The importance of a business plan for the new year

By Liz McKeon on December 14th, 2023

When you think of a business plan, do you think of something you make when you first open your business, or something that you continually evolve and refer back to? Business guru Liz McKeon is Founder of the International Salon Business School, bestselling author, speaker, salon coach and trainer, and she tells us why this is the perfect time to revisit and refine your business plan.

A business plan for salon owners is a document that lists the objectives and goals of the business.  It includes information on how the salon will specifically achieve its goals, including marketing activities and sales.  Ideally, it will also clearly outline each individual goal for the business, including where and how funds will be generated, how staff will contribute to the goals and ultimately how the business can profit in the coming year.

Your business plan will help to pinpoint specific goals, tasks and the steps you need to take. When creating a business plan, you create the opportunity to consider the requirements and potential of your business for the coming months and year.

The main reasons why it is important for entrepreneurs to have a business plan include:

When starting a new salon

In addition to coming up with a business idea, you also need to firm up on the specifics such as what services or products you will sell, your location and who you want to work on your team.  A business plan helps provide guidance in the start up process, helping to avoid costly mistakes along the way.

To conduct the necessary research

Writing your annual business plan requires that you carry out the necessary research, particularly if you’re planning to expand or take your business in a new direction.  By writing out the details and finances of the new plan, you can determine if your ideas will be profitable.  This part of the process includes defining your market, pinpointing who your customers are and how you will reach them. If you’re already an established business and you want to sell your new services to your existing clientele, use them for market research! If the numbers don’t add up or the plan isn’t viable, this is the time to find out – while it’s still just on paper!

To evaluate the competition and find your ideal clients

By identifying competitors and what they are not providing, you can predict how to service your market better and continue to reach your ideal clientele.

Set objectives for the team and managers

Setting and measuring objectives will ensure that all team members and managers are clear on their roles and responsibilities.  This can also help you recruit the right staff for your salon by setting clear expectations and objectives.  You can use this information to help your induction and training new employees and managers.  A business plan sets the expectations of the salon from the beginning.  When you change and update your goals, your business plan can help share these new objectives, providing structure and accountability for everyone on your team.

Set goals for you

Setting very clear goals is critical for you as the business owner.  You can use your business plan to list the specific goals you want to achieve, along with target dates.  This provides you with a guide to structure your daily responsibilities, and provides you with your accountability checklist.  Your business plan gives you a framework to follow to keep your business moving forward.  Otherwise, there is always the danger of getting consumed with day to day challenges, leaving no space for business growth.

To determine when new team members are needed

To expand your business and increase revenue, you will need additional team members to meet demand.  But, hiring people too soon will reduce your profits.  Your business plan helps you determine the correct time to bring on additional staff.  It can also help to clearly define duties, expectations and responsibilities for each position.

Helps to predict problems and provides guidance during difficult decisions

Your business plan should also help you predict potential problems, such as seasonality, changing trends or customer habits.  With a business plan, you will be able to prepare and overcome these challenges ahead of time.  

Part of being an entrepreneur is dealing with difficult circumstances such as employee conflict, legal issues or even a pandemic! A clear well written business plan will help you to deal with these issues, as you can remain focused on the purpose of your business and stay on track with your goals.

To determine the success of your business

Once profits begin to increase, you will need to decide how best to spend them.  Listing your cash flow plans in your business plan provides clarity.

The goal of entrepreneurship is to own a financially successful salon.  While no business idea is guaranteed, having a clear business plan in place increases your chances of success.  Allocating time to return to your business plan periodically will help to refocus you on your goals and mission statement of your salon business. 

Visit Liz’s website at: www.lizmckeon.com

Liz McKeon

Liz McKeon, a renowned Salon Business Expert, author, speaker, coach, and trainer, started her career building and exiting beauty businesses. Over the past decade, she's become a trusted go-to for business growth, transforming clients' ventures and lives. Liz's success strategies feature in global hair, beauty, and spa publications. Renowned brands and corporations hire her to train teams, raise revenues, and enhance profitability. With a stellar record, Liz empowers business owners as a beauty expert, coach, trainer, and mentor, driving profits for thousands.

All articles by Liz McKeon

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