hair products business plan

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Table of contents, a step-by-step business plan guide.

• 12 June, 2024

Hair Product Business Overview

Before diving into the intricacies of starting a hair product business, it’s essential to have a comprehensive understanding of the hair care market and the impact of external factors such as COVID-19. This knowledge will help you navigate the industry and make informed decisions as you embark on your entrepreneurial journey.

Hair Care Market Trends

The global hair care market is projected to reach over $100 billion by 2025, with significant growth expected in developing regions like Asia and Africa ( Ignition ). This presents a lucrative opportunity for entrepreneurs looking to enter the hair product business. The market encompasses a wide range of products, including shampoos, conditioners, hair styling products, hair color, and more.

According to Statista, the shampoo segment holds the largest market share, close to 35 percent, followed by hair color and hair conditioner ( Medium ). This indicates the diverse needs and preferences of consumers, creating space for innovation and specialization within the market.

Consumer behavior in the hair care industry is evolving. Individuals seek personal connections with brands, looking for products that align with their identity and self-expression ( Medium ). As an entrepreneur, understanding these shifting consumer preferences can help you develop products that resonate with your target market.

Impact of COVID-19 on Hair Product Demand

The COVID-19 pandemic has had a significant impact on the hair care industry. With people staying at home and avoiding salons, there has been a surge in demand for at-home hair care products. This increase in demand has been particularly notable for products catering to specific needs like hair color and hair styling ( Ignition ).

As an entrepreneur entering the hair product business, it’s important to recognize the changing landscape and adapt your strategies accordingly. Consider the demand for at-home hair care products and explore opportunities to meet the evolving needs of consumers.

By staying informed about market trends and understanding the impact of external factors like COVID-19, you can position your hair product business for success. As you progress through the rest of the business plan, keep in mind the potential for growth and profitability within the dynamic hair care market.

Market Segmentation and Strategies

To start a successful hair product business, it is essential to understand the market segments and develop effective strategies to target those segments.

Key Market Segments

The hair care industry encompasses various market segments, each with its specific needs and demands. By identifying and targeting these segments, you can tailor your products and marketing efforts to meet their requirements. Some key market segments within the hair care industry include:

Ethnic Hair Care: This segment focuses on products specifically designed for various ethnicities and hair types, catering to the unique needs of individuals with textured or curly hair. Understanding the specific challenges and preferences of this segment can help you develop products that address their concerns effectively.

Luxury Hair Care: The luxury hair care segment targets individuals who seek premium quality products and are willing to invest in their hair care routines. This segment often prioritizes high-end ingredients, innovative formulations, and personalized experiences. Developing a luxury line of products can appeal to this segment.

Men’s Grooming: Men’s grooming has gained significant traction in recent years. This segment includes products specifically designed for men, such as styling products, shampoos, and beard care items. Creating a range of products tailored to the unique needs and preferences of men can help capture this growing market.

Eco-friendly and Natural Products: With increasing awareness of environmental issues and a growing demand for sustainable options, the eco-friendly and natural products segment has gained popularity. Developing hair care products that are environmentally conscious, free from harmful chemicals, and cruelty-free can appeal to this segment.

Understanding these market segments and their specific needs will guide your product development process and enable you to tailor your offerings to meet the diverse requirements of your target audience.

Pricing Strategies for Hair Products

When determining the pricing strategy for your hair products, several factors should be considered, including production costs, competition, and perceived value. Here are a few pricing strategies commonly used in the hair care industry:

Cost-Based Pricing: This strategy involves setting prices based on the production costs, including raw materials, manufacturing, packaging, and overhead expenses. By adding a desired profit margin to the total cost, you can determine the selling price of your products.

Competitive Pricing: Competitive pricing involves setting prices in line with your competitors. Researching the market and analyzing the pricing strategies of similar products can help you position your products competitively. Consider factors such as product quality, unique features, and brand value when determining your pricing strategy.

Value-Based Pricing: Value-based pricing focuses on the perceived value of your products in the eyes of the customer. This strategy takes into account the benefits, features, and overall value proposition of your products. By emphasizing the unique selling points and benefits, you can justify a higher price point.

It’s important to strike a balance between profitability and market competitiveness when setting prices for your hair products. Conducting thorough market research and understanding your target audience’s willingness to pay can help you determine the optimal pricing strategy.

Crafting a Marketing Strategy

A well-crafted marketing strategy is vital for the success of your hair product business. It involves understanding your target market, positioning your products effectively, and developing a comprehensive plan to reach and engage your customers. Here are key elements to consider when crafting your marketing strategy:

Define Your Target Market: Clearly define your target market by considering demographic factors such as age, gender, location, and hair type. Additionally, psychographic segmentation, which focuses on lifestyle, values, and attitudes, can provide deeper insights into your target audience. Understanding your target market’s needs and preferences will guide your marketing efforts.

Position Your Products: Differentiate your hair products from competitors by highlighting unique features, benefits, or ingredients. Determine your unique selling proposition (USP) and communicate it effectively to your target audience. This will help create a distinct brand identity and position your products in the market.

Develop a Comprehensive Marketing Plan: A successful marketing strategy requires a well-developed marketing plan. This plan should encompass various marketing channels and tactics, including digital marketing, social media, influencer collaborations, traditional advertising, and public relations. Determine the most effective channels to reach your target audience and allocate resources accordingly.

Remember, a marketing strategy is an ongoing process that requires constant evaluation and adaptation. Regularly monitor the effectiveness of your marketing efforts and adjust your strategies as needed to ensure maximum reach and engagement.

By understanding the key market segments, implementing appropriate pricing strategies, and crafting a comprehensive marketing strategy, you can lay a solid foundation for your hair product business and successfully navigate the competitive hair care industry.

Choosing Distribution Channels

When starting a hair product business, choosing the right distribution channels is essential to ensure your products reach the intended customers effectively. There are several factors to consider in this process, including distribution channel considerations, positioning your product, and analyzing the market for distribution.

Distribution Channel Considerations

When selling hair products, it’s important to consider various distribution channels to reach your target market effectively. Some common distribution channels in the beauty industry include:

• Direct-to-consumer: Selling products directly to customers through your own website or online platform. This allows for a direct relationship with customers and greater control over the brand experience.
• Retail stores: Partnering with retail stores, such as drugstores or beauty supply stores, to stock and sell your products. This can provide wider market exposure and access to a diverse customer base.
• Specialty stores: Distributing your products through specialty stores that cater specifically to beauty and hair care products, like Whole Foods or Trader Joe’s. These stores often attract a specific target audience and can enhance the perceived value of your product.
• E-commerce platforms: Utilizing online marketplaces, such as Amazon or Shopify, to sell your products. This can offer a convenient shopping experience for customers and tap into the growing trend of online shopping.

Consider your target market, brand positioning, and the costs associated with each distribution channel when making your decision. For more information on starting a hair product business, refer to our article on how to start a hair product business .

Positioning Your Product

Positioning your hair product appropriately is crucial when choosing a distribution channel. Consider the unique features, benefits, and target audience of your product. For example, if you have a high-end hair care line, it may be more suitable to distribute your products through specialty stores that align with your brand’s image, rather than drugstores or gas stations. This allows you to reach customers who are more likely to appreciate and invest in premium products.

By understanding your product’s positioning, you can select the distribution channel that best complements and enhances your brand image. This alignment is key to attracting the right customers and creating a positive perception of your hair products.

Analyzing Market for Distribution

Analyzing the market is essential when choosing the most appropriate distribution channel for your hair products. By researching and understanding how similar products are brought to market, you can gain insights into the most effective distribution strategies. This analysis allows you to identify gaps in the market and potential opportunities for your products.

Consider factors such as competitor distribution channels, customer preferences, and emerging trends in the hair care industry. By understanding the current market landscape, you can make informed decisions about the distribution channels that are most likely to reach your target audience effectively.

It’s also important to consider the timeliness of the distribution channel. For example, certain products, such as over-the-counter pain medication, may sell better in retail drugstores for immediate relief, rather than online due to shipping times.

Remember to assess the costs associated with each distribution channel, including warehousing costs, rent, and utilities, to ensure that your business remains financially viable.

Choosing the right distribution channels for your hair product business is a critical step in building a successful venture. By considering distribution channel options, positioning your product effectively, and analyzing the market, you can optimize your product’s reach and maximize its potential for success.

Competitive Advantage in Hair Business

When starting a hair product business, it’s essential to establish a competitive advantage to differentiate yourself from competitors and attract customers. In the hair industry, there are various strategies you can employ to gain a competitive edge. In this section, we will explore salon competitive strategies, product line strategies, and the use of technology to achieve a competitive advantage.

Salon Competitive Strategies

A salon can use various competitive strategies to stand out in the crowded hair industry. One approach is to focus on providing exceptional customer service. By creating a welcoming and personalized experience for clients, you can build customer loyalty and positive word-of-mouth referrals. Additionally, emphasizing the quality and efficiency of hairstyling can be a competitive advantage, especially for customers who visit frequently ( Salon Proactive ).

To understand potential areas of competitive advantage, consider conducting customer surveys. This can help identify strengths and areas for improvement. Additionally, staying up-to-date with current trends and offering unique services, such as speed, cleanliness, appointment preparation, or aesthetics, can set your salon apart.

Product Line Strategies

Developing a well-curated and diverse product line is another way to establish a competitive advantage. By offering a range of high-quality hair products, you can cater to different customer needs and preferences. Take inspiration from successful companies like Coca-Cola, which introduced multiple varieties to its product line ( StudySmarter ).

Ensure that customers are well-informed about your product offerings. Utilize various means such as videos, photos, live demonstrations, and advertising to showcase the benefits and features of your products. This can help build trust and encourage customers to try and repurchase your hair products.

Using Technology for Competitive Edge

In today’s digital landscape, leveraging technology can provide a significant competitive edge. Embrace online platforms and social media channels to engage with customers, showcase your salon’s expertise, and promote your product line. Utilize visual platforms like Instagram and YouTube to share before-and-after transformations, tutorials, and style inspiration. Engage with your audience by responding to comments, providing helpful tips, and addressing customer concerns.

Consider implementing online booking systems to streamline the appointment process and offer convenience to your clients. Utilize customer relationship management (CRM) software to track client preferences, send personalized offers, and stay connected with your customer base. By harnessing the power of technology, you can enhance customer experience, streamline operations, and strengthen your competitive position.

By implementing salon competitive strategies, diversifying your product line, and utilizing technology effectively, you can establish a strong competitive advantage in the hair industry. Remember to continually assess and adapt your strategies to stay ahead of the competition and meet the evolving needs of your target market. For more guidance on starting a hair product business, refer to our comprehensive guide on how to start a hair product business.

Target Market Definition

Defining your target market is a crucial step when developing a business plan for your hair product business. By identifying and understanding your target market, you can tailor your products and marketing strategies to effectively reach and meet the needs of your customers. In this section, we will explore the process of defining your target market, the role of location in targeting, and the concept of psychographic segmentation.

Defining Your Target Market

Defining your target market involves identifying the specific group of people who are most likely to be interested in and purchase your hair products. This group shares certain characteristics, such as demographics, preferences, and purchasing behavior. By focusing on a well-defined target market, you can create a more focused and effective marketing strategy.

To define your target market, consider factors such as age, gender, income level, and lifestyle. For example, if your hair products are primarily designed for women in their 30s who are health-conscious and have a moderate to high income, you can tailor your marketing messages and product offerings to appeal to this specific group. This targeted approach helps you allocate your resources effectively and maximize your chances of success.

Role of Location in Targeting

The location of your hair product business plays a significant role in defining your target market. The geographical area in which your salon is situated can influence the demographics and preferences of your potential customers. For instance, a salon located in a family-populated suburb may attract older clients with higher incomes, while one in a bustling city may cater to a younger demographic with modern tastes.

Understanding the local market is essential for tailoring your products and services to meet the specific needs and preferences of your target customers. Conducting market research and analyzing the demographics and competition in your area can provide valuable insights into the characteristics and preferences of your target market.

Psychographic Segmentation

Psychographic segmentation is another method to define your target market for a hair product business plan. It involves grouping people based on their expected behaviors, thoughts, and lifestyle choices. By creating personas, which are generalized biographies of potential clients, you can gain a deeper understanding of their preferences and adjust your services, pricing, and salon ambiance accordingly.

Psychographic segmentation takes into account factors such as values, interests, attitudes, and lifestyle choices. For example, if your target market consists of environmentally conscious individuals who prioritize organic and sustainable products, you can develop hair products that align with these values.

By combining demographic data with psychographic segmentation, you can create a comprehensive profile of your target market. This information will guide your marketing efforts, product development, and overall business strategy.

By defining your target market, considering the role of location, and utilizing psychographic segmentation, you can develop a business plan that effectively targets and appeals to your ideal customers. Understanding their needs, preferences, and behaviors will enable you to create hair products and marketing strategies that resonate with your target market, setting your hair product business up for success.

Social Commerce and Partnerships

In today’s digital age, leveraging social commerce and forming strategic partnerships can play a crucial role in the success of a hair product business. This section will explore the benefits of social commerce, the concept of a virtual franchise, and the advantages of collaborating for growth.

Leveraging Social Commerce

Social commerce has become an increasingly popular avenue for businesses to reach their target market and generate sales. By utilizing social media platforms and messaging apps, hair product businesses can tap into a vast network of potential customers, including salon owners, stylists, and hair enthusiasts.

One example of successful social commerce implementation is the collaboration between a leading hair and beauty brand and Tada, a social commerce platform. The brand experienced a remarkable increase in revenue and sales by partnering with Tada, with resellers’ sales up by 452% compared to before adopting social commerce ( Tada Blog ).

Through social commerce, salon owners and hairdressers can become resellers and set up virtual stores to sell hair products directly to their customers. By sharing their virtual store links on social media or messaging apps, they can expand their reach and connect with a broader audience, increasing sales and generating income while staying safe at home ( Tada Blog ).

Benefits of Virtual Franchise

A virtual franchise allows salon owners and hairdressers to become part of a larger network while maintaining their independence. By joining a virtual franchise program, they can leverage the brand recognition and support of an established hair product business while still operating their own virtual store.

Virtual franchise programs, like the one offered by Tada, enable salon owners and hairdressers to generate income by selling hair products without physical involvement. This model provides convenience, flexibility, and the opportunity to earn additional revenue streams. By partnering with a trusted virtual franchise provider, salon owners can focus on their core expertise while benefiting from the brand’s marketing and distribution capabilities.

Collaborating for Growth

Collaboration can be a powerful growth strategy for hair product businesses. By partnering with complementary businesses or industry influencers, a hair product business can expand its reach, tap into new markets, and benefit from shared resources and expertise.

Through collaborations, hair product businesses can create win-win situations. For example, collaborating with local salons and hairdressers can help increase brand visibility and create opportunities for cross-promotion. By offering exclusive discounts or promotions to salon clients, a hair product business can incentivize customers to try their products and potentially become long-term customers.

Furthermore, collaborations with industry influencers, bloggers, or social media personalities can help increase brand awareness and credibility. Influencers can showcase the hair products to their followers, providing authentic testimonials and driving potential customers to the hair product business.

By leveraging social commerce and forming strategic partnerships, a hair product business can unlock new avenues for growth and establish a strong presence in the market. These approaches allow salon owners, hairdressers, and the business itself to thrive in an increasingly digital and interconnected world.

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Starting a Hair Care Business: A Beginner’s Handbook

So, you’re all set to weave your entrepreneurial dreams into reality and dive headfirst into the world of hair care business? Fantastic! Starting a hair care business can be an exciting journey filled with innovation, creativity, and endless opportunities to make people look and feel their best.

Here are some essential steps to kickstart your hair care business: research your market, craft a solid business plan, create a captivating brand identity, and curate a skilled team. With the right strategy, you’ll be on your way to making heads turn and hair shine.

In this guide, we’ll walk you through the essential steps, from concept to execution, to help you set up a thriving hair care business.

Table of Contents

Market Research: Lay the Groundwork

Market research serves as the critical cornerstone for laying the groundwork of your hair care business. Instead of hastily grasping your shears and leaping into action, take the essential step of conducting comprehensive market research. This phase is pivotal, as it offers a deep dive into understanding your potential customer base, their preferences, and the landscape in which you’ll be operating.

Therefore, before you even contemplate picking up those shears and initiating business operations, ensure that you’ve diligently completed your market research. It’s not merely a ritual; rather, it’s your strategic guide in constructing a business that genuinely resonates with and serves your intended customer base.

Read more about: Salon Startup Costs: Building a Strong Financial Foundation

Create a Solid Business Plan

In simpler terms, your business plan is a blueprint that prevents you from getting lost in the forest of uncertainties. It’s your strategy document that helps you make informed choices and stay on course. By detailing your goals, mission, pricing, and financial projections, you’re setting up a roadmap that not only keeps you aligned with your vision but also demonstrates your preparedness to potential investors or lenders.

In essence, before you plunge into the intricacies of sourcing, marketing, and operational activities, ensure you’ve charted your course through a robust business plan. It’s your tool for direction and clarity as you navigate the terrain of the hair care business landscape.

Choose a Catchy Name and Brand Identity

Beyond the name, it’s valuable to create a logo that sticks in people’s minds and opt for a consistent color palette that captures your brand’s character. Visual appeal matters here, as it’s what catches the eye and lingers in memory.

Imagine your business’s name as a melody that resonates with those who hear it, while your logo and colors are the visuals that leave an imprint. They work together to form a distinctive personality that people can recognize and connect with.

Legal Formalities and Permits

Firstly, you’ll need to officially register your business. Think of it like getting your business a proper ID card. This makes your business a recognized entity and gives you certain legal protections.

Next, there are permits. These are like special permissions that the authorities grant you to run your hair care business. It’s a bit like having the green light to start a specific kind of business activity.

So, by handling these legal matters, you’re making sure your business is set up strong and stable. It’s like building a solid foundation for a house. This way, you’re ready to face any challenges that might pop up while you’re doing what you love – taking care of hair and making people feel great.

Read more about: Salon Space Planning: Maximizing Efficiency with Layout Ideas

Location Matters

Choosing the right location for your hair care business is a critical decision that can significantly impact its outcome. Are you picturing a warm and welcoming salon, a high-end spa experience, or perhaps an online store to reach a wider audience? The place you settle on can have a significant impact on how many customers you attract and how easy it is for them to access your services.

Lastly, consider what your customers prefer. If your focus is on providing relaxation and luxury, a tranquil location might be ideal. On the other hand, if you want to offer convenience, being in a spot that’s easily accessible from where your customers live or work is key.

