Thousands of people
decide that they want to run their own business every year.
opening a salon?
you own salon often comes as the next logical step for
those hairdressers who have been successful at mobile
hairdressing. Owning your own shop implies a better quality
of the service you can offer and this is also more attractive
to your customers.
It is important that when opening a business it meets with the
needs of you as an individual and that it is viable. Hopefully
this will happen in hairdressing as you will go into business
in something that interests you, that way you hopefully wonít
You should ask yourself some questions before you start planning
your salon like is there a market opening for your service?
How can you differentiate so that you wonít be beaten by the
competition? And how will you fund your proposal? Do you have
money set aside or do you need to request a huge bank loan?
If you do not have a means to differentiate massively, then
you should perhaps consider buying a franchise or an existing
salon name. There may be a way in that you can buy out your
employer or run your salon as a family business, all of which
have their advantages and disadvantages. For many people who
open their own business, the main factor behind this is to be
their own boss and determine their own working hours.
The hairdressing business is a competitive one, and you must
not be fooled that it is always easy to succeed, but with a
good business plan and a good strategy in place, coupled with
a strong desire to be successful then there is no reason why
you cannot provide a good quality of service and create a strong
profitable business. You should ensure that you research and
develop your business ideas as thoroughly as possible. It is
essential that you determine whether there is room in the area
you want to set up in.
Financing the development
of your idea can be the hardest challenge that most people starting
up in business will face. The most common route to go down is
to be in contact with a financial advisor and establish a relationship
with your bank so that they can advise you well on taking out
a loan or an overdraft. There is also the opportunity to use
government grants as they actively seek to encourage entrepreneurs
and make support widely available. It is worth bearing in mind
that you will probably need different amounts of money at different
stages in the development of your business so be careful not
to use it all in setting up, as you may find you need to embark
on unexpected market research or competitor analysis for example.
As you develop your idea, you may speak to people outside your
business interest, therefore openly exposing your idea to others.
Once you do this, there is no reason why somebody may not pinch
your idea. It is essential therefore that you protect your intellectual
property. This can be done in several ways;
By using a trademark
Having a copyright
Patenting your idea
Using design rights that will protect the appearance
of your product
If you have developed a partnership then the idea is likely
to have been that of just one person. In this circumstance you
should write a contract that determines what, if any, will be
the difference of profit to each party.
Essentially, know that you can afford it. Before you start your
own business, it is important to assess the start-up costs required
and decide if you can physically afford it. The amount of money
that you will need to start up a salon varies immensely depending
on the type of service you are going to offer, the clientele
you wish to target, the quality of your salon, the fixtures
and fittings you would like to have, the equipment you will
need, the amount of bookings you aim to take, the leasehold
agreement you have, the rent you will pay and the opening inventory
you will have, to name just a few factors to be considered.
Below is a table with a summary of some of the things that
should be considered first.
price (or Tenancy, trade fixtures to fittings)
one month - three months in advance
and Decoration and Refit
fees and training costs
costs and sundries
If you decide that you can meet the necessary start-up costs
then it is essential to start to plan effectively. It must be
understood that there is more to running a salon than cutting
hair, and so it is imperative that you as the owner are educated
enough to be able to do things like balance the books, manage
supplies, deal with reps, have excellent interpersonal skills,
and that is just the start. Simple steps can be taken to ensure
that you are a top business owner, as well as a top stylist.
For example, go on courses, read books and the most valuable
information you will get of all is from talking to people and
listening to their experiences. All your employees, and of course
yourself, will need to be qualified in hairdressing to NVQ Level
2 at least, which qualifies as a junior stylist.
Hairdressing is a very competitive business, and you are more
than likely to be setting up where there are already salons
established. It is therefore essential that you have a good
marketing strategy to get yourself known in the area and entice
clientele. The name of your salon is one of the most important
things you should decide. Primarily it should be a name that
when someone hears it they never forget it. This can take a
lot of time to decide on your salon name so make sure you experiment
with it and talk to people about it before you come to a decision
(obviously make sure nobody you speak to is going to pinch your
It is important that you conduct your market research effectively.
Work out a good sample range dependent on the population where
you will be locating your salon and make sure you ask this number
of people if they would welcome a salon in their area, as if
you come up against public disapproval this can cause many problems.
You can use focus groups to see what they will want from your
salon, for example, will it be unisex and will you provide beauty
treatments? Having this approach allows you to ask questions
but also allows for discussion of the idea. Although time consuming,
it will be hugely beneficial to get the opinions of your potential
customer base. Questionnaires can also provide highly useful
information. They allow you to ask direct closed questions that
will be answered matter-of-factly and also you can ask open-ended
questions where the respondent can expand if they wish. This
also allows anonymity and so you are likely to get honest answers
and an idea if there is great public disapproval. You could
also speak to other businesses in the area and get their ideas,
if of course they are willing to discuss.
