Buying a salon is a dream come true for most people who love beauty. A lot of aspects need to be considered before opening a hair salon. You should expect a lot of competition in the beauty industry.
Most potential salon owners remain stranded because they have no idea where to start. Here we have compiled some of the basics you need to know before starting up a profitable salon business.
What You Will Learn?
You will learn how to be an owner of a salon.
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- How Much Money Can you Make Owning a Hair Salon?
- Do You Need A Cosmetology License to Buy A Salon?
- How Much Does It Take To Buy A Salon?
- Is Buying A Salon Profitable?
- How Much Does It Cost To Buy A Salon?
- Buying a Salon Pros and Cons
How Much Money Can you Make Owning a Hair Salon
There are a lot of aspects that determine how much a salon owner can make. For instance, the pricing of the services, employee wages, number of customers, permits, cost of electricity, and rent for space all play part in determining total earnings.
However, everything held constant, a salon owner should earn between 50,000 to 70,000 Euros per annum.
Do You Need A Cosmetology License To Buy A Salon
Many investors often ask whether they should have a cosmetology license to own a salon despite the fact that they have not studied anything related to beauty or hair styling.
But you need to check.....
Different states in the USA have different legislations that govern the operation of a salon.
However, as the owner, you should have a valid cosmetology license to run a salon business.
In the UK however, there are no does such rules, whereas in Germany you need to be 'friseurmeister', which means you have had further training as working many years as a stylist.
In addition, you should also ensure that you hire employees who are qualified so that you can provide your clients with the best services. Besides, being qualified is good for business because you can help out whenever there are many customers in your salon.
At times your employees will leave unannounced and you can step in and offer services to your customers. Imagine having to turn away your regular clients because there is no professional available to make their hair or nails.
It is disappointing and the customer may end up never returning to your salon.
The law in some states requires that you submit your qualifications and those of your employees before you are permitted to operate your salon.
Therefore, if you intend to open a salon, then you should attend school and acquire the necessary certifications.
Do not miss our post on nail salon license.
How Much Does It Take To Buy A Salon?
Other than hard work and determination, here is what it takes to open a salon.
Create a Business Plan
Starting a business without a plan is like boarding a vehicle without knowing your destination. A business plan will give you purpose as well as direction for your salon. It contains vital details on how to go about each step of the salon startup. If you would like to learn more about building up a plan for your business, please also check out out post on salon goals and objectives.
Find a Mentor
In any business, it is recommended that one finds a mentor who you can ask questions whenever you are in a fix. Ideally, a mentor should be someone who has owned a salon for a long. Over the years, your mentor has experienced a lot which can be a learning experience for you.
Furthermore, if you want to succeed, you have to walk with other successful people.
Find the Right Location
A salon should be located in a high traffic area. Other than return customers, if you are in an open place, your business could benefit from the walk-in customers, and if they are treated right they can become regular clients.
Have a Target Clientele
It is always good to have a target clientele even before you start out. The reason is so that as you package your services, you can tweak them to meet the needs of your customers.
For instance, if you want to attract the youth, your salon should have bold and warm colors.
If you want to attract the rich and classy customers, have your salon meeting their high standards from the colours to the furniture used.
As you begin, you may have few clients, therefore, you may not need help. However, as you build your clientele base, you will need extra hands.....
Hire workers who value meeting their client’s needs.
To have a prosperous salon, it is not about talent, it is about customer service and consistency in delivering the said services. No client will walk into a salon where they are treated with contempt or one where the employee gossip. As such, go for employees who value customers.
Create a Safe and Comfortable Environment
Most clients will continue booking hair services from one salon if they feel comfortable while receiving the services. No one wants to go home having back aches from poor furniture. Invest in furniture that speaks volumes to your clients in letting them know that they are valued.
Is Buying A Salon Profitable?
In the USA there are about 40,876 salons and barbershops that generate about 7 billion Euros every year. You may be wondering whether the salon industry is saturated.
Well, it is true that salons are many but the difference between them all of them is their way of service delivery. Therefore, you need not worry that yours will not thrive.
Profit is determined by many things including the average pricing of your products and services. Sales generate more income in a salon.
You, therefore, have to work towards selling as many product lines as you can. The services you offer also play a major role in determining your profit margins.
For instance, a salon that deals in hair styling and nail art make more than one that only deals with hair styling. As such, ensure that you incorporate many services for your clients. You will be surprised at how clients are willing to acquire more than one service whenever they pop into your salon. For instance, a customer can have her hair done as a nail specialist works on her toes.
