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Laser hair removal business plan for starting your own salon
Beauty is a field that can never go out of business. Laser hair removal is one of the most profitable businesses falling under this domain. You can set it up with minimal cost and earn major profits. We’ve come up with this business plan for buying laser hair removal to make it easy for you to start your own salon. This document will detail how to open a laser hair removal business. We will also teach you how to write a business plan for bank loan to get finance for your own business.
This blog will look into a lase hair removal business started by Paul Kellerman named Paul Laser Beauty.
Executive Summary
2.1 The Business
Paul Laser Beauty will be a licensed and registered laser hair removal business start up located in Miami, Florida. The focus of this business will be to provide top-notch laser hair removal services to clients from all over the state. The aim is to make a name in the industry. It is a sophisticated business and not just a barbers business plan.
2.2 Management of Laser Hair Removal Business
To make sure that the business operates and grows right, a strong management structure is needed. If you want to know how to start a laser hair removal business, you are in luck. The management of the business will be headed by Paul himself.
The business will hire 2 more managers to oversee the operations of the business. We’ll also tell you how to get into the tattoo removal business. To extend the business to more locations, Paul will be providing prospective investors with business plan for buying a franchise.
2.3 Customers of Laser Hair Removal Business
The customers of this business will be:
- People looking for facial hair removal.
- People looking for tattoo removal.
- People wanting wax services.
2.4 Business Target
The subjective target of Paul Laser Beauty is to become the leading provider of laser hair removal services in the US. Objectively, we plan to achieve the following:
- Starting to generate a revenue of $26.8k a month by the end of year 3.
- Repaying all the external finance (debt and equity) within the first 3 years.
- Expanding to at least 2 more states by the end of year 2.
Company Summary
3.1 Company Owner
Paul Kellerman, the owner is a beautician with 20 years of experience in the field of laser beauty treatments. He will act as the CEO of the company. His guidance and leadership along with his contacts will be the first thing necessary to make this business successful. He was initially planning on starting laser hair removal business from home.
3.2 Why the laser hair removal business is being started
Kellerman wants to start a laser hair removal business because he has a lot of experience in the field. He has worked as a beautician and as a beauty business manager. It is very easy for him to acquire a laser hair removal machine for business. The man also has a hair extension business plan but laser is what he likes.
3.3 How the laser hair removal business will be started
Step1: Planning
In order to open laser hair removal business, you need to plan everything. It is not like a business plan for hair salon. A strong planning is what can make it successful.
Step2: Define the Brand
Beauty businesses are nothing without an established brand. A brand needs to be established. Only then can the business be successful.
Step3: Establishing the Salon
To start the business, the most important thing is to make a salon. Only then can we start to deal the customers.
Step4: Go Online
People use Google to look for laser hair removal. We’ll need to make a website and optimize it for search engines to get noticed by clients.
Step5: Promotion
We’ll need all the major print, electronic and social media channels to make the business and the brand known to the clients.
| Start-up Expenses | |
| Legal | $249,000 |
| Consultants | $0 |
| Insurance | $30,000 |
| Rent | $25,000 |
| Research and Development | $20,000 |
| Expensed Equipment | $50,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $378,000 |
| Start-up Assets | $340,000 |
| Cash Required | $338,000 |
| Start-up Inventory | $52,000 |
| Other Current Assets | $230,000 |
| Long-term Assets | $227,000 |
| TOTAL ASSETS | $1,187,000 |
| Total Requirements | $1,565,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $378,000 |
| Start-up Assets to Fund | $1,187,000 |
| TOTAL FUNDING REQUIRED | $1,565,000 |
| Assets | |
| Non-cash Assets from Start-up | $1,579,000 |
| Cash Requirements from Start-up | $360,900 |
| Additional Cash Raised | $51,000 |
| Cash Balance on Starting Date | $31,000 |
| TOTAL ASSETS | $2,021,900 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $42,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $71,000 |
| Capital | |
| Planned Investment | $1,565,000 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,565,000 |
| Loss at Start-up (Start-up Expenses) | $385,900 |
| TOTAL CAPITAL | $1,950,900 |
| TOTAL CAPITAL AND LIABILITIES | $2,021,900 |
| Total Funding | $1,565,000 |
Services
If you want to know how to start your own laser hair removal business, the most important thing to note is what services would you be providing. Like any business plan for beauty supply store, you need to know the services.
