This hair salon business plan is a full worked sample for a six-station salon in Birmingham’s Jewellery Quarter, run by an experienced stylist opening her own place. If you’ve built a loyal client list in someone else’s salon and you’re ready to go it alone, this is the kind of plan a bank will expect from you.
The salon is fictional. The prices, wage rules, VAT and legal duties are real for England in 2026. Every figure in the text comes from the same annual forecast as the tables, so if you change your client visits or average spend, the profit and break-even move too.
Want a version built around your own salon? The Business Plan Generator for hair salons creates this structure from your prices and team, with 1 to 5 year projections.
Table of Contents
Hair salon business plan snapshot
- Business: Fern & Foil Hair Studio Ltd, a six-station colour-led hair salon (fictional)
- City: Jewellery Quarter, Birmingham, United Kingdom
- Legal form: Private limited company, one director-shareholder
- Start-up capital: £99,000
- Funding mix: £49,000 founder’s equity (49%) and a £50,000 bank loan (51%)
- Year 1 revenue: £297,648
- Break-even: Sales of about £271,000 a year (around 4,910 client visits), passed in Year 1
Executive summary
Fern & Foil Hair Studio will open a six-station salon on a busy corner of the Jewellery Quarter, specialising in colour: balayage, lived-in blondes and colour correction, alongside precision cuts. It opens Tuesday to Saturday, with late nights on Thursday and Friday.
Founder Amara Bello has 13 years behind the chair, the last six as salon manager and colour educator at a busy Birmingham city centre salon. Around 80 of her regular clients have said they’ll follow her, which gives the salon a head start most new openings don’t have.
We forecast sales of £297,648 in Year 1, rising to £427,392 in Year 3. Net profit is £19,401 in Year 1 and £46,386 in Year 3. We need £99,000 to open: £49,000 from Amara and a £50,000 bank loan over five years.
Company overview
Fern & Foil Hair Studio Ltd is a private limited company with Amara as sole director and shareholder. Operating as a company keeps her personal finances separate and makes it easier to bring in a business partner or second site later.
The premises is a 1,000 sq ft ground-floor unit with big windows, in a converted Victorian workshop. It already has Class E use, which covers a hair salon, so there’s no planning change to wait for.
Salon model in this hair salon business plan
Many salons rent chairs to self-employed stylists. We’ve chosen to employ our team instead. It costs more in wages, but it means consistent training, one standard of service and control over the client experience. Stylists earn a base salary plus commission on services and retail.
Products and services
Prices include VAT, as the salon will be VAT registered from the start. The forecast shows sales net of VAT.
| Service | Price (incl. VAT) | Time |
|---|---|---|
| Cut and blow-dry | £48 | 60 minutes |
| Men’s cut | £28 | 30 minutes |
| Blow-dry | £32 | 45 minutes |
| Full head tint | £75 | 90 minutes |
| Half head foils | £95 | 2 hours |
| Balayage, toner and blow-dry | From £140 | 3 hours |
| Gloss or toner | £35 | 30 minutes |
| Bond-repair treatment (add-on) | £25 | 15 minutes |
The average service spend is £52.00 net of VAT in Year 1, reflecting the high share of colour work. Retail products add about 6% on top of service sales.
Market analysis
Hair and beauty is a big, resilient sector. The National Hair & Beauty Federation counts more than 63,800 hair and beauty businesses in the UK, with turnover of £5.8 billion, and reports that 58% of people working in the sector are self-employed (NHBF industry statistics).
Birmingham and the Jewellery Quarter
Birmingham is the UK’s largest city outside London, with 1,144,900 residents at Census 2021, up 6.7% since 2011 (Office for National Statistics). The Jewellery Quarter has added thousands of flats in the last decade and has a strong daytime workforce in creative, legal and professional firms.
- Core clients: women aged 25 to 50 living or working within two miles, visiting every six to ten weeks for colour.
- Professionals booking late-night appointments after work on Thursdays and Fridays.
- Men wanting a quality cut in a relaxed salon rather than a walk-in barber, about 15% of visits.
