How to Run and Operate Your Own Salon - Part II
”The Business Plan”

Welcome to the wonderful world of salon ownership. By reading, this information you have already started out on the right foot toward salon ownership. However, if you have followed the instructions outlined in "Part 1", you should be well on your way to uncovering and overcoming the hidden obstacles that awaits numerous unsuspecting novice entrepreneurs. In "Part II", we will work on business plans.

Business Plan: The business plan or road map is considered the single most important business document you will possess. The plan encompasses the entire playing field on which today's ideas can become a tomorrow filled with success and prosperity. Summed up, "Today's planning is tomorrow's future."

"WRITING THE VISION DOWN GIVES YOUR PROJECT POWER."

"Absolutely no business is complete without the element of prayer. When your Savior's plan becomes your plan, then you have a plan that cannot fail. Ask him if this business is his plan for you, if the answer is yes, THEN YOU TRULY HAVE A BUSINESS PLAN!!!"

" And the Lord answered me and said, write the vision, and make it plan upon tables, that he may run that readeth it. For the vision is yet for an appointed time, but at the end it shall speak, and not lie: though it tarry, wait for it; because it will surely come, it will not tarry." (Habakkuk: 2; 2,3)

A "tip-top-tight" business plan is composed of several intricate parts with various functions. In many cases, the task of writing a plan could take more than six-months or up to 100 hours to complete. However, you should not make a move toward starting your business until the information is completely compiled. This time allows you to fine-tune your ideas, test your assumptions, and help avoid potentially disastrous miscalculations, like selecting the wrong location, hiring the wrong personal, soliciting the wrong market, and the most disastrous mistake of all, undercapitalization.

"Where there is no vision the people perish"(Proverbs: 29; 18)

YOUR PLAN SHOULD BE COMPREHENSIVE AND INCLUDE;

Title page: Describe company name, logo design, date, month, and year.

Table of contents: List each section of proposed business plan.

Executive Summery: epitomize Company's present status and future direction.

Present Situation: specify company's market environment, products, services, product life cycle, pricing and profitability, customers, distribution, management, and financial resources.

Objectives: Illustrate your long-term business goals for up to five consecutive years. Accentuate the motivating factors behind you starting your venture. Indicate the method of how investors will receive a return on their investments.

Management: Outline the management organizational chart describing background and functions founders and key personal, responsibilities, experience and how they tie into your business plans.

Legal company description: State the legal form of you business, i.e. sole proprietor, general, or limited partnership. Subchapter S Corporation etc. Give a brief synopsis of your company's product /service. Explain why you have chosen this form. Elucidate who is involved with proposed company, development staff, founders, and key managers.

Market analysis: Describes the existing market place which you will introduce your company, products and services. Define market by product feature, lifestyles of target consumer, geographic location, season, etc. Describe how the market share is distributed among major participants. What are the share and loss trends? Summarize your view of trends and implied opportunities.

Customers: What types of customers are likely to buy your products or services? List demographics by age, income, sex, marital status, location, and occupation. Psychographics includes lifestyles, motives, and personal needs. List their interest such as sports, music, art, any hobbies etc. Gather information from industry reports census data, trade journal
studies.

Competition: Describe the competition in your field. List their location, products, and services, pricing, and how this information correlate with your business.

Risk: Outline the elements and the degrees of risk. Explain the rational behind why you or an investor should take such a risk. State how your business could be affected in its maturing stages in the case that new salons or product outlets should come into your market. How can your salon stay competitive during these stages? Indicate rather the market is wide open or have few competitors. Explain your strategy on how you will promote, distribute, and keep your products and services ahead of your potential competitors.