An important decision that you will need to make when opening
a salon will be whether you want to be unisex or just for women
or just for men. There are proís and conís of both. Being unisex
means potentially more customers, but you will need to have
the staff to cover a wider range of styles and services your
customers may want. If your salon catered just for women, their
cuts and styles commonly are less frequent, however they will
usually require a higher standard and therefore cost more.
For menís and unisex salons, generally custom is obtained by
passing trade and therefore the expense of advertising is usually
minimum. However, for a womenís only salon, this is usually
operated via bookings and so it is generally essential to market
yourself well and gain custom. The cheapest and most valuable
form of advertising is word of mouth. Make sure that everybody
who comes into your salon is more than satisfied and leaves
with nothing more than good words to say about you. This can
be enhanced by having friendly staff, making the salon look
and feel comfortable and clean. Most women love having their
hair done so look into making their experience as memorable
and relaxing as possible.
It is essential that every business has a business plan in place
that works. It is just as essential that the business plan is
realistic and tailored specifically to meet the purpose of the
business, and that it is followed.
a Business Plan
What is it?
A business plan is a document that is compiled to show the businesses
aims and objectives, its strategies, the market it is in, the
customers it is targeting, a competitor analysis and its financial
Why do you need one?
The purpose of a business plan is to make sure that the proposed
venture will make money and the will be financially stable;
otherwise the business will cease to function. It is important
to be ethically and socially responsible as a business, and
it can improve your image if you are seen to be acting in such
a way. Elements of how you propose to be corporately responsibility
should be included in your plan. A business plan has a number
of purposes. Primarily, it secures your external financial position
and it is a means of measuring the success of your business.
Who is a business plan for?
Anybody with an interest in your business will want to see your
business plan, but obviously essentially you decide who sees
it. As it a means of securing your external funding, your bank
will want to ensure that the document is as legitimate as possible
as they are potential investors into your business. It would
therefore be beneficial to you to ensure that your plan is as
viable as possible before you show it to your bank.
The business plan, essentially, is for you. It is a means of
identifying what market your business will operate in, what
products you intend to sell, and identifying your potential
and current competition. It enables you to also identify any
pitfalls before they get you into trouble, because even if you
do not spot them, letting friends or potential partners, or
even a solicitor have a read may result in potential problem
areas being spotted and you being able to resolve them.
Anyone who is interested in buying your business from you may
wish to see your business plan so that they can gain an insight
into where you were going with it and what you hoped to achieve.
Consequently, it is imperative that you treat your business
plan as a live document and update it all the time. This is
important because if you diversify your product range, for example,
this could impact the market you are operating in, the consumers
you are targeting, and your competition, all of which could
have a substantial effect on the financing of your business.
You may, for example, need to borrow more money to expand an
existing range in your product portfolio, and if this is worked
into your business plan, you will be in a much more favourable
position with the bank.
Be aware when writing your business plan that not everybody
who has an interest in your business will be as business-minded
so try to avoid using jargon and explain fully about the service
and the products you will be offering. Make sure you get someone
who is impartial to read your plan and make sure they can understand
What should a business plan include?
Your business plan should provide detailed information about
the intent of your business and how you are going to develop
it from an idea into a real up-and-running business.
The structure of your business plan can be categorised into
sections as set out here. Your business plan should be of a
manageable length, therefore keep it as short and concise as
possible and make sure it looks professional as this will reflect
your seriousness of opening a business. Ensure that it is proofread
before you get it printed out on top quality paper and bound.
The most important
part of your plan and it should be written last. This will inform
everybody who reads your business plan what it actually entails,
and it is worth noting that it is in fact the only part of your
plan that may be read of the whole document. The executive summary
should include highlighted parts from each section which will
explain to the reader what the business is about. You must ensure
that you cover all the points your business plan talks about,
and not make it simply an extended table of contents because
this will add no value. You should ensure that your summary
is truthful because although you want it to interest its readers
it must not undermine the credibility of the whole document.
Your business its products and services
You must be able to get across clearly what your business will
be doing. This section of the business plan explains who you
are, what you intend to be doing and the market in which you
will enter. Basically this section will answer if your plan
The first part of your plan should start with an overview
of your business.
when you want to start trading
any information that may be relevant, for example, how
you acquired the business if you did so
if you already have a business talk about this and what
products and/or services it offers
talk about your mission statement and your aims and objectives
The second part should talk about the products and/or services
you will be offering.
how it will benefit the market
how it will benefit others
why customers would want to use your service
whether you have any design rights, copyrights, patents
include what your Unique Selling Points will be
use business tools such as the Boston Matrix to explain
whether your service will have a low or high market share in
a growing or mature market
The third section
should cover all the relevant information about the market you
will be entering and who your competitors will be. You should
write in here the results of any market research that has been
undertaken, and be able to demonstrate that you are fully aware
of how the market operates, its drivers and trends, that you
will be participating in
Market and your Competitors
define your market
quantify your market, for example, itís size, any relevant
explain your market, for example, any trends, any pending
legislation, use business tools such as PESTEL and Ansoffís
Matrix to explain if you are entering a new or existing market
with a new or existing service, explain whether there are any
restrictions on your market
identify who your competition is and how much of the
market you will share together
you should be able to demonstrate that you will be successful
in the market despite the current competition (if there is any)
discuss who your targeted customer base will be and you
know that you will gain custom from them
talk about any competitor analysis that you may have
carried out. For example, compare a SWOT analysis that you will
have done on your business in comparison to a SWOT analysis
of your competitors. Include here that you have thought about
the future as well, so if there were to be any anticipated changes,
how would you and your competitors react to these
The fourth part of your plan should concern marketing and sales.