Colour matters for this hair salon business plan because it drives repeat visits. A colour client comes back every six to ten weeks and spends two to three times as much as a cut-only client, so a full diary of colour regulars is worth far more than walk-in footfall.
Competition
Birmingham has hundreds of salons, from national chains to small independents, and the city centre has several well-known premium salons. Within a ten-minute walk of our unit there are around half a dozen hair salons and barbers.
We won’t be the cheapest. Our position is expert colour at fair city prices, with longer appointments and proper consultations. Most premium city centre salons charge more for balayage, and most local salons don’t specialise in it.
What sets us apart
- Colour expertise: Amara trains the whole team in her colour methods, so every stylist can deliver her standard.
- Booking that works: online booking 24/7, deposits for long colour appointments and text reminders.
- Space: six stations in 1,000 sq ft, not crammed in, with a separate colour bar.
Marketing and sales
- Existing clients: a personal message to Amara’s regulars with an opening offer and a refer-a-friend reward.
- Instagram and TikTok: before-and-after colour work, posted daily. In hairdressing, the work sells itself.
- Google Business Profile: photos, accurate hours and a review request after every first visit.
- Local partnerships: offers for staff at nearby offices and co-working spaces.
- Rebooking: every client is offered their next appointment before they leave. Our target is a 65% rebooking rate by Year 2.
The marketing budget is £7,000 in Year 1 and £5,500 a year after.
Operations
Premises and equipment
We’ll sign a ten-year lease with a break at year five, at £24,000 a year. The fit-out adds plumbing and hot water for three backwash basins, extra electrical circuits for dryers, slip-resistant flooring, good daylight-balanced lighting and a reception area. Equipment includes six styling stations, three basin units, a colour bar with extraction, and dryers.
Capacity and opening hours
The salon opens five days a week, about 250 days a year. At 7,200 visits in Year 3 that’s roughly 29 clients a day across the team, or five to six each for a stylist doing a mix of long colour appointments and quick cuts. Six stations leave room to grow without moving premises.
Suppliers
Colour and care products come from one professional brand on trade terms through a salon wholesaler, with retail stock bought on the same account. Towels go to a laundry service twice a week.
Health, safety and legal requirements
- Hazardous substances: hair dyes, bleach and other chemicals are covered by COSHH. We’ll keep assessments, provide gloves and good ventilation, and follow manufacturers’ skin test instructions before colour.
- Employers’ liability insurance of at least £5 million from the first hire, as required by law (GOV.UK), plus public liability and treatment risk cover.
- TheMusicLicence from PPL PRS for background music in the salon.
- Council registration: not needed for hairdressing in England. If we ever add ear piercing or skin treatments, we’d need to register with Birmingham City Council first.
- Employment: contracts, right-to-work checks, workplace pension auto-enrolment and VAT registration.
Management and team
Amara Bello (director, creative lead) has worked as a stylist for 13 years and managed a team of 12 at her current salon, including rotas, stock and weekly takings. She’ll do client work three days a week and spend the rest on training, marketing and running the business.
The team starts with three employed stylists (one senior stylist joining from Amara’s current salon), an apprentice and a part-time receptionist, with a fourth stylist in Year 2. Pay is at or above the National Living Wage of £12.71 an hour (GOV.UK) plus commission. Staff costs are £158,000 in Year 1, or 53% of sales.
Milestones
Here’s how the plan unfolds, year by year.
- Before opening: company formed, loan agreed, lease signed, eight-week fit-out, team hired and trained on the colour menu.
- Year 1: open with Amara’s regular clients, reach 1,200 active clients and pass break-even.
- Year 2: add a fourth stylist and hit a 65% rebooking rate.
- Year 3: qualify the first apprentice as a junior stylist and take on a second apprentice.
- Year 5: refurbish or open a second salon, funded from retained cash.