Your business’s location is like finding the perfect stage for your show. By choosing wisely and keeping customer convenience in mind, you’re setting the scene for a thriving hair care venture.

Curate an Exceptional Team

Assemble a remarkable team; they are the pulse of your hair care enterprise. Bring on board skilled hairstylists, color experts, and professionals who mirror your love for hair care. Their expertise and dedication to customer service will play a pivotal role in nurturing a devoted customer base.

Hiring experienced stylists and colorists is akin to having accomplished artists working on a masterpiece. Their skillful hands and creative touch will transform your clients’ hair and leave them feeling confident and satisfied.

Remember, the individuals you bring on board aren’t just employees; they are the faces of your business. Their dedication, expertise, and ability to connect with customers will determine the resonance your hair care business achieves in the market. In essence, your team is your business’s personality, and curating an outstanding one will set the tone for a hair care journey that leaves a lasting impression.

Products and Suppliers

The products you offer hold the key to your hair care business’s impact. The choice between triumph and disappointment hinges on the quality of what you provide. Partner with trusted suppliers to secure premium shampoos, conditioners, styling items, and tools.

Think of your suppliers as the backstage crew, working to ensure you’re equipped with the best resources. Just as a chef relies on top-notch ingredients to create a delicious meal, quality products are the foundation for excellent hair care results.

It’s not just about what you provide, but where it comes from. With the right products and trustworthy suppliers, you’re building a robust foundation for your hair care venture. So, invest wisely, and let your products tell your brand’s story with every use.

Design a Memorable Space

When setting up a physical salon or spa, the way your space looks and feels holds immense importance. Imagine it like arranging a warm and cozy living room that reflects your style. This setting needs to be welcoming and comfortable, matching the essence of your brand.

Think of your interior design as the backdrop to your hair care story. Just as the right backdrop enhances a photograph, a well-designed space enhances your customers’ experience.

Arrange the seating in a way that encourages relaxation and connection. Think of it as arranging chairs for a friendly gathering. Comfortable seating ensures that your customers feel at ease while getting pampered.

Ultimately, your space design is the canvas on which your hair care vision comes to life. It should feel like a warm embrace, capturing the essence of your brand and ensuring that each customer enjoys a delightful experience. So, curate your space with care, and let it tell your brand’s unique story.

Effective Marketing Strategies

Imagine social media as a big community party. You share interesting stories and pictures to get people talking and interested in what you offer. Engaging content is your icebreaker – it sparks conversations and creates connections.

But don’t forget the old-school methods. Think of flyers and local ads as handwritten invitations. They catch the attention of people nearby and remind them of your presence.

So, spreading the word is all about building a friendly buzz, both online and offline. Use these strategies to make sure your hair care business gets noticed and becomes the go-to place for anyone looking to boost their hair’s charm.

Exceptional Customer Service

Imagine your business as a cozy haven where customers can relax and enjoy themselves. Just as you’d offer your friends snacks and drinks, provide your customers with a comfortable and pleasant experience.

Every interaction matters. Answering questions, offering assistance, and providing a friendly smile are like little gestures that show you care. Just like how kind words and attentiveness make a conversation enjoyable, your customers should feel heard and appreciated.

Think of customer service as building connections. When you treat your customers with respect and kindness, you’re building a relationship that goes beyond a single visit. A happy customer is like a loyal companion who not only comes back but also tells others about the great time they had.

Engage and Expand

Maintaining a vibrant atmosphere involves more than just the initial launch – it’s an ongoing journey. Think of it like hosting a continuous series of enjoyable gatherings. Plan workshops, events, and special deals to keep the energy alive.

Imagine your hair care business as a place where the party never stops. Hosting workshops and events is like inviting friends over to learn something new or have a good time. It keeps the buzz going and makes your customers excited to be a part of what you offer.

Online engagement is like chatting with your friends on social media. Respond to your customers’ comments and feedback just like you would in a conversation. This interaction makes them feel valued and heard, fostering a sense of connection.

Adapt and Innovate

Being open to adaptation is like adjusting your sails to changing winds. If customers want new things, think of it as being ready to offer them. Flexibility ensures you’re catering to their evolving needs, just like a dancer tailors their performance to the audience’s preferences.

Remember, every thriving venture begins with a dream and evolves with determination, hard work, and a sprinkle of creativity. As you embark on this exciting journey, keep in mind that challenges will arise, but each hurdle presents an opportunity to learn and grow. So, hone those scissors, craft your dreams, and watch as your hair care business evolves into a remarkable story in the expansive landscape of beauty and entrepreneurship.

Frequently Asked Questions

Q: what are the key considerations before starting a hair care business, q: how do i choose the right location for my hair care business, q: what steps are involved in building a strong brand identity for my hair care business.

A: Crafting a memorable brand involves choosing an appealing name, designing a recognizable logo, and selecting a consistent color scheme that resonates with your target customers and reflects your business values.

Q: What are some effective marketing strategies for promoting a hair care business?

A: Leveraging social media platforms, creating engaging content, collaborating with influencers, using local advertising, and organizing events are effective ways to spread the word about your hair care business and attract a loyal customer base.

Q: How can I ensure exceptional customer service in my hair care business?

To learn more on how to start you own salon checkout my startup documents here..

How $800 and kitchen experiments helped Stormi Steele create a hair care brand that booked nearly $20 million in sales last year

• Stormi Steele is the founder of the hair care brand Canvas Beauty, a company she created from her kitchen experiments. 
• Canvas Beauty booked nearly $20 million in sales last year after Steele used paid social media advertising. 
• Steele shares the steps necessary for scaling a haircare business, including how to carve your own entrepreneurial path. 

As a child growing up in De Kalb, Mississippi, a small town 120 miles west of the state capital, Stormi Steele felt her aspirations were feared instead of encouraged. 

"No one pushed you to be ambitious — if anything, they're more afraid of ambition," said Steele, 32, of her childhood. "But as a child, I was always a dreamer." 

Steele's dreams led her to launch Canvas Beauty Brand , a 3-year-old hair care brand built on products she created in her kitchen. Steele booked nearly $20 million in sales last year, according to statements viewed by Insider, and described 2020 as one of the most rewarding years of her life. 

Steele shared how she grew from humble beginnings, stayed resilient, and how she scaled her brand from an experiment to a multi-million dollar burgeoning business. 

Carve your own entrepreneurial journey through apprenticeships and resilience

Steele's entrepreneurial journey started in the late 2000s, at Mississippi State University, where she studied art. With less than a year left to go, however, Steele dropped out. Academic stress left her nearly suicidal. "I was really lost and frustrated," she said.

In a dream, Steele realized she should pursue hairstyling. "I actually woke up in the middle of the night," she said, adding that the idea of starting her own business came to her then. "That was the beginning of the journey." 

Around 2011, Steele enrolled in a nearby cosmetology school . However, a few months later — just a semester before she was set to get her license — she got into a physical altercation with her father and fled Mississippi for Huntsville, Alabama.

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With no plan and just $800 in her pocket, she started an apprenticeship at a local salon, working under a master stylist who gave her credit hours toward her license.

In Huntsville, Steele was exposed to entrepreneurship — it was something she'd never seen growing up. "I felt like I could do it too," she said of seeing so many women run their own businesses. "They put a fire inside of me to go hard and make a name for myself in this city." 

Invest time and money into your dreams to see them grow

Steele started concocting her own hair products around 2012 in her kitchen while styling full-time. She'd mix over-the-counter ingredients, such as flaxseed oil and vitamin E, in an effort to create a solution that would help her hair grow. After about seven months and around $300, she said she perfected the serum, which she started using.

Steele isn't the only hair-focused entrepreneur to start out in the kitchen.

Janell Stephens , founder of Camille Rose, and Monique Rodriguez, cofounder of Mielle Organics, also began their businesses from home by mixing ingredients on the kitchen counter.

In 2013, Steele opened her own salon. By 2015, she was using her hair growth serum on customers and receiving rave reviews— including encouragement to sell it online. She went back to the kitchen, and in 2018, she left hair styling full-time to officially launch Canvas Beauty Brand. In the company's early days, she released a new product each month, including shampoos and deep conditioners, which range between $11.99 to $50.00.

Paid social media advertising can expose your business to billion-dollar markets

Business was slow in the first year, so in 2019, she began investing in paid social media advertising. Steele spent $100 on her first targeted ad, a glossy promotion she shared across Instagram and Facebook, which led to nearly $15,000 in sales in just a few days. In two weeks, she went on to sell nearly $440,000 worth of products.

"Discovery on Facebook and Instagram is powered by personalization — it's what helps people discover products and services that they love," said Christina Cua, director of product marketing on the Instagram Business team. "People coming to Instagram and Facebook expect to see content from brands — over ninety percent of accounts on Instagram follow a business." 

Steele targeted the Black hair care community, which had an estimated market value of at least $2.5 billion in 2018 , according to market research firm Mintel . The community centered on Black people embracing their natural hair grew in the last decade, which is a big deal — for centuries, Black hair has been a source of controversy , where the need to assimilate into Eurocentric societies saw the rising usage of harmful chemicals relaxers . 

"To have longevity in this industry, you really have to understand the weight of what it is you are providing," said Maya Smith, founder of the natural hair care brand Le Doux. "There's no other cultural group that has to fight to show up in the world the way they were born."

After the success of her first campaign, Steele kept posting ads with before-and-after photos of what her products did for hair. Two months later, the company hit $900,000 in sales, she said. One month after that, she reached $1 million in sales. 

Steele continues using paid social media advertising, which helped her company stay afloat in the pandemic. Originally a team of two, she and her husband hired 24 more people last year and moved from a 50-square-foot depository to a 17,000-square-foot factory. After booking nearly $20 million last year, she expects to make another $20 million this year.

Often, she thinks back to those small-town days, where people always told her to be more realistic with her dreams. "There's something about always being told to be more realistic," she said. "But I've always wanted to show people what real really is — anything you can imagine is real."

Watch: WATCH: How any business can use live shopping to net thousands of dollars per stream

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How To Start A Hair Product Line: The Complete Guide

Starting a hair product line isn’t easy, and without a well-known brand name behind you, competing against drugstore goods and other salon items will be difficult.

Furthermore, a failing product line may result in angry and disgruntled customers, putting your brand’s reputation in jeopardy. So, how can you establish a hair product line without jeopardizing your company’s reputation?

You’ve come to the perfect site if you want to learn how to establish your hair product brand. We created a comprehensive guide to help start and grow a hair product line from the ground up in this article.

Let’s get started. 

Pros & Cons Of Starting A Hair Product Line

When it comes to a successful salon business , introducing a hair product line is even more challenging. To start, you should know the pros and cons of launching a product line as one of your first steps.

This list of pros and cons will help you determine whether or not investing in one is worth it.

• Work from home: Selling hair products doesn’t need a physical store or office space, and you don’t even need a warehouse to store your inventory. You can choose how much time (or not) you want to put into this business, and depending on your life circumstances and goals, it varies.
• Stream of alternative income: If your salon has to cancel appointments or can only accommodate a limited number of clients, you could build on your business with the help of some hair products.
• Starting at a low price: You can get started with your business for as little as $2,500. If you’re running the show solo, you’ll also save on labor costs until your company is big enough to justify hiring someone to help out.
• Competition is fierce: The hair care industry is very crowded. If you want to get through this space successfully, identify a key market and know what people are looking for, precisely providing what they demand.
• Dependence on suppliers: Most hair care businesses don’t physically make the products themselves. They will buy from a supplier according to their specifications and choose the right one for that business . You rely on them when it comes down to it.
• Investment of time: If you want to market a successful hair product line, then you’ll need to put in a lot of work to promote your products and customer service. But if you’re confident that it’s something that can be done, start planning.

Does this sound like something you’d be interested in? If so, we can move forward. 

The process of creating a Hair Product Line

Here are the steps you should take to get started:

1. Understand your product’s purpose 

A unique selling proposition is a product’s or company’s primary argument to the customer. Every business needs one, and it involves looking at their competitors’ offerings and determining what they do better than them. 

Developing this type of message for all products may seem overwhelming, but some strategies can help break down an otherwise complicated task: 

•  Start with your mission statement – try to identify how you want customers to perceive you as a company by reflecting on why your business exists in the first place;
•  Determine if any features or benefits stand out from other similar businesses who offer those same products as well – these would be good starting points for developing copy explicitly related to those features/benefits; 
•   Brainstorm different types of messaging until something sticks – keep coming up with other ideas even if only one sentence evolves into more strategic content later on.

2. Build prototypes

Don’t give up! You will find the right one in time. Even if you can’t think of anything to start with, work on expanding your knowledge about what interests you, and who knows when it might click? The key is persevering; nothing good comes easy after all.

Keep trying until you figure out something that suits your needs or desires best.

3. Use volunteers to test your products  

It is essential to find out what they are looking for and how you can provide it. This may be through social media, surveys, or interviews. This way, you will know if your product could interest them at all before investing too much time in research on the possibility of marketing to them.

4. Make your hair product more effective

A lab expert may be able to help you identify bacteria in your home’s soil. If this is the case, they can recommend ways to get rid of it and avoid future problems with toxic substances on the ground. Laboratory experts are also trained to find solutions that will work best for any given situation within their field.

5. Choose the package and design

Graphic designers will work on your product’s color, layout, typography or advertisement. They’ll help you create a memorable image to represent your brand. 

Your graphic designer may work with creatives in other fields such as advertising and marketing professionals. Graphic design is more than simply making things look good: it’s about conveying an idea that communicates what makes your company special.

6. Large-scale production  

You can produce your cosmetics or choose to bring in a private label company. Making quality cosmetic products on site is possible with the right ingredients, lab equipment, and recipes. 

Along with this option, there are many other opportunities for retailing makeup, such as joining an online marketplace like Etsy or setting up an independent website where you can sell directly from home without having any costs associated with selling at a brick-and-mortar store.

A Step-by-Step Guide To Starting A Hair Product Line

You can start by focusing on the technical aspects. Ensure that your products do not contain any harmful chemicals and that they’re safe for public use. 

Next, you need to work out how much customer feedback you should consider when creating new hair care products; it may be wise to focus on what people want rather than risk a bad reputation with an unpopular product line! 

Additionally, don’t neglect accessibility: if a hairstyle is difficult or impossible to maintain without using certain hair care products, those will likely become popular too.

Are you pumped? Let’s begin. 

Step 1: Develop an action plan

If you manage the project hair care line, you must give them you’re all. To get started, take the time to learn how other brands have done it! In this section, we will look at the steps needed for success.

It would help if you looked at all the costs you would incur as you fund the marketing of a hair product line. The number of variables involved will determine the cost, however here are some common costs to consider:

• Licenses and business formation: Depending on where you live, you need to register your product with the appropriate office (like the FDA ) and pay for applicable business licensing fees. You might also have to pay taxes.
• Payment processing: Your salon might have a payment processing system of some sort, but you will need an additional one to accept online transactions.
• Equipment: If you choose to manufacture your products in-house, expect to pay for expensive laboratory and factory equipment. Partnering with a supplier is usually the better idea.
• Payroll: You may be able to handle launching the product line and processing the initial orders alone, but you might eventually need someone else to help.
• Liability insurance: Liability insurance is wise to have if a client files a complaint against your product. It ranges from $500 to around $2000 per year. In some locations, it’s legally required.
• Website: Owning an online business is different from selling hair products at your salon. If you want to look more credible, get your domain name. Also, create a Gmail account- one that’s separate from the current website- specifically for this side of the business.
• Inventory: If your supplier requires a certain amount of upfront inventory, you might be swayed to pick one over another. You may have been influenced by the initial stock cost rather than other specifics in this decision.

Step 2: Decide which hair products to sell

The first step is knowing your target demographic. Different kinds of people have different hair types, and you cannot appeal to everyone. 

You could start by observing the people who come into your salon. What treatments are they asking for most often? What demographic groups do they fall into? 

You might want to create a product line that caters to a particular kind of hair, such as curly or thin-hair products, which will be helpful for those with this type of hair problem in need of an answer from you! Or maybe you would like to cater specifically to older women or college students on a budget – when understanding who your target market is, it makes it easier to work out what types of products will best match their needs and wants.

Step 3: Select a supplier or make it yourself

When it comes to small businesses, the best way is to partner with a supplier. This means that you work with a manufacturer and give them your product specifications, where your name or branding will be on these items. 

Many suppliers require you to order specific amounts of product upfront if there are no defects in the manufactured goods after use from customer reviews. Suppose this makes sense so far – good. But not only do many business owners find themselves stuck with a surplus of inventory that they’ll never sell because their product didn’t live up to their expectations. 

Some manufacturers take advantage of this by charging higher prices than expected because they know people have already put money onto an order before being aware of any issues ahead of time.

Always do your research and ask around. The hair salon industry is tight-knit, especially for small independent salons, so fellow salon owners will be happy to share the suppliers they love with you. So don’t be afraid to ask someone who’s been in the business longer. You can also read online reviews and request samples before making decisions about products or services.

Step 4: Test the products after receiving them

Before you start to market your products, it’s essential to test them first. Companies like Revlon spend thousands of dollars trying their new product ideas before they launch a line – but that isn’t necessary for everyone. 

Here are some additional steps you can take:

Receive the sample products and try them out yourself- launching a hair product line 

If everything seems fine, then it’s time to start testing. Check whether your sample products pass the sight and smell tests when you receive them from your supplier. 

If something looks or smells different than expected, this might need addressing with the supplier as soon as possible so that there is no confusion around production specifications. 

During these tests, it is essential not just for things on paper but also for what happens in reality, too, such as how long shampoo lathers? Does my scalp feel dry after washing myself? Is there any irritation afterward? And if so, why would I be willing to put those feelings towards other people by selling my haircare range?

You can start by asking your team members and loyal clients to test the product, giving you their quality reviews. This is crucial in releasing a successful outcome because shows how different hair types react with the formula. 

Step 5: Design a brand, a website, and a domain

If you’re considering starting your hair product line, a large portion of your sales will likely come from online clients. You’ll need to pick the right brand name and SEO on your website- something that you may have been doing for other businesses previously.

First, think up a catchy name for your business. If you’ve already given the salon a title, then use this as inspiration or look at these pointers:

• It will help if you avoid names that are hard to spell. 
• Check out potential brand names on Google. Choose something else if your brand name is already taken or sounds like another company. 
• Don’t limit yourself to one niche if you decide later to branch out.

