Beauty Supply Store Business Plan Template
If you want to start a Beauty Supply Store or expand your current Beauty Supply business, you need a business plan.
The following beauty supply store business plan template gives you all the key elements included in winning business plans.
Sample Business Plan for Beauty Supply Stores
Below is a beauty supply store business plan example with each of the key sections to help you write a beauty supply store business plan for your own company.
I. Executive Summary
Business Overview
[Company Name] is a distributor of professional beauty products located at [Address]. It is the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and beauty services. It is a one-stop shop for all of your beauty needs. With the client at the center of the experience, our professional beauty experts are able to effectively educate and assist, while you explore.
It first opened in [year] and seeks to provide a pleasant and convenient beauty retail experience to shoppers by offering a wide selection of beauty products for everyone, in one cozy place.
Products Served
[Company Name] features premium beauty products in-store from well established brands including haircare, bath & body, fragrances, make-up, skincare and lotion, tools and brushes. We also offer make-up application and hairstyling services.
Customer Focus
[Company Name] will primarily serve the residents who live within a 10-mile radius of our store. The demographics of these customers are as follows:
- 27,827 residents
- 1,750 workers (who do not live the neighborhood)
- Average income of $54,700
- 38.9% married
- 49.6% in Management/Professional occupations
- Median age: 34 years
Management Team
[Company Name] is led by [Founder’s Name] who has been in the beauty business for 20 years. She was an assistant manager at another beauty supply store previously. As such [Founder] has an in-depth knowledge of the fashion and beauty business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no high-end beauty supply store in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
- The management team has a track record of success in the beauty business.
- The beauty supply industry is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $330,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $165,000
- Working capital: $165,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
II. Company Overview
Who is [Company Name]?
[Company Name] is a distributor of professional beauty products. Located at [Address], it is the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and beauty services. It is a one-stop shop for all of your beauty needs. With the client at the center of the experience, our professional beauty experts are able to effectively educate and assist, while you explore.
We are committed to providing the best shopping experience with the most sought after brands and products in hair and beauty.
[Company Name]’s History
In 1990, the brainchild of [Founder’s Name], [Company Name] beauty supply store, was first opened. [Founder’s Name] was an entrepreneur with a passion for beauty who seeks to provide a pleasant and convenient beauty retail experience to shoppers by offering a wide selection of beauty products for everyone, in one cozy place. Today, [Company Name] has grown to become a known beauty supply store in [Location] offering the complete beauty experience.
Since incorporation, the Company has achieved the following milestones:
- Found store space and signed Letter of Intent to lease it
- Developed the company’s name, logo and website located at [website]
- Hired an interior designer for the decor and furniture layout
- Determined equipment and fixture requirements
- Gathered and contacted beauty products suppliers
- Began recruiting key employees with previous beauty retailing, styling, and related experience
[Company Name]’s Products/Services
[Company Name] features premium beauty products in-store from well established brands. It will continue to update its offering in order to provide the newest beauty products to its customers.
Below are the products sold at [Company Name]:
- Wigs and Extensions
- Haircare products
- Bath products
- Fragrances
- Make-up
- Skincare and lotion
- Tools and Brushes
III. Industry Analysis
The Beauty Supply store industry has increased an annualized 2.4% due to favorable macroeconomic conditions and an increase in consumer spending. As companies expand to meet growing demand, the number of industry establishments is expected to rise an annualized 0.9% over the next five years. Larger chains are continuing to replace the small-scale stores that once dominated this industry. Consumers are increasingly opting to purchase products from beauty retailers due to their product expertise and incentivized loyalty programs.
Industry revenue is forecast to similarly trend upward at an annualized rate of 1.3% over the five years to 2025 as consumers buy more cosmetics and the domestic economy recovers. Moreover, the proliferation of environmentally friendly and cruelty-free products will likely spur growth in new markets. However, market saturation and competition from online retailers are anticipated to curb growth. E-commerce is projected to be one of the fastest-growing competitive threats to this industry, as consumers opt for the convenience and wide selection of products offered online.
As more high-end, imported products become available, industry profitability will remain high. The growing economy has enabled consumers to leverage greater disposable incomes to buy high-end products, resulting in big margins for operators. Consequently, the average industry profit margin is anticipated to comprise 7.6% of revenue, far above the average of the overall sector. This trend is expected to continue as manufacturers increase research and development expenditures and reformulate staple products that sell at higher price points.
IV. Customer Analysis
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].
The area we serve is populated mostly by the upper middle class; as a result, they have the means to pay for higher quality service, and are looking for beauty products and services somewhere between the deep discounters and the top-end luxury brands.
The precise demographics of the town in which our beauty supply store resides is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
The Company will primarily target the following three customer segments:
- Stay-at-home moms: The town has a large population of stay-at-home moms who are active in the school and community. These moms seek beauty services on a regular basis. Winning the loyalty of a mother often includes winning the business of her children and husband as well. These women are well-connected to each other and as such are a prime source of referral business. [Company name] expects to regularly acquire new customers from referrals.