Hair salon start-up costs
Plumbing for basins and good lighting are where most hair salon start-up costs go. We’ve included a contingency because old buildings always hide surprises.
| Item | Cost |
|---|---|
| Salon fit-out (plumbing, electrics, flooring, lighting, reception) | £42,000 |
| Salon equipment (six stations, three basins, dryers, colour bar) | £18,000 |
| Rent deposit (three months) | £6,000 |
| Opening stock (colour, care and retail products) | £5,000 |
| Booking system, POS and website | £2,500 |
| Legal, insurance and company set-up | £3,000 |
| Launch marketing | £4,500 |
| Working capital reserve | £10,000 |
| Contingency | £8,000 |
| Total start-up capital | £99,000 |
The fit-out and equipment (£60,000) are depreciated over five years. The working capital reserve and contingency (£18,000) are held as opening cash.
Financial plan
A lender will spend most of their time on this section of your hair salon business plan. The forecast is annual and net of VAT. Our guide to financial projections for a business plan explains how to build each line.
Key assumptions
- 5,400 client visits in Year 1, 6,400 in Year 2 and 7,200 in Year 3 as the team grows and diaries fill.
- Average service spend of £52.00, £54.00 and £56.00 net of VAT in Years 1 to 3.
- Retail sales at 6% of service sales, bought at half the retail price.
- Colour and consumables at 9% of service sales, giving a gross margin of 89%.
- Bank loan of £50,000 at 8% over five years, repaid in equal annual instalments of £10,000.
- Corporation tax at 19%, with marginal relief above £50,000 of profit (GOV.UK). No dividends in the forecast.
Three-year profit and loss
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | £297,648 | £366,336 | £427,392 |
| Cost of sales | £33,696 | £41,472 | £48,384 |
| Gross profit | £263,952 | £324,864 | £379,008 |
| Operating expenses | £224,000 | £267,800 | £306,600 |
| EBITDA | £39,952 | £57,064 | £72,408 |
| Depreciation | £12,000 | £12,000 | £12,000 |
| Interest | £4,000 | £3,200 | £2,400 |
| Tax | £4,551 | £7,954 | £11,622 |
| Net profit | £19,401 | £33,910 | £46,386 |
Operating expenses
| Cost line | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Staff (founder, stylists, apprentice, receptionist, incl. NI and pension) | £158,000 | £200,000 | £236,000 |
| Rent | £24,000 | £24,000 | £24,000 |
| Business rates (after relief) | £4,000 | £4,100 | £4,200 |
| Utilities (water, heating, electricity) | £9,000 | £9,500 | £10,000 |
| Marketing | £7,000 | £5,500 | £5,500 |
| Booking system, card fees and software | £6,500 | £7,500 | £8,500 |
| Insurance | £2,500 | £2,600 | £2,700 |
| Laundry, cleaning and sundries | £4,500 | £5,000 | £5,400 |
| Repairs and maintenance | £2,000 | £2,500 | £3,000 |
| Accountancy and professional fees | £3,000 | £3,100 | £3,200 |
| Music licence and subscriptions | £1,000 | £1,000 | £1,100 |
| Training and education | £2,500 | £3,000 | £3,000 |
| Total operating expenses | £224,000 | £267,800 | £306,600 |
Wages are by far the largest cost, which is normal for a salon that employs its stylists. Year 2 adds a fourth stylist and Year 3 a second apprentice, which is why staff costs climb each year while profit still grows.
Five-year summary
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | £297,648 | £366,336 | £427,392 | £467,248 | £502,440 |
| Net profit | £19,401 | £33,910 | £46,386 | £53,842 | £57,743 |
| Closing cash | £39,401 | £75,311 | £123,697 | £179,539 | £239,282 |
Cash builds from £39,401 at the end of Year 1 to £239,282 by the end of Year 5, with the loan repaid. That’s enough to refresh the salon in Year 5 or open a second site.
Funding request and use of funds
We’re asking for a £50,000 five-year loan at around 8%. Amara is investing £49,000 from her savings and the sale of a buy-to-let flat.
| Use of funds | Amount |
|---|---|
| Fit-out and salon equipment | £60,000 |
| Deposit, stock, systems, set-up and launch | £21,000 |
| Working capital reserve and contingency | £18,000 |
| Total | £99,000 |
Year 1 repayments and interest come to £14,000, against EBITDA of £39,952.