You can choose a name for your salon and start researching to see what the prospective clients think. Once you’ve selected a name, grab the domain right away. Register handles on social media sites like Facebook, Instagram, and YouTube.

You can build an e-commerce website using Shopify or an alternative platform, but if you want to use WooCommerce instead. Then you’ll need WordPress hosting from a reliable provider, installing WooCommerce on it; adding packaging images of your product; writing marketing copy for your product pages (with branding), and introducing yourself in short with details about any other services that might be included such as hair styling products mentioned above.

One good way to keep in touch with your customers is by creating a newsletter that sends subscribers hair care tips, special offers, and the latest updates from your business. Use a landing page builder to create an incredible-looking landing page where website visitors can subscribe. 

Next up: working on SEO for your e-commerce website. We all know it’s not going to happen overnight – but hopefully, these few pointers will help you get started:

• Maintain a blog within your site and use relevant keywords to post regularly
• Use your chosen keywords in the alt text of your images, describing their content. 
• You can use a plugin like Yoast SEO to help you.

It’s important to remember that local SEO is about targeting keywords too! This means by the time you start writing, make sure you include your business location in your content. If people are looking for reviews of businesses close to where they live, what better place than the internet?

Step 6: Calculating your expected income and pricing your products

It would help you decide what you want your products to cost before starting any business. Your pricing options are not limited, but two of the most common are overpricing and underpricing.

If you overprice your product, clients may view it as an unattractive deal, or that quality is low-quality for a high price mark up. Clients will be unlikely to buy this product if they feel like they’re getting something subpar for too much money spent! On the other hand, charging too little might lead people to view these items as cheap and therefore with no value at all (even if there’s not).

Both situations can damage your reputation and bottom line in different ways; make sure you know who will be purchasing from you beforehand to determine prices.

To see if your pricing is competitive, compare the products in your line with those of similar goods by competitors. How much do they charge? If your price point is very different from theirs and it’s not an exclusive product, then you might need to reassess.

Step 7: Expanding your salon’s hair product line

Your salon customers are the best target market for your hair products since you already know what they want and look for in their hair care. For example, a stylist can wash a client’s hair using your shampoo to see how high quality it is themselves. 

Your professional stylists have unique opportunities to promote your brand because of their knowledge about clients’ needs and tastes. They will be able to make customized recommendations leading to loyal customers who keep coming back again and again!

Along with nurturing relationships with your salon clients, building a community online is one of the best ways to extend that engagement. The simplest way of doing this is by creating an exclusive Facebook group where you can share hair care tips and encourage discussions between members while promoting some of your most loyal customers looking stunning after visiting your salon. 

As these people become more informed about their hair, you have the opportunity to introduce new products or services and build up influence in the industry.

Conclusion 

Opening a hair product line with your salon is an excellent way to expand and diversify your business. Haircare products offer a variety and different sources of revenue for the business. You must dedicate enough time and energy to both (or hire someone who will). 

On top of this, before you bring these products to the market, you must understand your target audience and the competition so that they’ll be able to design them accordingly. Finally – using their salon could be the perfect opportunity for promotion.

Before bringing your products to the market, you need to understand what target audience and competition exist. This will allow you to design, promote, and price your product accordingly. Finally, use your salon as a primary promotional tool- educate stylists on how to meet clients’ hair care needs with products that suit them best.

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Wow, you’ve said it all. I found this really helpful, cause i was just thinking of starting my hair care business. Thanks alot.

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Hair Business Plan Template & Guidebook

How to write a hair business plan in 7 steps:, 1. describe the purpose of your hair business..

It also helps to include a vision statement so that readers can understand what type of company you want to build.

2. Products & Services Offered by Your Hair Business.

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your hair business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

Target market

Customer base , product or service description, competitive analysis, marketing channels, form an llc in your state, 4. write your operational plan., what equipment, supplies, or permits are needed to run a hair business, 5. management & organization of your hair business., 6. hair business startup expenses & captial needed..

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your hair business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Frequently Asked Questions About Hair Business Plans:

Why do you need a business plan for a hair business.

A business plan is an important tool for any business, including a hair business. It helps you to identify your goals and objectives and plot out a roadmap to reach them. It can also help you to assess financial risk, analyze market trends, identify customer needs and develop strategies for success. Additionally, it can be used as a tool to help secure funding from investors or lenders.

Who should you ask for help with your hair business plan?

Can you write a hair business plan yourself.

Yes, it is possible to write a hair business plan yourself. Before writing your business plan, it is important to do research on your competitors and the hair services you plan to offer. Make sure you consider all the necessary aspects of creating a successful business, such as costs, pricing, marketing strategies, target demographic and more. Once you have done your research, create an outline for your plan that includes an executive summary and market analysis along with all of the pertinent information about your proposed business. Finally, flesh out each section with as much detail as possible in order to provide potential investors with a comprehensive view of your business goals and objectives.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

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How to Write the Perfect Salon Business Plan in 6 Steps

Discover how to craft a winning salon business plan in just six steps! Boost your salon's success with expert tips, market analysis, and strategy insights.

No credit card required.

As a salon owner, having a well-thought-out business plan is essential to the success of your business. A salon business plan outlines your business goals, market analysis, marketing strategies, financial projections, and other key details, serving as a roadmap that guides you through the process of starting, running, and growing your salon. In this article, we’ll go over the key elements of a salon business plan and provide tips on how to write the best business plan for salons in 2023.

How Much Does It Cost to Run a Salon? 

Before you start writing a salon business plan, it’s important to get an idea of the startup and ongoing costs. As we discuss in this article , the costs of starting a salon range from $62,000 for an existing salon to $90,000 for a new operation. With some of the expenses, you’ll incur one-time costs – other expenses will be ongoing such as supplies and inventory. Here are some of the typical costs associated with starting a salon: 

Existing Salon 

When you buy an existing salon, be it a hair salon or nail salon, you save on the costs of buildout, salon equipment , and salon marketing, assuming the salon already has some of these elements in place. Here’s what you can expect to pay for the following:

• Rent deposit: $4,500
• Buyout of current salon: $10,500
• Leasehold improvements: $15,000
• Equipment: $10,000
• Initial supplies: $8,000
• Initial inventory: $4,000
• Certifications and licenses: $4,000
• Marketing: $5,000
• Legal or consulting fees: $1,000

Grand total: $62,000

The upfront costs of building out a brand-new salon, marketing it to local clients, and getting the business up and running will likely exceed those of buying an existing salon. Here are the typical expenses you can expect to incur for a new salon:

• Buyout of current salon: $0
• Leasehold improvements: $35,000
• Equipment: $25,000
• Marketing: $8,000

Grand total: $89,500

You may also want to budget for the following:

• If you need a loan or financing to cover startup costs, expect to pay interest rates of 1.25% to 10%.
• Salon insurance ranges from $50 to $1,000 per month.
• Salon booking software and a point of sale (POS) system range from free to $500 per month. GlossGenius starts at an industry-low $24 per month with low payment processing fees and includes a website, a branded card reader, and other extras.
• A salon website can cost you thousands, but with GlossGenius, it’s included free! Beautiful and customizable, your website is packed with scheduling features and is easy to navigate, helping to increase bookings and future appointments.

How Profitable Is Owning a Salon?

If you owned a salon during the pandemic, no doubt you experienced your fair share of struggles between lockdowns, closures, and reduced business hours. According to Statista , the U.S. market size of beauty salons dropped from $69 billion in 2019 to $42.3 billion in 2020. Fortunately, things are beginning to look up for hair, skin, nail, and other types of salons, with the market valued at $53.6 billion as of 2022.

You can take advantage of the comeback by approaching your salon startup with a solid plan in place, a realistic budget, and a marketing strategy. A beauty salon business plan can help you identify any questions , opportunities, and potential roadblocks so you can have the best chances of getting funding, earning a return on your investment and achieving profitability. The more you control your expenses and market your business successfully, the more profitable you will be – so be sure to take your time creating a salon business plan for your needs.

6 Steps to Writing a Hair Salon Business Plan

The business plan is the most important document for any salon owner. It’s a formal, written plan that describes the future of your business and how you intend to achieve it. A good business plan will help you stay on track, get funding if you need it, and avoid costly mistakes as you navigate through choppy waters in this industry. 

We know what you’re thinking – that a business plan is a monster of a document that will take a ton of time to create. But, it doesn’t have to be. In fact, you can pare it down to one page and still have an effective, clear document that outlines everything you (and any other interested parties) need to know about your new salon. Below are six steps to writing a salon business plan that will ensure your success.

Here are six steps to creating your salon business plan:

• Create an Executive Summary
• Map Out Your Branding Vision
• Research Your Industry
• Create a Client Acquisition Strategy
• Management and Operations
• Financial Planning

Let's dive deeper into each one.

1. Create an Executive Summary

The executive summary is the first section of your business and management plan and provides a brief overview of your salon business. This section should include your mission statement , business objectives, target market, products and beauty services, and financial projections. It should be concise, engaging, and compelling to grab the attention of potential investors, lenders, or partners. It also serves to clarify your goals so you can come back to them anytime you need a refresher or wish to update this information.

Your executive summary is just that: a summary. This means you do not have to get into every detail in this section; you’ll provide a more complete analysis in the individual sections of your business plan. Here are some key elements to include in the executive summary:

• An opening “hook.” The first sentence or two of your executive summary needs to draw in the reader; otherwise, your business plan might not get the attention it deserves. Grab your audience’s attention by sharing a compelling fact about your company, a memorable story related to your industry, or some other well-crafted description of your business that will make your business plan stand out.
• Summary of your business. Describe what your company does, what services and products you will offer, who will run the company, and other high-level details.
• Market analysis. Briefly describe the market landscape for your own salon to show there is a proven need for your services. Be sure to address who your competitors are, any advantages you have compared with others, and any research you’ve conducted to demonstrate there is a demand for your services in the area. 
• Products and services. Highlight the specific services your salon will offer, any products you will sell, and any other information showing that your salon will fill the need you’ve described in your market analysis summary – and how you’ll do it better than the competition.
• Financial information and projections. Give your reader an overview of your business financials, including any current sales and profits, the funding amount you’re looking to acquire or any funding you already have, and your projections for growth.
• Future plans. Tell your reader exactly how you plan to use any funds you acquire and how their investment could pay off. Imagine where you want your business to be in a year, five years, and so on. Make it clear how funding will help you get there.

2. Map Out Your Branding Vision

Branding isn’t just about creating a unique identity for your business; it’s also about helping people connect with that identity and remember your name anytime they need your services. Branding helps both current clients and new customers recognize who you are and why they would want to seek out your salon. In your business plan, be sure to map out your branding vision by including:

• A description of your salon business. Describe who you are and what you do.
• Your mission and vision statement. Briefly summarize why your salon should exist, its primary objective, and how you plan to achieve your goals.
• An overview of your products and services, your pricing strategy, and any unique features or benefits that differentiate your salon from others in the market. Discuss the specific services you will offer and their price points, plus any product lines you will carry, such as hair care products, makeup, or skincare.
• A description of the target audience and customer demographics. Include relevant research on your market and the people who will buy what you’re offering.

3. Research Your Industry

This section should include a market analysis that provides an in-depth look at the salon industry, including trends, customer demographics, competition, and opportunities. It should also identify your target market and describe how you plan to reach them. This section should demonstrate your knowledge of the market and your ability to capitalize on it, with details on:

• The industry and trends. Provide an overview of the salon industry with relevant statistics, especially those that pertain to your area of expertise and geographic location.
• Your competition. Conduct a competitive analysis to gain insights into your competition, their marketing strategies, and the services and products they offer. The goal is to show how you will capture market share using stronger business strategies that set you apart from your competitors.
• Market segmentation. With market segmentation , you break down a larger target market into a smaller group of customers you plan to serve. Demographics such as age and income, geographic location, lifestyles or psychographics, and behavioral factors like price sensitivity or product loyalty are just a few approaches to market segmentation that you can consider for your business plan.
• SWOT analysis. The SWOT analysis is a way to assess your strengths, weaknesses, opportunities, and threats. It's an effective method for identifying your business strengths and weaknesses as well as external factors that may affect the success of your salon business.

4. Create a Client Acquisition Strategy

The client acquisition section of your salon business plan should describe how you plan to attract and retain customers as a hairstylist . It should outline your advertising and promotional strategies, such as social media marketing , SMS marketing , email marketing, and referral programs. This section should also discuss your sales strategy, including how you plan to increase sales and generate revenue.

• Description of marketing channels and tactics . Outline the different channels you will use to generate leads, such as social media, blog articles, emails, and text messages. 
• Sales forecasting and projections. Discuss how you will convert leads into clients, nurture them through the pipeline, and retain a loyal clientele. Include a realistic estimate of the quantity of goods and services you can sell within the forecast period (for example, monthly, quarterly, and annually). For a salon business, it’s helpful to determine the customer lifetime value of your typical client as well as the customer acquisition cost. You can then break down this number for the forecast period to determine the costs and sales projections.
• Customer acquisition and retention strategies. Include which strategies you will use and the associated costs, such as pay-per-click (PPC), search engine optimization (SEO), and paid ads on social media. Describe how you will retain customers – for example, through loyalty programs and responses to feedback and reviews on social media and Google. ‍
• Pricing strategy. It’s critical that you price your services and products competitively to drive revenue and profits. Detail the pricing strategy you plan to implement based on your buyer persona and competitive analysis. The strategy could be based on a variety of factors, but geographic location and local competition will likely be the biggest factors dictating your salon pricing strategy.

5. Management and Operations

The management and staffing section of your salon business plan should describe the organizational structure of your salon, including the roles and responsibilities of each staff member. It should also discuss your hiring and training practices, employee benefits , and compensation plans. This section should demonstrate your ability to attract and retain a skilled and motivated team, with information on your:

• Organizational structure. Spell out who runs the show and who reports to whom.
• Management team and staff. If you plan to hire a manager , look for someone who has experience in the industry and understands what it takes to run a salon. This person should also have good people skills and be able to work well with others.
• Business operations and processes. Consider which other support personnel you will need, such as an accountant and a dedicated marketing specialist. Don’t be a hero; you can’t do it all alone. ‍
• Legal and regulatory requirements. Include information on any legal advice you will employ to stay compliant with local, state, and federal guidelines.

Note that with GlossGenius, you can manage your team and collaborate with them to make your operations run more smoothly. Our software helps you delegate, mentor, and partner with others based on customizable permissions that let you grant as much or as little access as you wish. Easily manage your scheduling, booking, commissions, and reporting from one intuitive dashboard.

6. Financial Planning

Financial planning is a crucial section to include in any salon business plan. A cash flow forecast shows the anticipated amount of money coming into the business, as well as what you will spend on expenses. It also projects growth over time, which allows you to make predictions about future revenue and expenses so that you can better plan for them in advance.

The best way to get started with your financial projections is by creating an income statement (also called a profit and loss statement), which breaks down all income sources by category (e.g., retail sales and commissions), along with their associated costs (e.g., salaries). This will help provide insight into where your profits are coming from as well as areas where they could improve. Here are some key areas to cover in your salon business and marketing plan:

• Revenue and expense projections. Your revenue projections should consider the number of clients you expect to serve, as well as the average price per service. Your expense projections should reflect all costs associated with running your salon, such as utilities, rent, and supplies.
• Capital requirements and funding sources. Detail how much money you need to start and run your small business, including all costs associated with opening the salon. Describe the funding sources that you intend to use for starting your salon business, whether from personal funds, salon loans , or investors.
• Break-even analysis and profitability projections. A break-even analysis is a financial tool that shows how much revenue you need in order to cover your fixed costs (rent, utilities, etc.) and variable costs (such as salons supplies and staff wages). Profitability projections show how much profit you expect from your salon business for each year of operation. This is based on your estimates of revenue and expenses. You can use this information when seeking funding from investors or lenders.
• Financial ratios and metrics. A financial ratio is a measurement of the relationship between two numbers, usually expressed as a percentage or a fraction. For example, the working capital ratio compares your current assets to liabilities; this metric allows you to measure liquidity. Include the appropriate ratios and metrics in your business to demonstrate your company’s financial health.

A well-written salon business plan is essential for the success of your business. It provides a roadmap for achieving your business goals, attracting investors, and securing funding. By following the tips outlined in this article, you can write the best business plan for your salon and ensure your salon’s success!

As you’re creating your salon business plan, remember to start your free trial with GlossGenius and give yourself the best chances for success. From salon management to payment processing, we’ve got your new salon covered – making it easier to get up and running sooner rather than later.

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How to write a business plan for your hair salon.

Starting a hair salon is a great way to be your own boss and make a living doing something you love.

It also offers potential for growth and diversification, allowing you to add additional services or products to your business.

But, before launching anything, make sure you have a business plan in place.

A business plan is an essential tool for any new project, and a hair salon is no exception. Writing a business plan will help to ensure that the project is well-thought-out and has a clear roadmap for success.

In short, a thorough business plan will help make sure your hair salon is profitable .

What should you consider when writing a business plan for a hair salon? What should be the main focus areas? What are the important financial ratios to consider? How can I speed up the process of developing an efficient business plan?

Please, find comprehensive answers to all these questions below.

Additionally, it's worth noting that you have the option to avoid starting your business plan from scratch.

Instead, you can download our business plan for a hair salon and adapt it to your project.

Creating a business plan for a hair salon

Will a business plan be beneficial for your hair salon.

Yes, you should create a business plan to ensure the success of your hair salon.

Developing a robust business plan will enable you to:

• learn about the hair salon market
• be aware of new consumertrends and apply them to your project
• identify factors for viability in a hair salon
• understand the latest hair trends, styling preferences, and customer expectations in salon services
• find a great unique value proposition for your hairstyling salon
• investigate competitor customer retention strategies
• find competitive advantages for your hair salon
• find a business model that delivers consistent positive financial outcomes
• establish and execute a solid and strategic action plan for long-term success
• evaluate potential risks specific to a hair salon, including customer satisfaction, employee training, and product safety

Our team has drafted a business plan for a hair salon that is designed to make it easier for you to achieve all the elements listed.

How to outline a business plan for a hair salon?

Your business plan will include a wide range of numbers and valuable information. It must be presented in a structured format, to make easy to read and digest.

When we built our business plan for a hair salon , we took care to arrange it appropriately.

There are 5 parts within the business plan.

1. Market Opportunity

The introductory section has been named "Market Opportunity".

Our team has gathered essential information and metrics about the hair salon, providing valuable insights for entrepreneurs in this industry.

The data here is always kept current; we update it biannually.

