How to Open a Successful Hair Salon

Starting a hairdressing salon business can be very challenging. As the owner, your main responsibility is establishing the structure of the salon. You may choose to manage it or cut hair. Managing the business require you to be the wearer of many hats: you may need to be an entrepreneur, a receptionist, an accountant, a hairdresser, a cashier and maybe even a cleaner.

A hair salon business can be started with relatively moderate capital which, of course, will depend largely on the type, quality, clientele base and choice of salon design. If you want to open a hair salon in your home (usually small operation), then all the expenses and preparations are spent on buying equipment and redecorating the room (you will also need to check the licensing requirements for this as it is illegal in some areas). A professional hair salon business is another matter entirely.

Most people who seek success in the beauty industry will find that success greatly depends on your ability to offer a consistently good customer satisfaction experience. A successful hair salon business is supposed to offer good services, use quality hair products, maintain a hygienic environment and provide an enjoyable experience at an affordable price.

The beauty industry business is very promising and profitable, but one should be aware that it is also a very competitive industry. Almost every neighborhood, big or small, will have at least one hair salon; the more populated the neighborhood or city, the more likely you will be competing with several salons in a relatively small radius.

If you hope to establish a successful hair salon, it’s important to have a good plan in place beforehand. Here are few things to consider:

Market/Niche Analysis:

You can undertake the task yourself or hire specialized experts who can draw up a marketing niche plan which is marketing to focus on a specific targeted customers. Finding your niche will not be not easy. First, you must think about what you are good at, what your clients say they like best about your services, and what you enjoy doing for your clients.

Popular and promising areas of niche activity are hair salons which cater exclusively to children, or individuals who want salon services jointly with pet grooming capability, or which offer ultra-exotic services for wealthy clients.

Business Plan:

No business becomes successful by accident; what it generally takes is a good business plan. A business plan acts as a road map that will guide you to success. It is highly recommended that you revisit your business plan regularly, even daily would not be too much. It would also be beneficial to find a mentor in the business that can help you if you have questions. The key elements in your road map should be how to figure out what exactly your business will be, how to troubleshoot problems and how to achieve your dreams.

Because this is a fundamental and important stage in planning, think carefully and honestly about your own ability to craft a business plan. Are you confident enough in your skills or will you be better off getting support from professional business consultants?

Potential Profitability:

Is it profitable to open a hairdresser? It can be. The level of income will depend on your efforts from the onset to organize work and recruit staff that will help you grow the business. With a steady stream of customers you can expect a return on your investment in as little as two years. Remember, you will get out what you put into it; if you invest in expensive equipment, you should be prepared to charge higher prices. Conversely, with a more modest investment you would charge appropriately for services rendered.

It’s also worth bearing in mind that, during periods of economic hardship, beauty salons of medium and low price categories tend to survive. The number of elite style studios is consistently reduced relative to the economy. Success in this business depends primarily on the volume of customers you get, not only during the peak period (weekends and after work) but also when it is slow.

Legal Requirements:

Make sure that you acquire the appropriate business license and other required certifications and documentation (which will vary by state) before you open your doors for business. In the US, in most states, a beauty salon owner can register as a sole proprietorship or as a Limited Liability Company (LLC). While a sole proprietor is the easiest option, it may not be the best. There may be tax implications which would be better suited for an LLC type of ownership. It would be well worth the effort to research this aspect or to speak with an accountant or tax attorney.

Correct documentation and availability of necessary permits from public services will help to eliminate claims from the supervisory authorities. While a license to be a hairdresser is an absolute necessity in nearly every jurisdiction, other staff members, such as nail technicians and cosmetologists, may also need to have a license from an appropriate supervisory board, as well as certification from an accredited trade or beauty school. A hair salon must also satisfy all the requirements of the jurisdiction’s health and sanitation department, as well as be in compliance with fire safety regulations.

Premises:

It may not be easy to find a suitable and affordable place for rent for your hair salon; often the rental expense consumes a significant cost of operations. The goal here is to have a salon space that adequately meets your needs without being too cramped and over-crowded as a too small location is often a turn-off for clients. On the other hand, too big a location when you don’t have the staff and equipment to fill it simply looks unfinished.

