Lumière Nail Bar Business Plan — How a Salon Actually Makes Money
A salon sells a fixed number of treatment hours. Ten nail stations and five rooms set the ceiling; utilisation decides how much of it is sold.
How a Salon Actually Makes Money
Jump to section
- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Market and Positioning
- 3. How a Salon Actually Makes Money
- 4. The Membership Programme
- 5. SWOT and Competitive Position
- 6. Operations and the Capacity Build
- 7. Compliance and Standards
- 8. Management and Team
- 9. Financial Plan
- 10. Break-Even and Debt Service
- 11. Investment Analysis
- 12. Sensitivity and Scenario Analysis
- 13. Risk Analysis
- 14. Implementation Roadmap
- 15. Key Performance Indicators
- 16. Key Assumptions
- 17. Conclusion and Recommendation
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital and Capacity Schedules
- C. Appendix C: Funding, Debt and Working Capital Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 3.1 Fixed capacity, perishable inventory
- 3.2 Retail is smaller than it looks
3.1 Fixed capacity, perishable inventory
Ten nail stations and five treatment rooms trading ten hours a day, six days a week across 302 trading days offer approximately 45 300 sellable hours a year. The plan assumes 70 per cent nail utilisation and 57 per cent room utilisation at maturity, which are strong but achievable figures. Utilisation above roughly 70 per cent becomes difficult to sustain because demand is concentrated in late afternoons, Saturdays and the days before public holidays, while Tuesday mornings are quiet in every salon in the country.
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Nail stations |
6 |
8 |
8 |
10 |
10 |
|
Treatment rooms |
3 |
4 |
4 |
5 |
5 |
|
Sellable hours |
27 180 |
36 240 |
36 240 |
45 300 |
45 300 |
|
Nail utilisation |
44% |
56% |
63% |
67% |
70% |
|
Room utilisation |
33% |
43% |
50% |
54% |
57% |
|
Nail hours sold |
7 973 |
13 530 |
15 221 |
20 234 |
21 140 |
|
Room hours sold |
2 990 |
5 194 |
6 040 |
8 154 |
8 607 |
|
Total treatment hours |
10 963 |
18 724 |
21 261 |
28 388 |
29 747 |
|
Blended utilisation |
40.3% |
51.7% |
58.7% |
62.7% |
65.7% |
|
Realised rate per treatment hour, R |
321 |
321 |
322 |
322 |
323 |
Treatment rooms run at lower utilisation than nail stations because facial and massage bookings are longer, less frequent and more weather- and season-dependent. The practical ceiling of around 70 per cent reflects the concentration of demand into peak periods: a salon that is full on Saturday and empty on Tuesday morning has a high average only if it has deliberately filled the Tuesday.
3.2 Retail is smaller than it looks
Professional skincare retail is frequently presented as the salvation of salon economics. In this model it is worth having but not decisive: retail reaches 16.0 per cent attachment against treatment revenue by Year 5 — 15.1 per cent against total service revenue including ancillary — contributing R1 536 000 of revenue at a 44 per cent gross margin, or about 10 per cent of contribution. It is a genuine profit line and a retention tool, and it is not a substitute for filling chairs.
|
Year 5 line |
Revenue (R) |
Share of revenue |
Gross margin |
Contribution (R) |
Share of contribution |
|---|---|---|---|---|---|
|
Treatments and ancillary |
10 174 000 |
74.8% |
52% to 58% |
5 325 040 |
78.4% |
|
Memberships and packages |
1 900 000 |
14.0% |
100% |
1 900 000 |
28.0% |
|
Retail |
1 536 000 |
11.3% |
44% |
675 840 |
10.0% |
|
Total |
13 610 000 |
100.0% |
49.9% |
6 789 000 |
100.0% |
Treatments and ancillary are three-quarters of revenue and roughly two-thirds of contribution. Memberships and packages are a seventh of revenue and more than a quarter of contribution, because the treatment component is already counted in the treatment line and the retained portion carries no additional cost. That asymmetry is the single most important structural fact in the business.