BusinessHABOasis nail salon: The first step in getting your nail salon off the ground is to sit down and develop a thorough business plan. Before starting, be sure you’ve taken the time to consider the vision you have for your business, what you hope to accomplish as a business owner, and a basic plan for what this journey will entail. With those things in mind, it’s time to dive deeper into the details. This guide is designed to take you to the next phase in preparing to start your nail salon business.
Read on: 22 Tips to Build Good Organic Nail Salon Business
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1. Do a good market research
Understanding your market is an essential part of starting and maintaining a successful business. This includes getting to know both your target customer and your major competitors as well as learning all that you can about the nail salon industry in general. If you need help branding your nail salon, try using our Free Nail Salon Logo Maker. Our free tool will help you brand your nail salon with a unique logo to make your small business stand out.
2. Know your target customer
On the surface, identifying your target customer may seem simple. At the most basic level, a nail salon customer is anyone looking for nail services. However, true success comes from knowing not the target customer of a nail salon, but of your nail salon.
During the first phase of your business planning, you spent some time considering what type of salon you hope to open and who it will cater to. At this phase, it is time to deal with the specifics.
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An excellent way to approach this step is to create a profile or persona of your ideal customer. Consider the age, location, gender, income level, and other demographic details about who you think will be frequenting your salon. By doing this you can most effectively craft your design, atmosphere, marketing, prices, products, and services.
Some important questions to answer when establishing your target customer base are:
- How many people in your area fit into this customer base?
- What drives their consumer decisions?
- Do they need your services?
- Can they afford your services?
- How do they consume media and marketing?
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3. Know your competitors in the market
Just as important as understanding your customers is understanding who else is trying to attract them. Knowing who your competitors are, and what they offer, can help you make your products, services, and marketing stand out. It will enable you to set your prices competitively and help you respond to rival marketing campaigns with your own initiatives.
It is important to remember that competition can come from a number of places. The first stage of your competitive research should focus on identifying competing nail salons in your area. Look to local business directories, trade organizations and events, advertisements, and basic online research to develop a better understanding of what businesses and products exist in direct competition with what you hope to offer.
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4. Next, take a closer look at how they do business.
Compare prices, services, staff size, brand design, and media and marketing. Much of this information can be found by simply visiting your competitors’ websites or following them on social media. To dive even deeper, book a service or two at some of your competing salons. While there, pay close attention to the quality of their customer service, the wait time for an appointment, how busy their salon is at a given hour, how many people are working, and the skill of their technicians.
Throughout this process, make note of what aspects of their services you’d like to adopt and what things you know you can improve on. Consider what marketing tactics appear to be working for them and what falls flat.
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5. Finally, do not forget about less direct or obvious competition.
The explosion of multi-level marketing businesses means competing not only with other brick and mortar nail salons, but also a range of online businesses marketing directly to your customers in the comfort of their homes. Research what nail products are available through these companies and how you may be able to offer similar products or services in your salon.
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6. Understanding your industry
Understanding your industry as a whole is just as critical as knowing your local market. This information can help you predict your profitability and growth over time as well as how to effectively capitalize on industry trends or innovations.
The nail salon industry is fairly stable, with an annual growth rate of around 7.5% over the past three years. In 2019, industry sales were $5.9 billion dollars, with the average sales per company around $200,000. As a discretionary service business, nail salon profitability will often hinge on the economy at large. During economic downturns, demand for non-essential services such as manicures and pedicures will fall. As the owner of a nail salon, you should be prepared for these economic ebbs and flows.
7. Get the Product/Service
With an idea of who your ideal customer is and where your salon will fit in the local market, you can begin to consider what services you’d like to offer, any products you hope to sell, and how to price these selections.
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8. Get to know the types of services your will offer
A nail salon can offer anything from basic manicures and pedicures to a full slate of personally crafted specialty services. To begin, sketch out a list of services you hope to offer based on the type of salon you are opening. Start with the basic categories of manicure, pedicure, and artificial nails and build your list from there. This initial list will look something like this:
- Manicure
- Pedicure
- Artificial Nails
- Acrylic Overlay
- Dip Powder
- Gel (with or without UV curing)
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The specific services you offer will depend on your salon’s style, atmosphere, and aesthetic, but should also strongly take into account the information you gain during the market research phase of planning. Look closely at who uses salon services in your area, what services are most popular, what your competition offers, and what gaps can be filled.
9. Focus on both the service and the experience
A nail salon in a small college town will offer services and specialties different from one located in an upscale city centre, but that does not mean you can’t put your own personality into your salon. One of the best ways to do that is to focus on both the service and the experience. Consider how you can transform a manicure or pedicure into a unique spa experience for your clients. Services falling under the manicure category can include anything from simple polish or French manicures to paraffin wax treatments and aromatherapy hand massages, while pedicures may include a hot stone massage or callus treatment.
10. Offer additional services
One of the most appealing aspects of opening a nail salon is that changing and adapting your services comes with low overhead costs. As you begin seeing clients and getting a feel for what types of services they are requesting, what style of artificial nails they prefer, and which technicians are most in-demand (and why) you can further tailor your offerings to meet those demands.