Paul Laser Beauty will be providing the following services to the customers and this is the most important part of the business plan for buying laser hair removal:
- Laser Facial Hair Removal
This will be the major service provided by the business. The bulk of the customers of our business will fall into this category. The services will include:
- Facial hair removal for ladies.
- Facial hair removal for men.
- Beard border hair removal.
- Forehead hair removal for women.
- Laser Body Hair Removal
The clients of this service will be body builders and other people who like to showcase their body. We’ll provide:
- Full body hair removal services.
- Permanent hair removal from selected areas on the body.
- Waxing
For customers who may not want to avail of laser removal services, we’ll offer waxing services too. In this, we’ll be making use of finest qualities of wax to help our customers in getting rid of unwanted hair.
- Laser Tattoo Removal
This service will be focused on people who want to get rid of tattoos. These services will include:
- Painless permanent tattoo removal.
- Tattoo removal from any part of the body.
Marketing Analysis of Laser Hair Removal Business
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Before you start a laser hair removal business, you need to have an in-depth knowledge of the industry. According to the National Laser Institute, there are more than 1.5million laser hair removal businesses registered in the US. It means that getting a laser hair removal business opportunity for making profits might not be very easy. However, the promising aspect is that the total revenue of these companies is more than 500 million dollar a year. Another promising fact is that more than 2.8 million Americans opt for laser hair removal at least 4 times a year.
This means that opening a laser hair removal business or opening a tattoo removal business is difficult but has a lot of potential for growth. If you need to know how to open laser hair removal business, market analysis is one of the most important things.
5.1 Market Trends
The trend for laser hair removal is rapidly increasing over the last two decades. The industry has seen a whopping 51% growth over the last 10 years. It must also be noted that 82% of the customers of the laser hair removal business are women. The average cost for a hair removal treatment in the US is $125 and complicated procedures like hair removal from the back can cost up to $500.
In addition to that, as much as 87% of the laser hair removal customers say that they will be happy to have that done again.
5.2 Marketing Segmentation
The customers of this business will fall into the following categories:
5.2.1 Beauty Conscious Individuals
This will make up the bulk of our customers. We will provide them with the best-in-class hair removal services.
5.2.2 Celebrities
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These customers will be the high-paying ones. They will not only be a major source of revenue for use but will also be a source of advertisement and promotion.
5.2.3 Tattoo Removal Customers
This segment of the market will pay us the most per client. Tattoo removal is a specialized job and we will hire trained professionals to take care of jobs like this.
5.2.4 Athletes and Body Builders
These people will get full-body hair removal. As the procedures like this take a lot of time, the customers falling in this category will be the repeat customers our business will have.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Beauty Conscious Individuals | 39% | 43,000 | 45,000 | 47,000 | 49,000 | 51,000 | 10.00% |
| Celebrities | 16% | 11,000 | 12,000 | 14,000 | 15,000 | 16,000 | 10.00% |
| Tattoo Removal Customers | 21% | 18,000 | 19,000 | 20,000 | 21,000 | 22,000 | 10.00% |
| Athletes and Body Builders | 24% | 27,000 | 28,000 | 29,000 | 31,000 | 32,000 | 11.00% |
| Total | 100% | 99,000 | 104,000 | 110,000 | 116,000 | 121,000 | 10% |
5.3 Business Target
- The aim of this business is to become the leading provider of laser hair removal services in All of North America.
- We will focus on maintaining above 90% CSAT rating.
- We will expand to two more states by the end of year 2.
- We intend to have a steady revenue of above $26.8k per month by the end of year 3.
5.4 Product Pricing
The prices of our services will follow the following format:
- We will price our services 5% above the average price of the same service in Miami area.
- For the first 30 days, we will be providing a flat 20% off on all procedures to promote the business.
- Once the business has sufficient customers, we will shift to a case-to-case pricing model rather than the one-size-fits-all approach.
Marketing Strategy of Hair Removal Business
The next thing we need to have is a laser hair removal marketing plan. In order to make an identity among the established laser hair removal business names, we will have to be different and innovative in our approach to the business.
Other than the experienced and trained staff working for us, we will hire an exalted consultant to oversee all the procedures we perform. This will give us a competitive edge. Another thing that we’ll do will be to introduce new methods that can get the work done in a better way and at a lower price as compared to our competitors.
6.1 Competitive Analysis
- The biggest selling point and the major competitive edge Paul Laser Beauty will have is the experience Paul Kellerman and his team has.
