A successful business plan for your hair salon
That’s it. You’ve decided to get started. Your passion is itching, and you want to practice your hair-dressing skills independently.
Certainly, you are gifted, but you cannot only bet your success on your skills. The hairdressing salon market is very tense. And you will need to draw up a detailed business plan to make no mistakes and ensure sufficient financial profitability.
Hair salon or barber at home
The first question to ask yourself before opening a hairdressing salon is how you want to practice your profession. Do you want a permanent hairdressing salon, an address, or a sign. Or do you want to enjoy the status of self-entrepreneur in you in particular, establishing a hairdresser at home?
Hairdresser at home
Suppose you want to be flying without premises. In that case, you will need to acquire a minimum of equipment (vehicle, water tank, etc.). And carefully analyze your market because, without a customer, your activity will be doomed to failure.
To do this, do not hesitate to conduct a small market study (phoning, a survey in commercial places). Meet local elected officials if you are in the countryside and ask for a helping hand from the Chamber of Commerce and ‘Industry.
Warning! Many launch themselves under this flying status and generate only modest incomes. It must be said that the target clientele is generally made up of people with reduced mobility and/or very busy workers.
You should also know that the profession is very supervised and that in the absence of premises. You will need to hold a professional patent. A hairdressing master’s certificate or a capacity issued from an equivalent diploma.
Now, suppose you wish to establish yourself at a physical address. In that case, you will have to refine your file and prepare a detailed hair salon business plan to obtain the financing necessary to establish your activity.
The choice of location will be decisive for the future success of your business. A location in a busy street will cost you more in rent but will naturally attract customers. While a location with more setback will allow you to benefit from lower rent. But will require a larger marketing budget.
A stagnating market
Although the sector’s turnover remained stable at 6 billion dollars in 2013. The fact remains that turnover in volume is experiencing a downward trend.
In other words, the number of hairdressers has increased. And all share the same cake, resulting in a drop in profitability per trade. Today no less than 16,000 hairdressing salons (26% of the park) are on sale in the USA. These are generally family businesses that cannot find buyers.
In his interview with Challenges, the Director of the Mondial Coiffure salon, estimates that half of these businesses will not be bought out, leading to market regulation regarding business volume.
It must also be said that the hairdressing item in the household budget has been reduced significantly. Women go to the hairdresser on average 4.7 times a year compared to 6 times five years ago. But male attendance has increased slightly to 7 visits against 6.
In addition, if salons under brands do well by offering very competitive price lists – they represent 15% of the sector and capture 30% of turnover volume – they are also obliged to compensate for this loss of volume by offering services with parallel aesthetics such as manicures, facials or the sale of additional products (shampoos, hair styling, etc.). The latter represent approximately 10% of salon sales. Not to be overlooked in your offer.
Structure your approach
As you will have understood, you are not tackling an activity without competition, and you will have to arm yourself to succeed.
Here are some points you will need to study to make a successful business plan for your hair salon.
Establish a market study
Start by doing industry research to keep up to date with new trends.
Then analyze the competition: number of hairdressers, price lists, positioning, services, and type of clientele.
And then analyze the type of clientele where you want to settle: needs, frequency of visits, meeting times, and average budget.
Then, using this information, you can establish your positioning and your pricing policy to create a viable business over the long term.
To calculate your cost price, you will have to consider various factors such as the standing of the salon (current, Haute-hairstyle, well-to-do clientele, etc.), your structural costs, your salary costs, etc.
Detail your business opportunity: takeover of a salon with existing clientele, creating a business, or branding.
It all depends on the amount you have to invest, the level of competition in your target location, and your personal choices (willingness to be independent or not).
If you wish to take over an existing business, consider also studying the opportunities for leasing–management of an existing business. This mode of recovery allows you, for rent paid, to drastically reduce the amount to be invested at the start.
Determine your financing needs
This is where you should not be mistaken because if you underestimate your financing needs, you will quickly find yourself in difficulty.
As an indication, the average cost of an installation is 52,000 dollars for rework and 48,000 dollars for pure hair salon creations.
Be careful. These figures hide exponential differences depending on your installation mode: count 52,000 dollars for an independent salon and up to 111,000 dollars for a franchise.
In addition, the area of implantation, rural, city, and large cities, can modify the investment required.
Your cost structure will depend partly on your choices in terms of investment (purchase vs. rental or leasing), your marketing strategy, and your staffing needs.
Choose the right status: sole proprietorship or company
Again, there is no right or wrong choice: it depends on your situation, preferences, and ambition.
It is best to take advice from a lawyer.
Pay attention to professional regulations.
Your hair salon must be placed under the effective control of a qualified professional. There is only one exception: for villages with less than 2,000 inhabitants, men’s hairdressers can practice provided it is a supplementary income activity.
Don’t forget to take out insurance to cover yourself against risks related to real estate (vandalism, theft, water damage, etc.), your customers (skin reaction to a product, theft of a handbag, hand, etc.), to your activity (incident, work stoppage, etc.) and your employees if you take any.
As you can see, mastering the art of hairdressing alone cannot guarantee financial success.
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