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Finally! You've decided to open your own hair salon, but you have no idea how to go about it. Like any new project, there is a first step and that of wanting to open your business starts with writing your business plan. The business plan is the guiding thread of your project, it will give you a clear vision of the hair salon you will be able to open, and it is essential to convince your banker to grant you a loan.
The business plan contains several parts, and each of them allows you to define everything that is closely or remotely related to the project of opening your hairdressing salon. A business plan is concrete and coherent, it represents the guideline of the company. In your business plan, you must stand out and "prove" why your project is better than another.
The first part of the business plan of your hairdressing salon is a summary of what your business plan will look like.
This part includes all the important points from all the following parts of your business plan. We advise you to write this part on 1 page only, and also to write it last.
The presentation of the project should be succinct for stakeholders. Some people will not read your entire business plan, and their goal is to get to know your project in a few key points.
In the hairdressing sector, the Curriculum Vitae (CV) and experiences of the project leader are essential elements to open a hairdressing salon.
By law, there are obligations in the training to have the management of a hairdressing salon. You must either:
1. Have a minimum of a professional certificate, a master's degree, or a diploma listed in the national professional certification directory in a field directly related to hairdressing. In addition, you must complete an Installation Preparation Internship (IPS) and be registered in the trade directory. There are, however, some exemptions, which you can find in our guide Opening Your Hair Salon.
2. If you do not have a professional certificate or other diploma, your spouse must have one of the required diplomas, or you can hire an employee who has the professional certificate. In both cases, the person with the diploma is the technical manager.
Your CV is a sales pitch, where you have to be the driving force behind the proposal. Prove that you have the assets, that you are capable of running a hair salon and that the experience you have acquired will lead to the success of your salon. You have to convince investors and your banker that you can take on the tasks of a business owner and a manager.
The market research is a step that you must work on carefully because the next parts of the business plan are based on what you have established in this study. You most certainly already have a good idea of the salon you want to open, but thanks to this study you will be able to define the hair salon you should open.
Market research allows you to understand the context in which your hairdressing salon would be situated. It consists of 4 essential steps:
1. The hairdressing market: Find key information and figures about the hairdressing sector. You can also mention market developments: What are the new developments in the hairdressing sector?
2. Your potential customers: Define the type of population in the area and segment this population.
With all this information, you establish the age range of your target, their purchasing power, and their consumption habits.
3. Your competitors : Analyze the hair salons in the area and list your direct and indirect competitors.
Direct competitors are those who offer the same services as you, work with the same brands and have the same prices.
Indirect competitors are nearby hair salons offering services, prices and brands other than those you expect.
4. The health of nearby businesses : While discovering the area of the desired location, do not hesitate to visit the shops such as bakeries, pharmacies, butcher shops, etc.
You can ask the manager directly for questions related to population and consumption. In addition, try to detect peak periods in shops.
In market research, you must take into account the whole environment to propose a hair salon that will meet the needs of your future customers. This study allows you to limit potential failures, in order to ensure a long term insertion in this market.
It is in this study that you will be able to see the constraints and advantages of your hairdressing salon at the desired location. It is essential to identify whether your hairdressing salon will be able to survive in this location.
These elements will allow you to refine your offer and determine what differentiates you from others.
We advise you to have a differentiating element, to have a "plus" that will attract customers to your salon rather than the competitor's one.
To help you further develop your salon in the right direction, ask yourself this question:
Are the needs of the residents you identify in your study being met by your competitors, or is this an opportunity for you ?
How do you conduct your market research?
The official UNEC website gives you key figures on the hairdressing sector.
There are sites like Statista to give you key figures on the sector, and also on the population.
Most importantly, we advocate the research that you should do directly in the field. Go to the surrounding hair salons, visit the neighbourhood, the shops, and all the local businesses to get to know the locals better.
The commercial proposal of your business plan may have been modified according to the analyses resulting from your market research. It is in this section that you present your hairdressing salon.
In your business proposal, it is crucial that you rely on your market research. Here are the points that need to be defined:
1. Your target and your positioning: What type of customers you want to attract to your salon and then how you would like to position your salon.
For example: young 25 to 35 years old, middle class / salon with a young, dynamic image, rather strong American commercial music, etc.
2. Your competitive advantage: Why would your target go to you rather than your competitor? How do you stand out? What little extra do you have?
3. Your pricing strategy: Your prices must be in line with your target and your positioning. You need to define an affordable price range for your target.
4. Your communication strategy: How will you make yourself known to your target audience? How will you attract your target audience to your hair salon?
For your communication strategy, we advise you in all cases to be present on the web. Stand out also thanks to a website and engage a relationship with your target through social networks.
You have the choice between creating a hairdressing salon from 0, or taking over an existing hairdressing salon with the customer list. There are no right or wrong answers, it all depends on your personal preference.
Here are 3 things you should consider:
1. The ratio between the cost of the premises and the potential turnover
Choose a location close to a passageway where there is a flow of people. If your location is in the city centre, it can quickly become expensive. Nevertheless, calculate the turnover you can generate there, as it can be significant, so the cost of rent is no longer an issue.
2. The space of the room
Pay attention to the surface and layout of the room. The room must be practical during your activity.
3. A location in your image
The location of the room is very important in terms of your image and your target. The image of the hair salon must be consistent with the image of the location, and your hair salon must appeal to your target.
Whatever your choice, argue your answer and show that your choice is a good one.
The financial forecasts help determine the feasibility and viability of setting up your hair salon. Will you be able to be profitable in your project?
When making your financial forecast, you will evaluate which part of the project needs to be reviewed, if certain desires that you had will have to be put aside. Or if, on the contrary, you can implement actions that you had set aside.
In this study, you evaluate all the costs of the business, both human and material. Don't forget to make your calculations at the expense of your location, communication strategy and personal needs.
If you use external funding, your forecast figures should convince and reassure stakeholders. You have 5 steps:
The initial financing plan allows you to know if you have the capital you need to finance the major expenses that will allow you to launch your business:
A profit and loss statement is a document that brings together all the amounts paid and received, allowing the company's net result (profit or loss) to be calculated. This allows the company to see its performance.
In a third step, you define how many sales/services you have to make at least in the 1st year so that you can pay your expenses and be profitable.
The cash flow plan is a table detailing month by month all the receipts and all the expenses you will make during the 1st year.
The table has 2 columns, an Input column and an Output column. If you buy an element in April but it will only be paid for in June, you must put the element in the Output column for the month of June.
All amounts are in TTC.
This will allow you to see if you will be in deficit a certain month and if you need more cash.
The 3-year financing plan will determine whether the company will be sustainable. It is important to know that a 3-year financing plan is a series of assumptions and this rarely becomes reality. It is presented as the initial financing plan.
Tips for Financial Forecasting :
Don't inflate your prices too much so that there are no unpleasant surprises.
An imbalance? Rework your project, put some projects aside for now, which you can resume later when you have sufficient income.
The business plan is a malleable document, there is no business plan that you have to follow to the letter.
As you have understood, the business plan is an essential and very important step in your project. It is not built in a week. Take your time to assemble all the necessary information and write it clearly and precisely.
The Wavy team wishes you a great success!
