Beauty salons have become increasingly popular as disposable income has risen. Salons are as much a social institution as they are a way to improve the appearance of customers. The beauty industry generated $62.46 billion in 2016 alone, and it’s numbers have consistently gone up for the past 13 years.
What are the costs involved in opening a beauty salon?
Experts recommend you have at least $60,000 before opening a beauty salon, but this number is highly dependent on the property costs in your area and the number of chairs you plan to have (1,000 square feet will fit about 6 chairs.) Equipment will typically cost around half the initial capital, or around $30,000. The costs of licensing to operate vary widely (anywhere from $100 to $2,000.)
Advertising costs should also be factored in, with television time costing up to $15,000. If you choose to use a pay-per-click model for digital ads, your costs may be substantial due to the ubiquity of beauty salons.
What are the ongoing expenses for a beauty salon?
Equipment replacement (wear and tear on chairs, dryers, etc.)
Building costs (e.g., utilities, permits, upgrades)
Who is the target market?
Beauty salons will profit most from repeat clientele. You’re looking for men and women who are willing to pay more for quality work, and those who need set services every month.
How does a beauty salon make money?
Beauty salons make money by exchanging beautifying services for money. It is important to find the right profit margins for your services. Some salons use a base rate for coloring or haircuts. A good rule of thumb is to look at the pricing structure of other salons in the area, and aim for a middle-of-the-road approach. Customers do have their budget limits, but they may become instantly suspicious about the quality of work if the rates are too low.
How much can you charge customers?
The exact amount to charge customers will be dependent on where you are, who your clientele is, and the experience of the stylists. Celebrities may pay up to $800 for a hair service and $200 for their nails. Typically though, you’ll want to set your stylists up on a tier setting, with junior stylists charging around $30 for a cut, intermediates charging around $40, and masters charging $50 to $60. Manicures and pedicures can be anywhere from $15 for a basic treatment to $30 for a spa manicure.
How much profit can a beauty salon make?
On average, profits can be up to 15% of the total amount your salon brings in. You can also make additional money selling retail products, such as specialty shampoos and conditioners. Should you want to make additional money, you’ll need to adjust your service prices, but increasing prices may scare off customers.
How can you make your business more profitable?
Look for the ways you can make your customers look better based on their needs. For example, if you have a lot of middle-aged women coming in, offer more services to lift and refresh aging skin. Look into bringing in cosmetic specialists from time to time for special events (e.g., offer Brazilian hair straightening for a month.) There are a variety of new trends that hit the market, like vampire facelifts and sunset coloring that can drive interest and set your salon apart. You can also franchise if your business grows large enough, but 99% of beauty salons have a single location.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.