Finally, many nail salons offer additional services, such as waxing and false eyelash application. Keep in mind that as you expand your offerings your technicians may need to be specifically licensed to perform these new services.
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11. Offer products for sale
Offering products for sale in your salon is an excellent way to add to your profits. At the very least, most salons will sell the line of nail polish they use on their clients. Other popular offerings include hand and foot care products, cosmetics, fashion accessories, and gift sets.
Your product offerings should stem directly from your available services. Like your list of services, your selection of products will likely evolve over time as you learn the preferences of your clientele.
Read on: 21 Tip to Open the Best Nail Salon Business
12. Establish reasonable prices for your services
Pricing your services right is a critical factor in the success of your salon. At the most basic level, price setting is a product of supply and demand. As with each factor in your planning, your market research should be the first place you look for information on how to properly price your salon services.
If you set your prices too high above the average rate in your area, you risk pricing out your target customer base or driving them to your competitors. If there is a great deal of competition in your area, consumers will have enough options to choose a lower price for comparable services. Even if you are the only salon in town, however, your prices can still only go as high as your customers can reasonably afford and are willing to pay.
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On the other hand, pricing your services too low also comes with a number of problems. If your services are priced too far below average you risk inviting a higher demand of clients than you can handle, leading to long wait times for appointments or rushed services, both of which will turn people off to your salon. Additionally, low prices can lead to lost revenue or a price war with other salons in your area that can put you out of business.
Your prices will ultimately need to be high enough to cover your expenses and turn at least a modest profit.
Beyond the supply and demand curve, however, there is a strong psychological factor involved in pricing. It has consistently been shown across industries that consumers use the price of products and services to help determine their quality. For this reason, people will very often respond more favourably to higher-priced items, even when identical products are being compared.
If you consider all of these factors, you should be able to establish reasonable prices for your services that can be tweaked up or down as your business develops until you find your sweet spot.
See also: 29 Tips to Open a Profitable Organic Nails and Spa Beauty Salon
13. Get a good location
Finding the proper space for your salon will have a big impact on upfront and ongoing expenses as well as the overall success of your business. Because the location of your salon is one of the most important decisions you will make, be sure to set aside enough time to visit many locations and consider all of the following critical factors before settling on a space.
14. Get Day One Employees
Unless you are starting a small at-home salon or a one-person mobile salon, you will need to hire at least a handful of employees ready to work from day one. At a minimum your start-up staff should include one or more technicians to perform salon services, a front desk receptionist to greet clients, answer phones, and make appointments, and someone to manage the day to day business functions of the salon. You may choose to take on one or more of these tasks yourself, but will not be able to handle all of them on your own.
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15. Learn about hiring
To get a rough idea of who you’ll need to hire, think about how many manicure and pedicure stations you hope to have in your salon, what additional services you plan to offer, and how much you can afford to spend on your staff’s wages. You can also begin a preliminary list of qualifications you will seek in prospective employees and how you hope to conduct the interview process.
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16. Get the best training
This first core group of employees will be a more integral part of your business’ success than future hires. For this reason, hiring the right people and developing a training program that gets them invested not only in their job but in your business as a whole can make all the difference. Start to think about the key skills you’ll look for in your employees and how you can hone these skills through proper training. Consider also, what type of customer service environment you hope to create and how you can instill your values as a business owner in each person you bring into your venture.
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17. Get Permits/Licensing/Insurance
Before you get started, be sure you understand what permits, licenses, and insurance are required to keep your business compliant with state and local regulations.
In general, most states require that businesses be registered. This involves forming your business entity, be it a sole proprietorship, partnership, LLC, or corporation, through the state government where you plan to do business. Learn how to form a business in 6 easy steps.
Business and professional licensing requirements vary by state, but it is common for nail salons to require both a business license and a cosmetology establishment license before beginning operations. All states require that nail technicians complete a certain number of hours in cosmetology school to be eligible for work in a salon. Your state government’s website can direct you to exactly what is required.
Finally, insurance is critical to protect yourself and your business and is required by most states. To start, it is recommended that you purchase at a minimum, general liability, professional liability, worker’s compensation, and property insurance.
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18. Get the marketing strategy
At this point, you should feel confident about your business goals, your target customer, and where your business is likely to fit in the overall industry and marketplace. With these things in mind, you should be well equipped to begin considering a marketing strategy. To do so, there are a few things to consider.
19. Know how will position yourself in the market
With all of the information above in mind you should now be well equipped to understand where your business will fit in the market. Some questions to answer at this phase include:
- Will your nail salon be the premium choice in the area or offer a lower price option to customers currently priced out of local salon services?
- Is your salon a quick and convenient lunch-break stop or does it offer a more luxurious, personally tailored service than your competitors?
- What is the story behind your business and how will this help you connect with your customers?
- What value does your business add to your community?
The answers to these questions should be the jumping-off point to developing a broader marketing strategy to effectively reach your target customer base.
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20. Know how you will get new customers
Attracting customers is the most basic goal of a successful marketing strategy. As a direct business-to-consumer industry, your marketing will directly target your customers. To do so you’ll need to know where your customers are and how to reach them.
