How to Open a Beauty Salon: 2 Important Stages

Spoiler alert: opening a beauty salon is profitable. You should realize that this business requires attention. It is not about entertainment and easy money.

After the quarantine, only those beauty salons that are opened as modern enterprises, and not as a hobby or “for status”, have a chance of success.

This article is about the profit that beauty salons give. What do you need to know when opening a beauty salon? What can help you to navigate the market, find your niche and understand how much it costs to open a beauty salon? As it usually happens: at the beginning, the prospects seem tempting, and the difficulties are insignificant. It will not be possible to avoid mistakes.

Salon Business: Reality And Misconceptions

It is both reality and delusion to follow the widespread belief in the market that “the client follows the master.” In other words, you can continue to think so, and then the question of whether it is profitable to open a beauty salon becomes rhetorical. One of the major risks to watch out for is the huge black market for homeworkers that you will have to deal with all the time. And work side by side.

Then the pangs of creativity begin around the question: “Business model or premises?” On the one hand, the business model is important, on the other hand, very few people understand what it is. And realities sometimes force them to act the other way around. It is becoming more and more difficult to rent a suitable space, and redevelopment, showcases, communications, etc. of your premises can be very expensive.

The BUSINESS MODEL of your beauty salon is more important than having a “suitable” room right now.

The effectiveness of a beauty salon concept is related to your business sense, the ability to analyze the current situation in the professional salon services market, notice changes in consumer behavior, knowledge of marketing, and the basics of business planning. And besides this – self-confidence, readiness to change, and overcome difficulties.

The Concept of Your Beauty Salon

If you, like many investors, dream of opening a beauty salon in the “elite” segment, remember that if 3-4 years ago wealthy women did not have time to go around all super-expensive establishments in a year in order to keep abreast of current events, now only a few of such salons can boast of a full load. At the same time, salons positioning themselves as “elites” still work in cities with a population of over one million. Many of them are 10 or more years old. In many ways, they are morally and functionally outdated. Opening an elite beauty salon or spa is more likely to amuse self-esteem and emphasize your social status than to earn money. Whether it is profitable to open such a beauty salon becomes a rhetorical question. But of course, you can try.

No need to copy someone else’s beauty business. Firstly, it is not a fact that you will be able to understand what makes the salon flourish. It seems only at first glance that any beauty salon is in “full view”. Secondly, the one who has found a topic that is in demand by the market and has managed to present it differently from other salons always has a competitive advantage. Thirdly, it is always more difficult to enter a busy market – even more so to the local market.

So, in order to understand how to open a beauty salon from scratch, we will analyze this process in stages.

Stage I: Create a Business Model

Beauty salon, beauty center, and spa start with:

  1. idea
  2. business model

Idea. What idea can become in demand in the beauty industry and how will I market it? The answer to this question is the secret of the “profitability” or “disadvantage” of the beauty salon business. The success of the salons is achieved through the exploitation of an original business idea and competent management. You should read more about how to find profitable ideas in the beauty industry and invest in the Marketing section.

The business model of a beauty salon is a description and numbers. You should start looking for premises only after you understand for yourself:

  1. which target groups of clients you will work with;
  2. what will you sell;
  3. how to align communications with clients;
  4. how the production processes will be organized;
  5. what resources are available to you;
  6. estimate the structure of income and expenses.

Description of the target audience implies answers to the following points:

  • how and where your potential clients receive beauty services today;
  • what they like, what they dislike (do not generalize and do not judge by yourself);
  • gender, age;
  • place of residence;
  • income level;
  • the amount of expenses in the category “beauty” (hypothesis);
  • service preferences (standard, exclusive services)

Competitors. It is also impossible to say if it is profitable or not to open a beauty salon without studying the competitive environment in your city/country. You should also imply a scrupulous collection of information on salons that are already operating on the market. You need to collect information on prices, the list of services, the level of service provided. All data must be entered in the Table, otherwise, they are not suitable for analysis and further work.

As a result, you will have a General model of your competitors’ work and data for developing a Model of your beauty salon.

Stage ІІ: How Much Does it Cost to Open a Beauty Salon? 

To figure out how much it costs to open a beauty salon you need to understand – the larger the business, the more investment, the longer it pays for itself. And beauty salons are no exception to this macroeconomic pattern. Risks: revision of the taxable base of a beauty enterprise, changes in the licensing system and norms governing the daily life of the salon, failure or obsolescence of the material and technical base. And the longer the payback period, the more likely you face these risks.

The monthly net profit of 15-20% of the turnover testifies to the well-being of the business in the beauty industry. At the same time, the time frame for reaching the break-even point is observed. The last caveat is not accidental due to the fact that there are cases of a 20% profit with a payback period of 7-10 years (low turnover due to insufficient equipment of the premises).

I recommend that you write a business plan for a beauty salon. You can write it yourself using the Salon Marketing template or order it from consulting companies. At least, estimate the main figures for the estimated income and expenses in a simple Spreadsheet.

The beauty industry business is interesting because it makes you realize your entrepreneurial talent. It is possible to open a small beauty salon, using a low threshold of entry to the market. It is possible to build a network and a global international company, taking advantage of the fact that there are still few large network players in the beauty market. Every beginner can complete the four stages of opening a beauty salon.

Go for it! The beauty industry has been clearing itself of outdated formats and one-day salons. And after quarantine, this process will become irreversible. Only those salons that were created as enterprises, and not as a hobby, will remain on the market.

Bio: Hannah Butler works as an essay writer in WriteMyPapers4Me. She likes sharing her experience in the form of articles in such spheres as Business, Beauty, and Wellness. Besides, Hannah studies psychology, and in her free time enjoys rock climbing and bike riding.