Now anyone who has sat through one of my seminars or utilised my salon consultancy services will know how big I am on planning. Very few small businesses are just instantly successful. Success usually involves some carefully thought through planning.

We have all driven through a new area believing we know our way and wasted time taking wrong turns. The smart thing to do would be to stop the car, look in the street directory and arrive at your destination via the easiest route. The problem is that we all think we know where we are going, we are in too much of a rush to stop the car and using a directory is such a hassle. The same analogy can be used in business planning. We know pretty much what we want to achieve in our heads, we get so busy working in the business and producing a plan is too difficult. Well it doesn’t have to be. Here are a few pointers to get your planning started whether you are a new business or have been established for years.

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The first rule is, keep it simple. Business plans can be developed by most small business owners or if you feel you need some guidance, professional help is available through specialist business consultants and accountants. Just remember it has to be simple enough for you to flick through almost on a daily basis.

Don’t make it too long either. If you are planning for the next five years break the plan down so that you are handling it one year at a time.

Don’t bind your plan. It is a working document. Pages need to be altered, deleted, thrown away or added as you work through your plan.

Finally, share it with a significant person in your business life who will continually remind you of the contents of your plan and help you to compare your achievement levels against your key performance indicators.

1. The hardest part of writing a business plan is starting. The easiest way to start is simply to state facts. The Executive Summary is a list of your business name, address, phone numbers, company director’s details, the nature of the business and whether you intend to trade as a sole trader, partnership, trust or company.

2. It is important to clearly think through exactly what you want your business to look like. Whether you have a new or existing business writing down the picture you have in your head of the business in one, two or even five year’s time is important. So the next section of your plan is The Business Profile. It is a description of the business in terms of services you will provide, product ranges, staff numbers, the presentation of the salon, equipment you want, professional advisors with marketing, accounting, legal, advertising and business management.

Describe the type of client you wish to attract and the catchment area for your advertising. Find out from your local council some basic demographics about your local population, What are the age breakdowns, average incomes, sex, value of homes, etc. I also like to add a Mission Statement in this section. A mission statement is a brief statement of intent. A declaration about the goals of your business. For example in my own salon our Mission Statement reads; “We are committed to exceeding our client’s expectations each and every time they visit our salon.”

3. Next is your Product and Services Analysis. It is time to really think through what you are going to offer your clients. This goes beyond simply stating the basics of facials and waxing. What are the industry trends that you want to utilise? For example will you have IPL, Light therapy, Micro-dermabrasion, a Spray tanning booth, Natural products, a Male range, an Infra Red Hot Box, Mineral Make-up? I look at what is being shown at expos such as Las Vegas or Excel in London to pick trends. However, you can read professional magazines or talk with your association representatives. If you do plan to utilise new ideas in your salon, then state which target group you are aiming at. This section of your planning is where you make an educated prediction about the breakdown in income or percentage of each of your services and product sales.

4. Another important aspect to planning is to conduct a Competitor Analysis. This part of your planning looks at what competition your business is exposed to. The aim in studying your competitor’s services, prices, customer service levels, advertising, team size and experience is to realise unique points of difference for your own business. You can take advantage of being the first with new trends, a different price bracket, unique retail products, specialised equipment, better trained staff…in fact, anything that will set you apart. Simply list each of your competitors and tabulate the things you know about each of them. Using this and some local demographic information you can select the target market for your salon’s future growth.

A worthwhile exercise is to conduct a SWOT Analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. First, list aspects of each of these four areas for your own salon. For example, your location may be a strength due to great exposure to passing traffic. However, the lack of parking around the salon might be a weakness. You might have exclusive access to a particular product or piece of equipment so this could be an opportunity, whereas a new salon opening locally might be considered a threat. After compiling a list for your own salon, try writing one for each of your competitors as well.

5. In a modern clinic a Marketing Plan is absolutely essential. There are many different ways to put a marketing plan together, but I find the easiest is simply to draw a time line of a year and break this down into seasons, months and weeks. Start by marking in activities for Christmas, starting mid November and extending through to Christmas and New Year. Then plan promotions for two weeks leading up to Mother’s Day. Mark in all public holidays and if you are in a tourist area add in school holidays as well. Don’t forget regional events such as Show Day or local racing carnivals. I then plan seasonal activities such as newsletters and VIP events.

Finally I fill in the gaps with promotions from my suppliers before throwing in a few of my own favourite advertising activities. Try to mix the format and medium of your advertising from mailouts and letterbox drops, to radio and TV, newsletters, and flyers, as well as the newspaper. Always have a way of measuring the costs and response rates so you can judge the success of each campaign. I believe that successful clinics market themselves continuously. They do not rely on their product supply company to provide all of their marketing materials, nor do they wait for their local media outlets to approach them with the latest special offer. Your marketing plan should reflect strategies that will attract your target markets. Basically you want to attract more new customers, retain more existing clients, have them visit more often and spend more each time they visit.

Your marketing plan needs to be flexible. Many of your planned activities will be changed to reflect the specific needs of your business throughout the year. For example if your statistics indicate that your staff are not conducting many pedicures then a special on pedicures might renew interest. Your marketing plan also needs to calculate break even and profit margins for each campaign you undertake. For example, a mailout will have a fixed cost of paper, stamps and envelopes that can be calculated. By the time you factor in wages, room use, cost of product and advertising, you may need 20 responses for that campaign to be considered profitable.

6. Next is the Operational Plan. The operational plan can be broken down into a number of smaller areas. First is a plan of your procedures and systems. Confirming appointments, rosters, rebooking procedures, book keeping, ordering stock, contracts, reception and so on. Then there is the plant and equipment plan. When have you planned to expend money on purchasing or upgrading everything from magnifying lamps to computer software. Workplace Health and Safety measures also need to be outlined including procedures for sterilisation, storage and client safety. The Operational Plan also anticipates future staff employment and up-skilling of current staff. A good way of demonstrating this is to draw an organisational chart highlighting levels of experience. Another area to consider is a physical layout plan. This is important if you are considering expanding your salon by adding rooms, removing walls, changing reception areas or re-arranging equipment.

7. Finally, a Financial Plan is required. Not enough time and energy is usually spent on this vital part of your business plan. I like salon owners to start with a projected cost analysis. Exactly what will it cost per hour to open the doors taking in all of your expected costs? Costs can include wages, superannuation, workers compensation, product, electricity, phone, mail, rent, loan repayments training, advertising, equipment purchases, petty cash, office supplies, your takings – anything to do with the cost of operating the salon.

Knowing this information the next task is a cash flow projection. Cash flow projections can be tabulated in either weeks or months and they simply predict both the salon income and the operational costs, determining a profit or loss for each period. In many salons, income generation can be quite seasonal with the winter months delivering lower profits than the higher income months of Christmas and Mother’s Day. These variations should be reflected in the cash flow projection. For new salons, or for the re-modelling of existing salons, establishment cost predictions are required as well. Architects, building, advertising, staff, product purchases, council fees and a whole range of incidental costs must be considered.

Now all of this sounds like a lot of work. But the better prepared you are for the future growth of your salon, the better the growth will be. Simply arriving each day and seeing what happens might be good enough to survive in a salon, but if you are serious about building your business and making money, then thorough planning is going to reap much better returns.