Having a well thought out and quality business plan is a key component to running a hair salon, just like with any small business. Whether you are opening a new salon, or have been operating one for years, this important document is used to help guide your business to success.
At the beginning of your business plan, you have the executive summary. Your executive summary gives the reader a glimpse into what they can expect in your business plan, as well as highlights the essential components.
To write an effective executive summary for your hair salon you must include:
- Business opportunity
- Strategy to capitalize on the opportunity
- Business model
- Target market
- Financial plan
- Owners & key staff
- Implementation plan
What is an executive summary?
An executive summary is a clear and concise summary of what the body of the business plan will lay out for the reader. It is a summary of:
- What your business is
- What your plan is
- How you’re going to accomplish that plan
For your hair salon, it is especially important to focus on what services you will provide, what the local competition is like, and what makes your salon unique.
Having these sections will entice your reader to continue with the rest of the document. This is crucial for start-up hair salons looking for financial support. You need to paint a clear picture of why your salon is worthy of their money and give them confidence that you will succeed.
What to include in your executive summary?
Depending on what stage your hair salon business is in, you will have a different executive summary. If you are a start-up cleaning salon your executive summary (and business plan) will likely be used to apply for financial assistance or bring on investors.
If you have an established salon, your executive summary is going to show the reader your past accomplishments, current state, and goals for the future.
Start-up salon executive summary
As a start-up salon, you don’t have much tangible evidence of why or how your business is going to succeed. Since you don’t have proof of success, you must write a quality executive summary. Follow the template below to write a powerful executive summary that will grab your reader’s attention and allow them to see your vision.
Your introduction is a basic 1 to 2 sentence section that gives the basics about your business.
A Cut Above is a full-service, premium salon in the Denver, CO area.
The business opportunity should explain what your business will bring to the market that is different from the current competition and how your salon will be profitable.
A Cut Above offers a high-end salon experience for the wealthy residents in East Denver. We see a need for these services because there is little to no premium salons currently operating in this part of the city.
How you will capitalize on the opportunity
After you’ve explained the business opportunity, it’s time to show how your salon will capitalize on this opportunity to become a profitable business.
To satisfy the needs of these customers, A Cut Above will offer premium services and top-of-the-line customer service that our competition currency does not provide. To compensate for our premium experience, we will charge much higher rates than our competition. These higher rates will not only increase our margins but will also differentiate our salon and make our customers feel like they are paying for the best salon service possible.
Your business model gives the reader more detail about the services your salon will provide and how it will be run.
Our premium salon services will go above and beyond what our competition is offering and what our customer is expecting. Giving them an exciting and satisfying salon experience.
Your target market is the specific group of people you are going to target as your main client base. Narrowing down your target market helps you develop marketing material specific to your ideal customers.
Our target market is females between 35-55 that have an annual household income of over $200,000. This market has an image they want to portray and is willing to pay a premium price for exceptional service and care.
This section outlines how you will reach your target audience and how that message will persuade them to frequent your salon.
A Cut Above will be positioned as the most exclusive salon in the East Denver area. We will go above and beyond to ensure our customers have the best salon experience they have ever had while they are at our salon.
In this section, you give a brief overview of the competition in your local marketplace. You can also include unique factors that differentiate your salon from the others.
After researching the marketplace in the area, we found that most salons were focussing on saving customers money, or offering only a handful of services. This allows for an all-inclusive, premium salon to target wealthy clients who want the best salon services money can buy.
Your financial plan gives basic sales estimates and key financial numbers. If you are asking for funding you should detail how much you are needing and a plan to pay it back.
We are asking for a $50,000 initial investment to purchase specialized equipment and a quality facility. We project $125,000 in sales the first year at a 30% margin. We then expect sales to increase 50% in year 2, and 15-25% each year until year 5. Given these projections, we would plan to pay $10,000 back year 1 and $20,000 back year 2 & 3, with interest.
Owners & Key Staff
This section outlines the key employees and any plans to hire more employees.
Sydney Williams is the owner and lead cosmetologist at A Cut Above. Before start-up, she plans to hire 3 licensed cosmetologists, with plans to hire 2 more employees each year to keep up with demand.
Your implementation plan is an estimate of how long it will take to launch your business as well as reach your goals.
After receiving funding, the salon will be ready to open in 3-4 months. After year 1 we will have made enough to pay our employees, while also paying back some of our debt and making some minor improvements. Year 2 we will be able to turn a larger profit, hire more employees, and service more customers. After year 3 we will be debt-free and able to make major upgrades to our salon.
Established salon executive summary
If you are an established salon, your executive summary is a little less about persuading your reader. Detail your past accomplishments, the current state of your business, and your goals for the future.
Your mission statement gives the reader a clear understanding of why you own and operate a salon and what motivates you.
A Cut Above is the most exclusive hair salon in the East Denver area. We pride ourselves in providing top-of-the-line salon services so our customers can feel confident about themselves and look amazing while doing it.
Your company information is a 1 to 2 sentence history of where your salon started and where you are today.
Sydney Williams started A Cut Above in 2015 after working as a freelance cosmetologist for 10 years. The salon quickly grew to be one of the most sought after salons in the entire Denver metro area.
Unique business advantages
This is where you can talk about what makes your business unique and how that translates to competitive advantages in the marketplace.
We offer an all-inclusive salon experience with over 20 unique services that our competition is unable to offer. This gives us a leg-up on the competition and allows us to service our wealthy customer’s unique wants & needs.
This lays out your current financial state
We have had an average increase in gross profit of 25% over the past 5 years while keeping our margins at a consistent 30%.
Your goals show your reader what your plans are to expand or create sustainability for your salon.
At A Cut Above, we want to expand slowly so we don’t lose sight of our main goal, which is to offer the best salon experience to all of our customers.
Interested in writing a marketing plan? Check out our article HERE.
Tips for creating your perfect executive summary
Keep it concise
Your executive summary is meant to be as concise as possible, there should be no rambling or extra wording if you can help it. This is challenging for some business owners because there is so much about the business that you want to share. Keep these items for the body of your business plan.
Your goal with your executive summary is to lure your reader into reading the entire business plan. This means it needs to be only essential and exciting information, so your reader gets an understanding of your business and is excited about your potential.
Your business plan should be 1 page or less.
Use professional, confident language
This is especially important if you are a start-up salon looking for funding. Keep your language professional, but you also want to let the reader know you are confident in your ability to succeed and they should be too.
Write it to your audience
Tailor your message to the specific audience that you are writing to. If you are writing to potential investors, your message will be much different than if you are writing as an established business.
Revise, refine, review
Your executive summary is such an essential part of your business plan it is well worth it to revise it multiple times.
Reach out to friends, family, and professionals to help you polish and refine your executive summary. It will get tiresome going over the same couple of paragraphs over and over, but it will be well worth the effort to help your salon take off.
Should I include potential plans in my executive summary, even if I’m unsure about them coming to fruition?
No, your executive summary should only consist of the essential items regarding your salon. You will have time to explain potential plans in the main part of your business plan.
How do I develop accurate financial projections?
To calculate accurate financial projections you should break everything down as much as you can. Things such as:
- Rates for services
- Simulate multiple scenarios (Great, average, and poor)
- Identify your assumptions
Once you break these down into smaller, more manageable bits of information you will be able to come up with a more accurate financial forecast.
Looking to start your own Salon? Get the documents you need to get organized and funded here.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.