Operating a hair salon business is a profitable business venture. Millions of people are making money all over the world by starting hair salon businesses. However, above everything else, the hair salon business calls for exceptional relationships and the highest standards of service. This is one of the most lucrative businesses that have undergone significant transformation over the past two decades, particularly with the addition of the male clientele profile. The Professional Beauty Association reports that this industry has continued to thrive and rebound even during the global recession. The medium salary for a regional sales manager in the industry stands at about $75,000 per annum. Celebrity hairdressers can command salaries that would seem previously out of the question. The same can be said of small businesses that specialize in this niche. It is the type of model that can be combined with other activities such as homemaking and even part time alternative employment.This article explains how to start a profitable hair salon business.
Turning your passion into business
It goes without saying that an avid interest in fashion trends and an innate understanding of human hair are prerequisites to becoming successful in the hair salon business, no matter how small you want to start. This is a business model that is open to modification but must be done within the confines of a carefully worked out strategy. You will need the skills of a conversationalist, cosmetologist, PR person, counselor and even instructor in order to make the best of it. In addition, you may need a business mentor who is experienced so that they can show you the ropes of the hair salon business.
The hair salon business lends itself to variety in terms of the services that are on offer. For example, you can offer cutting, color, styling, pedicure, manicure and skin treatments. The individual services and products will vary greatly depending on the tastes and preferences of your client at any given moment in time. There will be lots of troubleshooting along the way because you may be required to respond to requests that were not originally part of your program. The hair salon business is unique in this respect because it varies so greatly depending on the fashion trends and the responses of the clients at that particular time.
Managing your finances
Just like any business, the lack of finance can devastate your hair saloon business. There are a number of funding sources including personal savings, borrowing from family, sale of assets and a bank loan. Most of these methods attract interest but borrowing from family is also not cost-free in reality. You may be asked to offer employment to less than competent family members in return. This is not a good practice because you need good workers in order to succeed in the hair salon business. Moreover, if the hair salon business fails and you are unable to pay back a family loan; you risk your personal relationships. With the bank or other official investor, your business is always at risk of bankruptcy unless you can keep up with the scheduled payments.
It is advisory to have a detailed accounting and inventory program. This is because supplies are required and used up at varying rates. If you have no computerized record, you run the risk of running out of essential items. Buying in bulk can attract important discounts which will ultimately improve your bottom line. More importantly, you need to ensure that your tax account is up to date. Normally it is advisable to pay the taxes as they arise rather than waiting for the very end. This is because of the temptation to spend the profits in the hope that they will be replaced in the future. Alternatively, you could earn interest on the tax funds by storing them in a separate account once you have done the calculation.
Make sure you have a comprehensive hair salon business plan
The failure to plan is the beginning of business failure. The hair salon business plan must be clear and succinct enough to give your potential partners, and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain the nuances of the business that you propose. At the very minimum you need to have the following included:
- The mission, vision and operational strategy
- Market Analysis And Customer Segmentation
- A business case showing that the business is financial viable and sustainable
- A marketing and customer care plan
- An organizational chart and human resource policy
- A three-year expansion outlook
- A risk and rewards Analysis
You will need to make an informed decision about the business type that you will adopt for your company. Each of the business structures requires very specific application processes for permits and registrations. The business type you select will determine who owns, runs and supervises the operations of the company.
Selecting the best location
The location of the hair salon business is important but you must remember that it is entirely possible to open up a successful hair salon in very rural areas because everyone needs to have their hair styled at some point in their lives. Do not make the mistake of first opening the hair salon then looking for customers. The customers are the first, middle and last consideration in all your business decisions. Try to cultivate long term clients because they are the mainstay of the business particularly during lean times. The hair salon should be as close to your priority customers as possible.
Word of mouth is the primary selling point for the hair salon business. However, if your location is too far or in an unsafe area then the customers may not want to visit. As an alternative you can offer to work on a mobile basis where a beautician visits clients in their home. The downside to this approach is that it adds to your operational costs and might mean that you cannot consistently deliver an excellent job since some of your bulkier equipment is necessarily left behind. The best location spots are therefore safe, visible and busy. The population that uses these spots should fall within your target clients.
The grand opening
Every hair salon requires some grand opening. You need not go overboard on the partying expenses. The purpose of the grand opening is to introduce your brand to the local community. It is at this point that you can present attractive offers in order to get the clients through the door. First impressions last a very long time so you must put your best foot forward. Interact with the prospective clients during the opening and take their comments on board. The changes they propose could potentially turn a good hair saloon business into an excellent one. From time to time you can do charity and social events such as ribbon cutting in order to create positive vibes for your brand in the community.
Do not forget to launch a website. Many people are booking their hair salon appointments online these days. It is better to hire a professional to do the website because of the technicalities involved in driving traffic and converting it into actual sales. For example; you need to have accurate contact information, your precise location, a price indicator and hours of operation. If you are organized and passionate about it; your hair salon business can become a great success.