THE FINANCIAL PART OF A HAIR SALON BUSINESS PLAN

You can’t cut it: you will have to show these estimates in your business plan.

For an accurate estimate of a hair salon’s revenue, you can use our financial model for a hair salon.

In this model, you fill in assumptions, and the turnover and the other financial indicators are calculated automatically. Also, a verification system tells you if your forecasts are consistent (or not).

In the case of a hairdressing business, you earn money when people come to have their hair done at your place.

The calculation of the forecast turnover of your hairdressing salon begins with the estimation of an average basket of expenses.

From what we have been able to observe, the average revenue per transaction for a hairdressing salon is between €15 and €25 for a men’s salon and around €70 for a women’s salon.

You must be wondering how many customers will walk through the door of your salon to come and get their hair done. When you start your project, it will probably take some time before you have a full living room. However, this number is not intended to remain stable: increase your number of customers from month to month.

In the context of a hair salon, an annual growth in turnover of 20% (for the first three years) should not shock a banker or an investor. You can, of course, display more ambitious income forecasts.

It should, however, be noted that an overly aggressive forecast turnover could give the impression to your banker that you do not have your feet on the ground. Also, remember that the operational capacity of your room limits you.

WHAT IS THE ESTIMATED BUDGET FOR A HAIR SALON?

The estimated budget of a hairdressing salon will be, in most cases, between 35,000 and 90,000 euros.

Of course, from one salon to another, certain parameters are different… and the startup budget is no longer the same.

For example, if you decide to buy the premises that will host your hairdressing salon instead of renting it, you will have to pay a larger sum.

If you join a franchise, there will probably be a fee to pay, which will add to the initial budget.

Also, the number of people you hire at the opening will impact the total amount of your hair salon’s forecast budget.

To obtain a complete and fully editable provisional budget (expenses and amounts) for your business project, you can use our financial model for a hair salon.

WHAT ARE THE EXPENSES OF STARTING A HAIR SALON?

You will certainly have to start by finding a place to accommodate your hairdressing salon, then arrange it and buy hairdressing equipment. The purchase of an existing business is also possible.

Either way, hairdressing is an art – for this reason, your living room should be particularly attractive and reflect your artistic spirit.

To capture a large flow of customers, you will need to open your hair salon in a busy area. Think of a residential area, for example. So when they’re done with work or school, your clients can quickly come to your salon for their hair care.

Everything you need to launch your salon should be listed and cost in your hair salon business plan. This work will allow you to establish a startup budget for your hair salon.

To know the complete and detailed list of expenses when opening a hairdressing salon, you can consult our financial model adapted to a hairdressing salon.

Of course, you can make your modifications and thus obtain your list of investments necessary for the realization of your project.

WHAT ARE THE COMMON EXPENSES OF A HAIR SALON?

The most important current costs when running a hairdressing salon are probably:

– the purchase and maintenance of materials and equipment

– stock rotation of hairdressing products

– expenses for communication and marketing

– traditional administrative costs

– the taxes and other taxes for which you are liable

– the salaries of the team

– any monthly installments of a loan

To find out the complete and detailed list of the current expenses of a hairdressing salon (as well as the clear income statement), you can use our financial model adapted for a hair salon.

Of course, you can make your modifications and thus obtain personalized financial statements for your hair salon.

OPENING A HAIR SALON: IS IT PROFITABLE?

Your hair salon is profitable when the revenue generated is sufficient to cover all current income statement expenses.

In this case, the hair salon has reached its break-even point.

A successful start is essential for the success of your hairdressing business. Only once the beginning of your hairdressing salon has started will you have to prepare the rest.

How to grow your income over the long term while minimizing the costs of running your hair salon?

In your business plan, draw up a rigorous program to increase your margins:

– partnerships with other companies that reach the same audience

– launch of a new range of services and treatments

– sale of hairdressing products to increase the average basket

– expansion into new markets such as Brazilian straightening and men’s haircuts

– development of a real brand image for your salon

– hiring of recognized hairdressers

– acquisition of a competitor

– developing a franchise concept

It is naive to think that customers will come knocking on the door of your salon, and your income will magically increase. Instead, show your investor that you have already thought about a precise and effective development plan.

To know your projected turnover, expenses, and break-even point, you can use our financial model adapted for a hairdressing salon.

HOW TO PROVE THE PROFITABILITY OF YOUR PROJECT IN THE BUSINESS PLAN OF YOUR HAIR SALON?

You have reached your break-even point when your hair salon’s operating income is positive. This financial data can be found in the economic forecast for your salon.

A robust financial model will allow you to identify the income to be achieved, but also in duration: it is a question of knowing how many days (weeks, months) it takes you to reach your break-even point each year.

Our financial forecast model for a hair salon gives you access to this information.

Anyway, in the business plan of your hairdressing salon, describe your strategy to be at the head of a profitable salon in the long term!

The profitability of a hair salon is directly derived from two factors—first, the increase in turnover of the hair salon. Then there is the proper management of the different loads.

It would help if you had a solid marketing strategy to attract customers to your hair salon. Customers follow the fashion for the choice of their haircuts. This implies that you will have to be regularly updated on the hairstyles in vogue.

In addition, you should be able to do them correctly so that your customers come back (we speak here of “customer retention”). This constant learning exercise is essential for the survival of your hairdressing salon. To do this, you can, for example, subscribe to the pages of other hair salons to see what new they offer their customers (you must maintain a competitive watch).

You can also promote your creations on the social networks used by your target market. Don’t get overtaken by competing for salons with a better online strategy.

When managing your expenses, we need to add nuance. For example, limiting investments for the startup of your salon is not always a good idea.

For example, not investing anything in marketing for the launch of your salon would be a bad strategic choice.

Controlling the recurring disbursements of your hair salon’s cash budget is a better long-term strategy.

For example, limit your personnel costs by starting to hire part-time, especially at the start of your project.

For investments in marketing and communication, we recommend keeping them between 8% and 12% of your salon’s turnover.

Please note: every euro spent on marketing must bring you more. As for taxes, make sure you have chosen the right tax regime for your hair salon. Then, list all these actions for a successful hair salon business plan.

In our financial model for a hair salon, we guide you to build realistic revenue forecasts that achieve the desired level of profitability for a hair salon.

WHAT TABLES SHOULD BE INCLUDED IN THE FINANCIAL PART OF A HAIR SALON BUSINESS PLAN?

For your financial business plan to be taken seriously, it must contain the following tables: details of the break-even point (we have just mentioned it), a forecast balance sheet, a financing plan (startup and forecast), a forecast result, a cash budget, analysis of intermediate management balances or details of the calculation of the working capital requirement.

Also, you can add graphs and financial ratios to complete the economic analysis of your hair salon.

You will find all these elements in our financial model for a hair salon.

HOW TO EASILY SUCCEED IN A BUSINESS PLAN FOR A HAIR SALON?

A BUSINESS PLAN TEMPLATE FOR A HAIR SALON

Our business plan template for a hair salon will help you make your business plan a success.

Being a beginner and starting from scratch means not only long work hours but also an uncertain outcome.

Nothing forces you to start from scratch: take advantage of the intense research, analysis, writing, and formatting work of our teams. Impress your banker with a solid and professional business plan.

Indeed:

– the template is fully adjustable (text, color, photos, images, etc.)

– our team supports you

It’s up to you to personalize it to obtain a complete, serious, and professional business plan for your hair salon.

To fully understand our business plan templates, you can consult a free sample business plan.