With people becoming increasingly beauty conscious, the beauty salon business has been booming ever since. According to Statistica, the cosmetic industry in America was worth about $49.2 billion in 2019. By 2024, that figure is expected to grow to $190 billion globally.
Despite the exciting numbers, many salon businesses fail badly, not because of lack of money or poor services but due to poor business planning. Start your planning by specifying the niche for your salon. You can choose between a hair salon, tanning, skincare treatments, or nail treatments niches. A well-defined niche will attract more loyal customers and help you hire talented employees. Read on to find more helpful tips for opening your beauty salon.
The Cost of Opening a Salon – Funding Options
Many banks avoid investing in a salon business due to the risks involved and the low probability of success because of the commonness of the company. So what type of beauty salon loans are available? Here are some popular funding options for opening a salon:
- SBA Loans: SBA loans are perfect for private businesses. For acquiring these loans, you need a perfect plan and a strong strategy to qualify.
- Microloans: Comparatively, microloans are easier to acquire than SBA loans because you don’t need to show credit history but only strategy.
- Alternative lenders: Alternative lenders are much more accessible compared to microloans and SBA loans. If you want money in a hurry, you might think of alternative lenders.
8 Crucial Steps of Opening a Salon
For opening a salon, there are various factors that you need to keep in mind before getting started that will help with the business:
1. Business Plan
Proper planning and writing are the main factors of growing businesses. Initially, you have a proper plan along with its budget. If you’re a newbie, then you should hire a financial planner. The planner should include the customer portion, suppliers, built-in relationships with other businesses, and economic infrastructure. Other than that, salon designing and equipment will also be part of the business plan.
Another important factor is figuring out the costs. Mark this point that advances and operating costs take time before turning into profits. You can resolve it by acquiring beauty salon loans, and discussing it with an accountant might help. The primary principle of opening a salon costs includes renting, training, inventory, insurance, and bills. Operating costs depend upon the size and services you are offering.
Location is important. Some salons are built next to other salons that take their clients by offering them some discounts. Ensure the site will be the center of the well-populated city, and customers will pass by easily or have good parking areas. However, the best tip is to be far enough from the competitor salons, which offer the same services. Try to make it convenient for customers. It will lead to more customers, which means more profit will help pay off your loan.
Once you’re done with planning and location, now the next step is marketing. Contact your old customers and tell them about the new salon and encourage them to refer their friends.
Apart from this, creating a website and ads in social media also play a crucial role in marketing. Post pictures of the salon on Instagram, Facebook, and Twitter with trending hashtags and share links with friends. Local advertisements like billboards, banners, and tv commercials also bring traffic to your salon.
It would help if you had a distributor for the usable products of your salon, like hair and hand accessories, makeup, electrical equipment, and brushes. Try to deal with a wholesaler or local shop to get things at low prices on time. For electrical equipment, contact with a more prominent distributor, whereas for small stuff like shampoos or soaps, deal with a local distributor or from a manufacturer.
It is essential to put your customers and their reviews at the top of your list so that you can grab your customers by making them feel special and giving them discounts. Sandra LaMorgese told Business News Daily that her best advice for salon entrepreneurs is to already have multiple clients before opening your actual place. Why? Because you will already have the income to cover all of your overhead costs!
Employees play an essential role in growing the businesses. It is very crucial to hire experienced staff. “I would advise any new salons to invest time in the training and motivation of the staff,” said Jennifer Quinn told Business News Daily that her best tip for new salon owners is to focus on the staff with training and motivation. You should invest your time into these two areas regarding the staff. Furthermore, you should focus on your employees’ growth — be passionate about it! Be a leader, not a boss.
It’s tough to decide the charges for your services when it comes to your own business. After some research, you will get an idea of how much you would charge. It would be best to keep in mind that your skills, services, and costs determine a price, no matters what offshoot the salon is charging.
Sheryl Miller, the owner of Fringe Hair Art, offered some advice to Business News Daily. She explained that when she moved to a small town, the most expensive haircut was only $38; yet, she charged $60 because she had over two decades of training and education. People didn’t think she would make any money, but since opening, Miller has raised her rates more, to $70. People will pay for a great skill if you have the talent to back it up!
Be Unique When Planning Your Beauty Salon Business
A unique niche gives you future security against failure and gives a possibility to work well. Owner of Everyday Esthetic Eyebrow Studio Pamela Jeschonek said, “With salons on every corner, even in small towns, entering into the market with a specialty or service niche can dramatically increase buzz and press about your opening.” Establishing your business in a niche market is easier than trying to succeed in a large popular market. So focus on your niche. Then you can determine which beauty salon loans are best for you, and begin the 8 steps to open a beauty salon!