2. Project Presentation

The "Project" section provides an opportunity to describe your hair salon, specifying the range of hair services you offer (cut, color, styling), specialized treatments, talented stylists, haircare products, salon ambiance, and the unique value proposition that guarantees exceptional hairstyling and customer satisfaction.

Remember to introduce yourself at the end of this section.

Discuss your passion for hairstyling, your expertise in hair trends and techniques, and how you plan to create a personalized and transformative hair salon experience for clients. Highlight your range of services, your skilled stylists, and your dedication to providing individualized consultations and exceptional customer service that leaves clients feeling confident, stylish, and satisfied at your hair salon.

We prepared text in our business plan. Customize it to suit your idea.

3. Market Research

Moving on, there's the "Market Research" section.

In this section, you will find a market segmentation analysis for your hair salon.

It includes a study of other hair salons in the area that will be competing with you. Your salon's unique hair services and competitive advantages are also highlighted. A customized SWOT analysis is included.

4. Strategy

The "Strategy" section outlines a comprehensive 3-year action plan, detailing the initiatives and steps needed to transform your hair salon into a highly profitable endeavor.

Furthermore, this section encompasses a comprehensive marketing plan, a strategy to mitigate risks, and a completed Business Model Canvas.

5. Finances

In the end, the section titled "Finances" is where you can present the financial plan and breakdown for your project.

How to write the Executive Summary for a hair salon?

The Executive Summary gives a summarized glimpse into the business plan of your hair salon.

Keep it brief, not going over 2 pages. Highlight the essential points.

When you share your business plan with an investor, this is the part they will read at the beginning. It should grab their interest and make them want to read the rest of the plan.

In the Executive Summary of your hair salon, address the following queries: what services does your hair salon offer? who is your target audience? are there other hair salons in the area? what makes your salon unique? what funding do you need?

How to do the market analysis for a hair salon?

Analyzing the market for your hair salon allows you to gain insights into factors such as customer preferences for hairstyling and haircare services, competition from other salons, and emerging trends in hair fashion.

By conducting a comprehensive market study, a hair salon can identify customer preferences, offer a range of hair services, optimize pricing strategies, and execute targeted marketing campaigns, ultimately leading to a loyal customer base, increased appointments, and a prominent position in the local hair care industry.

Here's what we've incorporated into the "Market Research" section of our business plan for a hair salon :

• fresh and updated data and statistics about the hair salon industry, including popular hairstyles, hair care trends, and customer preferences
• a list of potential market segments for a hair salon
• the competitor analysis
• the competitive advantages to target for a hair salon

The key points of the business plan for a hair salon

What's the business model of a hair salon, business model of a hair salon.

A hair salon's model revolves around providing various hair care services, including haircuts, styling, coloring, or treatments. Revenue is generated through service fees, potentially offering retail hair products or additional beauty services.

The business model focuses on employing skilled hair stylists, providing personalized consultations, using quality hair products, creating a welcoming and trendy salon environment, and building strong client relationships through exceptional service and hairstyling expertise.

Success depends on stylists' talent and creativity, effective marketing to target individuals seeking hair services, maintaining industry trends and techniques, fostering positive client reviews and referrals, and providing a satisfying and rejuvenating salon experience.

Business model ≠ Business plan

Be clear on the distinction between "business plan" and "business model."

A business model is a blueprint for how a company operates and makes money.

In a business plan, you use the Business Model Canvas as a visual aid to explain the inner workings of your business.

Rest assured, there is a Business Model Canvas (already completed) in our business plan for a hair salon .

How do you identify the market segments of a hair salon?

Market segmentation for your hair salon involves dividing your potential customers into different groups based on their haircare needs, preferences, and demographics.

These categories may include factors such as haircuts and styling, coloring and highlights, extensions, or customers seeking specific hair treatments (e.g., keratin treatments, scalp treatments).

By segmenting your market, you can offer a range of hair services and solutions that cater to each segment's specific requirements. For example, you might provide a variety of haircut and styling options for customers seeking trendy or classic looks, offer professional hair coloring and highlighting services for customers looking to enhance their hair color, specialize in hair extensions and volumizing treatments, or provide specialized treatments for customers with specific hair concerns such as damaged hair, dry scalp, or frizz control.

Market segmentation allows you to effectively target your marketing efforts, showcase your hairstyling expertise, and deliver personalized and satisfying hair services that meet the unique needs and preferences of each customer segment.

In the business plan for a hair salon , you will get a detailed market segmentation, helping you understand your target audiences and their needs.

How to conduct a competitor analysis for a hair salon?

Without surprise, you won't be the only hair salon in your city. There will be other establishments offering hair styling, cutting, and coloring services to customers.

Your business plan must incorporate a thorough examination of your competitors, including their characteristics, strengths, and weaknesses.

Pay attention to their weaknesses (such as inexperienced stylists, lack of trending hairstyles, or poor customer satisfaction).

Why is it crucial to notice these aspects? Because these weaknesses can impact the client experience at hair salons. By addressing these elements, you can provide a wide range of hair services and treatments, offer skilled and creative stylists, and create a welcoming and stylish salon environment, establishing your hair salon as a preferred choice for hair care and styling needs.

It's what we call competitive advantages—work on developing them for a distinct business identity.

Here are some examples of competitive advantages for a beauty salon: skilled and experienced stylists, wide range of beauty services, relaxing and luxurious ambiance.

How to draft a SWOT analysis for a beauty salon?

A SWOT analysis can help identify potential strengths, weaknesses, opportunities, and threats that may affect the success of a hair salon.

As you can guess, there is indeed a completed and editable SWOT matrix in our business plan for a hair salon

The strengths for a hair salon

The letter "S" in SWOT signifies Strengths, highlighting the project's internal advantages or positive features.

For a hair salon, potential strengths include excellent customer service, a wide range of services, experienced staff, and attractive pricing.

The weaknesses for a hair salon

The "W" stands for Weaknesses, referring to the areas or aspects of the project that need to be addressed.

For a hair salon, potential weaknesses could include lack of repeat customers, limited marketing budget, lack of online presence, and lack of staff training.

The opportunities for a hair salon

O represents Opportunities in SWOT, referring to the external factors or conditions that can create opportunities for the project's advancement.

In the case of a hair salon, potential opportunities may include offering online booking services, expanding into new markets, providing additional services such as cosmetics and nail care, and advertising on social media.

The threats for a hair salon

The "T" in SWOT stands for Threats, which are external factors that may pose risks or challenges to the project's success.

How to outline a marketing strategy for a beauty salon?

A marketing strategy is a vital element of a business plan as it details how a business will attract customers and generate business.

A hair salon can attract clients in need of professional and trendy hairstyling services by implementing a targeted marketing plan that highlights the salon's skilled stylists and personalized approach.

Clients won't choose your beauty salon without effective marketing; showcasing your range of services, talented stylists, and relaxing atmosphere is crucial.

Are you implementing effective marketing strategies for your hair salon? Consider offering first-time client discounts or referral programs, showcasing trendy hairstyles or transformations on social media, and partnering with local fashion influencers for endorsements.

Don't fret if you lack ideas for your project's marketing strategy.

How to build a solid financial plan for a beauty salon?

A successful business plan must include detailed financial information, such as income and expense projections, cash flow statements, and a break-even analysis.

As you outline your business plan, you should include revenue projections for your hair salon.

The inclusion of a relevant and credible revenue forecast in your business plan adds credibility and enhances appeal to banks or investors.

Our financial plan for a hair salon is straightforward and equipped with automated checks, enabling you to validate and adjust your assumptions easily. This way, we make sure you're building solid financial projections.

Without a doubt, you'll need to come up with a basic budget for starting your hair salon. Make certain to include all expenses without exception - you can find them all listed in our financial plan!

The break-even analysis is a crucial tool in your financial plan, providing insight into whether your hair salon will become a profitable company or not.

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How to Start a Natural Hair Product Line at Home

By: Author Tony Martins Ajaero

Home » Business ideas » Beauty Care Industry » Cosmetics Line

More women are transitioning back to natural hair, and while this might be a feat to applaud, caring for the natural hair is quite different and tough. If you have natural hair and have tried several products that have worked on your hair, and you know these products will be of immense help to others, then it is time to think of starting your own natural hair care product line business .

You will need to ensure that you have the required start-up capital because this will be necessary to help you procure the raw materials and ingredients for your natural hair care products as well as the packaging. You will also need to know if you want to use normal ingredients or go organic.

Steps to Starting a Making Natural Hair Care Line

1. understand the industry.

According to a research by Mintel, more blacks in the united states of America are gravitating towards natural hair care products and this has seen an increase in the sale of hair styling products, which jumped to 26.8 percent between 2013 and 2015, reaching a value of $946 million which represents more than 16 percent of the overall hair industry. The move to naturals has also seen a drop in the sale of relaxers.

According to IBISWorld, industry revenue for natural hair care products is projected to reach $212 million by 2017 growing by 2.8 percent between the periods of 2011 and 2016. Even though the economy is slowly recovering, spending power amongst the blacks according to The Nielson Co has increased tremendously within a decade and is still expected to grow some more within the next decade.

The increase in production of organic and natural hair care products has been fueled by the approval given by the U.S Department of Agriculture (USDA) and the FDA. What has fueled demand in this industry is the change in the lifestyle of consumers as they now demand chemical-free hair products.

More than 51 percent of blacks in the United States have resorted to natural hair care products and yet demand shows no signs of slowing down as sales have been projected to reach $1.4 billion in the year 2022.

According to a research by Mintel, 35 percent of blacks with natural hair also like to change hairstyles at least once in a month, with favorite styles including coloring of the hair. 19 percent of black women have continually changed their hair care products because they can’t find what is right for them.

Even though more customers have shifted to natural hair products, it hasn’t stopped the high demand for hair extensions, wigs and weave as 44 percent of black women with natural hair claimed to have a wig, while 38 percent planned to get one within the year.

Even though there are new entrants into the natural hair care product line of business, the industry is not expected to grow tremendously according to IBISWorld and this is due to the fact that the larger companies will continue to acquire the smaller ones. Also, because of stiff competition in this industry, it is hard for new entrants to come in much less break through.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

The demographic and psychographic composition of those who require natural hair care products are not only individuals that have natural hair but those who are also transitioning to natural hair and even those who don’t have natural hair but use the products anyway.

So, this is basically for women in different adult age groups with even a few men as well. Also, it has been said that Caucasian women are more likely to be customers of hair care product lines that women of other races use. This does not mean that the demographics is limited to just these ones.

3. Decide What Niche to Concentrate On

Starting a natural hair care product line business is an all-encompassing business as your products would need to be tested before they can be sold to others. However to generate more revenue for your business and boost your bottom line, you can go into several niches in order to cater to a wide variety of your market.

While it is usually easier for large scale companies to specialize in several niches, thereby offering more to their customers; small scale businesses usually stick to just one or two unique niches and use that to stand out in the industry. Some of the niche areas that you may decide to get into after starting your natural hair care product line business are;

• Natural hair care product line
• Organic natural hair care product line
• Hair kits and accessories
• Sale of other hair care products

The Level of Competition in the Industry

While you might have tried on your hair products and think that your target market should automatically fall in love with it, you will need to contend with running the business and making it a success. First, the amount you intend to use in starting your natural hair care product line business will go a long way in determining what scale you intend to start on and how effective this would likely be against your competitors.

If you intend to compete favourably against your competitors, you would need to focus first on those that are offering the same services as you, so that you can manipulate any gap and use this to offer better products to your customers. What most clients are looking for when they purchase hair care products is one that would meet their expectations.

4. Know the Major Competitors in the Industry

Every industry has brands that stand out and the natural hair care product line industry is no different. The brands that stand out are those that are well recognized by the target market.

These brands either stand out due to the effectiveness of their products, their marketing strategies or they must have been in the industry for a long time. Therefore some of the leading natural hair care product line brands in the United States of America are;

• Yelani all-natural hair care products
• Alikay Naturals
• Amazing Botanicals
• Camille Rose
• Design Essentials
• Kinky Curly
• Koils By Nature
• The Mane Choice
• Tropic Isle Living
• Sunny Isle JBCO
• Uncle Funky’s Daughter
• Lawrence Ray Concepts
• The Detangle Brush
• TGIN (Thank God I’m Natural)
• Jane Carter Solution

Economic Analysis

The natural hair care product line industry is a huge one and according to analysis, revenue in this industry is likely to increase by 5 percent each year. However, most of the natural hair care products that are being produced in the industry are by major brands, while the other few are being shared by independent natural hair care product businesses.

However, if you are a new entrant that has found the right niche, you will have no problem at all standing out. If you intend to build your own natural hair care product line empire, you might need to decide if you want to concentrate on women, men or both; adults, kids or both.

You will need to identify the ethnic distribution that is dominant in your target area and know what their hair care needs are, what they expect from a natural hair care product and what they also expect from you as the producer of a natural hair care product line.

Another decision that you would need to look into is your geographic location. The location of your natural hair care business is very important because it would be useless to produce natural hair care products for African American women in Utah as opposed to doing so in Georgia.

Even if you are located far off your target market, you must determine the cost of ensuring that the products get to the target market by engaging in massive publicity and also getting the big stores to put your natural hair care products on their shelves.

5. Decide Whether to Buy a Franchise or Start from Scratch

Starting from scratch gives you the opportunity to be in control of your business and draft the strategies that would help make your business become a force to be reckoned with. Starting from scratch however involves you having to deal with enough paperwork and making certain decisions that could either grow or destroy your business.

Buying a franchise on the other hand allows you to worry less about the minute details of the business such as where to source for products, getting the right equipment or even marketing strategies that would aid your business grow to the level you want.

It should however be noted that the natural hair care product line isn’t one that involves buying a franchise, as manufacturers of these products usually prefer to have their names on the product instead.

6. Know the Possible Threats and Challenges You Will Face

Every business in existence, either new or old, is usually faced with threats and challenges that might make the business fail, which is why you must be prepared as an entrepreneur to face any challenges that you may encounter by drafting strategies to help you deal with them.

Some of the threats and challenges that you may likely face will come from stringent and unfavorable government policies, the arrival of a competitor offering same or better services, inability – either financially or via human capital – to meet with the growing demand of customers, and the downturn of the economy which will affect the purchasing power of our target market.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Having a legal entity is very important for your natural hair care business, otherwise you will not be taken seriously by major retailers and stores when trying to get your business out to your target market. Also, if you do not have a legal entity, there is no way that you can seriously compete with other brands or even employ anyone to work for you.

choosing a legal entity means that you have plans to grow your business and become a force to be reckoned with in your industry. It should be noted that any business structure you pick comes with tax and legal implications. There are four basic types of legal entities in the United States of America and they are;

Sole proprietorship is the most basic and simplest form of legal entity to set up. As an entrepreneur using this business structure, you own all the profits as well as all the debts incurred by the business. Partnership form of legal entity involves two or more people as partners.

A corporation is usually more complex and is for larger companies that have more than your average number of employees. A Limited Liability Company (LLC) is a more preferred form of legal entity because of the advantages it has.

Choosing a legal entity is serious business and you would need to seek the advice or engage the services of a law attorney to help you choose the legal structure that is best for your natural hair care product line business.

8. Choose a Catchy Business Name from the ideas Below

Choosing the right name for your business is very important because your company name precedes your products. So it is absolutely necessary that you choose a business name that is not only unique, creative or memorable but one that allows your target market know that this is the industry that you are in.

Therefore, if you are thinking of starting your own natural hair care product line business, below are some business names to consider;

• Sharon Rose Kinky Hair Products
• Afro Eau Natural Hair Products
• Missy Curls Hair Products
• Boonty Organic Hair Products
• Vixen natural Hair Care Products
• Yo’girl natural Hair Care Products

9. Discuss With an Agent to Know the Best Insurance Policies for You

Regardless of the size of your business and what legal entity you intend to use for your business, having insurance for your natural hair care product line business is very necessary.

The reason why you need an insurance policy is that as much as you are sure that your natural hair care products are good, you can still get sued by a customer who didn’t get the result they were expecting, and for this you would need to insure your business so as to be personally protected from any liability.

If you are confused about the kind of insurance to get for your business, it is best you approach an insurance agent or broker for advise on which would best suit your business. However, some of the basic insurance policies that you might need to think of purchasing if you intend to start your natural hair care product line in the United States of America are;

• General insurance
• Professional Liability Insurance
• Health insurance
• Workers’ Compensation Insurance
• Business Property Insurance
• Commercial Auto Insurance
• Business Owner’s Policy (BOP)
• Hazard Insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

The natural hair care product line is one that involves the production of hair care products by mixing several ingredients together. Some of the ingredients are usually sourced from places that will give the hair products some form of distinctiveness.

This distinctive nature is usually what an entrepreneur in this kind of business seeks to protect by intellectually filing to protect his hair care products.

If you are out to protect the uniqueness of your natural hair care products, the logo of your company, your business name and any other vital piece that you would not want your competitors copying, then you would do well to file for intellectual property protection for your natural hair care product line business.

11. Get the Necessary Professional Certification

Even though formal training isn’t needed before you start producing your own natural hair care products in the United States of America, you would be required to have a license that permits you to run your natural hair care product line business.

It is however necessary to find out from your state what exactly would be required from you in order to start your own natural hair care product line so that you do not break any laws.

12. Get the Necessary Legal Documents You Need to Operate

It is very essential that you have the required documentation in place before launching your natural hair care product line business in the United States of America. Not to have any proper documentation is to get in trouble with the law which could in the end affect your ability to conduct your business.

Therefore, some of the legal documents that you would be required to have in order to successfully run your natural hair care business in the United States of America are;

• Certificate of Incorporation or Doing Business As (DBA)
• Business Plan
• Business License
• Seller’s Permit ID
• Operating Agreement
• Material Data Safety Sheets
• Non-disclosure Agreement
• Employment Agreement
• Insurance Policy
• Contract Document

13. Raise the Needed Startup Capital

You will need money for several things if you are starting your natural hair care product line business, such as sourcing and producing the ingredients and marketing the produced products to your target market.

Raising money to start a business isn’t an easy affair which is why it is usually advised that you have a business plan in place as this would help convince your bank, investors and friends of the seriousness of your business to enable them give you the funds that you would need.

Some of the options available to you to raise money for your natural hair care product line business are;

• Generating start-up capital from personal savings and sale of properties
• Approaching venture capitalists
• Sourcing for soft loan from friends and family members
• Approaching the bank for a loan

14. Choose a Suitable Location for your Business

Choosing a suitable location for your business is very important. However, choosing a location might depend on the scale with which you might be starting your business. If you intend to start your business on a very small scale and want to deal with just the target area in your locality, then you can start this business from home and produce just as much as you can keep up with.

