Spa or salon plan

Lesson Details:

Video Transcription: Some time ago I post a question in the course discussion for this course and I asked what business plan example would you like to see and people responded and one of the popular responses was two people asked I'd like to create a business plan for a new beauty salon brand and then that's Alessandra and then right after that Nasima said I'd like to see a business plan for a spa those would be somewhat of a similar type of business it's a local business so let's talk about how you would plan that to me it's a brick and mortar business so costs are going to be really important because many people never actually start this kind of a business precisely because the costs are large and to start there are a couple of costs that are particularly high the least in your area it's going to be really expensive right that's gonna be your consistent big expense and you want to also find the place with a high passerby foot traffic so people would see your signs you don't want to open your place in a play in a street that nobody walks around that's gonna be one of your main marketing long-term where are you located are many people in the neighborhood who are walking by seeing your space so you want to go around and you can either find like for lease signs on business office space if you see some businesses closed and it has a sign like oh you know looking for new tenants for at least and it's a business space in a high passerby foot traffic area call them usually the phone number is right there if you don't want to do this kind of research on your own you can contact like a local real estate office they'll know what the business listings are that are available so those are the two ways and then you literally schedule appointments go visit them look at the areas and see you know how big is your place potentially going to be in what is it going to be the cost of that real estate that's gonna be a consistent cost that you have to realize the next thing is employees so let's say for example if you are doing like salon or haircut place any kind of thing like this you have chairs the chairs represent like an employee can work there what's the finance per employee does the employee expect an hourly wage do they expect to just give you a little cut of their earnings so you can you can start to count every additional chair that's gonna be an additional cost in real estate for you and how many employees do you want was the potential that you want and what's the risk you want because of course you're gonna say I want great potential I want a million chairs right you want everybody in the neighborhood to come get your haircut but it's gonna cost you more money to start that and the cost might be at some point prohibitive.

Also it's hard to manage and also at some point there's just not enough demand in a neighborhood for a million chairs right so you have to understand how many chairs you can fit and count up the finances per additional chair let's say it's a barbershop type of place I mean I'm a guy so that's what I know so I know okay his barbershop has two three four chairs that it can be serviced at a time and everybody else is waiting so each chair has certain daily monthly finances and what happens if a chair is empty you're still paying for the real estate what happens if they're all full those issues after that there's legal and accounting costs they're not that great and they're typically just costs at the start you need to find how to register the business the basic accounting those things are not that expensive there may be some licenses and permits you might need in your local area you'd have to find that out with the local government that the lawyer can also tell you what what is necessary and there may be some remodeling so you might want to get quotes for remodeling like how much do these chairs cost how much does you know the initial like a little bit of tools and inventory cost on supplies can you find the place that used to be a salon because if you can find the real estate space to lease that used to be a salon or take over a salon a lot of the remodeling has already been done for you so it reduces those costs and that's what you have to do is sum up how much this is gonna cost me to start this how much is it gonna cost me monthly and that's how you'll know how much money you have to raise because all the planning in the world can start it until you die until you have the money and you need to come up with at least six to eight months of like maybe twelve months of runway before the business can become profitable because when you open the doors on day one you might have very few clients and you might be operating on a loss for a little while you ask how do your clients promotion for this kind of business is relatively easy fliers passerby foot traffic and of course local search if I'm looking for a barber shop and I'm walking around and or if I'm looking for a salon or a spa what am I gonna do I'm gonna go to Google and I'm gonna look for where the spas in my area buzz near me and you have to do that SEO to rank higher for a local businesses it's not that hard so those things they're easier the hardest part is understanding this and coming up with the money how do you come up with the money well you have a few fundraising strategies from savings from doing your own part-time work or full-time work and you're saving up or you can get a loan you can raise money from friends and family you can do like a little fund raising crowdfunding campaign you can do a lot of little things and add up the money and save save save so that you can eventually open this but how much do you need to save and raise well this is the process of finding out so that you're not blindly doing it and really start early in the fundraising process and the research process of this ideal space so that you are making progress all the time don't let this kind of a business be the kind of business you keep planning planning planning forever never start.