Salon expert Liz McKeon explains how the road to a lucrative new year begins with a brilliant business plan
Business plans are like road maps; it is possible to travel without one, but it will only increase the likelihood of getting lost along the way. Entrepreneurs use business plans to help guide them. This is because a business plan will help you see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success.
Why a business plan matters
A well-written business plan is an important tool because it gives the business owner the ability to lay out their goals and track their progress as the business continues to grow.
Formulating a business plan should be the first thing done when starting a new business and is always necessary for attracting investors.
The primary importance of a business plan is to help the business owner make better decisions. The practice of writing the business plan annually helps the salon owner to articulate their vision in realistic terms and better determine if there are any gaps in the strategy for business growth.
The discipline of writing and updating your salon business plan is also to avoid making big and costly mistakes, as every section of a business plan can help spot some of those potentially critical mistakes before they arise.
Many salon businesses are created out of passion and while passion can be a great motivator, it is not a guarantee of long-term success. Planning how to turn that vision into a successful salon business is an important step between concept and reality. Your business plan can help to confirm that your idea also makes business sense. It can also help keep you accountable for your long-term vision and strategy. Sharing your vision helps ensure that all staff members are aligned with what you are doing and share the same understanding of your salon objectives. Having one in place allows you to easily share relevant sections with those you rely on to support the salon, including external professionals such as your accountant, freelancers, and mentors.
If you need to secure outside financing, such as from a bank, or are ever considering selling your salon in the future, you must be able to prove that your business is viable in the long run – your business plan is the most effective way of demonstrating this.
Writing a business plan can go a long way in helping you better understand your competition and the market you are operating in, demonstrating customer trends, potential business disruptions and other insights that aren’t always plainly visible.
Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Having to draw up revenue and expense projections, devising operational plans and understanding your market can all help reduce the risk factors of being a small business owner.
Approach your business plan as a living, breathing document. Ideally, create a master business plan, that is kept up to date based on your salon’s activity. You can then tailor that plan to a specific request or need without having to recreate it from scratch again.
Writing the business plan
The one universal aspect of every business plan is the inclusion of an executive summary, which is your document’s introduction to the reader, so be sure it is well constructed and start out with a compelling story.
Next, give a business overview, explain in detail your proposed services, products, and team requirements. Remember to outline your marketing and sales plans, and seriously focus on financials.
Whether starting off or securing funding, clarifying your goals, or getting your team on the same page, business plans are invaluable for providing a pathway to salon success. Develop a plan that serves you, your business, and its future growth. Keep it up to date and focused on the elements vital to your success, including where you’ve been, where you want your business to go and how you plan to get there.
Finally, a great business plan doesn’t need to be expertly written to be effective, but it should be written so you can expertly execute it.
Liz McKeon is a salon business expert