The issue of location for this kind of business is important because even though you will most times have to take your products to the big stores and salons, it doesn’t mean that locating your business in a remote area is okay for you as you will have to commute longer distances.

Also, if you locate your business in an area that is too far, you will need to spend more in creating more publicity so as to increase awareness for your natural hair care products.

15. Hire Employees for your Technical and Manpower Needs

In order to get your products out on the shelf, there are certain things you would need to do such as creating your first product sample, which will involve you sourcing for raw materials and working with a cosmetologist to ensure that you get only the best for your natural hair care products line.

Once you have gotten the sample you need and have perfected it, you can then go into mass production; you will then need to purchase your packaging materials and products in large quantities.

You will need to get bottles, jars and cups to store your products as well as a beautiful label to make your packaging attractive. Other basic equipment you will need are; measuring utensils, pots, metal funnels, heat-safe bowls and spoons and a precision kitchen scale.

The number of employees that you would require in building a solid business structure would vary depending on what scale of business you would be running.

Basically though, you would need a Chief Executive Officer, an admin and human resources manager, marketing and sales executives, business development officer, hair analyzer, production specialist, accountant, front desk officer, cleaner and a driver.

Therefore you would need at least 12 people to be able to run a successful natural hair care product line business and grow it to the level you want.

The Service Delivery Process of the Business

The production process when starting a natural hair care product line business starts from developing products that would meet the specific idea you have in mind. The right ingredients must be used to match the characteristics or performance of the products to be produced.

Most entrepreneurs in the hair care line usually make use of product development and manufacturing laboratories to ensure that the product they intend to formulate is in line with the guiding regulations and requirements of the natural hair care product line industry.

After coming upon the right formula, samples are usually tested for room temperature stability as well as preservative effectiveness in order to determine how long the product is likely to last for, although the industry regulations always put a timeline for products produced.

After the right formula has been found, raw materials are then ordered for in bulk and tested by the lab to check its quality. Once this is done, the products can then be produced. Another thing that is important is the packaging of the product. The different cups, jars or bottles are used for the product.

16. Write a Marketing Plan Packed With ideas & Strategies

Knowing what kind of natural hair care products you intend to roll out to your target market and also knowing who your target market is, will help you draft proper marketing strategies that would help generate revenue for your business.

This is why it is important to conduct a proper market research that will allow you know what your competitors are up to and the best way to penetrate and get a fair share of the market so as to stand out in the industry.

Also, while crafting your marketing strategies, you have to be careful to ensure that they fit right into your marketing budget. Creating strategies that would not fit into your marketing budget might spell doom for your business financially.

Therefore, below are some of the marketing strategies and ideas that you would need to adopt for your natural hair care products line business;

• Introduce your natural hair care products to salons, spas, supermarkets and other stakeholders in the industry
• Ensure that your business is listed in yellow pages and in online directories
• Place adverts in local newspapers and magazines as well as on radio and television stations
• Distribute handbills, fliers and business cards in various strategic locations
• Engage in direct marketing and sales
• Use official website and social media platforms to market our natural hair care products

17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Every brand needs a boost in order to create the necessary awareness that would get the intended target market to become interested in its products or activities. Engaging in activities that would boost the brand of a business is however not peculiar to only new businesses as already existing businesses engage in it as well.

It can sometimes be overwhelming to create a product and constantly engage in activities that would boost the awareness of the product, which is why some entrepreneurs usually engage the services of a brand consultant to help them draft strategies that would effectively promote the brand of the business.

The natural hair care product line industry is one that is stiff with competition especially as most people are now resorting to DIY methods in their homes in order to care for their natural hair, which is why boosting the awareness of your brand is important.

There are several means – both conventional and unconventional – by which one can use in conveniently reaching out to the intended target market. Therefore, the several platforms that can be leveraged on to boost the awareness of your brand as well as create a corporate identity are;

• Use the testimony from people who have used your products and are satisfied with the results to boost awareness for your brand
• Use social media platforms such as Facebook, Twitter, Instagram, Linkedin and Google Plus to vigorously promote your brand
• Ensure that you distribute handbills and fliers in various strategic locations
• Install billboards in various strategic locations to increase awareness about our brands
• Place advertisements in local newspapers, hair and beauty magazines as well as on radio and television stations
• Throw contests via our website and social media platforms in order to stimulate awareness about our brand

Related Posts:

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• How to Start a Cosmetics Line With No Money
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• How to Start a Nail Polish Manufacturing Company – Sample Business Plan Template
• How Much Does It Cost to Hire a Cosmetic Chemist?

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04.21.2023 13 min read time

How To Start A Hair Product Line While Still Running A Busy Hair Salon —A Step By Step Guide

• Business Categories
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As a salon owner , you have the unique opportunity to offer your clients not just top-notch services, but also high-quality products that they can use at home to maintain their hair. Developing your hair product line can be a rewarding way to expand your business and create an additional revenue stream . However, it's important to proceed with caution and a strategic plan in place. With so many established brands on the market, it can be challenging to stand out and gain a loyal following. Additionally, a poorly executed product line could harm your reputation and leave your clients disappointed.

Fortunately, Booksy is here to help. In this blog post, we'll walk you through the steps of launching your hair product line, from developing a unique brand to identifying your target audience and finding the right supplier. With our expert guidance, you can confidently create a successful product line that complements your salon business and delights your clients. So, let's dive in!

Step 1: Understand the pros & cons of starting a hair product line

Running a successful salon business is tough enough. But introducing a hair product line is even more challenging. That’s why it’s important to do the groundwork i.e know the pros and cons of launching a product line as the first and foremost step. 

The pros and cons listed below will help you identify if investing in one is worthy enough. 

• Work from home : You don’t need a physical store or office space to sell your hair product line. You don’t even need a warehouse to store your inventory (we’ll get to that later). You can put as much or as little time into your business as you like, depending on your life circumstances and your goals. 
• Alternative income stream : If your salon is having to cancel appointments or can accommodate only a limited number of clients at any given time, a hair product line will keep the money flowing in.
• Low startup cost : You could spend as little as $2,500 for your initial batch of orders. If you’re going solo, you’ll also save on labor costs until your business grows enough to justify hiring someone to help you out.
• Lots of competition : Haircare is a very crowded space, so you need to identify a key market you want to focus on, get to know what people want, and deliver exactly what they demand. 
• Reliance upon a supplier : Most hair care businesses don’t physically make their products. Instead, they engage with a supplier to manufacture the product line according to their specifications. You’ll need to choose the right supplier as you will be reliant upon them. 
• Time investment: Marketing a successful hair product line means you’ll have to put in a lot of work into promoting your products, providing great client service, and communicating with vendors and employees. But if you’re confident you can do it, you need to start planning.

 Seems like something you’d want to do? Let’s look at the next steps.   

Step 2: Create a plan of action

Since you will be managing two projects – a salon and a hair product line – you will need to be deliberate and strategic about it. Take the time to learn how other brands have done it. In this section, we’ll look at the steps you need to take to get started. 

First, you’ll need to look at the costs you will incur . This will depend on some factors. Here are some things you will have to budget for as you market a hair product line:  

• Licenses and business formation : Depending on your location, you might need to register your product with the appropriate office (such as the FDA), then pay for the cost of business licensing and other applicable taxes. 
• Payment processing : While your salon probably has a payment processing system of some sort, you will need a separate payment processing system for online transactions.
• Payroll: While you might be able to handle launching the product line and processing the initial orders yourself, you may eventually need to hire someone to help you. 
• Liability insurance: It’s always smart to have liability insurance in case a client files a complaint against your product. Costs range from $500 to around $2000 per year. In some locations, liability insurance is legally required. 
• Website: Operating an online business is different from selling hair products out of your salon . If you want to look like a credible seller, you will need to get your domain name. You should also create a new Gmail account specifically for this side of the business—one that’s separate from your current website.
• Inventory: Your supplier might require you to purchase a certain amount of product upfront. The initial inventory cost might be the key deciding factor that sways you toward a specific supplier.   

How are you going to fund your new project? You could secure a loan from a bank, find an investor who believes in your product, ask friends and family for help, or go to Kickstarter for initial funding. You will need a compelling business model to get people to invest in your product, so a good unique selling proposition (USP ) is very important. In other words, what makes your line different from all the other hair care products out there? 

Step 3: Choose the hair products you’ll sell

Knowing which products you’ll sell is the next step. It might be tempting to say “everything!”, but we recommend starting small. Focus on just a few products that are highly in demand. Once the profits start rolling in, you can gradually expand your business . 

The first step is knowing your target demographic. Different kinds of people have different kinds of hair, and you cannot appeal to everyone. You could start by observing the people who come into your salon. What treatments are they asking for most often? What demographic groups do they fall into? 

You might wish to create a product line that will be useful to people with a specific kind of hair, such as curly, thin, or straight hair. You might choose to cater to a particular demographic, such as older women or college students on a budget. When you understand your target market , you can work out the kinds of products that would appeal to them. 

Step 4: Decide between getting a supplier or producing in-house

Some companies produce their hair products using their equipment. However, this takes a lot of capital for equipment and research and development costs. It also requires a lot of specialist scientific knowledge that most people don’t have (or the budget to hire those who do!). 

For a small business like yours, it’s best to work with a supplier . This means that you partner with a manufacturer, give them your specifications, and they’ll produce the products for you. Your name and branding will be on the products. This is sometimes called a private label. 

Many suppliers require you to order a certain amount of product upfront. If you find that the product doesn’t live up to your expectations, you might end up with a surplus of inventory that you won’t ever sell.  Therefore, do your research . Ask around for supplier referrals. The hair salon industry is a tightly-knit one, especially for small, independent salons, and fellow salon owners will be happy to share the suppliers they love. So don’t be afraid to ask someone who’s been in the business longer! 

You can also read online reviews, and ask for sample products before you make a decision. 

Step 5: Receive the products & test them

Before you start marketing your products to paying clients, you’ll need to test them first . While some hair product brands spend thousands of dollars on testing, you don’t need to do that. 

When you receive your sample products from your supplier, check whether they pass the sight and scent test. If something looks and smells different from what you expected, you might need to have a word with the supplier. If everything seems fine, it’s time to start testing!

Before you test it on other people, try it out yourself . After all, you wouldn’t sell something you wouldn’t use, right? If it leaves your hair dry or your scalp itchy, or it doesn’t lather and rinse very well, you might need your supplier to reformulate the product. 

If it passes your quality control, it’s time to start asking your team members and loyal clients to try it out and give you their feedback . 

Make sure you test your product on different kinds of hair to see if they have the desired effect for your target audience. Once you and your clients are satisfied with the performance of your product, it’s time to bring it to the market!

Step 6: Create your branding, website, and domain

A huge part of starting your hair product line is learning how to promote it . Many of your sales will likely come from online clients. You will need to pick the right brand name, build your website, choose your domain name, and do SEO on your site to make it easily searchable—something that you’ve most likely been doing for your hair salon business too. 

First, you need to think of a catchy name for your hair product line. If you’ve already given your salon a name, you could use that. Otherwise, here are some pointers to help you: 

• Avoid names that are hard to spell. 
• Do a quick Google search for a potential brand name. If your brand name is taken or sounds like another company, choose something else. 
• Try to avoid anything that boxes you into just one niche, in case you decide to branch out later 

Make a shortlist of possible names, and do some market research to see what your prospective clients think. Once you’ve chosen a name, grab the domain name straight away. Register the handles on social media sites like Facebook, Instagram, and YouTube, too.

You can also list your products on your Booksy profile as well, so customers can see and add them to their service once they are done with their appointment. This feature can help increase your product sales and create an easier experience for your clients.

Additionally, you can build an e-commerce website using Shopify or an alternative platform . However, if you choose to use WooCommerce instead, you’ll need to have a WordPress website. For that, you’ll need to get WordPress hosting from a reliable hosting provider and then install WooCommerce on it. You will also need images of your product packaging, marketing copy for your product pages, and a short introduction to your salon and hair product line. In fact, with a recent boom in e-commerce social selling has become key too. Test out platforms like Facebook Shops or sell via Instagram Shops.

You might also wish to create a newsletter where subscribers can receive hair care tips, special offers, and the latest updates from your business. Use a landing page builder to create a great-looking landing page where website visitors can subscribe to your newsletter. 

Finally, you’ll need to work on the SEO for your e-commerce website. SEO is a long game and cannot be accomplished overnight. Here are a few tips to help you get started: 

• Create a blog within your site and post regularly, using relevant keywords
• Add alt text to your images, describing their content, and using your chosen keywords. 
• Use a plugin like Yoast SEO to help you 

Pro tip: people love to support local businesses. When you choose your keywords and start writing SEO-optimized content for your site, don’t forget to target local keywords. client reviews are also hugely helpful for local SEO.

Step 7: Pricing your products & calculating expected income

One of the most critical tasks you have to do as you start your hair product line is deciding how much your products will cost . Both overpricing and underpricing your product could have serious negative effects on your business.

If you overprice your product , your clients may not see it as good value. On the other hand, charging too little might lead to clients viewing it as cheap and therefore of lower quality. Both options can be damaging to your reputation and bottom line.

When you price your products, you need to understand your target clients. You’ll need to know their age, buying habits, location, and price sensitivity. An affluent middle-aged person is likely to be willing to spend more on hair care than a college student. 

You will also need to identify the costs you incur as you produce and market your product, ensuring you keep a healthy profit margin . 

You also need to understand your revenue goals by calculating your break-even cost and estimated sales for the first few months. These factors together will help you identify your pricing sweet spot. 

You can see if your pricing is competitive by comparing your product line with your competitors’ similar products. How much do they charge? If your price point is very different, you might need to reassess. 

Step 8: Growing your hair product line with your salon

Your salon clients make the best target market for your hair product line since you already know what they want and look for in their hair care. If you already own a salon, your stylists will play a crucial role in educating your clients about your products and their benefits. For example, they can use your shampoo to wash clients’ hair, allowing the client to see how high quality it is. 

Your professional stylists are well-positioned to promote your brand because they know their clients’ needs intimately. They will be able to make customized recommendations , leading to loyal clients who keep coming back again and again. 

Along with nurturing relationships with your salon clients, you can also build a community online . The simplest way of building an online community is creating an exclusive Facebook group . You can post hair care tips, encourage discussions between members, feature some of your most loyal clients looking stunning after visiting your salon, and run surveys and market research to inform future product launches and marketing campaigns. 

As your clients get to know more about their hair and what it needs to stay healthy, you have the opportunity to introduce more products and build your influence in the market.

Starting a hair product line along with your salon allows you to expand your business beyond the local market and gives you an additional source of revenue. 

When you run both a salon and a hair product line, you need to make sure you can dedicate sufficient time and energy to both (or else hire someone to help you). While a hair product line is an exciting opportunity, you will need to ensure it is financially viable and that you have a strong USP. You will also need to find the right supplier for your products, assuming you don’t intend to physically make them in-house. 

Before launching your product line, it's essential to have a strong understanding of your target audience and competition. This will help you design, promote, and price your products accordingly. To effectively promote your hair product line, you can leverage your salon as a primary tool by educating your stylists on how the products can meet your clients' hair care needs. And with the Booksy app , you can take things to the next level by listing your products on your Booksy profile. This allows your customers to easily see and add your products to their service once they're done with their appointment. 

So, start expanding your business with confidence, but make sure you have a strong USP and a viable financial plan for your product line.

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Hair Extensions Business Plan Template

Written by Dave Lavinsky

Hair Extensions Business Plan

You’ve come to the right place to create your Hair Extensions business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Hair Extensions businesses.

Below is a template to help you create each section of your Hair Extensions business plan.

Executive Summary

Business overview.

Hairapy Extensions is a new hair extensions shop located in the heart of Los Angeles, California. Our mission is to make every customer feel empowered and beautiful by providing them with the perfect hair extensions and hair care products. We do this by offering every style and color imaginable so that every customer can find exactly what they want to feel and look their best. With our amazing customer service and enormous selection, we hope to be the most popular hair extensions store in the city in the next few years.

Hairapy Extensions is founded by Angelina Matthews, who has been a hairstylist for five years. Throughout her career, he has sold and inserted hair extensions for hundreds of customers and has found it to be the most enjoyable part of her job. As such, she has extensive knowledge of hair extensions and how to insert and care for them. Her experience and expertise will be the company’s most valuable asset.

Product Offering

Hairapy Extensions will showcase a wide variety of hair extensions throughout our store. Our hair extensions will come in all colors, from natural hair colors to fun dyed colors like pink or blue. We guarantee that every customer will find the perfect hair extensions that fit their style and budget. We also sell hair care supplies and accessories to ensure that our customers’ new hair extensions last as long as possible.

Customer Focus

Hairapy Extensions will serve the community residents of Los Angeles, California, and its surrounding areas. We will primarily target female and female-identifying people, as this group is traditionally the most likely to buy hair extensions and hair care products. We also expect most of our clientele to be in the age range of 20-40, as young women are much more likely to get hair extensions than women in other age ranges.

Management Team

Hairapy Extensions is led by Angelina Matthews, an experienced hairstylist and salon manager with over five years of experience. Throughout her career, she found inserting hair extensions to be the most enjoyable aspect of her job and wanted to build a company that solely focuses on hair extensions. After years of planning, she is finally ready to start her business. Her extensive knowledge of hair extensions and the industry will be the company’s most valuable asset.

Success Factors

Hairapy Extensions is primed for success by offering the following competitive advantages:

• Friendly and attentive staff who will go out of their way to find the perfect hair extensions for each customer.
• Comprehensive supply of hair extensions that includes every color and texture imaginable.
• Cost-effective pricing that rivals the competition without sacrificing service or quality.

Financial Highlights

Hairapy Extensions is currently seeking $280,000 to launch. The funding will be dedicated to the store design and buildout, working capital, overhead, supplies, and marketing costs. The breakout of the funding is below:

• Store design/build: $150,000
• Initial inventory, supplies, and technology: $50,000
• Payroll, rent, and overhead costs (3 months): $30,000
• Working capital: $25,000
• Marketing expenses: $25,000

The following graph below outlines the pro forma financial projections for Hairapy Extensions.

Company Overview

Who is hairapy extensions.

