How to Start a Successful Salon Business
Dreaming of opening your own salon and day spa? No time is better than now. A report from the Professional Beauty Association says that the salon industry is continuing to grow, despite the recession. Analysts even expect sustained growth for the next five years, at least.
You might be wondering how it’s possible for the beauty industry to thrive despite the state of the economy. Industry experts say that it’s probably because salons provide services that cannot be duplicated well at home. The prices of haircuts and other services that improve the appearance also probably don’t seem very high, considering the confidence boost they give.
The continued growth of the beauty industry can also be attributed to the fact that baby boomers, who constitute one of the largest population segments in the US today, have the will and the means to spend money on personal care services they think will make them look younger.
The good outlook for the salon industry means that you’ll have some tough competition, too. But don’t let that stop you from sharing in the $48 billion annual revenue of salons (as of 2019). According to the Small Business Development Center, this revenue is expected to grow to $88.7 billion by 2024.
Planning your salon
You’ll find that opening a salon requires determination, especially in the planning stages. Here are some other things you’ll need before you open your salon:
- A business plan. All successful businesses start out with a concrete, on-paper business plan. It’s the main roadmap that will lead your salon to success. Don’t be intimidated by the business plan; you probably already have much of the plan figured out in your head. You just have to write it down on paper, so you can map everything out, from your projected operating costs, to your salon’s operating hours, to your plans for troubleshooting problems.
- Funding. You have to figure out how much money you need to get started on your salon. More importantly, you have to find a source for this money. Maybe you have the money saved up, or maybe you want to borrow money through a traditional bank loan. You also have the option to look for investors in your salon.
- A mentor. Planning your own business is so much easier with a business mentor providing experience-based advice. Try to look for someone in the salon industry, like a veteran salon owner, who can answer your questions and help you make business decisions.
- Accounting and inventory software. No matter how good you are at math, it’s still best to use reliable accounting and inventory software for tracking your money and projecting your salon’s growth. The software will also help you track revenue and expenses, as well as figure out just how much tax you owe the government. QuickBooks Pro, Sage 50, and AccountEdge are all great accounting software for small businesses.
- The right location. The location of a salon is so important that many salon owners recommend being fussy about it. Your business’ location might be the difference between success and failure. Your salon must be in a spot that receives a good amount of traffic and is highly visible. Of course, it’s also important that you set up shop near where your target demographic shops or lives.
Go for a tour with a realtor so you can look at available properties where you can put your salon. Keep in mind, there’s no harm in asking – just because there’s no ‘For Sale’ sign in the window doesn’t mean the property is not available. Sometimes, people don’t want to completely give up a property for sentimental reasons but are willing to rent it out.
Having the right location for your salon also means knowing the area around it. Do your homework and thoroughly inspect the site. What are the demographics of the people living near it? Are you going to have any competitors in the area? Will your salon be easy to find and will your customers have ample parking space? These are just some of the factors you have to consider when picking the right location for your salon.
Building your salon
Now that the planning stage is complete, you can now work on building your salon. Start with your salon’s look and feel. Make sure that your salon’s design matches the kind of customers you want to attract. Want to attract a younger customer base? Paint your salon in bright, bold colors and go for fun-looking pieces of furniture and décor. More interested in providing services to higher-end clientele? Go for a clean but elegant look, in neutral colors and with sophisticated, plush furniture and décor. Whatever theme you choose, what’s important is that your customers feel comfortable in your salon.
Of course, an impeccable design for your salon isn’t enough. You have to follow through by providing the best level of customer service, too. Each service you offer clients must be a complete experience; this is what keeps your customers coming back.
With your salon ready, the next thing to do is to hire staff. You’ll probably need just a small staff at first, but, hopefully, your salon will become so popular and so busy you’ll need to hire additional help. Many salon owners recommend hiring staff based on personality rather than skill.
“I don’t hire for talent—I can teach a new hire the skills I want, but I can’t train someone to love and nurture my clients,” a veteran salon owner says. Of course, this doesn’t mean hiring incompetent staff. But personality and working attitude matter just as much as skill when it comes to hiring staff for service-based businesses like your salon.
You’ll also need to select a product line to use in your salon, whether it’s for hair care products like shampoo and conditioner or nail care products like nail polish. Some salons are able to enjoy a big profit from selling the shampoo and conditioner they use, but long-time salon owners advise newbie salon owners to not expect to make big money from this. It’s best to stick with one product line, too, instead of selling a variety of product lines.
“I find that choosing one brand to work with is less confusing for the client and the staff,” a veteran salon owner says.
Marketing your salon
For it to be successful, your salon needs a steady stream of clients. The best way to ensure that is to have a marketing plan in place. Make sure you set aside a budget for your marketing plan so you won’t have to dip into funds reserved for other purposes.
One of the best ways to market your salon today is to have an excellent website. Use some of your marketing budget to hire a professional to create your website. You can also set up your website on your own, thanks to the DIY website platforms available for free today. Your salon’s website should reflect the look and feel of the salon. Aside from being easy to navigate, it should also be informative, with your salon’s hours, location, contact info, and pricing. You can even make things easier for your customers by setting up an online booking system.
Aside from having a website, you must also take advantage of social media platforms today. Set up Facebook, Twitter, and Instagram profiles for your salon. These social media profiles give you more ways to engage your customers and connect with them. You can also use these profiles to send out information on your salon’s latest deals and discounts.
There are a lot of marketing campaigns you can do offline, too. Distribute flyers and business cards around your neighborhood to attract more customers. Get involved the community to get the word out on your salon. You can also host an event like a ribbon-cutting ceremony or a charity event to increase your salon’s visibility. Team up with other local businesses and offer cross-promotional services.
Reevaluate your business plan
Think of your business plan as a work in progress rather than something set in stone. As each month passes, you learn something new about your salon and your salon’s customer base. It’s definitely a good idea to revisit your business plan once in a while to make sure you’re still on track. Make some changes, if needed, and adjust your salon’s operations accordingly.
For instance, you might want to check how you can lower operational costs and save money. You might have splurged on some things that, as it turns out, you didn’t really need. Review your inventory and your monthly expenses – there might be some areas where you can trim back without affecting your salon’s daily operations. Maybe you can order a smaller amount of product each month.
Opening a successful salon is by no means an easy feat, but all the challenges will be worth it once your salon becomes one of the most sought-after salons around.