Salon Startup – What to Consider

If your dream is to open a hair salon, you’re in luck; the salon industry is growing. According to the Bureau of Labor Statistics, as of 2021, the employment of barbers, hairstylists, and cosmetologists is projected to increase by 19 percent from 2020 to 2030, faster than the average for all occupations. While the timing is right, you’ll still face a lot of competition, as there are nearly a million salons across the United States. However, don’t let that number quash your dreams. According to the American Association of Cosmetology Schools, those salons are generating over $40 billion a year in sales, and if you play your cards right, you too can realize your share of it.

There are a lot of obstacles for new salon owners to consider but the hardest thing is facing the possibility of failure. It’s true of any business and a hard reality with which to come to terms. However, facing hard truths, and understanding what could happen if you are not prepared, is part of the process. And by extension, the first step on the road to success.

Every new business owner faces an uphill battle for survival. In fact, financial giant Bloomberg estimates that up to 80 percent of all new small businesses fail within the first 18 months. Since opening a salon takes a lot of time and sweat equity, not to mention capital, it’s wise to educate yourself and prepare as much as possible so that you and your salon don’t become one of these statistics. That’s why we advise you to do your research, crunch the numbers, again and again, make a solid plan for your business, and get the help you need before putting everything you have and have worked for on the line.

If you’re committed to opening a salon, you’ll need more than sheer determination to get started. Here are a few things you’ll want to do first:

Analyzing Your Motivation & Expectations

Before diving in, first, delve into the whys of salon ownership. The goal is twofold: to discover your true motivation for starting your own business and to help uncover the reality of entrepreneurship.

The Dream

Many of us leave beauty school with stars in our eyes and big dreams of having our own place, essentially seeing our name in lights, or in this case on the signage in front of our business. As assistants, we witness other salons and their owners tolling away and think to ourselves how we could run things better. After years on the floor working away behind someone else’s chair, we go into management and experience firsthand what it’s like to carry the burden of leading others. At some point in this journey, a light bulb goes off and sparks the idea of branching out on our own – taking the reins of our own destiny. Along this pathway, the idea of setting our own hours and blazing our own trails becomes an obvious next step in our careers. We’ve put in our time, assisted others, worked hard behind the chair, managed other stylists, and observed how other salon owners run their businesses. It’s a good start and a realistic stepping stone to the next level: salon ownership.

Learning, doing, perfecting, managing, and then exploring one’s own path – this is the natural course of salon or spa ownership. In a sense, absorbing as much as possible while working for someone else and then letting the innate desire take over. A scenario similar to this one is how many salons came to fruition – where a dream and a realization intersect with ideal timing. Missing any one of these aspects, however, is a recipe for failure.

The Reality

As wonderful as salon ownership can be for some, the truth is that it’s not right for everyone. Just because you want to make your own rules and set your own hours does not mean that you are meant to run your own place. At least not a salon where you manage others.

Running any business is demanding but owning a salon or spa can be that much more rigorous. It’s a marriage of entrepreneurial spirit and creative know-how, which is a tough balance to achieve. Also, most salon or spa owners have a hands-on investment in the business and typically perform many of the services available to customers. In addition to servicing a regular clientele, owners are tapped for daily decision-making, handling employee and client disputes, bookkeeping, ordering inventory, managing service calls, plus an endless line of sales professionals competing for the owner’s time. In a nutshell, salon ownership can be quite overwhelming both physically and emotionally.

The best advice is to examine the reality of entrepreneurship, break down your motivation for it, and to think long and hard as to whether or not salon ownership is ideal for you.

To start, reach out to a few salon owner mentors and ask the hard questions:

• What was it like for them in the beginning?
• How long before the business was able to show a profit?
• When did they see a return on their investment?
• What’s the hardest part of running their own business?
• What’s the best part?
• How do they feel about their business now?
• What do they wish they knew before opening their doors?
• Would they do it again?
• What would they do differently?
• How is their business structured (employee, commission, rental)?
• If a commission salon, what are the percentages for the salon and the operator?
• Have they had any issues with the current structure?
• What words of advice they might have for you.

Pay careful attention to what each owner says and then compare notes from one mentor to the other. Does anything stand out? Are there any patterns that you can learn from? How does their advice apply to you?

Next, set aside some quality alone time to do some serious soul-searching. Take a good hard look at your reasoning for wanting to be a salon owner by asking yourself the following questions:

What is it that makes you want to open up your own place? Are you longing to set your own hours, make your own rules, and answer only to customers? Does the prospect of daily salon management excite you? Are you looking to build a long-term investment with your salon so someday you can either sell it or step back and let others take over? Is your reasoning ego driven? Is it the idea that you could have your own name on a business?

Next, ask yourself these questions to see if you are cut out for business ownership.

• When it comes to running a salon, do you excel at managing others?
• Do you have sufficient management experience?
• Can you effectively handle conflict resolution between other creatives?
• Are you good at customer service and advocating for the client (and their experience in your salon)?
• Are you good with details?
• Are you easily overwhelmed or can you multitask without becoming frazzled?
• Do you consider yourself to be a patient person?
• Are you self-motivating?
• Are you able to set goals, identify the steps to reach the goals, and then implement them?
• Are you able to put aside your pride and ask for help when you need it?
• Are you able to separate yourself, specifically your creative side, from the business side? In other words, do you have any issues asking for what you are worth?
• What are you willing to give up to have your own place? Time? Effort? Steady income?
• If times are bad or it takes longer than anticipated to turn a profit, can you manage the salon on your own, financially?

If you have unearthed your true motivation for becoming a salon or spa owner and have come to terms with the pros and cons of business ownership, the next step is to examine the type of salon that’s right for you. Click here to find The Right Type of Salon or Spa for You.

Updated July 6, 2022