Hairapy Extensions is a new hair extensions shop located in the heart of Los Angeles, California. We provide an enormous selection of hair extensions to choose from, with every style and color imaginable. Customers can get natural colors to match their natural hair, such as blond, brunette, or red. They can also get dyed hair extensions if they want to add some color to their hair, such as blue, purple, pink, or green. Customers can expect to find the perfect hair extensions that fit their style and budget when shopping with Hairapy Extensions.

  Our store will be located in downtown Los Angeles, nearby fashion stores, hair salons, and other hair care stores. We will also have an online shop for those who don’t live in Los Angeles or can’t make it to our location to make a purchase in person.

Hairapy Extensions’ History

Angelina Matthews incorporated Hairapy Extensions as an S-Corporation on August 1st, 2023. Angelina has identified a potential retail location and is in the process of negotiating a lease. The company is currently being run out of her home but will move to the retail space once the lease is finalized.

Since its incorporation, Hairapy Extensions has achieved the following milestones:

• Found a retail space and signed a Letter of Intent to purchase it
• Developed the company’s name, logo, and website
• Determined equipment and inventory requirements
• Begun recruiting key employees with previous experience in the beauty/hair care industries

Hairapy Extensions’ Services

Hairapy Extensions will sell a wide variety of hair extensions online and in our store. We will offer several styles and every color imaginable, including numerous shades of blond, brown, red, pink, purple, and blue. Whether a customer wants longer hair, a style change, or a little bit of color without dye, we can find the perfect extension to fit their needs and budget. We also sell hair care products that ensure the extensions last as long as possible.

Industry Analysis

Hair extensions have been a part of style and fashion for centuries. In the past, hair extensions exemplified power and position and created lasting fashion trends. They were used to thicken and lengthen hair as well as to maintain a youthful appearance. It is believed that many powerful figures used hair extensions, including Cleopatra and Queen Elizabeth I.

The current hair extension industry is a thriving industry that helps many people show off their unique style and feel more comfortable in their bodies. Many people purchase hair extensions when they want to try a certain hairstyle but can’t pull it off naturally. Hair extensions are also popular amongst people who want to color their hair without destroying it with dye and bleach. Finally, hair extensions help many people suffering from thinning hair due to age or illness.

According to Future Market Insights, the current hair extensions industry was valued at $2.38 billion last year and is expected to grow at a compound annual growth rate (CAGR) of 5.3% from now until 2032. The industry is positively affected by the rise in disposable income as well as beauty trends created and spread by social media. These trends are expected to continue, and the hair extensions industry is expected to thrive for the foreseeable future.

Customer Analysis

Demographic profile of target market.

Customer Segmentation

Hairapy Extensions will primarily target the following customer profiles:

• Women/female-identifying people
• Young adults
• People with conditions that affect their hair

Competitive Analysis

Direct and indirect competitors.

Hairapy Extensions will face competition from other businesses with a similar company profile. A summary of the competitor companies is below.

Hair Heaven

Hair Heaven is a major online warehouse that sells wigs and hair extensions. They have every color and style imaginable, which makes them an incredibly popular hair extensions supplier nationwide. They are particularly popular with beauty supply stores as they can sell their products wholesale. Though Hair Heaven is a popular source of hair extensions, it is a completely online store. Customers who want to talk with a professional and purchase hair extensions in person will be more inclined to come to Hairapy.

Lanie’s Wig & Hair Supply

Lanie’s Wig & Hair Supply is a small, locally-owned supplier of all things hair care. This includes organic shampoos, hair extensions, wigs, and accessories. They offer many colors and styles of wigs and hair extensions to choose from, and many customers report being satisfied with their products. The store also has a few hair stylists on standby who can help them clean and style their hair extensions and wigs as needed. Though Lanie’s will continue to thrive, their selection is much smaller than ours. Our inventory will be far more enticing, and we will be able to find hair extensions for far more customers than Lanie’s can.

Sally’s Salon

Sally’s Salon is a popular and hip hair salon business located in downtown Los Angeles, California. People all over the city come here to get their hair cut and styled to keep up with current fashion and trends. In addition to providing hair styling services, Sally’s sells a large assortment of wigs, hair extensions, and hair care accessories. Customers can choose some hair extensions and have a stylist insert and style them all in the same appointment. Since Sally’s is such a popular salon, we expect them to be our biggest direct competitor.

Competitive Advantage

Hairapy Extensions will be able to offer the following competitive advantages over their competition:

• Management : Our management team has years of experience in the hair care industry, which allows us to sell to and serve customers in a much more sophisticated manner than our competitors.
• Friendly Staff : Our staff understands that buying hair extensions can be a stressful and difficult process, especially for those who need them to hide their thin or damaged hair. Hairapy Extensions only hires the friendliest staff who can work with these customers in a compassionate manner.
• Inventory : Hairapy Extensions aims to own the largest and most diverse collection of hair extensions that can be found anywhere in Los Angeles, California.

Marketing Plan

Brand & value proposition.

Hairapy Extensions will offer a unique value proposition to its clientele:

• Friendly and helpful staff
• Affordable pricing on all products
• A large inventory of unique and stylish hair extensions that include every color and style imaginable

Promotions Strategy

The promotions strategy for Hairapy Extensions is as follows:

Influencer Marketing

Hairapy Extensions will partner with local beauty influencers to spread the word about the company. The company will offer discount codes to the influencers’ audiences to entice them to shop our products.

Angelina Matthews will invest in appealing billboards and marketing techniques for the company. The billboards will be located in highly trafficked areas of Los Angeles where the visibility is highest.

Social Media

Hairapy Extensions will have Instagram and Facebook business profiles where Angelina will post professional and appealing pictures that will draw in anyone looking for hair extensions. The posts will be able to show the beautifully designed store as well as satisfied customers with their new hair extensions. Angelina will also post upcoming specials and special offerings.

Website & SEO Marketing

The marketing assistant will design and manage a comprehensive and attractive website for Hairapy Extensions. The website will be easy to navigate and include pictures of our products, pricing, contact information, and location. The SEO will also be managed to ensure that anyone searching “hair extensions near me” or “hair extensions Los Angeles” will see Hairapy Extensions listed at the top of the Bing or Google search engine.

The pricing of Hairapy Extensions will be moderate and on par with competitors so customers feel they receive value when buying our hair extensions.

Operations Plan

The following will be the operations plan of Hairapy Extensions. Operation Functions:

• Angelina Matthews will be the Owner and President of the company. She will oversee the general operations of the store as well as provide customer services and sales. Angelina will spend the next several months hiring the following staff:
• Several associates who will provide customer service, sell products, and help insert hair extensions for customers.
• An Accountant who will manage all client invoicing, billing, and payables.
• A Marketing Assistant who will run all the marketing and promotions campaigns.

Milestones:

Hairapy Extensions will have the following milestones completed in the next six months.

• 9/1/202X – Finalize lease agreement
• 9/15/202X – Begin build out and design
• 10/1/202X – Begin hiring essential staff
• 10/15/202X – Finish build out and design; final walk-through of store
• 11/1/202X – Begin marketing campaign
• 11/15/202X – Grand opening of Hairapy Extensions

Though Angelina has never run a business herself, she has been in the industry long enough to have an in-depth knowledge of the operations and marketing sides of the business. She will also hire other professionals who can help with the other aspects of the business she is unfamiliar with.

Financial Plan

Key revenue & costs.

The revenue drivers for Hairapy Extensions will be the sales of our hair extensions and other hair products.

The major costs for the company will include the costs of inventory, payroll, and overhead. In the initial years, the company’s marketing spending will be high as it establishes itself in the market.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Average number of daily customers: 50
• Average product price: $250
• Annual Lease: $50,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Hair Extensions Business Plan FAQs

What is a hair extensions business plan.

A hair extensions business plan is a plan to start and/or grow your hair extensions business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Hair Extensions business plan using our Hair Extensions Business Plan Template here .

What are the Main Types of Hair Extensions Businesses? 

There are a number of different kinds of hair extensions businesses , some examples include: Hair extension services, Hair extension stores, and Online hair extension sales.

How Do You Get Funding for Your Hair Extensions Business Plan?

Hair Extensions businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Hair Extensions Business?

Starting a hair extensions business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Hair Extensions Business Plan - The first step in starting a business is to create a detailed hair extensions business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your hair extensions business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your hair extensions business is in compliance with local laws.

3. Register Your Hair Extensions Business - Once you have chosen a legal structure, the next step is to register your hair extensions business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your hair extensions business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Hair Extensions Equipment & Supplies - In order to start your hair extensions business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your hair extensions business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Sample Salon Business Plan

Writing a business plan is a crucial step in starting a salon. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring salon owners, having access to a sample salon business plan can be especially helpful in providing direction and gaining insight into how to draft their own salon business plan.

Download our Ultimate Salon Business Plan Template

Having a thorough business plan in place is critical for any successful salon venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A beauty salon business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The salon business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your salon as Growthink’s Ultimate Salon Business Plan Template , but it can help you write a salon business plan of your own.

Salon Business Plan Example – ShearElegance Studio

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

ShearElegance Studio is a premier hair and beauty salon located in the vibrant city of Honolulu, HI. With a commitment to providing top-notch services in hair care, styling, and beauty treatments, we cater to a diverse clientele including local residents, tourists, and professionals in the area. Our salon is designed to offer a luxurious experience, combining the latest industry trends with traditional methods to meet the unique needs of each client. Situated in a prime location, ShearElegance Studio aims to become the go-to destination for anyone looking to enhance their natural beauty and enjoy a moment of pampering in a welcoming and stylish environment.

Our success at ShearElegance Studio is driven by our dedication to customer satisfaction, the expertise of our team, and our strategic location in Honolulu. We have established a strong foundation by securing a loyal customer base among local residents, while our tailored services for tourists and professionals help to ensure a steady flow of clients throughout the year. Our accomplishments to date include building a talented team of beauty professionals, creating a welcoming and luxurious salon atmosphere, and developing a comprehensive service menu that addresses the diverse needs of our clientele. Together, these factors position us for continued success and growth in the competitive beauty industry.

The beauty salon industry in Honolulu, HI, is characterized by intense competition and a dynamic customer base that includes both locals and tourists. Trends indicate a growing demand for specialized beauty services that cater to individual needs, including treatments that address the local climate’s impact on hair and skin. Moreover, there is an increasing preference for salons that offer a holistic beauty experience, combining traditional services with innovative techniques and products. The industry’s growth is further fueled by the rise of social media, which influences beauty trends and customer expectations. ShearElegance Studio is well-positioned to capitalize on these trends by offering a diverse range of services in a luxurious setting, making us a strong competitor in the local market.

ShearElegance Studio targets a diverse clientele in Honolulu, focusing on local residents, tourists, and professionals. Local residents provide a consistent customer base year-round, looking for quality hair care and beauty treatments that reflect the local culture and climate. Tourists offer seasonal opportunities for increased business, seeking luxury pampering or quick beauty services during their stay. Professionals in the vicinity value convenience and efficiency, demanding high-quality service that fits their busy schedules. Our approach is to cater to these varying needs through flexible scheduling, express services, and membership packages, ensuring a personalized and satisfying experience for every client.

Top competitors in our market include established salons known for their quality services and strong customer loyalty. However, ShearElegance Studio sets itself apart through our exceptional customer service, innovative use of technology for booking and service customization, and our commitment to staying abreast of industry trends. Our competitive advantages lie in our ability to offer a unique and personalized beauty experience, leveraging our team’s expertise and the latest trends to meet and exceed customer expectations.

ShearElegance Studio’s marketing strategy is centered on a mix of online and community-based efforts to engage our target audience. We will utilize social media platforms to showcase our services, share styling tips, and promote special offers, leveraging the visual nature of our industry to attract attention. Our SEO-optimized website and email marketing campaigns will further support our online presence, offering easy booking and exclusive deals. Community engagement through local events and partnerships will enhance our visibility and draw in customers looking for a salon that values local connections. Introductory discounts, referral programs, and a loyalty scheme will encourage trial and foster a community of loyal clients. Our commitment to exceptional service will serve as a natural promotional tool, ensuring customer satisfaction and word-of-mouth referrals.

At ShearElegance Studio, our operational focus is on delivering unparalleled beauty services while ensuring smooth day-to-day operations. Key processes include rigorous staff training, inventory management, and the implementation of a streamlined booking system. Our milestones include the launch of our salon with a full suite of services, achieving a set number of bookings within the first six months, and the establishment of partnerships with local businesses within the first year. These steps are crucial for laying the groundwork for our salon’s success and setting the stage for future expansion.

Our management team comprises seasoned professionals with extensive experience in the beauty industry and business management. From our salon manager to our lead stylists and beauty technicians, each team member brings a wealth of knowledge and a passion for excellence to ShearElegance Studio. Their expertise not only ensures the highest quality of service but also positions our salon for strategic growth and innovation in the competitive Honolulu market.

Welcome to ShearElegance Studio, a fresh and vibrant salon located in the heart of Honolulu, HI. As a local salon, we are proud to serve our community by offering unparalleled beauty services. We noticed a gap in the market for high-quality, local salons, and we are here to fill that void with our exceptional services and unique approach to beauty and wellness.

At ShearElegance Studio, our offerings are designed to cater to a wide array of beauty needs. Our services include professional haircuts and styling, hair coloring, manicures and pedicures, skincare treatments, as well as waxing and hair removal. Each service is tailored to meet the individual preferences and requirements of our clients, ensuring a personalized and satisfying experience every time.

Our studio is strategically located in Honolulu, HI, making it accessible to customers from all over the city. This prime location allows us to serve a diverse clientele and become a go-to destination for those seeking top-notch beauty services in the area.

We are confident in our ability to thrive and make a significant impact in the local beauty industry for several reasons. Firstly, our founder brings invaluable experience from successfully running a previous salon, ensuring that ShearElegance Studio is built on a foundation of proven success strategies. Furthermore, our extensive range of services sets us apart from the competition, offering our clients a one-stop solution for all their beauty needs.

Since our founding on January 6, 2024, as a Sole Proprietorship, we have made considerable progress in establishing ShearElegance Studio as a premier salon in Honolulu. Our accomplishments include the creation of our unique logo, the development of our distinctive company name, and securing an ideal location for our salon. These milestones are just the beginning of our journey to becoming a leading beauty destination in Honolulu.

The Salon industry in the United States is currently estimated to be worth over $46 billion, with an expected annual growth rate of 3.2%. This growth can be attributed to an increasing demand for beauty services, as well as a rise in disposable income among consumers. As more people prioritize self-care and grooming, the Salon industry continues to expand and thrive.

One of the key trends in the Salon industry is the growing popularity of personalized and specialized services. Customers are increasingly seeking unique and customized experiences when it comes to their beauty treatments. This trend bodes well for ShearElegance Studio, as it positions itself as a new Salon that offers tailored services to meet the individual needs and preferences of its customers. By staying ahead of industry trends and providing exceptional customer service, ShearElegance Studio is well-positioned to capture a share of the growing market.

Another trend in the Salon industry is the rising demand for eco-friendly and sustainable beauty products. Consumers are becoming more conscious of the environmental impact of their beauty choices and are seeking out Salons that prioritize sustainability. ShearElegance Studio can capitalize on this trend by sourcing environmentally-friendly products and incorporating eco-friendly practices into its operations. By aligning with the values of environmentally-conscious consumers, ShearElegance Studio can attract a loyal customer base and differentiate itself in the competitive Salon industry.

Below is a description of our target customers and their core needs.

Target Customers

At the core of ShearElegance Studio’s target market will be local residents of Honolulu. This demographic is crucial as they provide a steady base of clientele year-round. The salon will tailor its services to meet the diverse needs of this group, ranging from traditional hair care to more specialized treatments that reflect the local culture and climate.

ShearElegance Studio will also focus on tourists visiting Honolulu. This segment presents a unique opportunity for seasonal boosts in clientele. The salon will offer services that are appealing to vacationers looking for luxury pampering experiences or those in need of quick beauty services before heading to the beach or a special event. This strategy is expected to complement the regular patronage from local residents by filling in the seasonal demand gaps.

Additionally, ShearElegance Studio will target professionals working in the vicinity. This segment values convenience and efficiency, alongside high-quality service. By offering flexible scheduling, express services, and membership packages, the salon will cater to the needs of busy professionals looking for a reliable beauty solution within their hectic schedules.

Customer Needs

ShearElegance Studio fulfills the essential need for high-quality personal grooming services, including haircut, styling, manicure, pedicure, and skincare treatments. Residents seeking these services can expect to receive unparalleled attention to detail and craftsmanship. The salon prioritizes the use of premium products and cutting-edge techniques to ensure every client feels pampered and rejuvenated.

In addition to the core services, ShearElegance Studio recognizes the importance of a holistic beauty experience. Customers can enjoy a serene and luxurious atmosphere that promotes relaxation and well-being. This environment, coupled with exceptional customer service, ensures that every visit meets the highest standards of satisfaction and indulgence.

Understanding the diverse needs of its clientele, ShearElegance Studio offers customizable services that cater to individual preferences and styles. Whether clients are looking for a bold new haircut, meticulous nail art, or soothing skincare treatments, they can find tailored solutions that reflect their personal taste and lifestyle. The salon’s commitment to versatility and creativity makes it a trusted destination for all beauty and grooming needs.

ShearElegance Studio’s competitors include the following companies:

Salon Blanc offers a wide range of hair services focusing on high-end treatments such as balayage, hair coloring, and precision cuts. Their price points are in the premium segment, reflecting the upscale services they provide. Salon Blanc generates significant revenue by targeting affluent clients who prioritize exclusive hair care experiences. The salon is located in a fashionable district of Honolulu, attracting a clientele that values trend-setting hairstyles and personalized services. Salon Blanc serves customers primarily in the Honolulu area but also attracts visitors looking for luxury hair care while on vacation. The key strength of Salon Blanc lies in its reputation for innovative styling and use of premium products. However, its weakness could be its premium pricing, which may not appeal to budget-conscious consumers.

Salon 808 offers a comprehensive range of hair and beauty services, including haircuts, coloring, and styling, as well as makeup and bridal services. Their price points are designed to cater to a broad spectrum of customers, from budget to mid-range, making them accessible to a wider audience. Salon 808 has a strong revenue stream, supported by its diverse service offerings and competitive pricing. With multiple locations across Honolulu, Salon 808 serves a diverse customer base, from locals to tourists. The salon’s key strengths include its versatility in service offerings and its accessibility in terms of location and price. However, its broad focus might dilute its brand identity, potentially making it less attractive to clients seeking highly specialized services.

