Planning a business carefully is critical to long-term success. That being said, planning doesn’t have to start even before your business door opens. But its something you should figure out eventually long the way. A business plan makes it easier to decide how you want to run your business and what your competitive strategy is.
Businesses need to organize their different components both individually to achieve short-term tactical objectives and also together as a broader unit to achieve long-term strategic objectives. You want to create a business plan to formalize your business and construct its financial success. The goal is to give yourself an operating plan so you know how to approach parts of your business. Salons can especially benefit from this because we operate in competitive industries where having a plan of action can be important to differentiate yourself.
This article will provide an overview of how to create a business plan that is perfect for your specific needs. We will try to lay out the basics for you — but feel free to use or add things on as needed.
When planning a new business venture, you need to formulize everything on paper so that a clear business vision can be implemented and executed.
Business plans should include several key items:
– Including the leadership team/employee structure
– Target customer profile
– Customer success
– Marketing strategies
– Total addressable market
– Important financial metrics
– Budgeting and forecasting
– Growth strategies
– Short-term and long-term business objectives
– Financing sources
– Potential exit plan strategies
– Main competitors
– Technology needs
– Full product and service suite
– Differentiating factors/business moat
– Product/service stickiness
– Regulatory risk/impacts.
Note: not all business plans have all of that, but good businesses have usually thought about what each of them means for their operations. If you are confused as you try to define something on the list, let us know in the comments below and we are happy to walk you through it! There are also plenty of resources online that can help you define these.
Here is a sample template. You can start out by brainstorming your business idea in this format; copy and paste the template in a word doc and fill out what applies to you.
A business plan evolves as the business matures, so don’t be afraid to make changes as your business advances during the process. You can always make alterations to your growing business. It is an evolving document, never expect it to be ‘complete’. However, we recommend putting time into it over the course of a month before you finalize an initial version.
1-year, 3-year, and 5-year goals
Products and Services:
Key customer profile
Identifying customer success
Total addressable market
Sources of capital
Total budget, split up by department
Most important financial metrics/ratios
A business plan is essential to cover all areas by setting up expectations and the success of your salon business. It is a roadmap to understanding what your business is, what you need in order for it to be successful and your financial metrics for the next couple of years.
Creating a formal business plan is the first stage of creating a business venture. It’s helpful if you are looking to get a loan, planning on having a franchise in multiple locations, and even when you aren’t sure if you want to pursue a salon business. It will make you really consider the ins and outs of your business for additional success.
Jessica is really passionate about creating different hairstyles and has deep knowledge for understanding hair texture and matching the right products to each client. She decides to build a salon business but her idea isn’t as cohesive or robust as she would like.
She feels like she doesn’t know where exactly to start, how she would set herself apart from competition, or even the full set of products and services that she would offer. Jessica decides to create a business plan, which has helped her develop her mission statement, identify her product and service offering, zone in on which customers to target, how to market to them directly, which technologies she needs, and how to finance the business!
A business plan documents all your ideas and what you set your business purpose to be in a formal way. It will allow you to really consider why you started a business in the first place and what you want to get out of it.
It doesn’t hurt to scan other resources as well to help you plan your business more comprehensively. Some other resources to help your business:
They have insightful articles and templates from pitching your idea, funding, and business planning. This is a great resource if you want to go down the funding route.
Provides how-tos to create a business plan, marketing plan, and financing needs. This is perfect for new or aspiring entrepreneurs.
Covers the financial section of the business plan such as cash flow projections and balance sheets. Finances can be hard and this walks you through all the steps.
A business plan software that helps you strategize your business needs and finances. This is great for providing templates you need to get set up.
Business plans are important to set realistic business objectives (both short-term and long-term) and to answer key business questions that will inevitably arise at some point. For salons, it is important that we know exactly how we plan to run the business, with products to hiring, to cash flows.
By already having a strategy in-place, you can more efficiently overcome many hurdles and set your business up for success! If you have any advice on how to make a business plan for any salon better, please leave a comment below!!