Marketing Strategy: In developing marketing profiles that could help assure long-term success, understand that it is impossible to serve every group. You must identify your target market and how the demographics will affect the buying habits of the consumer group that would most likely patronize your salon. In making this decision, consider the potential client's income, education level, age, ethnicity, and place of residence, gender, social attitudes, and marital status. Other indicators that could predict or significantly affect the public's purchasing habits, are, culture, personal attitudes, peer influence, and experience with similar salons or products. Once you have identified your target market, determine the size of the market, usually within a few miles radius. Also, in your plan, include newcomers, potential tourist, and the conventioneer trade; they expect to buy goods and services on their visits to your metropolitan areas. You can obtain this information from census data at the public library or chamber of commerce. Additional census information can be obtained at your local Convention & Visitors Bureau or by writing your local office of the Department of Labor " You must research your market to develop a strategy for your business"

Pricing & Profitability: How did you set your prices? What is this price based on? How does this price compare with your competition? Include price comparisons and reports in the appendix of your business plan.

Selling Tactics: Describe your methods of promoting your products and services. List the advertising mediums you plan to use. They may include: Radio, Television, Direct mail, Billboards, Flyers, Telephone, Internet, Print media, etc. State the purpose and percentage of clients you expect to reach by using each medium. Be sure the price and profitability justifies the cost of sales presentations, commissions, telephone, travel, and additional overhead.

Distribution: This area describes what channels are used to distribute your proposed business. Determining factors should include: customer profile, geography, seasonal concerns, efficient use of funds, and the feasibility of choosing these channels to identify products and services already on the market. Point out the primary means of distribution and how your products and services are distributed.

Advertising & Promotions: Describe the tools and methods used to increase the awareness of your potential customer. Point out your purpose to enhance, promote, and support the fact that your business will be sound. State your advertising and promotion objectives. How does these objectives fit together to optimize the impact your overall promotional campaign. Pinpoint your media strategies and objectives and spell out your advertising campaign. Present a preliminary media schedule and list publications, editorial dates, air times for radio or television commercials, when they will run and any special issues or programs that will enhance your ads. Be innovative, in addition to standard advertising practices; take advantage of trade and consumer programs that could add considerable recognition to your ad campaign. Press releases will boast new and innovative businesses at no cost. Include your budget and rational. Also, consider using specialty items that may include imprinted gifts like, coffee mugs, t-shirts, and other gifts and gadgets. (Place this information in appendix).

Pubic Relations: Introducing your venture to the public is one of the most important pieces of your business plan. Start by producing a complete company background as your primary public relations tool. This tool is designed to target editorial contact in the media, also effective for inclusion in press kits, dealer kits, and sales packages, and to communicate on a regular basis to public audiences; major trade, business, and local publications editorial staff. Include in your business background; overview of the market size, characteristics of your business, market needs in the current year, and project at least (60) sixty- months into the future. State the history of your experience, management philosophy, and brief outlines of top executives or business partners.

Financial Projections: The importance of this section is second to none, it is the single most powerful reason lending institutions even consider reading your business plan. A novice numbers person should not attempt this section alone. Supply your accountant with all the financial information needed to complete this package. (He/she will advise you on what's needed to complete this section).

Summary: What is your approach in starting your new venture? How much capital is required and how will this capital turn into profits? When is the venture expected to start profiting? Create a schedule for staring the business? Who is involved, their background and what role do they play. List where your clientele will come from, how you plan to reach them, and what percentage of the market will your product or service fill.

Appendix: The information contained in this final section should support the major points stated in your business plan. These items are used to develop your plan. The appendix is designed to assist readers in understanding the background of your plan and the basis of your rational and projections. Appendix is also used as a quick-find for instant reference.
 

"NO GOOD BUSINESS PLAN IS WORTH THE PAPER IT'S WRITTEN ON WITHOUT FAITH. TURBULENCE IS SURE TO VISIT EVERY NEW BUSINESS VENTURE. BE PREPARED TO STAND STRONG WHEN THE STORM HITS YOUR HOUSE. THIS IS ONLY A TEST. HOW YOU HANDLE THE TEST WILL DETERMINE IF YOUR BUSINESS WILL BE A SUCCESS OR FAILURE."


Now your map is complete.

For complete instructions on How to Own and Operate Successful Salons: Purchase the book ”Are You Running A Business OR Just Doin’ Hair”