- We will start the services at a discounted rate to attract customers.
- We will be importing the best laser hair removal machines from Germany to achieve better results.
6.2 Sales Strategy
- The business will be advertised across all media channels including print, electronic and social.
- A grand opening ceremony will be launched with a musical event where famous singers will be invited.
- Celebrities from the Miami area will be appointed as brand ambassadors to endorse Paul Laser Beauty.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Laser Facial Hair Removal | 50,000 | 53,000 | 56,180 |
| Laser Body Hair Removal | 31,000 | 32,860 | 34,832 |
| Waxing | 22,000 | 23,320 | 24,719 |
| Laser Tattoo Removal | 26,000 | 27,560 | 29,214 |
| TOTAL UNIT SALES | 129,000 | 136,740 | 144,944 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Laser Facial Hair Removal | $39.00 | $45.24 | $52.48 |
| Laser Body Hair Removal | $60.00 | $69.60 | $80.74 |
| Waxing | $38.00 | $44.08 | $51.13 |
| Laser Tattoo Removal | $55.00 | $63.80 | $74.01 |
| Sales | |||
| Laser Facial Hair Removal | $1,950,000.00 | $2,397,720.00 | $2,948,236.51 |
| Laser Body Hair Removal | $1,860,000.00 | $2,287,056.00 | $2,812,164.06 |
| Waxing | $836,000.00 | $1,027,945.60 | $1,263,961.91 |
| Laser Tattoo Removal | $1,430,000.00 | $1,758,328.00 | $2,162,040.11 |
| TOTAL SALES | $6,076,000.00 | $7,471,049.60 | $9,186,402.59 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Laser Facial Hair Removal | $37.00 | $42.00 | $48.00 |
| Laser Body Hair Removal | $58.00 | $66.00 | $76.00 |
| Waxing | $36.00 | $41.00 | $46.00 |
| Laser Tattoo Removal | $53.00 | $60.00 | $69.00 |
| Direct Cost of Sales | |||
| Laser Facial Hair Removal | $1,850,000.00 | $2,226,000.00 | $2,696,640.00 |
| Laser Body Hair Removal | $1,798,000.00 | $2,168,760.00 | $2,647,201.60 |
| Waxing | $792,000.00 | $956,120.00 | $1,137,083.20 |
| Laser Tattoo Removal | $1,378,000.00 | $1,653,600.00 | $2,015,738.40 |
| Subtotal Direct Cost of Sales | $5,818,000.00 | $7,004,480.00 | $8,496,663.20 |
Personnel plan
Note
The next step towards opening a laser hair removal business is making a personnel plan. This is important to determine how many employees the business will have.
Only then we can make a realistic estimate of the finances and progress of the business over time. Unlike the business plan for soap making company, we need workers skilled in operating the lasers.
7.1 Company Staff
- 1 Manager to oversee the operations of the company.
- 1 Accountant to maintain the books and collect bills.
- 1 IT Expert to handle the online presence of the business.
- 1 Receptionist/Telephone Operator to welcome the customers.
- 1 Consultant to head all the hair removal jobs.
- 4 Laser Operators to perform the procedures for hair and tattoo removal.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $13,000 | $14,300 | $15,730 |
| Accountant | $11,000 | $12,100 | $13,310 |
| IT Expert | $10,000 | $11,000 | $12,100 |
| Receptionist/ Telephone Operator | $8,000 | $8,800 | $9,680 |
| Consultant | $10,000 | $11,000 | $12,100 |
| Laser Operators | $48,000 | $52,800 | $58,080 |
| Total Salaries | $100,000 | $110,000 | $121,000 |
Financial Plan
The laser hair removal business profit depends on making a solid financial plan for the business. The best way for doing that is to make a realistic estimate of the costs and revenue of the business. Only then can we determine a financial strategy to make the business profitable. Just like a nail polish business plan, we need to forecast the expenses before the business is launched. The major expenses for launching this business will be:
- The cost of setting up the salon.
- The cost of machinery and equipment.
- The pays of the staff for the first 6 months.
