Herr Haar

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Hair Replacement and Salon Business Plan

Strategy and Implementation Summary

Our primary focus on the next year is to incorporate our existing services into a full-scale salon concept, so that hair replacement is seen as just one more hair service option. We will leverage our skills and reputation and our highly visible new location to increase our client base with more extensive marketing campaigns on the benefits of hair replacement.

We will continue to provide great service, and will track our sales and marketing goals as we go. We will work with our independent stylists to ensure a consistent level of quality and customer service at Herr Haar. We will train them in some of the cosmetic forms of hair replacement treatment, such as extensions, so as to incorporate some of that business into the "salon" portion of the business, further de-stigmatizing it.

5.1 Competitive Edge

Herr Haar will be a place to enjoy a relaxed atmosphere, where the whole person is taken care of. Unlike a typical salon, we will provide not only basic hair care and products for hair health, but also hair replacements, massage, and assistance in maintaining care greatly.

Although our primary focus is on male clients seeking hair styling and/or hair replacement therapies, two of our contracted stylists are coming from very upscale boutiques and will bring with them a significant female clientele.

Our competitive edges are:

  • Skilled and experienced staff
  • Help for all hair types (thick, thinning, balding, and anything in between)
  • Full-scale salon, not just hair care
  • New location, with high visibility
  • Existing client base of owners and stylists

5.2 Marketing Strategy

Herr Haar's new location will provide easier access and greater visibility than allowed by our present space. The surrounding area is growing rapidly, and Herr Haar will be able to reach its target market, as well as increasing walk-ins. There is an increasing trend among well-off couples for both to use the same spa or salon, although not necessarily at the same time. We will use our services for each gender to "pull in" spouses and partners seeking quality hair, skin and body care.

One of the best ways to market Herr Haar is to satisfy clients. When a client leaves our business with a new look, he or she is broadcasting our name and quality to the public. Many of our clients will be referrals from existing clients.

On the other hand, for hair replacement systems, it has been our experience that clients do not talk about hair care problems, existing, or other additions because they look so natural that they don't want anyone to know that it is not their hair. Therefore, our strategy has been to use the yellow page ads and television, to inform people that there is a place where they can go and take care of hair loss problems, in a convenient and private place. We will be adding some new, targeted marketing strategies to supplement our existing ones.

We will target our three different hair replacement groups directly: we will liase with doctors and therapists at the Anytown Cancer Treatment Center, and the University of Colorado Cancer Center; we will distribute pamphlets and flyers to local OB/GYNs and midwives about our services for post-natal female hair loss, and send mailings to all primary care doctors in Anytown who treat women; and for clients with male-pattern baldness,we will place ads in the local paper next to men's clothing advertisements and in the weekly women's fashion insert, on the theory that their wives may show them the ads.

5.3 Sales Strategy

Herr Haar provides the highest quality replacement services such as Great Lengths, and Le Metric, while the stylists are committed to continual education in the field of hair replacement as well as basic hair care. Herr Haar will also provide products that were used on the client, and will encourage the person to continue using the products to aid in maintaining the services local. Our sales strategy relies on continuously high quality, prompt service in a pleasant atmosphere, where clients are treated as people, not heads of hair.

We will offer every client complimentary coffee or tea while they wait. All of our staff will be trained to be discreet and compassionate toward our clients with hair replacement needs; none of our verbal communications in front of other clients will let on whether someone has had hair replacement treatments. The owners will also make themselves available by appointment for non-standard times, if a hair replacement client cannot come in during regular hours, or wants a consultation when no other clients are around.

We will also offer special discounts and promotions to build the client base in our new location, including 10% discounts when clients refer new customers.

5.3.1 Sales Forecast

The sales forecast table shows our expectations for the next three years. The attached appendix shows the monthly growth.

The first category, hair and skin services, includes revenue generated by the owners' work (hair replacement and some of the facials). We also collect all massage revenues, and absorb all direct costs for products used in these services and laundering of massage table coverings.

We do not collect the revenue from our affiliates' services (the other four stylists), but instead receive a monthly booth rental, listed below, which covers shared costs of using the receptionist, the payment system and the utilities, and a modest profit.

Sales Forecast
2004 2005 2006
Sales
Hair and Skin Services $127,337 $133,704 $140,389
Massage $38,150 $50,139 $52,646
Booth Rent $31,200 $32,760 $34,398
Products $47,751 $50,139 $52,646
Total Sales $244,438 $266,742 $280,079
Direct Cost of Sales 2004 2005 2006
Hair Services $31,834 $33,426 $35,097
Massage $763 $1,003 $1,053
Products $23,876 $25,069 $26,323
Subtotal Direct Cost of Sales $56,473 $59,498 $62,473