The beauty industry is booming. In fact, according to GlobalData, the UK’s health and beauty market size was worth over £39 billion in 2022.
Whilst COVID-19 saw many hair salons close due to reduced footfall, the numbers are certainly back up. According to Statista, in 2022, there were a total of 48,578 hair and beauty salons operating in the UK – a huge industry.
And it’s not just women who are interested in taking care of their appearance, men are starting to jump on the bandwagon too. The rise of barbers offering boutique services such as hot towel shaves and beard maintenance, not to mention hair cut, styling and colour shows just how big the business opportunity is.
If you’re thinking about opening a hair salon and are dreaming of overnight success, it’s important to remember that it takes hard work and dedication to establish your salon. Gaining a following with your target demographic won’t happen overnight, but if you follow these steps, you can be sure you’ll be on the right track.
Decide On Your Business Model
Most salons operate on one of two business models. You either hire your staff and pay them a salary plus commission, or you rent out chairs in your salon to freelancers and they pay you a portion of their takings.
It’s important to choose which method works best for you at the beginning and then stick to it. Changing your set up once you are established could mean that you lose your best stylists.
In order to make this decision, it’s important you conduct thorough market research. Look at how successful salons run, make notes of what they charge, how much they pay and figure out how you can position yourself as a real competitor.
Also look at your target audience. If you live in a lower-income area, you might want to consider cutting costs to lower prices.
Additionally, if you live somewhere with lots of working age people, consider the opening times that might suit them. It’s likely that many people won’t be able to come in during the day, so opening later at night could be a good option.
By analysing your audience and competitors, you can start to build a fool-proof business plan.
Establish Your USP
Creating a unique brand and understanding what makes a salon unique is essential to success. Will you be high-end? Will you be quirky and off-kilter? Decide on what will make your salon unique, even if it’s something as simple as offering organic and environmentally friendly products.
When you know what your USP is, you will know how to position yourself and how to market yourself across all your marketing channels.
Your USP will also help you to identify your ideal target customers. While you might rely on walk-ins or discounts to get people through the door during your first few months of operations, over time, you will need to shift your focus to active marketing campaigns. Knowing your USP will help you to target the right people on and help you to craft a message that speaks authentically to that audience.
Choose Your Location Wisely
When starting your salon business, location is everything. Many new salon owners start their careers are mobile hairdressers and eventually decide it’s time to open their own salon. If you did this, would your existing clients follow you? In order to answer this, you need to have a think about location and what it means you to your biggest fans.
If you are moving into an already saturated area, do you have enough of a unique offering to stand out? And if you are cornering a new geographical area, do you have enough potential customers to make it a success? Don’t rush the location process as this will inevitably make or break your salon.
Take Control of Your Finances
Opening a salon can be incredibly costly if you don’t keep a close eye on your finances.
Start by making a budget based on your predicted incomings and outgoings. Then, price your services accordingly to ensure they can cover these costs.
Using fintech software from day one will help you to understand your cash position and forecast where you can expect to be in 6 months, a year and beyond.
Working with a financial advisor can also help you to understand your tax position and how you could save money in creative ways.
Be obsessive about your cash position and don’t spring for anything you don’t truly need in your first year of operations.
For example, your chosen site might have enough space for five stylists, but if you only plan to have three working for you in the first 12 months, wait to install the extra chairs.
And if you don’t have anyone lined up to offer spa treatments, don’t worry about fitting out the treatment rooms yet.
Here are some FinTech startups to help:
For Managing Finances: Decimal
Decimal helps make financial operations easier by bookkeeping, paying bills, managing payroll and paying taxes – perfect for salon owners looking to automate finances.
The platform is perfect for businesses that make regular transactions and are looking to more accurately manage their cashflow.
For Team Payroll: Multiplier
Multiplier is a great tool for businesses looking to quickly on board new people to their payroll.
Given salons can have high employee turnover, or be the perfect place for freelancers to pop in and out of, this app makes it easier to pay anyone, anywhere, in any currency.
For Forecasting: Financial Forecast
Budgeting for a business can be really hard, especially if you’ve never done it before.
Financial Forecast helps with budgeting, expenses, cash flow management and understanding financial scenarios. This can help in the initial stages of budget planning for your salon, setting you up for success.
Understand The Legals And Compliance
When opening a hair salon, it’s important to get to know and respect any legal requirements that may affect your business.
Start by applying for the necessary licenses and permits to operate in your area. These may include a business license, permit or other permits related to health and safety. It’s also important to make sure you have the right insurance, in order to protect yourself and your business from any claims against you.
If you do decide to go down the route of renting chairs to freelancers, setting up proper contracts and agreements is important.
These documents should clearly outline payment structures, working hours and any other information to ensure everyone is on the same page. Taking the time to understand and work up these agreements can help you build a solid foundation for your salon.
Salon Design
The design and atmosphere of your salon are important parts of building your business.
If you want to appeal to a certain demographic, think about the type of spaces that they might enjoy spending time in. Whether it’s modern, cosy or vibrant and colourful.
Lighting, seat position and mirrors are also important. Think about how to make the space as functional as possible, especially with multiple people working in the space at the same time.
Train Your Team From Day One
If you want your entire team to be on the same page, you need to make sure you effectively communicate your vision.
Offering team training from the first day will help you to establish the ethos and USP of your salon much faster. For example, there should be processes in place for handling everything from social media complaints to phone enquiries.
Don’t leave anything to chance when it comes to the outward image of your company. In the first year of business, your customer’s impressions of your company will be everything.
Get Ready To Open!
Opening a salon can be an incredibly rewarding business and experience. As long as you ensure you have planned correctly, worked out your USP and streamlined your finances, you can be sure your businesses is perfectly poised for success!
