Are you a hair and/or beauty enthusiast with a strong desire for entrepreneurship? Well, opening a hair or beauty salon would be the best gateway for you to venture into the business world. The good thing is that you don’t necessarily have to be an expert in hair or beauty to be a salon owner. You just need a dream, a business plan, and the right experts to help you actualize your dream.
You may also be happy to know that the salon business in the U.S. is quite profitable too. It is estimated that the average salon profit margin in the U.S. is well over 8.2%, with the margins ranging from 2% profit for the least profitable to 17% for the best-managed salons. That’s quite impressive considering that the average profit margin for American businesses is 7.7%. And even though the pandemic has taken a toll on these impressive numbers, the beauty industry is one of the industries that business futurists expect to bounce back fast in the post-COVID economy.
If you have decided to open a salon, there are key things that you need to do beforehand. Here are 8 of those things:
1. Size Up The Competition Through Competitive Research
You don’t have to spy on your to-be competitors, but you must pay attention to everything they do (or don’t do) if you are to find any space in your target market. That’s where competitive research comes in. Competitive research will give you insights into the industry trends worth paying attention to, help you identify gaps in the market, and help you optimize your marketing strategies.
When sizing up the competition, here are a few things that you should focus on:
- Their online presence, especially their websites, social media engagement stats, and online reviews.
- Which are their best-used keywords? Use an SEO analytical tool for this research.
- What are their pricing plans and special offers?
- How do they communicate with their customers? You will get these answers by trying their services firsthand, talking to their customers, and subscribing to their email blasts.
- Be methodical: Track your findings for each competitor on a spreadsheet.
2. Find The Best Possible Location
The need for a perfect location for any business cannot be overemphasized. But how do you find the perfect location for a salon? Here is a brief summary of the key considerations to make:
- Accessibility and visibility. If you are targeting foot traffic, your ideal location is on a major roadway or street. If your business largely depends on online bookings, you may want your salon to be tucked away a little for privacy purposes. Ensure that the location is easily accessible to the old, handicapped, and customers who may not be familiar with the neighborhood.
- Choose a location where the surrounding businesses help you attract new customers and enhance your customer experience. A neighborhood with classy coffee shops, gyms, boutiques, etc. Avoid overly industrial neighborhoods and, basically, any neighborhood where your clients’ security and/or safety aren’t guaranteed.
- Choose a neighborhood with local regulations that favor your salon business. Avoid localities that, for example, ban graffiti or hanging custom signage on salons. Speaking of regulations, always remember to confirm the property manager’s/owner’s restrictions before signing any contracts. Some restrictions are bad for business.
3. Put Together A Hair Salon Equipment List To Help You Stay Organized
You already found the perfect location for your new hair salon. It’s now time to shift your focus to the in-store preparations. Your customers expect a fully professional working service when you open on the first day; they won’t tolerate any excuses for substandard services even for a brand new hair salon. To ensure that you didn’t miss any important equipment, it is important that you put together an equipment list beforehand. You can divide the list into a few subcategories such as:
- Hair salon furniture: These include styling and backwash units, salon chairs, a reception desk and chairs, couches, cabinetry & storage, stylist cutting stools, manicure & pedicure chairs, and salon retail stands for showcasing your products, among others.
- At the reception, you might need a magazine rack, welcoming mat, business cards, houseplants, etc.
- Hairdressing supplies: Towels, brushes and combs, salon hygiene products, hair care & perming products, hair coloring products, scissors, razors, etc.
- Washing machine, dryer, and other cleaning equipment/supplies to ensure that you always have clean towels and gowns.
- Beauty supplies: Such as hair removal products, lash & brow kits, and nail supplies.
- Office equipment: An office is important for professional business management. The office will need a desk and some chairs, stationary especially an appointment records book, a phone, and a computer.
- Trolley, carts, & trays
We cannot list all the equipment you need, but you get the idea now, don’t you? Do your research and apply your personal touch to ensure that your salon is the best and most aesthetically appealing in its neighborhood. Speaking of aesthetic appeal, you might want to hire an interior décor expert to help you create a unique, stylish, and beautiful space.
4. Invest In A Reputable Online Booking System Provider
Old-school customer services may not make the cut in today’s tech-dominated business world. Your prospective customers are shopping for salon services online and they want all the convenience that comes with online shopping. To attract new and high-quality customers, therefore, your salon should have an effective hair salon online booking system that allows potential customers to make appointments and payments remotely and on their own schedule. A reputable booking system will help you remotely manage your schedule, keep tabs with reservations, and generally keep an eye on the status of your business from any location.
Perhaps the most convincing benefit of investing in a salon online booking system is that it gives you access to a dashboard of all the business analytics that you need to strategize and grow your business. You can, for example, get insights into the most popular competitors, the demographic with most of your customers, or even the most requested time slots. Knowing who your customers are, what they want, and how to impress them will save you time and money in your marketing processes.
5. Come Up With A Foolproof Hair Salon Business Plan
The purpose of a business plan is to outline your salon’s initial budget, location, flagship services, business goals, business strategies, and everything you need to start and grow your salon. A plan is a tool that you need for business consistency and continuity.
What should a foolproof salon business plan entail?
- An overview of everything from the budget, target customers, goals, and location.
- A breakdown of what you want your salon to be known for: The services, vision, social media reputation, and brand reputation, etc.
- A financial plan: Where will your funding come from? What fraction of the profits will you plow back to the business?
- Market research. How well do you know your competitors? Why does the target customer need your salon services? What makes you different/better?
- A marketing plan: Which social influencers will you work with, if at all? Which traditional marketing methods will you leverage? What’s your marketing budget? Which web designers, CMS, and SEO service providers will you work with?
6. Understand And Have All The Relevant Legalities In Place
This goes without saying: You have to comply with local, state, and federal licensing and permit regulations for your business to get off the ground. That is why you need multiple insurance covers (especially Employers’ Liability and Public Liability insurance), State and Federal Tax IDs, and licenses (particularly cosmetology/salon License) in place before opening your salon. There also are key health and safety regulations that your salon must be compliant with and have legal documentation for the same. Where electrical installments and plumbing are involved, you might need clearance from local government inspectors. You must, therefore, ensure that the companies you work with during the installation process are licensed and reputable.
Note: Different countries, states, and localities have different legal requirements, so it is important that you seek legal advice from lawyers, financial experts, and building inspectors every step of the way.
7. Create Your Salon Brand
Branding is as important to a salon as it is to any other business. It helps your salon to stand out from the competition and have its own unique identity. That is why, among other things, you should hire a professional to design a logo for your salon. A brand tagline and signature colors would also be great for your brand’s visual identity.
Note: Your social media campaigns will largely be dependent on the brand you create early on. The social influencers you will liaise with in the future, the brands you will collaborate with, and the message you will be sharing with your followers must align with the brand you create now.
8. Hire Workers Who Align With Your Business Core Values
Your core values will help you get the right people to carry your dream to fruition. These values define what your salon stands for, the workplace culture you intend to cultivate, and the customer experience you want your employees to offer.
With the core values clear, now conduct a competitive recruitment process for all the workers you need. These include receptionists, hairstylists, massage therapists, manicurists, a manager, and estheticians, among others.
It’s great that you have decided to start a salon business; it’s quite a rewarding business when managed right. That’s why we cannot emphasize this enough: Don’t rely too much on old-school salon customer service solutions. Invest in modern booking systems and other technologies in order to increase your odds of success.