How to Write a Nail Salon Business Plan

While the economic downturn has hit the hair and beauty salon industry hard, it still sees annual revenue in excess of $42 billion according to market research. With more than 250,000 beauty salons currently operating in the US, new nail salons face stiff competition from established salons that already have loyal clientele. If a new nail salon is to build a solid client base, a good reputation and succeed in the long-term, it is vital that the potential business owner develops a viable business plan and seriously considers all aspects of the business start-up prior to expending funds on opening a salon prematurely. Once the salon start-up has been thoroughly researched and analyzed, it may even be found that it is simply not financially prudent to open a salon. Enthusiasm is no substitute for the facts that can be ascertained from adequate research, analysis of the local market and financial data. A salon that opens without adequate pre-planning and a solid business plan has a high potential for failure.

What is a Business Plan?

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A business plan sets down the goals of the nail salon, validates why the business is likely to succeed and determines how the goals will be reached. It will also project the salon's future growth, as well as address required funding. The federal government's Small Business Administration (SBA) can assist potential salon owners in all aspects of business start-up, including business plan development. The SBA has offices located throughout the nation. If the beauty salon owner hopes to attract investors and loans, she will need to ensure that the salon's business plan comprehensively addresses the key factors that all lenders will consider, before investing in a business. These include: Many owner-managed salon business plans also include an exit plan, which helps the owner to develop a well-considered exit strategy that maximizes the return the owner will get for her business and end her involvement with it, with as little disruption as possible.

Competitive Analysis and Identifying a Niche Market

It is important to identify existing nail salons in the area and conduct a competitive analysis. Review the following: There is little point in opening a new nail salon that provides similar services at similar prices as existing salons in the area. It is essential to identify a currently under-served niche demographic or ethnic group to whom the salon can customize it services. A family-friendly location might need a salon that caters to toddlers and young children. A college town may need a trendy, yet inexpensive salon to cater to its students. A predominantly African-American community will require a hair salon that specializes in treatments for Afro-textured hair, while a senior-oriented community might need a salon that provides easy access and that is willing to visit its older, frailer clients at home. The fact that a niche market is not currently being served is not necessarily an indicator that a new salon catering to it will be successful. It may be that previous salons have tried and failed to penetrate that market, or that it simply does not exist.