Beauty salons have a habit of doing well, even in economic downturns. According to one study by Mintel, only 1 in 10 women cut back on their salon spending in the most recent recession. But why? Experts think it has something to do with the fact that people are unwilling to give up their creature comforts. We saw a similar thing in the restaurant business. Most people thought that the restaurant business would suffer as a result of falling wages and incomes. But it turned out that what people wanted during the bad times was a relatively cheap indulgence.
It seems, therefore, that there’s never been a better time to invest in starting your own hair salon business. But before you dive right in, there are some things that you need to know.
What Does It Cost?
As with many business ventures, you need to be willing to sink a lot of money into a salon to get it up and running. Your main cost will be the cost of employing staff, which could run into the tens of thousands of dollars. Then there’s the issue of equipment financing. And you’ll have to fork out to pay the rent on commercial premises. Finally, you’ll have to model the interior so that it looks like a genuine salon.
Thus, to get a top-notch salon off the ground, you’re looking at an initial investment of more than $250,000.
You could, however, require additional money, depending on the type of equipment you plan to use. Sauna treatments, for instance, will cost a lot more than a simple cut and dry.
How Much Can You Earn As An Owner?
The first few years in the salon business can be tough. Almost no salons enter profitability in the first year. And most don’t start making money until their third or fourth years.
Once you become established, however, everything changes. The Himalayan Day Spa estimates that the profit margin for a typical service is around 65 percent. Many salon owners can bring in around $450 per day.
How much you earn over the long term depends on how successful you are in retaining your customers. Small salons are likely to see around 125 customers per week.
How Much Should You Charge?
The world of salon products has changed dramatically over the last few years. In the past, massages were the most commonly chosen product. But they’ve since been replaced by pedicures as the number one treatment. The nail industry is huge right now, according to leading analysts from BABTEC. Interest in products in the salon are driven by editorials in popular women’s magazines. Thus, salon owners should keep an eye out for the latest magazine trends and market to that.
A simple manicure can cost anywhere from $25 all the way up to $60 for a French manicure. Eyebrow threading starts at $25. Full face and body tans begin at $40. Facial cleansing starts at $90 and Swedish massage from $100.
These prices, of course, will vary depending on your region. If you’re located in a big city like New York, your prices will be on the higher side.