V.Competitive Analysis
This Section's Contents
You can download the Nail Salon business plan template (including a full, customizable financial model) to your computer here.
Direct & Indirect Competitors
The following retailers are located within a 5 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Joe’s Beauty Salon
Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.
Besides offering nail services, Joe’s also offers hair care services. In fact, over 60% of Joe’s revenue comes from services targeted at women outside of nail services. In addition, Joe’s does not offer its customers premium salon products.
For example, they only offer 2 types of product lines. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. [Company Name], on the other hand, offers numerous options for exclusive products that are not yet available in [Town’s Name].
LUX CUTS
LUX CUTS has been in business for 5 years. LUX CUTSoffers an extremely high-end nail service, with introductory prices of $50 per service.
However, LUX CUTS will primarily be targeting a different customer segment from [Company Name], focusing on the households with an income in the top 10% of the city.
Furthermore, [Company Name] offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:
- Manicures
- Pedicures
- Gel Nails
Freddie’s Fast Salon
Freddie’s Fast Salon is located four stores down the road from [Company Name]. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.
Freddy’s business offers inexpensive nail services and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.
[Company Name] has several advantages over Freddy’s Fast Salon including:
- An entertainment focused waiting room, with TV’s and board games to make the wait for service more pleasurable. Especially great for parents that bring their children.
- A focus on service quality rather than speed alone to ensure repeat visits. [Company Name] will spend on average 20 more minutes with its clients than Freddy’s.
While we expect that Freddy’s Fast Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent [Company Name] based on the high-quality service it provides.
Competitive Pricing
| Type of furniture | Joe's | LUX | Freddy's |
|---|---|---|---|
| Women's Cut | $30-$40 | $40-$50 | $60-$70 |
| Women's Color | $60-$70 | $70-$80 | $80-$90 |
| Men's Cut | $20-$25 | $30-$35 | $40-$45 |
| Highlights | $65-$75 | $80-$90 | $85-$90 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and passersby shopping in the city. We also offer adequate parking making it easy for customers to patronize us.
- Great service at an affordable price: The complete array of nail services offered by [Company Name] nearly equals the most premium positioned competitor, LUX CUTS. However, [Company Name] will offer these services at a much more affordable price.
- Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