To start, think about which major marketing devices will work best for your business. These include:
- Digital
- Social media
- Radio
- Television
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Which of these tools you use and how you use them will depend on the results of your market research. Consider some of the following questions:
- Where do your target customers spend time, both on and offline?
- What other local businesses do they frequent?
- What social media platforms are they most likely to use?
- What, if any, print media are they reading?
- Do they listen to traditional radio or stream their music?
- Are they likely to have cable or do they primarily stream their media?
The answers to these questions will depend significantly on the demographics of your target customer. Finding accurate answers will save you a tremendous amount of time and money and get your business off the ground much more quickly.
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21. Get to know how to get Customers return
Although new customer acquisition is an essential part of any business plan, understanding customer retention is absolutely critical to your success. No amount of effective ads can replace the value of building a loyal customer base that will return again and again. Return customers are also likely to provide you with word-of-mouth marketing, giving your business an additional cost-free boost and allowing you to scale back on your overall marketing expenses over time.
Customer retention is often a natural product of doing good business, but that doesn’t mean you should take it for granted. Consider your entire business plan and how each facet of it can help you build effective communication and strong connections with your clients. Staying active on social media, reaching out with new product offerings or promotions, streamlining your appointment system, and simply providing stellar customer service can all keep your clients coming back for more.
22. Plan ahead
Planning ahead is critical to any business, but these plans will not come to fruition unless you have the funds to put them in motion. Before you can begin to fund your business you’ll need to have a clear picture of what you need to get started. Potential lenders and investors will want to see a solid and realistic budget before committing funds to your project.
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23. Get the Equipment and supplies
Your initial purchase of equipment and supplies should include everything you need to set up and stock your salon. This will include:
- Administrative equipment such as a point of sale system, register, phones, and a reception desk.
- Reception furniture such as chairs, couches, tables, lamps, and other furnishings; shelving or cases for retail products; laundering equipment.
- Salon station equipment such as manicure stations, pedicure stations, sanitation stations, nail drying lamps, nail polish racks, and any other manicure and pedicure supplies you want to have on hand.
You will also need to budget for your initial salon inventory. This includes all of the nail polish, lotions, cleaning and sanitation products, and other consumable items you will need on day one.
The cost of these items will depend on both the size of your salon and the style you’re looking to create. Manicure and pedicure stations, for example, can range anywhere from $200 to well over $1000.
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24. Get Salon insurance
To get the best price on business insurance, shop around for bundle options that include all of the policies you’ll need for your business. While business insurance costs vary significantly based on industry, you should expect to spend a few hundred to a few thousand dollars to get your policies up and running. CW Insurance offers a broad range of business insurance options.
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25. Know the ongoing expenses
Once you’ve gotten your salon up and running, you will face a number of ongoing expenses. You should not, however, wait until that point to plan for these costs. Your salon’s revenue will ideally cover your expenses moving forward, but you should be prepared to cover at least part of your ongoing costs over the first few months as you get your business off the ground.
26. Know the rent and utility bills
Your electric, gas, and water bills will depend on the scale of your business, the type of equipment you use, and where your business is located. Unless you operate a large-scale salon with the highest-tech equipment, your utility expenses should not exceed a few hundred dollars per month.
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27. Get the Ongoing inventory
After your initial inventory purchase, you will need to restock your supplies on a regular basis. If you are starting your salon from scratch, it may take a few months to determine how quickly you run through your supplies, so it is important to have extra money set aside initially for this expense.
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28. Get financial projections
- Prospective profit/loss sheet: This summarizes your revenues, costs, and expenses incurred during a specific period of time. It shows the ability of your business to generate profits by increasing revenue and reducing costs.
- Prospective cash flow/budget: This shows how money will come in and go out of your business. This will indicate when your expenses are too high and help you determine if you should arrange short term investments to deal with cash flow surpluses. It will also highlight how much capital investment your business will need.
- Prospective balance sheet: This indicates the future financial health of your business. Using your profit and loss and cash flow spreadsheets, you can project what your balance sheet will look like at the end of your first year.
- Break even analysis: This indicates when your business will be able to cover all of its expenses and begin making a profit.
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29. Complete your business plan
If you’ve made it this far and are ready to get moving on making your business a reality, https://businesshab.com/keep your momentum going by continuing on to our guide to developing a Profitable Oasis Nail Salon business.
30. Get little things
Finally, don’t forget the little things. With so many big things to worry about it’s easy to overlook the simplest items. When it comes to supplies, consider the following:
- Floor mats
- Coat Racks
- Wet floor signs
- Open/Closed signs
- Sign-in sheets
- Bathroom cleaning checklists
- MSDS sheets
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Also consider any plans and procedures you may have overlooked. This should include everything from what to do when a technician calls out sick at the last minute to critical emergency plans such as chemical clean up procedures and a posted fire escape route. This is also a good time to be sure you and your employees have all reviewed OSHA’s guidelines for nail salon workers. This should be a celebration of your business that gets prospective clients excited about giving you their business. Prepare as much as you can, but don’t forget to enjoy yourself and take pride in your amazing accomplishment.
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