Salon Business Plan

Gone are the days when Salon and Spa business was something only women took up to keep themselves busy in their free time. In the past couple of decades, it has seen a significant surge, to the point that today, the beauty and wellness sector is a full fledged industry in itself! It would not be an overstatement to claim that the salon and spa industry is one of the most profitable business ventures in today’s times, internationally as well as in India. As per a survey conducted by the cosmetic industry, it has experienced a growth of almost 60% in the last 5 years itself. In fact, it has been estimated that the hair and beauty industry is likely to generate revenue of more than 5 billion dollars by the end of the financial year 2019-2020.

Some of the factors that have contributed to the rapid growth of the beauty and wellness industry include increase in the urban population, increase in the population of working women in India, which gives them the financial freedom to indulge themselves, evolution of technology and science, rise in the salary standards because of an increase in international companies investing in India and a general tendency amongst  men and women of all age groups wanting to look good, thanks to the increasing influence of social media, especially amongst the younger generation.

Hence, with lifestyle experts in India estimating a massive growth of the beauty industry at twice the pace compared to Europe and USA, starting a salon business can be a feasible option.

Below is a detailed Salon and Spa Business Plan:

Create a business strategy –

you will need to start with a systematic business plan in place, which will act as your road map along the way. This plan will include deciding the target market, setting goals, foreseeing obstacles, SWAT analysis and figuring out ways to achieve goals as well as troubleshoot problems. Basically, almost every major business decision will revolve around this plan.

Finding a mentor –

though not a must, finding a mentor who has been a part of the beauty industry long enough can be of immense help in figuring out the know how’s of the industry, for someone who is relatively new to the industry.

Location hunting –

choosing an apt location can be the difference between success and failure in this business. Some factors to look for while choosing the location will include, busy market/shopping areas, high visibility, good traffic, number of local competitors around, visitor’s  population of your target demographic and so on.

Infrastructure –

with the kind of exposure the current generation has, they expect nothing but the best! And, with the stiff competition in the service industry, up to the mark infrastructure is a must, especially because people usually visit saloons to indulge and relax themselves. A well designed space will play a crucial role in not just attracting customers to your salon, but more importantly retaining them!

Workforce –

Hiring a highly skilled workforce is of paramount importance when it comes to the success of any business and salon business is no different as the main operations of this business are skilled based and creative. Apart from the main staff, you will also need a good admin, accounts and management team to ensure smooth workflow.

Digital marketing –

in today’s times of immense digital dependence, it is imperative to have a well designed and attractive website that lists out all the products and services offered by your beauty salon. This will go a long way in attracting clients. Along with a website, it is also important to make your presence felt across various social media platforms.

Physical marketing –

along with promoting your business online, physical advertising is equally important. Some options would be to print & circulate pamphlets locally, have a opening ceremony for potential clients, introduce attractive launch discounts and other such ways of building your brand.

Financing –

just like with any other business, you will need to borrow a business loan from external sources for your salon and spa business for the below:

  1. Interior designing or renovation of the salon
  2. Purchase of salon equipment and beauty products
  3. Working capital for day to day operations
  4. Expansion or relocation of the salon
  5. Marketing
  6. Covering gaps in cash flow

You can get a business loan for your salon from various banks, NBFCs or even digital NBFCs like Lending kart, a trend that is picking pace in the financial sector because of the many advantages that include:

  1. Quick application process
  2. Low rate of interest
  3. Fast processing of loans
  4. Customised loan options
  5. Flexibility in repayment
  6. Zero hidden charges

Documents required

At lending kart, we demand only the basic documents for a salon business loan:

  1. PAN card
  2. KYC documents
  3. Aadhar card
  4. Business registration and license
  5. Tax compliance proof
  6. Bank statements

Application Process:

Lending kart has a simple three step application process for business loans:

  1. Fill up the application form on our official website with accurate personal, professional and required loan details.
  2. Upload all the required documents
  3. After verification, your loan will be sanctioned and duly disbursed to your account within the stipulated timeframe.

Salon Business Plan FAQs:

1. What are the costs involved in opening a Salon and Spa business?

Before venturing into a new start-up of a salon and spa, one must consider the following expenses: • Licenses and Legal Permits that have to be acquired • Real Estate – He may have to either rent or buy a property for the business • Employment Payroll and appropriate staffing • Salon equipment • Inventory and machinery • Insurance

2. Is financing easy for a Salon Business?

Salon and Spa business is considered as a high-risk business and many institutions hesitate in providing finance for it. Most common financers for Salon business are SBA Loans, Microloans, Alternative lenders, equipment financing, personal loans etc.

3. What are the appropriate marketing techniques to be employed in a Salon Business?

One must indulge in the following marketing strategies to promote the salon business: • Promote and update the product and brand name on social media • Create Loyalty incentives and create attractive packages • Referral Discounts should be offered • Partnering with other small business will help • Online reviews, feedback, customer comments and testimonials can be quite helpful • Advertising and word of mouth • List the salon in all offline and online directives.

4. What are some of the common licenses and regulations that need to be undertaken before opening a salon?

Common permits and licenses are: • Salon License • License of Cosmetology • Building Permit • Sanitation and Hygiene certified • OSHA Requirements - Occupational Safety and Health Act of 1970, • Employee Identification Number

5. What are the suggestions that can be useful for new owners of a salon and spa?

One must consider the following suggestions: • The first thing to keep in mind is financial matters and nothing should be taken for granted. It is not a cheap process and could require much more time, investment and effort as expected. • Leadership realities should be faced, as staff, dealers and proficient you are dealing with are all experts in their fields. • Physical wear and tear and depreciation of goods, services and equipment will exist. • Client retention should be the first priority. • Be passionate about providing services as this is all about beauty and comfort