Profit is realized after calculating the total sales and deducting the production costs.
Ideally, there are fixed costs such as rent, and variable costs such as electricity, and hair products. Variable costs vary depending on how they are used.
For example, if you have many clients in a month, more products will get used and the electricity and water bills will go up as well. Besides, there are also employee commissions that vary depending on the number of clients they serve in a day.
On average, a salon can generate an income of about 100,000 Euros annually. Out of the generated revenue, about 50,000 Euros is profit for the salon owner. Isn’t this a lucrative business? It sure is if the right techniques are used in the startup as well as the management of the business.
Do not miss our post about the requirements to open a hair salon.
How Much Does It Cost To Buy A Salon?
Obtaining the necessary certificates should be done before you even plan on opening a hair salon. Each state has different laws but you should have licenses obtained from the state where your salon is to be located.
The cost of certificates depends on the school where you study while the cost of licenses differs depending on the state laws.
Whichever location you choose, you will be expected to pay rent every month. Rent is charged according to the size of your premises as well as the location.
More often than not, you will find that the shops located on the front side of a building and especially on a high traffic route will be charged higher than those found in remote areas.
Cost of Equipment
Having the necessary tools for work makes it easy for salon owners to give good services. Buying quality equipment can be expensive at the beginning but trust me that eventually, it will all be worth it.
Ensure that you invest in high-quality blow dryers, combs, steamers, dryers, tongs, hair products, and good furniture. You also need to have mirrors and shelves. The other most important aspect that incurs some hefty cost is painting and branding. Paint colors that represent your brand.
Creating a Website
No modern salon operates without a website. In the 21st century, clients value a salon with some web presence where they can conduct bookings and any other inquiries. A decent website could cost you quite an amount.
Renting an empty room is not enough to get that dream salon you have always dreamed about. You have to put in a lot of work to remodel the building such that it represents your brand. You may need to change the flooring or even the location of the taps. All of these activities require monetary input.
You will also be required to pay insurance premiums for your business. For peace of mind, ensure your salon against incidents such as fires, theft, and accidents related to work.
Buying A Salon Pros and Cons
There are many advantages and disadvantages associated with owning a beauty salon.
1. You Make Decisions
Being at liberty to make decisions is something most employees desire. Owning a salon implies that you are the boss and every major decision solely lies on you. Some of these decisions include:
- Firing and hiring of employees
- How your brand is to be marketed
- Beauty products to use within your salon
- Price of your services
- Your brand image
- What clientele to attract and serve
- Opening and closing hours
2. You Don't Need to go to Work Every day
Being a boss gives you the flexibility to attend work at your convenience. However, failing to be physically present at your job should only be done after your salon has established and you have trustworthy employees whom you can delegate duties to when you are absent.
3. You Take the Profits
The beauty of being a business owner is that after payment of all production costs, all the profit is yours. Yes, having to pocket all the extra cash is a pathway to financial freedom which is what every entrepreneur is seeking.
4. You Learn Managerial Skills
Running a hair salon not only gives you income but also gives you experience in managing a business. Proper management skills are the key to expanding and growing your business.
It is quite difficult to manage a salon. When the salon is yours, you have all the determination to see it grow and in the process, you apply all the necessary input.
As much as there are more benefits in owning a salon, sadly, there are some disadvantages as listed here.
It is difficult to carry all the administration work. However, if you have decided to own a business, you have no choice. You need to ensure you have employees who have both the talent and passion to offer exemplary services to your clients. Besides, you need to follow up with clients to confirm whether the services offered were satisfactory.
2. Payment of Taxes and Insurance
As the salon owner, you have to ensure that you pay taxes in a timely manner and also pay insurance premiums. It may seem difficult at the start but once you get used to it, you will not forget.
Just as you get to take home all the profit, in the event of misappropriation of funds and possible losses, you have to incur the cost.
Starting a salon business is lucrative and can give you a financial breakthrough if you start it on the right track. For instance, you have to start with a business plan and seek a location that has high traffic.
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...Another crucial thing is a running website for your business.
However, being a salon owner can give you more income than being employed as well as teach you managerial skills.
Most importantly, seeking a mentor to walk with you through the journey is the key towards realizing your dream of owning a salon.
And if you love these ideas or have some other ideas that you've used in the past to promote your salon business, why not share it with the Zolmi community in the comment section below. We would also be delighted to answer your questions, as well.
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