This should discuss how you intend to sell your service and
the products you may sell in your salon. You should invest some
valuable time into this section as it is important that once
you are up and running you can actually enter the market immediately
and start building your self up as soon as possible. This time
should also be used to make sure that your whole plan is achievable.
This part of the plan should answer the following questions:
How will you create your marketing strategy? i.e. how
will your service be positioned in the market?
What are your customerís needs? Who are your customers?
If anybody has shown an interest in you setting up your salon
in a particular area, include any details and talk about how
you will attract new customers to your salon.
How will you price your service and products?
How will you promote yourself? Look into sales methods,
for example, PR, emails and advertising.
Thorough consideration should go into the structure of your
people planning Ė your management team and your employees. If
you can see any foreseeable weaknesses then you should try to
deal with them as effectively as possible.
For this part of your business plan you should talk specifically
about your team members and how they fit into your business.
For example, give background details on your stylists like how
long they have been in the business and what qualifications
they have. Ideally, you want your management team to have varied
range of skills and experience to make the team as balanced
as possible, which will lead to the greater success of your
salon. You should also talk here about what you plan to pay
your employees and what benefits, if any, you would like to
This part of your plan should also talk about any training schemes
you intend to run or recruitment days. You should probably provide
the timescales of these and how much it would cost your business.
You should be honest about your workforce. If you feel that
motivation or absence is an issue or could potentially be one,
then include your ideas about how you would overcome this.
For your business plan you need to provide information that
talks about your business in terms of money. This includes how
much capital you need, if any. What security are you able to
offer to the people that may be lending you any money? And what
will your sources of revenue be?
Your financial forecast should include the following:
Cashflow forecast. This will be your balance of cash
and cashflow patterns for the first 18 months at least. This
is to make sure that the business will be able to survive the
first 18 months of trading.
Profit and Loss forecast. This will be the amount of
profit you expect to make, the amount you have projected for
your sales and cost of goods and your overheads.
Sales forecast. This will be the amount you expect to
generate in sales.
This information should run for at least the next 3 years, but
include most of the detail in the first 12 months. The investors
should be able to clearly see what the thinking has been behind
all the numbers.
A major concern to you may be how do you survive while you business
is getting started. The easiest answer to this is to make you
sure plan well. Be aware that you may not make any money in
the first year of trading, and cover your back to at least make
sure you can pay for all your outgoings (salaries, rent/mortgage,
overheads etc.). Make the provisions also for any unexpected
payments that may need to be made, for example, building works.
Seek the advice from a financial advisor of how you can help
yourself in the early days as well.
Making personal savings can help you. Small things like consolidating
your debts. This can involve you paying a 0% APR and a single
monthly payment is usually much cheaper than several. Re-mortgaging
your property could be another way to release some money that
would otherwise be tied up. Think about your own personal overheads
like your bills and see if you can contact the companies concerned
and make any additional savings. Set yourself a personal budget,
but ensure that you are realistic in the process.
Make sure that you do not waste money at home or in your new
business premises. Donít use electricity unnecessarily and think
about your gas bills. All these little things will contribute
to you having more money in the long-run.
As it may be difficult initially, it is a good idea to try and
work out much money you made need to source within the first
12 months of trading.
You can do this by taking the following steps:
work out what your estimated income will be from your
work out what your expenses will be
estimate what you will pay for salaries, including the
and estimate what is left after your monetary requirements
and how much you will take out.
Once calculated, this figure will tell you how much you may
need to source from elsewhere. Be careful not to rely too much
on external funding on things like bank overdrafts as this money
can be spent very quickly and you reach your borrowing limits
before you know it.
In the initial stages of starting up, you will more than likely
always need money. Here are a few suggestions of places to look
for where this may be found:
Sell unwanted assets
Borrow from your family and friends
Release any unused equity
Get another job!
To avoid disappointment, make sure you plan well and take advice
from business tools that have dealt with business failures.
Commonly, make you sure you do adequate market research, plan
you finances well and thoroughly, always be aware of your competitors
and know what they are doing as far as possible, make sure you
have a high standard of customer service as customers are your
main driver for success in your salon and make sure that you
employee the right type of people with the right attitude.
All in all plan, plan, plan. If you fail to plan, you plan to
fail and so make sure that everything is above board and you
have a really good strategy in place. Apart from barriers to
entering the market that are outside of your control, there
is then no reason why you cannot succeed.