People seek beauty. They are constantly looking to improve what they have or
give themselves a whole new look. It is no wonder that hair and salon
business remains one of the rapidly growing industries today. Learn what you
need to start and succeed in this business.
by Jenny Fulbright
Staff Writer
People seek beauty. They are constantly looking
to improve what they have or give themselves a whole new look. They drop by the nearest hair and
beauty salon to be pampered by stylists and beauticians to style their
tresses, shape their eyebrows, and color their nails – all for a few (or
more) bucks. An hour in a hair and salon shop every month and one emerges
confident and ready to take on the world.
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It is no wonder that hair and salon business remains one of the
rapidly growing industries today. According to the
Service Annual Survey of the Bureau of Census, the U.S. hair, nail and
skin care services saw a growth spurt in 2001, with revenues increasing by
78 percent from 2000.
In 2001, the industry reached $25.3 billion in revenues. Of this number,
sales receipts from barbershops totaled $2.1 billion; beauty salons at $20.8
billion; and nail salons at $2.5 billion. According to industry insiders,
the growing popularity of day spas account for the increase in sales on the
hair and salon industry.
The hair and salon business can be started with moderate capitalization.
Success in this venture depends on the ability to provide a consistently
high customer satisfaction. The successful hair and salon business is one
that offers excellent service, use quality products, and provide an
enjoyable atmosphere at an acceptable price. Customers of this type of
business are willing to pay for a higher price to an operation that can
satisfy the client’s desire for improved physical appearance and even mental
relaxation.
Services Offered
Hair and salon businesses range from the “$15 budget haircut only” to
upscale full-service hair, nail and day spa services that could pitch a
price of a few hundreds.
A typical full-service
hair and salon business offers all or any of the following services:
Nails: manicures, pedicures,
polish, sculptured nails, nail repair, hand conditioning treatments.
Skin
Care: Facials, body waxing, massage.
Sale of professional
hair/beauty products: Many salon businesses also offer a wide range of hair
and beauty products in order to provide everything a customer needs in one
convenient location. You can choose to sell top-of-the-line beauty products
shampoo, daily and deep treatment conditioners, hair styling products such
as mousse, gel, pomades, among others; and other specialty hair products.
Retailing professional hair products is an important strategy for retaining
clients and making additional profits.
Some hair and salon businesses also offer spa services, a growing niche
in the salon business. Day spas offer services such as body scrubs, skin
lightening, body wrapping, herbal wraps, massage/aromatherapy, derma
abrasion, stretch mark and blemishes, anti-aging, facials, makeup, skin
care, waxing, polishing, and anti-acne treatments.
Start Up Requirements
The amount of capital you need to start the business depend on the type, quality and choice of salon design, rent and utility
deposits, fixtures, leasehold improvements, opening inventory, and
equipment that you intend to use.
Key start-up expense components of a hair and salon
business are:
Salon space. Unless you live in a big house with room for a salon and
in an area with favorable zoning restrictions, you will need to rent space
for your business. Depending on the type of your operations, you may need
space anywhere from 500 to 2,000 square feet.
Many cities allow salons to be located within a residential area, but
with zoning restrictions, it may be difficult to operate a salon as a
home business. In particular, some residents may not tolerate the flow of
traffic as well as parking in your neighborhood.
Personnel. The number and type of personnel you need to hire will
depend on the services that your hair and salon business will offer.
Typically, a salon will require one to several stylists and a receptionist.
Other personnel that your business may hire include shampoo technicians,
barber, nail technician, facialist, make-up artist, and a massage therapist.
Leasehold improvements. You may need to undertake leasehold
improvements to your space based on your interior layout, design, and
plumbing requirements. Leasehold improvements are defined as the
construction of new buildings or improvements made to existing structures by
the lessee. As the lessee, you will have the right to use these leasehold
improvements over the term of the lease. In many states, however, these
improvements will revert to the lessor at the expiration of the lease.
Moveable equipment or office furniture that is not attached to the leased
property is not considered a leasehold improvement.
