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How To Open A Hair Salon

Updated: Jul 20, 2019

If your dream is to open a hair salon, now it might be one of the best time to do it.

The salon industry can be significantly profitable. It is growing steadily and is predicted to continue growing.

There are a lot of pieces and parts that really need to be thought through and organized before you open your doors.

Like every new venture, there are some steps you should follow to get started.

Keep reading and figure out what they are!

Make A Business Plan For Your Hair Salon

Why should you create your business plan carefully?

When you have an intention to develop your own hair salon business, there are dozens of obstacles you have to face up to, and the first and foremost thing you should do is to plan ahead your business carefully.

Here are 5 reasons why:

  • The plan brings an overview picture of your hair salon

  • It helps with focusing your business on strategic problems

  • Set priorities of what should the business do

  • You will always be ready for unexpected issues

  • Force you to be result-oriented

Pick a business model

Each type of salon has vastly different business models. Will you open a salon from scratch, buy an established salon or purchase a franchise?

Will it follow the commission or chair-rental model? Just keep in mind that any of those models have both pros and cons. With chair rentals, stylists are independent contractors who carry their own insurance.

Explore reliable partnership

It will be much easier for any business to have strong business partners who do not only support you when you are in need but also continue to be an ally to push you to the next level.

Whether it’s an investor, a product company or simply a strong mentor group, partnering could make you the most successful salon owner.

But to seek for the right partners is not that easy. For example, if you are looking for suppliers, consider things like reputation, price, product quality, then place some trial orders before deciding buy goods in bulk.

The right ones are those who can handle every problems in the purchasing process thus you will receive the items immediately with the best satisfaction.

When your hair business depends on a reliable partner, you do not have to worry about the success of anymore.

Create a comprehensive plan

The main point of a solid business plan is to figure out what your business goal is, how to reach the goal successfully, and how you’ll troubleshoot all the arising problems.

A clear business plan acts like a roadmap that will guide your business to success. A well-rounded business plan includes:

  • Business name

  • Business competitive edge

  • Market trends research

  • Target market (customer segments and insights)

  • Brand identity

  • Acquisition channels (such as social media)

  • Marketing strategy

  • Supplier plan

  • Business relationships

  • Revenue forecasts

  • Cost structure

  • Key resources

Outline everything you need, it involves a lot more than just simply designing your salon and getting people in the chair.

Release your hair treatments and services

After you’ve created a cozy atmosphere at the salon that your customers will love, it’s time to offer excellent hair treatments and services.

Providing an unforgettable experience for your customers is what keeps them coming back.

You may want to look into sơm tips to help you deliver better customer service

  • Estimate how many services (such as hair cuts, bleachings, colors, etc.) you might perform to the customers.

  • Keep in mind that though you need to charge enough to be profitable, you can't charge too much — or you'll drive customers away. Try to set a price point that is both fair for your customers and prosperous for you.

  • Get an idea of what other salons charge. Browse comparable salons in your area, and take note of what they charge. Your prices should probably be in a similar range.

Determine and figure out the start-up cost

A cornerstone of your business plan is figuring out how much money you need to run your business. Finances are top of mind because though you want the salon to be profitable as soon as possible, the startup costs could make you anxious.

Keep in mind that due to both the upfront costs and the operating costs, it might be a few months, sometimes more than a year, before you turn a profit.

You can also estimate the salon startup costs based on fixed and variable costs. Fixed costs are the salon’s expenses which stay the same with any sales volume, and are typically non-negotiable costs. Some of these include:

  • Business insurance

  • Renting a location

  • Utility furniture

  • Equipment for services

On the other hand, variable costs are easier to manipulate. You can probably cut down costs and save money. These are the costs of labor and materials that change with sales volume. Variable costs associated with opening a salon include:

  • Labor costs

  • Products and tools used by hair stylists

  • Shipping and delivery costs to replenish hair product

  • Advertising and marketing

It depends on your expenses and projected revenue — to create an operating budget that keeps you on track and helps you avoid overspending.

Set Up For New Salon

Choose a physical location

Choosing the right place to locate your salon and looking for vacant properties are the huge differences between success and failure.

Know the demographics, the local competitors, and think about how your customers will get to your salon.

You’d better know everything about the area. Consider these factors:

  • Get into a central spot with good traffic and high visibility. Busy streets, malls or spaces next to locations people visit often are ideal.

  • Try to have easy access. Is there sufficient parking? If parking is a hassle and traffic is thick on the way to your hair salon, people might not consider it worth their effort and time.

Purchase salon equipment

To get your salon wrapped up in furniture, equipment, and decor, you have to remember that these things make up a large portion of your startup costs.

To keep costs reasonable and avoid overspending on salon equipment, you should create a basic checklist of the materials needed. Every salon needs the following:

  • Salon stations that include chairs, mirrors, and storage space or booths for hair and styling products

  • Shampooing stations with chairs, shampoo bowls, and storage space for products

  • Drying stations for use during other hair treatments and services.

