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?
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:
- An executive summary, detailing who the salon's owners and management team are, and what experience they have in the industry.
- A summary of the salon's objectives and targets and a timeline for achieving them.
- An operational overview, discussing logistics such as salon location, size of premises, staffing, services to be offered and salon equipment and furniture required.
- An industry overview and how it relates to the local market, and who the local market actually is.
- An analysis of competitors.
- Identification of an under served local market niche that the salon can fulfill.
- A marketing strategy.
- Financial information including profit and loss forecasts, cashflow projections, existing business capital, required capital and potential sources of funding.
Competitive Analysis and Identifying a Niche MarketIt is important to identify existing nail salons in the area and conduct a competitive analysis. Review the following:
- Their marketing strategies
- Key selling points
- Services and products provided
- Attractiveness and convenience of premises