Salon Equipment. The equipment you buy will depend on the services
you offer. Some of the basic equipment you need to purchase include
washing basin, styling chair, hair driers, supply trolleys and manicure
sets and aprons. Other equipment you may need include shampoo spray machines; facial
bed, hair steaming machines, and other body/skin care instruments. If you
are planning to sell beauty products, you also need to invest in inventory.
Contact the beauty salon equipment suppliers and check if you can get a
good deal. You can also look into alternative sources such as eBay where
lower-priced equipment is up for bidding.
You can choose to spend anywhere from $2,000 to $30,000 for salon
equipment alone. You may also need initial training, professional and
licensing fees, and at least three months of working capital.
Other start-up expenses may include:
Cash register
Merchant account fees (to accept credit cards)
Business license fees and other
required documentation (varies by state)
Utilities
Insurance
Professional fees
(accountant, lawyer, etc.)
Signage costs
Initial marketing and
advertising expenses
Depending on the range of the services you offer and the overall look and
design of your salon, you can spend anywhere from $10,000 for a bare bones
operation to $100,000 for a full-service outfit to jumpstart your salon
business.
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Success Tips
The keys to success in the hair and salon business are:
1. Keep your clients satisfied. A salon’s best marketing tool is
word-of-mouth. If a client is happy with the results, he or she will come
back to the your salon; after all, it is all a question of trust. Satisfied
clients can then help advertise your business to their friends, family, and
colleagues. Word can easily spread about the great look and outstanding
personal service that your salon provides. It is important that your
business create and maintain the desirable reputation as a quality hair and
salon operation.
2. Choose the right location: Location is critical to the success of your
business. You need a location that is strategically situated on one of the
busiest streets in your area, if not in a mall. Some salons employing
well-known hair stylists (e.g. “stylists to the stars) can put their
business anywhere and still clients will flock to them. If you don’t have a
well-established reputation in the business and a long list of loyal
clientele, find a high-profile location with an easy access from all parts
of town.
3. Offer a clean and safe atmosphere. Salons thrive on an environment
that is clean, safe and relaxing where customers can receive prompt and
professional service. Cleanliness is a particularly important element that
can draw clients again and again. Your clients must be able to trust that
the products and tools that you use on them are of top-notch quality and
safe. You cannot afford to put your clients at risk from infections, as it
could damage your reputation.
Irrespective of size, salons should be scrupulously clean with the
cleaning, disinfecting and sterilizing of equipment and work areas
undertaken several times (not just once) a day, preferably at the start and
end of the day and in-between clients. Be sure your towels, footbaths, and
other equipments are washed, clean and odor-free.
4. Convenience: Salons offering a wide range of services in one setting
have a distinct advantage over those who offer only one or two types of
services. Many clients prefer to have their hair, nails or face done in one
place, instead of going to three different places. While you can specialize
in one main area (e.g. hair), giving your clients the convenience of a
one-stop beauty shop can set your business apart from your competitors.
5. Hire qualified and trained personnel. The cosmetic procedures performed by untrained
personnel may cause health problems to the clients. It is important that you
hire only qualified and well-trained beauticians, stylists, and other
personnel. Experience may give a beautician the expertise to render
treatment, but, without proper training, she would be unaware of the merits
and demerits of procedures. It is your responsibility as the salon owner to
ensure that your personnel are adequately trained and understand each
procedure offered.
You need to be aware of the liabilities that you and your business can be
subjected to as a result of accidents and botched procedures (from rashes
resulting from improper waxing procedure to damaged hair). Check with your
insurance company on policies that can protect you and your business from
liability and lawsuits that may arise from customer complaints.
Also consider providing training classes on a regular basis to your
personnel to improve their product knowledge and skills as well as awareness
to trends.
6. Save on personnel costs. Personnel will be one of the biggest
recurring expenses of a hair and salon business. To save on expenses, you
can arrange for everyone but the receptionist to be contractual workers to
be paid a sliding commission scale based on the amount of revenue created.
About the Author:
Jenny Fulbright is a staff writer of PowerHomeBiz.com.