At a minimum, the space in your salon needs to be able to accommodate a waiting area and a reception desk, work stations for your stylists (and, if your budget allows, consider separate spaces or work areas to separate the genders; while not a necessity, one survey suggested women prefer a separate space and are more likely to opt for additional services, as a result), a sink and drying area. You will also need a backroom for your beauty supplies and fixtures (washer, dryer, hot water heater, etc.), and a washroom for both staff and clients. If your budget allows, a break room for your staff would be a great morale booster, and an office to handle administrative tasks would make them considerably easier.

Location and Competition:

The main difference between success and failure is location. You should select one with high visibility and good traffic, that is close to where your target clients live and shop. Do not open your salon near your competition. Almost every neighborhood, big or small, will have at least one hair salon; the more populated the neighborhood or city, the more likely you will be competing with several salons in a relatively small radius.

Competition in the beauty care industry, while promising and potentially quite profitable, is also very fierce for the same reasons. As much as possible, gather information about your competitors in the neighborhood and be sure that you can distinguish your services from them. Don’t hesitate to check out your competition, personally; get a feel for what you may be up against by getting your hair styled at your competition. If that is not a possibility, make sure you scrutinize online reviews of your competition to find out what your potential clients like or don’t like about them. Gauge the quality and pricing structure of the beauty salons in your desired location. What type of services do they offer, who is their market, how many employees do they have, how attractive and welcoming is their salon? Your task, really, your responsibility, is to collect as much background information about your rivals as possible.

While the aforementioned considerations do need to be addressed, the pieces of the puzzle which will be the deciding factor between the ultimate success and failure of your hair salon are these:

  • Personnel
  • Desired Clientele
  • Services Offered
  • Equipment
  • Pricing

These five go hand-in-hand. The bottom line is this; if not in sync, they can make or break you.

Personnel

Personnel costs are the biggest recurring expenses in this business. How many employees you need will depend on the type of services you want to offer. Interestingly, some salon owners claim they do not hire talent because they can teach the new employees the required skills, though the love of the job and a nurturing disposition are not traits that can be taught. While you will always want to hire a person who is good at what they do, you do need to bear in mind that an employee who does not have “people skills” will not be an asset to your salon.

While the basics in the salon business are a given, i.e. sinks, chairs, mirrors, scissors and clippers, etc., your biggest investment will be in your staff and, especially, your “master.” A master stylist is someone who has attended a reputable beauty school, who has trained extensively under the best in the business, who has years of solid experience and has built a good reputation (and, subsequently, a good fan base), and who is well versed in all aspects of the craft.

Very few customers are willing to let an untested stylist have carte-blanche with their appearance but having a master stylist on board, whose attention to detail is beyond compare, is quite a different story (thus, worth every penny of your investment). If a customer is pleased with the outcome, she will continue to return to your salon for an appointment with your master stylist, often regardless of the cost.

Though there are no hard and fast rules, the following should be considered a guide to your potential staffing needs:

  • Small-sized salon: Male or female stylist, occasionally a nail technician. Sometimes there is an administrator. Total of 3-4 people;
  • Medium-sized salon: Up to four hair stylists, perhaps one individual who handles the shampooing and conditioning, one or two nail technicians, administrator, cleaning personnel, cosmetologist. Total may be more than 10 people.
  • High-end salon: In general, there are often an equal number of staff as the medium-sized salon, but they will also have a master stylist and/or master colorist, plus more than one person to handle shampooing, as well as one or two nail technicians and cosmetologists (who may or may not be required to be licensed). Last but not least they may have a person who handles the clean-up work during and after business hours.

If you plan to open a small beauty salon, and provided you yourself are a master stylist, you can save on the salaries of hired workers by doing double duty as not only the master but the salon administrator (or the receptionist, clerk and cleaner). If the owner of the business is a master with a brand, this will only add prestige to the salon.

Services Offered

You need to decide on the type and quality of the services you would like to offer in your salon. Below are some of the services offered in typical hair salons of varying price tiers:

For an economy class salon:

  • Simple men’s and women’s haircut
  • Model haircut
  • Coloring
  • Waving, perming or straightening
  • Styling or blow outs
  • Manicure and/or pedicure
  • Waxing and/or shaving
  • Sale of mid-range hair care items

For a mid-level salon, in addition to the above:

  • Lamination
  • Coloring and balayage
  • Biowave
  • Trendy haircuts
  • Braiding or weave
  • Art sculpture, nail painting, application of tips
  • Pedicure
  • Cosmetologist services that do not require the qualification of a doctor-dermatologist
  • Sale of high-quality hair care cosmetics

For a prestigious studio, in addition to the above services:

  • Image creation
  • Stylist services
  • Copyrighted haircuts or the ability to realize any version of your favorite hairstyle
  • High-quality expensive visage
  • Spa treatments for hair
  • Sale of quality styling products, masks, shampoos, balms of famous brands

Fixtures and Equipment

The type and quality of fixtures and equipment you buy for the salon will depend on the level of services you intend to provide which will itself depend on the type of clientele you seek. You will need very expensive equipment if your target clientele is wealthy individuals, or if you intend to offer upscale services.

