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Don’t open your salon without a plan!

February 24, 2015
Spa Business Plan
Profit and Loss Analysis

Salon and Spa Business Plan

Do not sign a lease or incorporate a business with a partner before you’ve taken care of the most critical aspect of starting a new business; writing a business plan. Compiling a business plan is a daunting, soul searching exercise that requires structure, foresight and a great deal of stamina. Without one, it is like writing a final exam without ever having done your homework; only with far greater consequences. Below are just a few of the components you will need to address in a well laid out business plan.

Your Unique Selling Position
Address how your goods and/or services will appeal to customers. How will your salon/spa products and services make a difference in the lives of your customers? How will you be remembered? What does your business stand for; its mission and values? If your business is not unique enough to stand out from the fray, your chances of success are greatly diminished.

Market Analysis
Basically, your market research helps you understand your customer’s needs so that you can offer a product or service that precisely meets those needs. You’ll need to provide information such as your target market, customer demographics, competitive environment and market condition.

Key Competitive Information

Business Concept Development

Business Plan Idea Generation

Assess the top 10 competitors in your business area and provide detailed information on their strengths and weaknesses. Then explain how you intend to improve on what they’re doing. Be honest; they can’t all be treating their customers badly or providing lacklustre service. Anyone that has been in business for more than two years is doing something right.

Partnership and Legal Structure
You will need to find a good and unique business name (one that is available as a domain name as well), file for your GST and employer numbers, and ensure that you compile all the permits and certifications you will need from all levels of government to legally run your business. If you are forming a partnership, it is of the utmost importance that you set up a partnership agreement that details the tasks, duties, and responsibilities of each partner, outlines the shareholding status of each, lays out how the company valuation will be established, sets the rules and conditions for the sale of shares, and describes the course of action for those situations where you
can’t agree. Once everything is compiled, ensure all legal documents are vetted by a lawyer or notary.

Human Resources
Your business plan should include a section that outlines how you plan to recruit and maintain your employees, what your pay structure will be, the kinds of incentives, social benefits, insurance, pension plan, discounts, and the education and motivational programs that you will offer to maintain and grow your staff.

Location, Location, Location
The physical location of your business should be based on extensive research, your budget and your business model. Your business plan should lay out why being located on a specific street or in a specific neighbourhood is so important to the success of your venture. Can your new business survive on the second floor or just around the block for half the rent, less walk-in traffic and less visibility?

Key Financial Data
In this section, you will need to create several tables, the first one outlining your start-up costs, including: rent deposit, renovation costs, location improvements, décor, furniture, furnishings, technology, equipment, signage, inventory, marketing, cash reserves, etc. The second table will be your Start-up P&L and operational budget for at least the first 3 to 5 years. You may want to also include a month by month revenue and expense projection table. The ultimate goal is to determine the exact amount of money you need to finance your project and where these funds will be coming from.

Writing a business plan is a daunting task that is better not done alone. At Solnyx Consultants we have helped numerous salon and spa owners build their business plans; maybe we can help you too.

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