- The cost of overheads and utility expenses.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.20% | 8.23% | 8.26% |
| Long-term Interest Rate | 8.37% | 8.40% | 8.47% |
| Tax Rate | 23.78% | 23.82% | 24.00% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,300 |
| Assumptions: | |
| Average Per-Unit Revenue | $235.00 |
| Average Per-Unit Variable Cost | $0.67 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $6,076,000 | $7,471,050 | $9,186,403 |
| Direct Cost of Sales | $5,818,000 | $7,004,480 | $8,496,663 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $5,818,000 | $7,004,480 | $8,496,663 |
| Gross Margin | $258,000 | $466,570 | $689,739 |
| Gross Margin % | 4.25% | 6.25% | 7.51% |
| Expenses | |||
| Payroll | $100,000 | $110,000 | $121,000 |
| Sales and Marketing and Other Expenses | $122,000 | $123,000 | $125,000 |
| Depreciation | $2,234 | $2,300 | $2,450 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,200 |
| Insurance | $1,900 | $1,980 | $2,100 |
| Rent | $2,800 | $2,900 | $3,000 |
| Payroll Taxes | $29,000 | $30,000 | $31,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $260,834 | $273,180 | $287,750 |
| Profit Before Interest and Taxes | ($2,834) | $193,390 | $401,989 |
| EBITDA | ($2,834) | $193,390 | $401,989 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($567) | $38,678 | $80,398 |
| Net Profit | ($2,267) | $154,712 | $321,592 |
| Net Profit/Sales | -0.04% | 2.07% | 3.50% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $18,000 | $19,440 | $20,995 |
| SUBTOTAL CASH FROM OPERATIONS | $69,000 | $75,210 | $81,227 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $70,000 | $76,000 | $82,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $32,000 | $34,000 | $35,000 |
| Bill Payments | $20,000 | $21,000 | $22,000 |
| SUBTOTAL SPENT ON OPERATIONS | $52,000 | $56,000 | $57,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $52,000 | $56,160 | $60,653 |
| Net Cash Flow | $15,000 | $16,000 | $17,000 |
| Cash Balance | $23,000 | $24,000 | $25,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $268,000 | $300,160 | $330,176 |
| Accounts Receivable | $22,000 | $24,640 | $27,695 |
| Inventory | $4,000 | $4,480 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $279,000 | $312,480 | $351,228 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,000 | $21,280 | $23,940 |
| TOTAL LONG-TERM ASSETS | $22,300 | $24,976 | $28,098 |
| TOTAL ASSETS | $292,300 | $327,376 | $368,298 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,500 | $20,720 | $23,289 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,500 | $17,360 | $19,513 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $13,500 | $15,120 | $16,995 |
| Paid-in Capital | $29,000 | $30,400 | $32,000 |
| Retained Earnings | $53,200 | $57,988 | $63,787 |
| Earnings | $195,000 | $212,550 | $233,805 |
| TOTAL CAPITAL | $275,000 | $299,750 | $329,725 |
| TOTAL LIABILITIES AND CAPITAL | $288,500 | $327,376 | $368,298 |
| Net Worth | $280,000 | $305,200 | $335,720 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.24% | 8.02% | 8.89% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.23% | 10.23% | 11.33% | 9.80% |
| Inventory | 5.44% | 6.03% | 6.68% | 9.90% |
| Other Current Assets | 2.90% | 3.21% | 3.56% | 2.40% |
| Total Current Assets | 148.12% | 149.00% | 150.00% | 158.00% |
| Long-term Assets | 11.31% | 11.39% | 11.45% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.88% | 4.92% | 4.96% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.52% | 7.58% | 7.65% | 7.38% |
| NET WORTH | 100.29% | 101.09% | 102.02% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 95.04% | 97.61% | 100.34% | 99.00% |
| Selling, General & Administrative Expenses | 94.17% | 96.71% | 99.42% | 97.80% |
| Advertising Expenses | 1.50% | 1.54% | 1.58% | 1.40% |
| Profit Before Interest and Taxes | 41.05% | 42.16% | 43.34% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 34 | 34.8 | 35.67 | 33 |
| Total Debt to Total Assets | 0.17% | 0.17% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 73.20% | 74.70% | 75.50% | 75.00% |
| Pre-tax Return on Assets | 94.60% | 99.33% | 104.30% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.09% | 34.12% | 35.17% | N.A. |
| Return on Equity | 55.02% | 56.73% | 58.48% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 31.2 | 32.76 | 33 | N.A. |
| Accounts Payable Turnover | 15.2 | 15.7 | 16.5 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $235,000 | $248,160 | $262,057 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 28.6 | 29 | 29.09 | N.A. |
| Sales/Net Worth | 2.1 | 2.1 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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