Salon Allure specializes in hair care and beauty services, with a focus on innovative treatments such as keratin treatments and extensions, in addition to traditional services like haircuts and coloring. Their pricing strategy balances between mid-range and high-end, aiming to attract a middle to upper-middle-class clientele. Salon Allure has a strong presence in Honolulu, with a single, well-located salon that emphasizes a personalized customer experience. Salon Allure targets a wide geographic area within Honolulu, catering to both residents and visitors who seek high-quality hair and beauty services. The salon’s key strength is its commitment to using advanced hair care technologies and techniques. A potential weakness for Salon Allure is the challenge of maintaining a high level of personalized service as it grows and potentially expands its customer base.

Competitive Advantages

At ShearElegance Studio, we pride ourselves on offering a more extensive variety of haircut, styling, coloring, and other beauty services than our competition. This expansive menu not only allows us to cater to a wider audience but also enables our clients to enjoy a one-stop beauty experience. Our skilled team is trained in the latest trends and techniques, ensuring that every service we provide is of the highest quality. By continuously updating our offerings and staying ahead of beauty trends, we can meet and exceed the expectations of even the most discerning clients, setting us apart in the vibrant Honolulu beauty scene.

Moreover, our commitment to customer satisfaction extends beyond the variety of services we offer. We create a welcoming and comfortable atmosphere that makes every client feel pampered and valued from the moment they step into our salon. Our use of high-quality products and tools further reinforces our dedication to excellence, ensuring that clients not only look their best but also feel their best. Additionally, our strategic location offers convenience to both local residents and visitors, enhancing our accessibility and appeal. These competitive advantages, combined with our passion for beauty and excellence, make ShearElegance Studio a premier destination for anyone seeking top-notch beauty services in Honolulu.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

At ShearElegance Studio, clients can expect a wide array of premium beauty and grooming services tailored to meet the unique needs of each individual. This salon prides itself on delivering quality, style, and comfort across all its offerings. From transformative haircuts to rejuvenating skincare treatments, ShearElegance Studio provides a full spectrum of services to ensure clients leave feeling and looking their very best.

One of the cornerstone services is Haircut and Styling. The salon offers bespoke haircuts tailored to fit each client’s personal style and preferences. Whether you’re seeking a dramatic change or a simple trim, the experienced stylists work with precision and care. Prices for haircuts and styling start at $50, ensuring that clients can access top-tier service at competitive rates.

Hair Coloring is another specialty of ShearElegance Studio, where the aim is to achieve the perfect shade and tone for every client. From full color transformations to subtle highlights, the salon uses high-quality products to ensure lasting results and hair health. Prices for hair coloring services begin at $70, varying based on the complexity and length of the hair.

For those looking to pamper their hands and feet, Manicures and Pedicures are available. The salon offers a range of treatments from basic grooming to luxurious spa pedicures, ensuring that every client’s needs are met. With meticulous attention to detail, the beauty specialists provide a relaxing and satisfying experience. The starting price for manicures is $25 and pedicures begin at $45.

Skincare Treatments at ShearElegance Studio stand out for their personalized approach. Each treatment begins with a thorough skin analysis to tailor the service to the client’s specific skin needs. From facials to more targeted treatments, the salon uses only the finest products to promote healthy, glowing skin. Clients can expect to invest starting from $60 for a skincare treatment, depending on the type and duration of the service.

Last but not least, Waxing and Hair Removal services are available for those seeking smooth, hair-free skin. The salon provides a comfortable and discreet environment for all waxing services, ensuring the highest standards of hygiene and care. Prices for waxing and hair removal services start at $15, varying according to the area being treated.

In summary, ShearElegance Studio offers a comprehensive suite of beauty services designed to cater to a wide range of preferences and needs. With a focus on quality, comfort, and style, clients can expect nothing but the best from their experience at the salon.

Promotions Plan

ShearElegance Studio embraces a comprehensive approach to attract customers and establish its brand in the competitive market of Honolulu, HI. With a keen understanding that the right promotional methods play a crucial role in business growth, the studio will leverage both traditional and digital channels to reach its target audience effectively.

Online Marketing stands at the forefront of ShearElegance Studio’s promotional strategy. The studio will utilize social media platforms such as Instagram, Facebook, and Pinterest, given their high visual appeal, which is perfect for showcasing the studio’s hair and beauty services. Regular posts featuring before-and-after photos, styling tips, and promotional offers will engage the community and drive traffic to the salon. Additionally, the salon will maintain an SEO-optimized website that provides a seamless booking experience, introduces the team of professionals, and highlights services and special promotions. Email marketing campaigns will also be an integral part of the strategy, offering exclusive deals to subscribers and keeping them informed about the latest trends and services available at ShearElegance Studio.

Beyond online marketing, ShearElegance Studio will engage in local community events and partnerships to build brand awareness and attract customers. Participating in or sponsoring local fashion shows, beauty contests, and community events will position the salon as a key player in Honolulu’s beauty scene. Collaborations with local businesses, such as gyms, spas, and boutiques, will provide cross-promotional opportunities, introducing the salon to potential customers who value wellness and style.

To further entice new clients, ShearElegance Studio will offer introductory discounts and referral programs. These incentives not only encourage first-time visits but also turn satisfied customers into brand ambassadors who share their positive experiences with friends and family. Additionally, the salon will implement a loyalty program to reward regular clients, ensuring they feel valued and incentivized to return.

Lastly, ShearElegance Studio will not overlook the power of exceptional customer service as a promotional tool. By creating a welcoming atmosphere, offering personalized consultations, and ensuring each client leaves feeling beautiful and satisfied, word-of-mouth recommendations will become a powerful asset for the salon.

Through a mix of online marketing, community engagement, incentive programs, and unparalleled service, ShearElegance Studio will attract and retain a diverse clientele, securing its place as a go-to destination for beauty services in Honolulu, HI.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of ShearElegance Studio, there are several key day-to-day operational processes that we will perform.

• Appointment Scheduling and Management : We will utilize a digital scheduling system to book, confirm, and reschedule appointments efficiently. This system will also send reminders to clients to reduce no-shows.
• Client Check-in and Check-out Procedures : Upon arrival, clients are promptly checked in. After services are rendered, we will ensure a smooth check-out process, including handling payments and booking future appointments.
• Inventory Management : Regularly monitor and reorder salon supplies, beauty products, and equipment to ensure we always have necessary items in stock to provide our services.
• Staff Scheduling : Ensure adequate staffing levels to meet client demand while optimizing staff productivity and satisfaction. Adjust schedules as needed based on peak hours and staff availability.
• Quality Control of Services : Implement a system for assessing and ensuring the quality of services provided. This includes continuous training for stylists and staff on the latest techniques and trends.
• Sanitation and Cleanliness : Maintain a clean and sanitary environment in line with health and safety regulations. This includes regular cleaning of workstations, tools, and common areas.
• Customer Service and Feedback : Prioritize exceptional customer service at all points of interaction. Encourage and review client feedback to identify areas for improvement and celebrate successes.
• Marketing and Promotion : Execute ongoing marketing efforts to attract new clients and retain existing ones. This includes managing social media accounts, email marketing, and special promotions.
• Financial Management : Monitor daily revenues and expenses. Conduct regular financial reviews to ensure the salon is profitable and identify opportunities for cost savings.
• Compliance and Legal : Ensure the salon complies with all local, state, and federal regulations, including business licenses, health and safety standards, and employee labor laws.

ShearElegance Studio expects to complete the following milestones in the coming months in order to ensure its success:

• Securing a Prime Location : Find and secure a salon premise in a high-traffic area of Honolulu, HI, that is easily accessible to the target demographic. This location should also comply with local zoning laws and have the potential for attractive signage to draw in walk-in customers.
• Obtaining Licenses and Permits : Ensure all necessary local and state licenses and permits are obtained. This includes cosmetology licenses for staff, a business license, health and safety permits, and any other regulatory requirements specific to operating a salon in Honolulu.
• Building Out and Decorating the Salon : Complete the interior design and build-out of ShearElegance Studio. This includes purchasing salon equipment, chairs, styling stations, and creating a welcoming and stylish environment that aligns with the brand image.
• Hiring and Training Staff : Hire skilled and licensed hairstylists, colorists, and support staff. Implement a training program to ensure all staff are familiar with the salon’s operating procedures, customer service standards, and health and safety protocols.
• Launch Our Salon : Officially open ShearElegance Studio with a grand opening event to generate buzz in the community. Implement an initial marketing campaign to attract customers, utilizing social media, local advertising, and promotional offers.
• Establishing a Strong Online Presence : Develop a professional website and establish active social media profiles. Utilize these platforms for marketing purposes, showcasing services, sharing customer testimonials, and providing an online booking system.
• Building a Loyal Customer Base : Implement a customer loyalty program and gather customer feedback to improve services. Focus on word-of-mouth marketing by providing exceptional service that encourages customers to refer friends and family.
• Get to $15,000/Month in Revenue : Implement strategies to steadily increase monthly revenue, such as expanding service offerings, optimizing pricing strategies, hosting special events, and increasing repeat business through effective customer relationship management.
• Monitoring Financial Health : Regularly review financial statements to monitor profitability, manage expenses, and adjust business strategies as necessary. This includes setting up a robust accounting system from the start.
• Ongoing Professional Development : Provide ongoing education and professional development opportunities for staff to stay current with the latest salon trends, techniques, and health and safety standards. This will help in maintaining a competitive edge and ensuring high-quality service. By successfully completing these milestones, ShearElegance Studio will be well-positioned for success in the competitive salon industry in Honolulu, HI.

ShearElegance Studio management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Owen Perry, President

Owen Perry, President of ShearElegance Studio, brings a robust portfolio of experience to the table, having previously managed a successful salon. His entrepreneurial journey is marked by a keen understanding of the beauty industry’s nuances and the ability to foster a culture of excellence and innovation. Owen’s leadership style is characterized by his commitment to setting high standards in customer service and operational efficiency. His prior success in running a salon not only demonstrates his competence in managing day-to-day operations but also his skill in navigating the competitive landscape of the beauty industry. Owen’s insight into market trends and his ability to adapt and evolve business strategies make him a pivotal asset in steering ShearElegance Studio towards lasting success.

ShearElegance Studio requires significant investment to achieve our growth objectives. This funding will be allocated towards salon setup, marketing initiatives, inventory procurement, and operational expenses. Our financial strategy is designed to ensure that we have the resources needed to establish a strong market presence, attract a diverse clientele, and deliver exceptional beauty services, setting the stage for long-term profitability and success.

Financial Statements

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Salon Business Plan Example PDF

Download our Salon Business Plan PDF here. This is a free salon business plan example to help you get started on your own salon plan.  

How to Finish Your Salon Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Other Helpful Free Business Plan Resources

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Free Business Plan Template for Small Businesses (2024)

Use this free business plan template to write your business plan quickly and efficiently.

A good business plan is essential to successfully starting your business —  and the easiest way to simplify the work of writing a business plan is to start with a business plan template.

You’re already investing time and energy in refining your business model and planning your launch—there’s no need to reinvent the wheel when it comes to writing a business plan. Instead, to help build a complete and effective plan, lean on time-tested structures created by other  entrepreneurs and startups. 

Ahead, learn what it takes to create a solid business plan and download Shopify's free business plan template to get started on your dream today. 

What this free business plan template includes

• Executive summary
• Company overview
• Products or services offered
• Market analysis
• Marketing plan
• Logistics and operations plan
• Financial plan

This business plan outline is designed to ensure you’re thinking through all of the important facets of starting a new business. It’s intended to help new business owners and entrepreneurs consider the full scope of running a business and identify functional areas they may not have considered or where they may need to level up their skills as they grow.

That said, it may not include the specific details or structure preferred by a potential investor or lender. If your goal with a business plan is to secure funding , check with your target organizations—typically banks or investors—to see if they have business plan templates you can follow to maximize your chances of success.

Our free business plan template includes seven key elements typically found in the traditional business plan format:

1. Executive summary

This is a one-page summary of your whole plan, typically written after the rest of the plan is completed. The description section of your executive summary will also cover your management team, business objectives and strategy, and other background information about the brand. 

2. Company overview

This section of your business plan will answer two fundamental questions: “Who are you?” and “What do you plan to do?” Answering these questions clarifies why your company exists, what sets it apart from others, and why it’s a good investment opportunity. This section will detail the reasons for your business’s existence, its goals, and its guiding principles.

3. Products or services offered

What you sell and the most important features of your products or services. It also includes any plans for intellectual property, like patent filings or copyright. If you do market research for new product lines, it will show up in this section of your business plan.

4. Market analysis

This section includes everything from estimated market size to your target markets and competitive advantage. It’ll include a competitive analysis of your industry to address competitors’ strengths and weaknesses. Market research is an important part of ensuring you have a viable idea.

5. Marketing plan

How you intend to get the word out about your business, and what strategic decisions you’ve made about things like your pricing strategy. It also covers potential customers’ demographics, your sales plan, and your metrics and milestones for success.

6. Logistics and operations plan

Everything that needs to happen to turn your raw materials into products and get them into the hands of your customers.

7. Financial plan

It’s important to include a look at your financial projections, including both revenue and expense projections. This section includes templates for three key financial statements: an income statement, a balance sheet, and a cash-flow statement . You can also include whether or not you need a business loan and how much you’ll need.

Business plan examples

What do financial projections look like on paper? How do you write an executive summary? What should your company description include?  Business plan examples  can help answer some of these questions and transform your business idea into an actionable plan.

Professional business plan example

Inside our template, we’ve filled out a sample business plan featuring a fictional ecommerce business . 

The sample is set up to help you get a sense of each section and understand how they apply to the planning and evaluation stages of a business plan. If you’re looking for funding, this example won’t be a complete or formal look at business plans, but it will give you a great place to start and notes about where to expand.

Lean business plan example

A lean business plan format is a shortened version of your more detailed business plan. It’s helpful when modifying your plan for a specific audience, like investors or new hires. 

Also known as a one-page business plan, it includes only the most important, need-to-know information, such as:

• Company description
• Key members of your team
• Customer segments

💡 Tip: For a step-by-step guide to creating a lean business plan (including a sample business plan), read our guide on how to create a lean business plan .

Benefits of writing a solid business plan

It’s tempting to dive right into execution when you’re excited about a new business or side project, but taking the time to write a thorough business plan and get your thoughts on paper allows you to do a number of beneficial things:

• Test the viability of your business idea. Whether you’ve got one business idea or many, business plans can make an idea more tangible, helping you see if it’s truly viable and ensure you’ve found a target market. 
• Plan for your next phase. Whether your goal is to start a new business or scale an existing business to the next level, a business plan can help you understand what needs to happen and identify gaps to address.
• Clarify marketing strategy, goals, and tactics. Writing a business plan can show you the actionable next steps to take on a big, abstract idea. It can also help you narrow your strategy and identify clear-cut tactics that will support it.
• Scope the necessary work. Without a concrete plan, cost overruns and delays are all but certain. A business plan can help you see the full scope of work to be done and adjust your investment of time and money accordingly.
• Hire and build partnerships. When you need buy-in from potential employees and business partners, especially in the early stages of your business, a clearly written business plan is one of the best tools at your disposal. A business plan provides a refined look at your goals for the business, letting partners judge for themselves whether or not they agree with your vision.
• Secure funds. Seeking financing for your business—whether from venture capital, financial institutions, or Shopify Capital —is one of the most common reasons to create a business plan.

Why you should you use a template for a business plan

A business plan can be as informal or formal as your situation calls for, but even if you’re a fan of the back-of-the-napkin approach to planning, there are some key benefits to starting your plan from an existing outline or simple business plan template.

No blank-page paralysis

A blank page can be intimidating to even the most seasoned writers. Using an established business planning process and template can help you get past the inertia of starting your business plan, and it allows you to skip the work of building an outline from scratch. You can always adjust a template to suit your needs.

Guidance on what to include in each section

If you’ve never sat through a business class, you might never have created a SWOT analysis or financial projections. Templates that offer guidance—in plain language—about how to fill in each section can help you navigate sometimes-daunting business jargon and create a complete and effective plan.

Knowing you’ve considered every section

In some cases, you may not need to complete every section of a startup business plan template, but its initial structure shows you you’re choosing to omit a section as opposed to forgetting to include it in the first place.

Tips for creating a successful business plan

There are some high-level strategic guidelines beyond the advice included in this free business plan template that can help you write an effective, complete plan while minimizing busywork.

Understand the audience for your plan

If you’re writing a business plan for yourself in order to get clarity on your ideas and your industry as a whole, you may not need to include the same level of detail or polish you would with a business plan you want to send to potential investors. Knowing who will read your plan will help you decide how much time to spend on it.

Know your goals

Understanding the goals of your plan can help you set the right scope. If your goal is to use the plan as a roadmap for growth, you may invest more time in it than if your goal is to understand the competitive landscape of a new industry.

Take it step by step

Writing a 10- to 15-page document can feel daunting, so try to tackle one section at a time. Select a couple of sections you feel most confident writing and start there—you can start on the next few sections once those are complete. Jot down bullet-point notes in each section before you start writing to organize your thoughts and streamline the writing process.

Maximize your business planning efforts

Planning is key to the financial success of any type of business , whether you’re a startup, non-profit, or corporation.

To make sure your efforts are focused on the highest-value parts of your own business planning, like clarifying your goals, setting a strategy, and understanding the target market and competitive landscape, lean on a business plan outline to handle the structure and format for you. Even if you eventually omit sections, you’ll save yourself time and energy by starting with a framework already in place.

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Business plan template FAQ

What is the purpose of a business plan.

The purpose of your business plan is to describe a new business opportunity or an existing one. It clarifies the business strategy, marketing plan, financial forecasts, potential providers, and more information about the company.

How do I write a simple business plan?

• Choose a business plan format, such as a traditional or a one-page business plan. 
• Find a business plan template.
• Read through a business plan sample.
• Fill in the sections of your business plan.

What is the best business plan template?

If you need help writing a business plan, Shopify’s template is one of the most beginner-friendly options you’ll find. It’s comprehensive, well-written, and helps you fill out every section.

What are the 5 essential parts of a business plan?

The five essential parts of a traditional business plan include:

• Executive summary: This is a brief overview of the business plan, summarizing the key points and highlighting the main points of the plan.
• Business description: This section outlines the business concept and how it will be executed.
• Market analysis: This section provides an in-depth look at the target market and how the business will compete in the marketplace.
• Financial plan: This section details the financial projections for the business, including sales forecasts, capital requirements, and a break-even analysis.
• Management and organization: This section describes the management team and the organizational structure of the business.