- Professionals: [Company name] is located along a well-traveled commute route. By offering convenient a location and exceptional service to the customer, [Company name] will draw in working men and women who need to look professional for work.
- Students: There are multiple high schools and middle schools located in the surrounding area. These students still live on their parents’ income and can therefore afford to pay for higher-quality services than discounters provide. In particular, [Company name] can expect to generate significant seasonal business based on the beauty needs of the local youth culture.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Premier Beauty, Inc.
Premier Beauty operates about 1,000 stores across the US, making it the country’s biggest specialized beauty retailer. The company stocks more than 10,000 products, including cosmetics, fragrances, skin and hair care products, salon styling tools, and accessories. In addition to its brick-and-mortar presence in retail power centers, the company operates an e-commerce site that sells items available in stores plus brands available only online.
Premier Beauty has products from some 300 product vendors, which altogether offer more than 500 brands. Its top 10 vendors include the likes of Bare Escentuals, Procter & Gamble, Coty, and L’Oréal.
It helps that the company sells hands-on products like cosmetics that customers can try in stores. They have also developed a customer loyalty program that rewards members with deals and access to products available.
Beauty Supply USA
Through more than 300 stand-alone stores in North America and another 475 inside department stores, Beauty Supply USA takes a self-service approach to buying makeup, fragrances, and skin care products. It offers more than 200 brands of prestige products, including its own-brand products, all of which customers are encouraged to sample. The company also sells via catalog and online.
The retailer differentiates itself from competitors by emphasizing its Insider loyalty program, holding in-store events to promote selected brands, providing beauty services (including makeup lessons and express hairstyling), and offering a broad array of products from popular makers and its own collection.
Beauty Supplies Incorporated
Beauty Supplies Incorporated is one of the largest retailers and distributors of professional beauty supplies in the US. The company sells more than 10,500 hair, skin, and nail products in more than 5,000 stores, including franchised locations. Beauty Supplies Incorporated’s customers are consumers, salons, and salon professionals.
The stores offer products for hair, skin, and nails, and carry brands such as Clairol, L’Oréal, Wella, and Conair, as well as proprietary merchandise. Overall, products for hair color and hair care generate about 75% of the company’s sales while skin and nail care products supply about 15%.
Competitive Pricing
Pricing varies widely depending on the type of product.
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 products and services at an affordable price: The complete array of beauty products and services offered by [Company Name] nearly equals the most premium positioned competitor, [Competitor]. 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.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient location
- In-house, experienced beauty experts
- Significant personal attention
- Moderate price point
- Comfortable, customer-focused environment
Promotions Strategy
[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [The Company’s] promotions strategy to reach these individuals includes:
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.
Major Publications
We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of xyz, and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost-effectiveness. These ads will include discount coupons so that response to the ads can be tracked.
Community Events/Organizations
[Company name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events. Since mothers are often heavily involved in such things, we will not only reach the lucrative audience of adult women but also potentially their families by extension.
Commute Advertising
We will drive attention toward [Company name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals with disposable income of our opening.
Customer Loyalty Programs
[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again. When not actively providing services to customers in the store, our professionals and other employees will make periodic, regular phone calls to customers. These phone calls will (a) ensure that customers are satisfied with their beauty products, and (b) remind customers after a certain period of time has passed that they might want to check out the latest products. Long-term customers will have the opportunity to participate in the loyalty program, and referrals will be rewarded as well.
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to visit the beauty supply store.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products and more.
Pre-Opening Events
Before opening the store, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the beauty supply store. The customer can expect to speak with the beauty experts for a more personalized and affordable price range of products.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing suppliers and managing supplier relations
- Hiring and training staff
Retail Functions
- Customer service and check-out
- Gift wrapping
- Gift certificate program management
- Display rotation and design
- Janitor/maintenance personnel to keep the beauty supply store
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the beauty business for 20 years. [Founder] was assistant manager at a beauty supply store previously. As such [Founder] has an in-depth knowledge of the beauty supply retailing including:
- Store operations and management
- Floor sales
- Display design
- Retail marketing
- Hiring and training workers
- Makeup and beauty care trends
[Founder] also has personal relationships with salespeople at a variety of high-end beauty products.
Hiring Plan
[Founder] will serve as the beauty supply store manager. In order to launch the store, we need to hire the following personnel:
- Assistant Manager (Will handle much of the operations and manage the store on [Founder]’s day’s off)
- Check-out and Floor Staff (3 to start)
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of make-up, fragrances, and other beauty products to customers.
The major costs for the company will be cost of goods sold (supplier costs), salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $330,000 to launch its beauty supply store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: approximately $165,000
- Working capital: approximately $165,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Number of customers per day | |
|---|---|
| FY 1 | 75 |
| FY 2 | 100 |
| FY 3 | 125 |
| FY 4 | 150 |
| FY 5 | 175 |
| Annual Lease (per location) | $50,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
