Any new children’s hair salon owner needs to be able to put together a comprehensive business plan that not only demonstrates you have a clear, logical strategy to achieve your specific business goals, but also that you have your finger on the pulse of the industry and local market.
Most importantly, your business plan is your key to securing funding from financial institutions.
So, how do you get started writing a rock-solid business plan for your children’s hair salon? Let’s get started.
What Are the Basic Elements of a Children’s Hair Salon Business Plan?
The good news is a business plan is a straightforward document structurally speaking. There’s not a lot of room for interpretation of what type of information you should include. The trade-off, however, is the level of detail and legwork required to complete the document. According to the Small Business Administration (SBA), a well-rounded business plan includes a/an:
- Executive Summary
- Company Description
- Market Analysis
- Organizational Structure
- Marketing and Sales Strategies
- Description of Products and Services
- Funding Request
- Financial Information
In the next sections, you can see what exactly each of these subtopics should include.
This is your opportunity to make a great first impression on a potential source of funding, whether it’s a lender or an investor. However, this is the last part of your salon business plan you should write. As the name implies, it provides an overview of the plan and information about the business you intend to open, including the current status and your future plans. Above all, you should focus on your arguments for why you believe your salon will succeed.
Think of the company description as your opportunity to pitch your children’s hair salon. It should provide a cohesive overview of how all of the different aspects – from standard salon services to retail sales to birthday parties and events – of your children’s hair salon come together from an operational perspective. You should also briefly touch on where your business fits into the hair care industry and the demand for your services. Keep this section relatively brief.
To prove to potential sources of capital that you know the industry and market where you’re looking to open your salon, you need to provide a thorough analysis. You should:
- Discuss the state of the children’s hair salon industry and where it’s headed
- Identify your target markets and explain why your business is necessary for the specific demographic you’re going after
- Speak to the growth trajectory of your target market
- Explain who your customer segments are and which acquisition channels you’ll use to reach your customers
- Perform a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis to disclose your strengths and weaknesses in comparison to competitors in your market
- Highlight your revenue streams and pricing structure
- Outline any potential barriers to entry
The SBA recommends this section of your business plan include your insights from the research you conduct, but the actual data should be added to the appendix. Instead, your goal should be to convey your knowledge and expertise, giving a lender the confidence you know what you’re getting into as a business owner.
The most logical place to begin this section is to create an organizational chart to show who is in charge of managing the different operational functions of your salon. From that point, you can then start describing the ownership structure from a legal point of view – who owns what and how much they own. Finally, you’ll want to add details about each stakeholder so that a lender can clearly see you and the people on your management team have the experience to successfully operate a kid’s hair salon.
Marketing and Sales Strategies
Potentially one of the single most important considerations when you’re putting together a salon business plan is how you’re going to develop awareness and demand for your services in your local market. The significant upside of opening a franchise business, like Pigtails & Crewcuts, is the fact marketing support is built into the investment opportunity. So, you have a coherent brand style guide and collateral to work with. Still, you need to be able to clarify how you’re going to use these assets and other marketing channels to build your business. This includes identifying who will be responsible for selling and what the strategy will be.
Description of Products and Services
Here, you’ll want to dedicate most of your energy to showcasing how your salon’s services and products are differentiated from competitors. For instance, Pigtails & Crewcuts franchise owners would play up the fact that their salons provide a memorable haircutting experience for the whole family in an environment that’s warm and welcoming to kids. Owners also have two additional revenue streams by providing kid-centric retail products and offering parties.
This section of your business plan is where you’ll outline how much you plan to invest in your kid’s hair salon. You need to be specific about how much funding you’ll need. Another advantage of a franchise business investment is that most brands will have the projected initial investment included in their Franchise Disclosure Document (FDD). This can be helpful and answer many of the questions lenders will have about different funding scenarios.
Last, but most certainly not least, is the financial plan and projections. Here’s a breakdown of what you should include:
- Personal financial statements from the owners
- Any outstanding debt, current status, the amount owed, terms and collateral
- Projected income and expenses for the subsequent five years
- Cash flow forecasting
- Budget for capital expenditures
- Data visualizations
It’s recommended that you have an accountant look over this part of your business plan to make sure there aren’t any errors and that it closely aligns with your funding requests. Again, this is one of the most critical parts of a salon business plan and will be highly scrutinized. Be sure you put due time and effort into making sure it’s accurate.