Plan for a Successful Salon Start
All of the greatest ideas conceived, at some point, still require the careful, and sometimes painful, process of putting numbers and ideas on paper. So WHY must we do this?
The process of building your financial forecasts and a development plan itself is a terrific learning tool to either prepare the potential salon operator to go into the business, or realize what the key areas to watch for in operating at maximum potential.
Up to date and accurate figures are critical in order for the spa to respond to the business needs. But even more importantly they are the guide that will help to reasonably predict what may happen in the future and thus helps in designing the path for the salon leadership to lead the company to a healthy long term financial position.
These are some of the fundamental issues that will be addressed before you should start to invest your hard earned money.
In the Beginning… Where to Start?
Starting up means planning and homework.
In the beginning stages of deciding to build, or buy, a salon, it is vital that time is taken to carefully consider some of the following items. Performing mindful analysis on key areas will drastically affect the decision making process and may well determine whether or not to go ahead with the dream as it looks today.
Not only will this aid in the financial planning process it will assist in closely defining the goals of the business and thus help create a clear vision to follow for all those who will join in making the dream a reality.
KEY AREAS:
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What kind of experience are you looking to create for your guest? What is the vision?
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Who is the guest? What do they “look like”? What are their demographics?
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Where does the salon (geographically) want, need, to be? Is it a new building, existing building, existing salon?
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Estimate Start up Costs
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Developing a Proforma
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Sales and Marketing Strategy and Plan
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Operations
All of these items require careful thought and consideration. If time is not taken to make these decisions the ability to forecast the success of the business will be limited.
THE EXPERIENCE
Are you creating a salon and spa, brand specific salon, resort salon? Is it a green salon, holistic, brand specific or somewhere in between?
The experience is important as it will impact who the salon is going to attract and what kind of physical space requirements and equipment the salon will require.
The salon may have a theme chosen for it. Is it east meets west? Trendy uptown? When this choice is made it will assist in determining all of the other choices to be made that will affect the guest visit. Things they see and touch, the treatments, the details that will evoke feelings and emotions, and thus create a unique experience that will differentiate this salon from the competitors.
If you cannot differentiate yourself from your competitors, whether physically, your treatments, or your service then why will they want to come to your salon over somewhere else?
THE GUEST
Take a close look around and see where “your guest” lives. Is it a neighbourhood salon looking to attract the local residents to walk on over or is it a specific salon location looking to have the world’s rich and famous find it on the coast of some tropical land? You need to know, or at the very least, try to predict, the demographics of your guests.
Demographics are:
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Socioeconomic groups, characterized by age, income, sex, education, occupation, etc., that comprise a market niche.
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The characteristics of human populations and population segments, especially when used to identify consumer markets:
The closer it is identified who they are it can then be determined where they are and then the most important, how to get to them. This is essential for determining the marketing plan.
Now, depending on the experience of the development team, and target guest, the next stage in preparation can start taking shape. These two factors, the guest and the experience, will help in planning the spatial needs.
THE SPACE
LOCATION
First and foremost, location, location, location. It is an old adage but still has great truth to it. By finding a fit between the spa experience, and the target guest, specific target locations can now be considered. Or at least where the salon can be located to achieve the greatest possibility for success. What is the population? How much competition is in the area?
SIZE
How many rooms? Chair spaces? Sinks
What will happen in each treatment room, what is the purpose?
What are the common areas needed?
What about reception, storage and staff areas?
How much space will be needed to deliver the experience you have planned on?
OPTIONS
Once you determine how much space is required you need to determine how is the space going to be created.
Is it better to build, or to buy, or to rent?
Can it grow and expand if needed?
These questions are interrelated to the location and size as they play key roles in the cost of the project and the ability to attract the guests you need.
These are the difficult decisions that will be faced, and need to be resolved, as you collect all the information necessary to determined whether or not this dream is feasible.
START UP COSTS
This is a detailed outlook of what is required to get the salon up and running. A review of everything from development costs, construction costs, furnishing and fixtures, pre opening costs, including training and marketing all need to be considered. Establishing all of these items are the first step is deciding whether the business is viable, or not. It is not uncommon to see ranges in start up anywhere from $200.00 – $550.00 per square foot.
PROFORMA
This is the most often forgotten, or neglected, area of spa development. Many future owners and operators fail to invest the time and energy required to complete a thorough proforma. It is easy to “fall in love” with the idea of creating a new salon. However it is crucial to look at some realistic numbers to determine if this concept will make a profit.
Proforma means “for form’s sake”. So for our purposes this is giving form to the salon project before it exists. Really this is the first close look at a rough “estimated” budget. With a combination of some knowledge, experience, and/or advice, there will need to be an estimate of what level of revenue the spa can generate and then what will be the proportionate share of the expenses.
Labour is, and always will be, the single greatest expense as the spa experience is generally being a one-on-one personal practice. The planned compensation structure will be critical. Learn what salons of a similar size and scope are operating at
Be balanced and realistic. Good decision making here will serve the salon well.
Sales & Marketing Plan
SALES – How is the salon going to be sold? What are the key messages the team will convey to the potential guests in hoping to entice them to visit the salon. The training of the team in educating the consumers on why they should choose this salon rather than the multitude of others is essential. Are you focusing on local business or corporate business? What is your sales strategy?
MARKETING – This area includes everything from the production of collateral, brochures and newsletters, to website, signage and videos. Public relations and strategic alliances are wonderful advocates of the salon business and will deliver results for the salon. Build a plan and start having your awareness begin before the salon is open. You need to have guests coming to your door the first time it opens!
For a new salon operation the amount of investment here is more expensive in the beginning as this process is launching something new and requires awareness by the spa goer marketplace but should become more efficient and economical as time passes. Never look too closely at this expense line as a place to cut. It will always be the lifeblood of the business as the salon will never have “too many” guests!
Operations
The salon has all been created on paper but services still have to be delivered, day in and day out. Spending time on looking at all the smaller costs required to convey the desired experience to the guest will have long term benefits to operating at maximum efficiency both from a service and cost basis.
In Summary
By reviewing each one of these keys areas you will have a strong basis from which to make your decisions. What you ultimately decide to do may not look exactly like you first thought but you will know that you are now taking an informed approach to starting up your salon.
In the end all this careful planning and homework will not guarantee you success but without it you are just hoping that great idea turns out as good as you thought.
Need helping starting your salon? Contact Rob at help@spaformation.com