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.

Lazer Hair Removal Business Plan - 3 Years Profit Forecast

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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.

Lazer Hair Removal Business Plan - Startup Cost

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

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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:

  1. 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.
  1. 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.
  1. 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.

  1. 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:

Lazer Hair Removal Business Plan - Marketing Segmentation

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

Business Plan for Investors

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

  1. The biggest selling point and the major competitive edge Paul Laser Beauty will have is the experience Paul Kellerman and his team has.
  2. We will start the services at a discounted rate to attract customers.
  3. 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

Lazer Hair Removal Business Plan - Sales Monthly

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6.4 Sales Yearly

Lazer Hair Removal Business Plan - Sales Yearly

6.5 Sales Forecast

Lazer Hair Removal Business Plan - Unit Sales

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

Lazer Hair Removal Business Plan - 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

Lazer Hair Removal Business Plan - Profit Monthly

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8.3.2 Profit Yearly

Lazer Hair Removal Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Lazer Hair Removal Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Lazer Hair Removal Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Lazer Hair Removal Business Plan - 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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