Risks and mitigation
Every hair salon business plan should face its biggest risk head on: people. Clients follow stylists, and stylists can leave.
- Losing a stylist. Fair pay, commission, paid education and a clear path to senior stylist. Contracts include a reasonable non-solicitation clause.
- Recruitment. The NHBF reports the sector’s workforce has been shrinking, so we’ll train our own through an apprentice from day one.
- Slow diary fill. Break-even is about 4,910 visits against 5,400 forecast in Year 1, and Amara’s existing clients cover much of the gap.
- Product price rises. Prices reviewed every year; colour costs tracked per appointment in the booking system.
- No-shows. Deposits for appointments over two hours and a 48-hour cancellation policy.
Stress-testing this hair salon business plan
The big unknown in any new salon is how fast the diary fills. This test holds Fern & Foil’s operating costs steady and lets colour and consumables move with sales.
| Year 1 scenario | Revenue | Profit before tax |
|---|---|---|
| Base case | £297,648 | £23,952 |
| Sales 10% lower | £267,883 | -£2,443 |
| Sales 15% lower | £253,001 | -£15,641 |
Sales can fall about 9% before Year 1 slips into a small loss, which lines up with break-even at about 4,910 visits against 5,400 forecast. The 15% case loses around £15,600: inside the £18,000 cash reserve, but only just.
The early warning in this business plan is simple. If visits run below 420 a month after the first quarter, the next stylist hire waits, a mid-week colour offer fills quiet chairs and every client is asked to rebook at the till. Anyone looking to open a hair salon should know their own warning number before signing the lease.
Where the hair salon start-up costs could flex
- Salon fit-out (£42,000): plumbing and lighting are hard to cut, but reception furniture and flooring finishes can be simpler.
- Salon equipment (£18,000): starting with four stations and adding two as stylists join spreads the cost.
- Launch marketing (£4,500): a referral reward for the first clients usually does more than paid ads.
Keep the contingency in your salon business plan. Jewellery Quarter buildings are old, and old buildings always hide something behind the plaster.
How to adapt this salon business plan for the UK, Europe, US or elsewhere
Salons work the same way almost everywhere. The rules on licensing, VAT and employment change, so update those first.
Using this hair salon business plan outside Birmingham
- Elsewhere in the UK: prices and rents vary a lot by city. Northern Ireland and some councils have their own rules for skin treatments. See our business plan UK guide and the business plan Birmingham page.
- Europe: VAT on hairdressing differs by country, and some countries require a recognised hairdressing qualification to open a salon. Use the local company form, such as a GmbH or SL.
- United States: no VAT, but most states require a cosmetology licence for stylists and a salon licence for the premises. Many salons trade as an LLC and use booth rental.
- Anywhere: check minimum wage, employer charges and corporation tax on official government sites.
Prefer to write it yourself? Our free business plan template follows the same structure, and there are more sample business plans for beauty and personal care businesses.
Start yours now: create your hair salon business plan with the Business Plan Generator, with 1 to 5 year projections from your own prices and team.
Hair Salon Business Plan FAQs
How much does it cost to open a hair salon in the UK?
The hair salon start-up costs in this sample come to £99,000 for a six-station salon in Birmingham, including fit-out, basins and stations, stock, a deposit, working capital and a contingency. Taking over an existing salon can cost less.
Do you need a licence to open a hair salon in England?
No licence is needed for hairdressing itself in England. You do need employers’ liability insurance once you hire, COSHH assessments for chemicals and a music licence if you play music. Piercing or skin treatments need council registration.
How profitable is a hair salon?
Wages are the main cost. In this hair salon business plan, staff are 53% of sales in Year 1, and net profit is £19,401 in Year 1 and £46,386 in Year 3.
Should I employ stylists or rent chairs?
Employing costs more but gives you control over training and service. Chair rental lowers fixed costs, but renters are self-employed and set their own way of working. This plan uses employed stylists paid salary plus commission.
Can I use this hair salon business plan for a bank loan?
Yes, as a model. Replace the fictional details with your own premises, prices, quotes and experience, and check every number in the text matches your tables.