Are there any free business plan templates?

There are several free templates for business plans for small business owners available online, including Shopify’s own version. Download a copy for your business.

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Hair Replacement and Salon Business Plan

Start your own hair replacement and salon business plan

Executive Summary executive summary is a brief introduction to your business plan. It describes your business, the problem that it solves, your target market, and financial highlights.">

Herr Haar is a full service salon dedicated to providing quality services as well as taking care of the whole person.  Herr Haar will be superior to other salons in Anytown because of its unique approach to taking care of the client. With the most innovative advancements in hair replacement and other salon services, Herr Haar will stand out from the rest. Currently, no other business in Anytown provides an adequate solution to hair loss problems. Herr Haar’s experienced cosmetologists are committed to filling this niche.

Herr Haar has been up and running since May 2003, but the limitations of the current location make it necessary to move. To achieve our objectives, Herr Haar is seeking a $4,000 short-term (10 month) loan.  The talent and determination of the owner, with 27 years of experience, is sure to make Herr Haar a continued success.

Over the past six months, Herr Haar has seen hair service sales of almost $47,000, or more than $7,800/month. In the new facility, where we can accommodate a larger clientele, we expect those hair services sales to increase to roughly $10,600/month, a fairly conservative increase. We are also opening new revenue streams with the introduction of a massage room, booth rental from other stylists who will lease space in our new facility, and increased direct sales of products we have formerly recommended, for a total 2004 sales goal of $244,000. These forecasts are based on performance of similar salons in the area, and on our research with other stylists and massage therapists here in Anytown.

In the past, hair replacement has carried a stigma for many men. Herr Haar’s professionalism and integration of hair replacement into the broader range of hair, skin, and body care will redefine this service in the Anytown area as a necessary luxury for the busy, successful man. To feel and perform your best, you must look your best – and Herr Haar is the first step.

1.1 Objectives

Herr Haar is more than just a full service salon providing excellent hair care and quality products, in a peaceful, relaxed atmosphere. Herr Haar will also provide a friendly work environment,  respecting diversity, creativity, and hard work.

1.2 Mission

Our mission is to provide skilled services, through talented cosmetologists, that give our customers the dignity and self respect needed to be successful in the world today. We are also committed to offering a range of complementary services for hair styling and bodycare in the same location, to give our customers the convenience of a single location for all their hair and bodycare needs.

1.3 Keys to Success

• Location – Provides easy access for clients as well as greater visibility to potential clients.
• Advertising – will get our name and the concept of Herr Haar out to the public.
• Unique – Herr Haar is like no other in providing quality hair care and addressing more complicated hair care issues in private consultation.
• Reputation – The owners and stylists have great reputations with existing clientele
• Discreet – Our new, more visible location is paired with a range of hair and bodycare services, so when a client comes in, passersby cannot assume he is seeking hair replacement.
• Customer Satisfaction! – this is the most important factor in whether a one-time customer becomes a repeat customer and recommends us to friends.

The time is right for a salon that provides the skill and knowledge to take care of everyday hair care needs and hair loss problems. The diligence of the owner, along with the earnest desire of every skilled cosmetologist working with Herr Haar to constantly improve their knowledge, gives this business great potential.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Herr Haar will provide a wide range of hair care services, products, wigs, and hairpieces. We will only offer top quality hair and skin services and beauty products. Herr Haar is moving to a new location on a main road at ground level, which is ideal for this kind of business. What will set Herr Haar apart from any competition is our commitment to continued education, providing the latest hair care and replacement techniques, along with other related services, at a convenient location.

2.1 Company Ownership

Herr Haar is an S-Corporation, established in 2003 by Jane Whigg, who owns the majority of the business. Joan Whigg, her daughter, holds less than 15% of the business.

• Jane has been a cosmetologist for 27 years, with years of experience in hair extensions and other hair care needs, and has been trained in the latest hair replacement systems.
• Joan has been working successfully with a modest clientele for three years, after receiving training in the latest hair replacement systems, such as Great Lengths and Le Metric. Joan will continue to take several more classes that will help her specialize in specific hair loss syndromes and corrective color techniques.

2.2 Company History

Herr Haar was started in May, 2003. Although this may seem a fairly short existence, Herr Haar has done fairly well in the past six months, as the following table and chart show, garnering hair services revenue of roughly $7,800 per month. Herr Haar has done well in spite of a declining economy and a location with poor visibility and small square footage. 

We do not do sales on credit, and have a good asset base of almost $6,000, in the form of inventory and equipment, which will move with us to the new building. We currently have $4,365 in liabilities, in the form of $3,500 of Accounts Payable (for recent inventory shipments and utilities) and a no-interest loan for $1,350 from another family member. Accounts Payable are paid on 30 day terms, on time. The outstanding loan will be repaid gradually over the course of the next two years, according to our agreement with the lender (see the Cash Flow table for details).

The future shows much promise, and the new location will afford Herr Haar greater access to the public.

Products and Services

Herr Haar realizes that good hair starts from within, so Herr Haar will provide not only hair care and replacements for all types of hair, but also the finest hair products and vitamins, taking care of both inside and out. Herr Haar will also provide day spa services, such as massages and facials, and assistance in management of care received.

Hair replacement The owners will provide all of the hair replacement services and some of the facials. Hair replacement services offered include Great Lengths and Le Metric, as well as more traditional methods, including wigs and smaller hairpieces.

Massages In addition, the facility contains a separate room which will be used for massages, aromatherapy, and craniosacral therapy. We have hired two part-time Licensed Massage Therapists with 8 and 5 years of experience in spa settings, respectively, to provide these services.

Market Analysis Summary how to do a market analysis for your business plan.">

Hair Replacement Market The hair replacement industry earns more than $1 billion/year in the United States alone. Millions of hair-loss sufferers are reduced to trying quack remedies they see on TV because there are no professional hair replacement services in their area. When presented with real treatments that work, many clients are amazed, having given up on really receiving help.

Herr Haar is committed to helping hair loss sufferers of both genders in the Anytown area reclaim their looks, their self-respect, and their dignity by providing professional services that will remedy their problems.

Salon and Beauty Spa Market Herr Haar’s expanded product and service offerings will also place it in the even larger spa and beauty salon industry. In 2001, according to the U.S. Census, beauty salons reached revenue of $20.8 billion within the United States.

A typical full-service hair and salon business offers most of the following services:

• Hair: haircuts, trims and styling; highlights/foils & weaving; hair & scalp treatments; relaxers, perms; colors; shampoo and conditioning; curling, reconstructing, permanent waving.
• Nails: manicures, pedicures, polish, sculptured nails, nail repair, hand conditioning treatments.
• Skin Care: Facials, body waxing, massage.
• Sale of professional hair/beauty products: Many salon businesses also offer a wide range of hair and beauty products in order to provide everything a customer needs in one convenient location.

Herr Haar will not offer manicures or pedicures in the next two years, although we will consider expanding our services to include these if customer demand and cash flows warrant it. There are three nail salons within 10 minutes of Herr Haar, so competition is high.

4.1 Market Segmentation

According to the U.S. Census, in 2000, Anytown had an overall population of 360,890. Of these, the majority are caucasian (80%), and roughly half were married couples, with or without children. 60% of Anytown population owned their own house, and the median household income was $45,081. The local economy is based heavily on tourism, although it has recently gained a strong foothold in the electronics, high-technology, and manufacturing industries. Anytown has seen a strong population growth over the last 25 years.

Herr Haar will target customers with an average to above-average income level ($50,000 to $150,000 household incomes), seeking hair replacement and hair, skin, and bodycare services. Although our clients need different services, their underlying needs are much the same: to be treated with respect and dignity; to feel good about their appearance; and to be pampered now and then.

Hair replacement clients About 50% of the general population will suffer some hair loss by the age of 50; many expect and tolerate this. However, for some people, especially women, hair loss is a dramatic and traumatic event. When hair loss accompanies a major illness, such as cancer, it is even more devastating. The numbers in the following table reflect potential hair replacement clients within 1 hour’s drive of our location.

• Cancer patients: Anytown has a world-renowned cancer center, and is just one hour from the University of Colorado’s cancer treatment center in Aurora. We will advertise our presence more visibly to doctors, therapists, and patients at these centers, to let them know how we can help patients maintain a sense of normalcy during the stress of cancer treatment.
• Female hair loss: Over 25 million American women suffer the effects of female hair loss, and many have no idea what causes it or how to treat it. By integrating hair replacement services into the context of a traditional “salon,” we hope to turn what could be a stigmatizing experience into just another day at the beauty parlor.
• Male pattern baldness: Once considered just a fact of life, male pattern baldness is now being viewed as a treatable disease. Men are also paying more attention to their personal grooming, and professional men are willing to pay higher prices for the luxury of a salon atmosphere and the reassurance of using professionally-trained cosmetologists. We will market to this target segment with the promise of a better, more attractive appearance.

Salon clients (hair styling, skin care, and body work) Going to the beauty salon has been a female tradition for the last 100 years, whether for a haircut, styling before a big event, or a simple indulgence. The growing interest in professional hair and skin care among men has expanded our client base greatly. The following table includes potential clients within Anytown.

4.2 Target Market Segment Strategy

Our target market segments are fairly broad, in part because our services appeal to such a wide range of people. We are focusing on a slightly upscale target market, who can afford our salon services on a regular basis and not just as an occasional treat, because satisfied repeat customers are the backbone of the salon industry.

For the hair replacement services, we are targeting three different groups: cancer patients, women with hair loss, and men with male-pattern baldness. Although we have listed these together in the market analysis table, we will use slightly different marketing tactics with each group. Many of these customers will come to us only a few times, especially if their hair loss is temporary (post-natal hair loss and cancer patients, especially). Others will remain loyal customers for years, coming in for repeat treatments or new wigs. In both cases, our marketing efforts need to establish our reputation as legitimate, skilled professionals who can solve their hair loss problems.

4.3 Service Business Analysis

The beauty spa and salon industry is decentralized, and contains numerous small businesses and franchises. As a more upscale salon, and especially as one with a significant focus on male beauty needs, Herr Haar does not fit the “chain” model. Similar businesses gain initial clientele through print and media advertising, but maintain and expand their clientele by consistently satisfying their customers, generating not only repeat business, but word of mouth referrals. Many people will switch salons if a friend or relative is getting consistently good haircuts and expressing satisfaction with the services of a particular salon.

Most similar salons are owner operated, with additional hairstyling or station employees, or with independently contracted stylists who work on commission. (Herr Haar uses a mix of these two models.)

The hair replacement industry is split between large, international chains offering drugs, dyes, and other products, and smaller local businesses specializing in customized treatment, including surgery. We clearly fit into the latter category, and buy some of our products from the national chains.

4.3.1 Competition and Buying Patterns

Hair replacement In Anytown, there really is no serious competition for hair replacement. There are a few salons that offer some forms of extensions, but not with the years of experience available at Herr Haar.

Potential clients seeking a good salon experience are looking for good quality, professional, clean and luxurious atmosphere, and skilled staff. Among our target market, they are quite willing to pay more for such elements. In fact, the price premium gives our service the feeling of being an affordable luxury, like gourmet coffee, which enhances our customers’ identities as upscale, trendy people.

The most important factor, hands down, for the success of a salon is satisfied customers. Word of mouth is our biggest way of building clientele.

Strategy and Implementation Summary

Our primary focus on the next year is to incorporate our existing services into a full-scale salon concept, so that hair replacement is seen as just one more hair service option. We will leverage our skills and reputation and our highly visible new location to increase our client base with more extensive marketing campaigns on the benefits of hair replacement.

We will continue to provide great service, and will track our sales and marketing goals as we go. We will work with our independent stylists to ensure a consistent level of quality and customer service at Herr Haar. We will train them in some of the cosmetic forms of hair replacement treatment, such as extensions, so as to incorporate some of that business into the “salon” portion of the business, further de-stigmatizing it.

5.1 Competitive Edge

Herr Haar will be a place to enjoy a relaxed atmosphere, where the whole person is taken care of. Unlike a typical salon, we will provide not only basic hair care and products for hair health, but also hair replacements, massage, and assistance in maintaining care greatly.

Although our primary focus is on male clients seeking hair styling and/or hair replacement therapies, two of our contracted stylists are coming from very upscale boutiques and will bring with them a significant female clientele.

Our competitive edges are:

• Skilled and experienced staff
• Help for all hair types (thick, thinning, balding, and anything in between)
• Full-scale salon, not just hair care
• New location, with high visibility
• Existing client base of owners and stylists

5.2 Marketing Strategy

Herr Haar’s new location will provide easier access and greater visibility than allowed by our present space. The surrounding area is growing rapidly, and Herr Haar will be able to reach its target market, as well as increasing walk-ins. There is an increasing trend among well-off couples for both to use the same spa or salon, although not necessarily at the same time. We will use our services for each gender to “pull in” spouses and partners seeking quality hair, skin and body care.

One of the best ways to market Herr Haar is to satisfy clients. When a client leaves our business with a new look, he or she is broadcasting our name and quality to the public. Many of our clients will be referrals from existing clients.

On the other hand, for hair replacement systems, it has been our experience that clients do not talk about hair care problems, existing, or other additions because they look so natural that they don’t want anyone to know that it is not their hair. Therefore, our strategy has been to use the yellow page ads and television, to inform people that there is a place where they can go and take care of hair loss problems, in a convenient and private place. We will be adding some new, targeted marketing strategies to supplement our existing ones.

We will target our three different hair replacement groups directly: we will liase with doctors and therapists at the Anytown Cancer Treatment Center, and the University of Colorado Cancer Center; we will distribute pamphlets and flyers to local OB/GYNs and midwives about our services for post-natal female hair loss, and send mailings to all primary care doctors in Anytown who treat women; and for clients with male-pattern baldness,we will place ads in the local paper next to men’s clothing advertisements and in the weekly women’s fashion insert, on the theory that their wives may show them the ads.

5.3 Sales Strategy

Herr Haar provides the highest quality replacement services such as Great Lengths, and Le Metric, while the stylists are committed to continual education in the field of hair replacement as well as basic hair care. Herr Haar will also provide products that were used on the client, and will encourage the person to continue using the products to aid in maintaining the services local. Our sales strategy relies on continuously high quality, prompt service in a pleasant atmosphere, where clients are treated as people, not heads of hair.

We will offer every client complimentary coffee or tea while they wait. All of our staff will be trained to be discreet and compassionate toward our clients with hair replacement needs; none of our verbal communications in front of other clients will let on whether someone has had hair replacement treatments. The owners will also make themselves available by appointment for non-standard times, if a hair replacement client cannot come in during regular hours, or wants a consultation when no other clients are around.

We will also offer special discounts and promotions to build the client base in our new location, including 10% discounts when clients refer new customers.

5.3.1 Sales Forecast

The sales forecast table shows our expectations for the next three years. The attached appendix shows the monthly growth.

The first category, hair and skin services, includes revenue generated by the owners’ work (hair replacement and some of the facials). We also collect all massage revenues, and absorb all direct costs for products used in these services and laundering of massage table coverings.

We do not collect the revenue from our affiliates’ services (the other four stylists), but instead receive a monthly booth rental, listed below, which covers shared costs of using the receptionist, the payment system and the utilities, and a modest profit.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Jane Whigg: Owner.  Jane has been a cosmetologist for 27 years.  Jane has ample experience at managing a successful salon, having run three salons in the past. She has owned and operated Herr Haar for the last six months. Jane has the drive, determination, skill, and excellent people skills to give clients just what they need to make this business a true success.

Joan Whigg: Co-owner.  Joan has been a cosmetologist for three years. Joan is a highly talented beautician with the drive to increase her knowledge and be a true asset to the company.  Joan is knowledgeable in many areas of the business, therefore making herself useful in all avenues of the business.

6.1 Personnel Plan

Financial Plan investor-ready personnel plan .">

Herr Haar is expecting growth of at least 5% each year and we anticipate the increase to continue as new clients come to the salon. Our financial plan for the next three years includes several new revenue streams from massage therapy and booth rental from affiliated stylists. The projections for the first year are therefore much different from the starting balances for our last year, even considering that the past performance included only six months of data. The major accompanying expense is a much higher personnel payroll, as well as higher rent for the new location, to accommodate all these people.

Our advertising expenses will be higher than those of similar businesses, because after only six months in business, we are still a “start-up,” and because our new location and services will be unknown to many in the community without heavy advertising. We will work hard to keep costs down and to use word-of-mouth as much as possible to build our business.

Herr Haar is seeking financing to achieve the goal of becoming a great hair clinic which focuses on the total wellness of clients. We will use this money to renovate the new space, so that we can build our clientele base, increase revenues, maintain a positive cash flow, and steadily increase the net worth of the business with good management.

7.1 Important Assumptions

The following table shows important financials assumptions for our plan, including a projected interest rate for the short-term loan we are seeking. We are also assuming:

• No serious disability on the part of either owner which prevents her from working
• No new direct competition for hair replacement services in Anytown in the next three years
• No sudden changes in licensing or technology which would make our services obsolete 

7.2 Break-even Analysis

For our break-even analysis, we assume running costs which include full payroll, rent, utilities, and an estimation of other running costs.  Payroll alone, at our present rate, is only $8,930/month. We will reach our break-even point at the new location in March.

7.3 Projected Profit and Loss

We expect net profit to reach $17,795 at the end of the next fiscal year. We will take on a smaller net profit in years two and three in order to increase the salaries of our workers as the salon becomes busier. Happy employees make for good customer experiences, which generates increased revenues.

7.4 Projected Cash Flow

Herr Haar expects to manage cash flow conservatively over the next three years. The business will generate more than enough cash flow to cover all of its expenses, and we will pace growth slowly.

In addition to showing repayment of the loan, the Cash Flow table, below, shows the purchase of new current assets in January. We will purchase a water- and energy-efficient washing machine and dryer in the first month to clean towels and drapes from hair services and massage.

7.5 Projected Balance Sheet

The Balance Sheet shows our projected steady increase in net worth. With no accounts receivable, our cash sales go immediately into our assets. We also expect a steady increase in retained earnings.

7.6 Business Ratios

Business ratios for the years of this plan are shown below.  Industry profile ratios based on the Standard Industrial Classification (SIC) Index code 7231, Cosmetologist and personal hygiene salon, are shown for comparison.

Our huge sales growth in the first year is, as stated before, due to a radical change in the revenue structure of the business in the new location. Although our asset base is smaller than many similar businesses, partly because we are leasing a location, our debt to asset ratio is quite good compared to the industry standard.

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