Did you know that 8 out of 10 new salon businesses fail? When opening a salon business, you are entering a highly competitive market. So do you know how to be one of the few that succeeds?
Part of it is down to good planning and getting it right from the start. Read on as we discuss the essential steps to take when starting a salon.
Working Out Your Costs
Before you even start a business plan and apply for funding, you need to know what that funding is for. There are a number of items you will need for a successful salon. Some of them you may already have, and some may be brand new to you.
The first cost you need to get is the price of licenses and permits. Each state will have its own rules regarding how you can operate in the local area. If you also plan to sell products, then you will also need to cost up a seller’s permit.
Next, you need to decide how many staff you will take on and how much they will be paid. Put money aside for any financial services, and price up a business insurance package.
Finally, you will need the salon equipment. Everything from hairdryers to towels, to a wax hair removal kit, will need to be purchased. These salon essentials will be a huge part of your budget.
Finding a Location
Your location can make or break your salon. When starting a business, add up your costs and see what you can afford on rent. From here, you should see what properties are available and in what location.
Generally, the more desirable places with better footfall will cost more money. The cheaper the rent, the more out of the way you will be. You also need to check out how many competitors are in the local vicinity.
If you do decide to rent somewhere further out, then make sure it is accessible. You will also need lots of parking space.
Creating a Business Plan
The cost you worked out can be incorporated into the rest of your business plan. However, the business plan is more than just costs and financial predictions. It is the blueprint for your business success.
Begin by researching the local market. Which salons will be your competitors? How many are there and is the customer base growing?
After this, know your target audience. Are you going for elderly, wealthy clients or fashion-conscious youngsters? All of these should influence how you market the salon, price your products, and all of them should be included in your business plan.
Unfortunately, many banks view salons as high-risk. This means it can be extremely hard to secure financing. In this instance, it pays to start small, reducing the risk, and build your salon up once you have more experience.
If you can not get standard financing, you may consider small business loans (SBA). However, they are very competitive and take a long time to secure. You also need a very good credit score already in place.
There are a number of alternative lenders. Credit cards and asset-based loans can help you get on your feet if you already have some money tucked away.
Finally, one great way to get your costs down when starting a company is with equipment financing. This allows you a lease, of sorts, for all the equipment you will need. You simply make payments to the company, which owns the equipment, until the plan is paid off and it becomes yours.
Due to the growth of social media and the internet, marketing a business has never been easier. However, this has also meant that it has become fiercely competitive. So how can you stand out?
Start on social media. Before the salon is even open, do some free stylings and cuts. By placing pictures of them online, you can start to build a following and anticipation for your salon opening. Make sure that this is something that is carried on once your salon business starts.
As the salon is about to open, list yourself in local business directories and publications. You may have local print papers and magazines you can put yourself in.
Once you have customers, they will be your biggest source of marketing. Ask them to tag themselves on social media and spread you via word of mouth. Offer an incentive scheme to keep them coming back, and referral schemes if they bring other people.
Be Unique When Starting a Salon
Wherever you set up, it is probable that you are already competing with a number of salons. So what makes yours stand out?
Perhaps you can offer a service that no one else does. You may have some sort of customer experience or staff that is unlike any others. All of this can give you a competitive advantage.
If you can attract this niche market, then you have less chance of failure. Encourage loyalty from this niche market, and you will always have a customer base. That means even in lean times, or when trends change, your clients will remain.
The uniqueness of the company will come from your passion. Have a vision and make sure it is shared with your staff and customers, so they understand what you are about. From family-friendly cuts to punk styles, always let people know what your original aim was when opening the salon, and keep your eyes on this goal.
Starting a salon is not a short-term route to success. You need to keep working hard over a number of years. Build up slowly and scale very carefully, before you move on to turning your business into an empire.
If you enjoyed this article, we have many more to help. From marketing to finance, let us help grow your company in the coming year.