At a minimum, any salon will need the following furniture, fixtures, equipment and consumables:

  • Large wall mirror(s)
  • At least two stylist chairs
  • Shelves and cabinets for tools and consumables
  • A sink (or two) with attached client chair
  • Hair drying station(s)
  • Hot water heater, washer and dryer for towels and aprons, etc.

Also, dependent upon the various services you plan to offer:

  • For hair services: Hairbrushes, combs, scissors, hair dryers, crimpers, straighteners, hair clippers, towels, smocks, hair apparatus sanitizers, etc.
  • For nail services (manicure and nail artistry): Nail clippers, nail files, nail dryers (air and gel) and assortment of nail polishes and nail care products for nail treatment.
  • For nail services (pedicures): Besides the above for manicures, you will also need a special purpose foot bath and chair combo for your customer, as well as a stool and movable equipment storage unit for your employee.
  • For cosmetology services and/or waxing: Special purpose chair or lounge, table, assorted makeups and facial treatments, wax warmers, linens, etc.

Of course, customers who are awaiting their turn with the stylist or other specialist will need to be made to feel comfortable. You will need chairs, tables, reading materials, a television (optional, but at minimum, a decent sound system), and a beverage station for coffee, tea, water and other non-alcoholic drinks. The goal is to keep your potential customer from getting frustrated with the wait and leaving.

Pricing

During your marketing research, you must be able to identify your client base, the level of services they may need or want, and at what price. Incorrect assessment of this may lead to business failure. As far as clients are concerned, the higher the price level, the more and better quality of services expected. There are essentially three levels of service and pricing tiers to consider:

  • Economy Class/Inexpensive: Your target clients would likely be senior citizens, children with their parents, public sector employees, high school or college students, and men and women who want to simply get in, be served, and get out quickly. Your clients will expect you to offer basic services such as haircuts for men and women, styling, coloring, perm, straightening, blow outs and, occasionally, waxing services. The shop may be located in a residential area or in a shopping or strip mall. It generally has a single modest room and inexpensive equipment. Most income generated is from rapid turnover of these basic services.
  • Middle-Class/Average Price: Your target clientele would be middle-class or high-middle class men and women, entrepreneurs, professional workers such as office managers, teachers, bankers, as well as some well-to-do youth. Clients in this tier would expect the aforementioned basic services and more, including nail styling, biowave, and lamination, etc. The shop will have more modern equipment and a well-furnished interior and exterior. Prices are higher than the economy class salon.
  • Elite Class/Expensive: Your target customers are wealthier individuals with money to spare, those who simply like to be pampered, those who enjoy the relaxation of the salon experience, and even those who are rushed for time but willing to pay extra to get in and out. Elite class clients would generally expect to find a high-end salon in an upscale or trendy neighborhood. Clients will expect to receive excellent personalized services, all of which are performed by well-trained professionals. The shops are well-designed, and equipped with top-of-the line furniture, fixtures and equipment. Some salons may offer private rooms. In general, pricing in this tier is very expensive in keeping with the level of service.

Some Useful Tips

To attract new customers consider offering discounts, special promotions, or bonuses—customers love getting something for “free.” And don’t neglect return customers who will feel jilted if they are not properly appreciated. To that end, advertise locally, or use social media (Facebook, Instagram, Twitter, etc.) to your benefit. It is very important that you create an online presence and maintain your page well—yes, it is more work for you but it will be work which pays off with increased foot traffic.

Your mantra should be, a happy customer is a repeat customer. That means that you need to scour the online reviews (Yelp, for example) for your salon and thank those clients who have left you a favorable review and address the issues which are less than complimentary.

Conclusion

Opening a beauty salon is not always easy. Besides the ability to wield scissors and a blow dryer, you must have a love for the job and a willingness to want to create beauty. Ask any successful salon owner and they will tell you it is next to impossible to create a profitable business that you don’t love. As the saying goes: Love what you do and you won’t work a day in your life.

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