industry. It looks at the size of the market both in terms of volume and value, as well as the economic environment in terms of barriers to entry and regulation.

A competitive analysis of your market and location will explore who has the biggest market share, how close competitors’ salons are to yours and what advantages you have over them.

A sensible conclusion to this section is a SWOT analysis. This will help you explain your salon’s position in the market by looking at:

  • Strengths.
    What do you do well? What is your competitive advantage? What have you got that nobody else does?

  • Weaknesses.
    What might limit your ability to gain the competitive advantage? Where can you improve? What could limit sales?

  • Opportunities.
    Are there changes in the market that will benefit you? What upcoming trends can you use to your advantage?

  • Threats.
    What obstacles do you face, such as wholesale price increases, new competitors in the area, people spending less and so on?

Marketing Plan

A salon marketing plan is designed to help you increase brand visibility when you first open, as well as acquire new customers and retain existing ones. Here’s what it should include:

Positioning statement

Start with a positioning statement that explains how you want customers to perceive your brand. It should include:

  • How your salon stands out from others
  • How you specifically benefit your customers in contrast with competitors
  • The specific segment or category in which your company competes
  • Compelling evidence that validate any claims of differentiation

Target market

Your target market is the group of people most suited to your products and services. They’re the ones you model your services and approach around. It’s essential to understand them properly by creating customer personas and drilling into their needs.


Here’s where to lay out your pricing strategy, taking into account both your business goals and trends in pricing across the market. By evaluating prices right across the spectrum — from budget salons to high end parlours — you’ll uncover the sweet spot where your business fits in.


Promotions give new customers an incentive to try you out, whilst encouraging existing customers to come back for more. You can offer discounted services through sites like Treatwell, but social media is your friend here too. Instagram, Facebook and Twitter are all low-cost channels that can be used to advertise irresistible discounts, freebies and deals. Rewards and loyalty programs also work well for salons.

The only limits to the marketing plan section are your imagination and your budget. There’s no right or wrong way to go about marketing to your customers, so long as you keep their requirements and tastes front of mind — make it about them.

Organisation and Management

This section should explain your company’s legal structure, or “business entity”, to determine the tax you’ll have to pay and the impact of that tax on your bottom line. Types of entities include: sole trader, general partnership, limited partnership and limited liability company.

It should also specify your business’s organisational structure, and the number of staff you plan to start out with. Include an introduction to the management team that focuses on each individual’s unique experience.

You should also include technology needs. Scheduling and managing your appointments is a critical component to the success of your business. When assessing scheduling software, consider the following:

Financial plan

The goal of your financial plan is to work out how your salon can afford to achieve its strategic goals and objectives. It may also serve to apply for funding from banks and investors.

Discuss startup costs, funding options, a break-even analysis, projected profit and loss and cash flow management.

Finance isn’t everyone’s strong point, and because the details of this section are so important to get right, never hesitate to use a financial professional. Getting a second pair of eyes will give you peace of mind. In fact, once you’ve completed your salon business plan, you might share it with trusted friends and business associates who can give you another opinion.

This post is for guidance only and is not intended as legal advice. For financial or legal advice related to your specific business, be sure to consult an independent financial or legal professional.

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