The amount of equipment you need depends on the size of your business and the number of hairstylists you decide to hire.

A small reception area and a waiting area are also necessary for most hair salons. You may want your customers to feel comfortable with the waiting seats when the stylists are busy.

Equipment and furniture costs vary significantly but most of them can be bought at wholesale prices to save money if you are buying in bulk. Create a specific financing plan based on your budget and equip your salon adequately.

Take care of legal requirements

One obligatory factor to run a salon is getting numerous licenses and permits in business and cosmetology. These requirements vary from different states but there are several common documents you need to take care of.

  • Get business licenses such as an operating agreement, a certificate of occupancy, a license to sell retail, a building permit.

  • Look into basic insurance policy like general insurance, health insurance, liability insurance or workers’ compensation, etc

  • All personal appearance staff must be licensed. That includes professional certifications and cosmetology licenses

  • Make sure your hair salon can pass the health inspection to avoid fines or being shut down by the health department.

Visit websites of your state and local municipality to see what’s required. Or you can consult a local lawyer to make sure your salon is following the guidelines laid out by your state.

Hire The Right Staffs Based On Personality

Just as important as holding out for the right location, hiring the right staff can make or break your salon business.

It’s a common struggle for salon owners to find a competent team so don’t make a rash decision about who to hire just to fill seats when starting out.

Before you start the interview process, create a list of what you are looking for in an ideal candidate. These are some things to consider:

  • Skillset: The candidate’s skill set and capacity to learn new things are important when interviewing and selecting employees. Consider the previous experience in the field when hiring professional stylists. Do you want to pay for training a newbie or pay for a high salary of professional staff? This is all up to you.

  • Attitude: A candidate’s attitude and work ethic determine their dependability, their willingness to learn, ability to work with a team are also vital.

  • Personality: Does the candidate’s personality match the business culture you infuse in your salon? Think carefully about how you want to define your company culture and the traits that each employee should have.

  • Be ready for Employee Identification Number (EIN) numbers.

Once you have hired and on-boarded your staff, you may think that it’s all done. But not that fast. The beauty industry is competitive, and the problem is hairstylists often jump from one salon to the next.

In order to prevent employee turnover at your salon, you should provide your staff with reasons to stay. Here are a few ways to boost employee engagement and retain staff:

  • Build strong relationships and encourage team bonding activities outside of working hours.

  • Outline a clear career path for employees and give your hair stylists an opportunity to advance.

  • Promote from within before you decide to hire outside resources; this encourages stylists to stay.

  • Offer competitive compensation compared to salons in the area.

  • Provide perks like flexible hours, commuter benefits, birthday recognition, and regular happy hours to keep your employees feeling valued.

How To Market You Hair Salon?

Once you have your business plan written, your location set, and your salon insured, it’s time to create a solid marketing plan and attract more customers.

If you are a hairdresser, you can start by letting your old customers know that you’ve finally started your own hair salon that they can come to get their hair treated. For any customers that choose to move and to become loyal with you, give them extra appreciation and encourage them to refer you to their friends.

You will then need a good e-commerce website. You are suggested to hire a professional to create your site if you can afford it. Your site should be catchy, easy to navigate, and ideally include helpful information for your customers, such as contact info, location, opening hours, and pricing. The website site is the extension of your brand, so it should match the image you want your salon to present to customers.

On the other hand, social media is an important component of your marketing plan, it’s ideal to set up accounts on a variety of media platforms to publicize your business.

As most salons use an online booking system nowadays, that’s also an important element to look for business management software.

Keep in mind that advertising and marketing hold a significant percentage of your startup costs that you should learn how to well spent on this.

5 Reasons That Often Lead To Salon Failure

Many salon owners follow all the right steps from doing substantial research to creating a detailed business plan when opening their hair salon. But staying afloat in the health and beauty industry is tough.

Here are five common reasons why salons fail:

  • Inadequate cash reserves: You need cash reserves for unexpected costs that you may incur when opening a hair salon.

  • Lack of industry knowledge and experience: Without expertise advises in the industry, you can struggle with operations and future growth forecast.

  • Failure to keep up with market trends: Hairstyles change frequently, and sticking to the old ways can lead to a downturn in business. Promote continued education and training for your staff and stylists that they can learn new skills with new trends and expand their services.

  • Failure to appointment management: Salon owners who find it difficult managing booking appointments and reoccurring customers often have a hard time staying afloat.

  • Weak competitive edge: Because of the industry’s saturation, competition is a top struggle for many salon owners. It is important to constantly assess neighboring salons and remain competitive with prices and overall customer services.

Don’t let the risk of failure impede your dream of opening a hair salon.

In order to ensure that you are going in the right way, be sure to create and follow your business plan, make sure you’re properly licensed and insured, well outfitted and located.

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