Strategic Planning for Salons & Spas

5 minute read

Creating and following a strategy is essential to business survival, let alone success. Without a strategic plan, it is easy to get complacent and to fall behind the competition. Alternatively, you may spread yourself too thin by trying to do everything, even if it does not make sense for your salon or spa.

Business and Industry Analysis

The first step in building a strategy is to gain insight on your company, your competition, and the environment in which you operate. In The Art of War, Sun Tzu says:

So it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss. If you only know yourself, but not your opponent, you may win or may lose. If you know neither yourself nor your enemy, you will always endanger yourself.

A SWOT Analysis, which identifies strengths, weaknesses, opportunities and threats, will help you in this stage.

Strengths and Weaknesses

These are the elements that you have a direct influence on and can change. Strengths include how you differentiate yourself from competitors whereas weaknesses are the things that hold you back.

Think about your salon or spa's processes such as appointment scheduling, service provision, payment processing, client follow up, inventory tracking, marketing, and performance reporting. If you are unsure about some of your strengths and weaknesses, survey some of your clients and ask them what they love about your business and what they would change if they could.

Opportunities and Threats

To see the full picture, consider the aspects beyond your control such as competition and market trends. An area to focus on is your existing and potential clients. What trends or products do they want? Are their purchase behaviors changing? For example, are more clients doing their nails themselves instead of visiting your salon? A potential threat can also be changes to regulations such as Tennessee's licensing requirement for shampooing hair.

Example: SWOT Analysis of Salon ABC


+  Stylists' skills, experience, and personalities

+  Prime location near a major intersection

+  Client loyalty (strong client retention percentage)

+  Minimal no shows due to SMS confirmations


–  Low retail sales

–  Not accepting credit card payments

–  Unreliable internet access

–  Gaps in the appointment book


+  Latest hair trends and products

+  Partnership with neighboring business

+  Market trends (e.g. memberships, environmental responsibility)

+  Expansion into new markets (e.g. multi-location, target different demographics)


–  New competitor down the street

–  Proposed changes to regulations

–  Current state of the economy (clients have less disposable income)

–  Foreign currency exchange rate (increasing cost of supplies)

Creating an Action Plan

Now that you have identified these factors, where do you go from here? Thoughtfully craft strategies to grow your business. How can you further develop those strengths to push away from the competition? In what ways can you turn those weaknesses into strengths, or at least to pull them on par with your competition? How might you be able to take advantage of those opportunities and mitigate those threats?

When deciding what actions to make, carefully consider any consequences. Depending on your business's current situation, you may not want to make any sudden and drastic changes in fear of alienating existing clients. Instead, you may want to slowly roll out changes or to consider alternate strategies to achieve the same goal.

Example: Salon ABC's Action Plan

Salon ABC's clients often rave about their stylists' knowledge and service. To encourage team members to continue providing exceptional service, the salon can reward its employees. The salon can also offer additional education and skill development to its staff in order to reinforce its reputation as one of the best in the business.

Despite their reputation, Salon ABC is losing potential clients by only allowing cash or debit payments. By making the simple adjustment to accept credit cards, it will be able to increase their clientele and, ultimately, their sales revenue.

Over the years, Salon ABC's clients have primarily been female. However, there is now a growing demand from men in the area for upscale salon and spa services. Thus, there is an opportunity to appeal to a new demographic by offering services like men's haircuts and straight razor shaves. To prevent any disruption to the female clients, the management team may choose to find a nearby location to serve men instead of adapting its current location to serve everyone.

Due to the growing overall demand, a new competitor has set up shop a block away from Salon ABC. Because of this threat, Salon ABC can offer its clients free WiFi and beverages to further improve the client experience.


Results will not happen overnight, so stick to the path you set. In order to determine success, use your original data and analysis as a benchmark and continue to track performance as you implement your strategy. Have courage to try new things and to make tweaks along the way to find what works best for your business.

To help you track and analyze data, Insight Software gives you access to over 80 reports and graphs. In addition, follow up with clients and get feedback with Insight's automatic emails and text messages.

Experience Insight today - download a free trial

Topics: Management
Posted on May 25, 2016