Valued at $129 billion, the salon industry is growing at 6% CAGR per year and is expected to employ more professionals in the upcoming years. Increasing numbers of female entrepreneurs are successfully joining the salon industry because it allows them to be innovative, gives them the freedom to be creative, set their own schedule and achieve real financial independence. Today’s salon owners have evolved a lot to adapt to changing customer needs, and they aim to provide real value to their customers.
The growing demand for stress-relieving breaks from busy lifestyles and growing consumer awareness has fueled the growth of the salon industry. There are various categories of salons and spa including medical spas, day spas, ayurvedic spa, hair salon, beauty salon, nail salon and hair salons. You can join any one of these categories depending on your personal area of expertise and preference. However, starting your own business is no piece of cake and requires a good level of planning and self-confidence. If you think you’re ready to join the league and become a salon-trepreneur, we equip you with a step-by-step guide you need to successfully start your salon business with this post.
Stage 1: Research & Planning
When we think of research and planning, we often imagine analyzing loads of books and going through tons of boring documents. However, if you want to start a successful business, the research and planning stage is very important and can end up defining the future of your salon. Asking the right questions and finding the answers for those is important for making the right business decisions. We can break down the research and planning stage further into essential steps to help you make the most out of it without losing yourself in an information overload.
Step 1: Have a clear goal for your business
A lot of spa and salon owners run their business on a day-to-day basis and they end up limiting their own growth due to lack of planning. This can cause a feeling of irritation and frustration after the initial success stage and may lead you to leave the business, or worse, joining another big spa or salon organization. Define SMART goals for your business, which means specific, measurable, actionable, realistic and timely goals. Having clear end goals for your business will help you monitor and correct your actions at further stages. For example, a SMART goal for a bridal hair salon can be “We want to be the best hairdressing salon for brides with at least 100 regular customers by the end of 2019”. This can then be further broken down to different timely actions to measure if the business is going in the right direction.
Step 2: Decide your target customer segment
Identifying the right target customer segment for your business will end up defining all the other details about your salon. In order to find your target segment, you need to ask yourself the following questions:
- Do you want to be a accessible, budget salon or do you want to offer a luxury salon experience?
- Where does your target audience live?
- How much do they earn on average?
- Which social media channels do they use?
- What is the most important factor for your customers when looking for a salon?
- What kind of services are they looking for?
- What services do I want to offer? Does it match their requirements?
Once you have clear answers to your questions, you know what kind of products or services your salon should provide, what kind of location should choose, what channels to use for your promotions and so on. Having a clear target segment can save you from spending a lot of money on the wrong things and help you identify the things that matter the most to your audience.
Step 3: Understand your competition
Once you have identified your target segment, your next important step is to identify your major competitors. Research the market and identify the categories which have major competition and categories which are attractive to you. Proper research at this stage can help you identify the gaps in the existing services and better tailor your services to your customer’s needs. In any given industry, you will observe that there are hundreds of brands targeted to serve the needs of the same set of customers. However, if you can clearly identify your target segments, their needs, their pain points and the gaps in your competitor’s services, then you can brew yourself the recipe for success.
Stage 2: Planning your finances
Financial planning is not a skill which comes naturally to many people and may prove very stressful, especially in the early days of your business. Becoming a salon or spa owner comes with its own set of challenges and requires a specific skill set. Basic understanding of financial management can help you go a long way to achieve success in your business. The next stage of your salon business planning is organizing your finances. We break down the financial planning stage further to help you identify the key areas which require your attention.
Step 1: Getting the basic permits & licenses for your salon
Every country has its own requirements for getting the licenses and permits to start a salon business. Before starting your business, find out from other local merchants about the licenses you need to obtain to run your business. In addition, check with the local authorities and the local government about the permits you need to obtain when looking for a location to establish your salon. Ensure that you have all the right licenses before you start your salon, or you may end up unintentionally ruining your reputation and your brand.
Step 2: Carefully planning your business investments
At the starting stage of your business, you will need basic funds to start-up your salon which includes buying the furniture, paying for the location, hiring staff and the starting investment in the products for your services. In addition, it will take some time for you to establish your salon and build a loyal clientele for your business, so you should be prepared with at least six months of basic capital for your salon. You can find out more about loans from your local banks or consider lending some money from your family and friends. Once you have established your business, you can then pay away your loan steadily and consider better lending options. Remember, you should start small and grow slowly. Many salon owners make the mistake of spending the initial capital in embellishing their salon, and end up frustrated when the business projections doesn’t work out the way they expected.
Step 3: Consider equipment financing, location & basic hiring cost
Many new salon-trepreneurs find it difficult to spend money on the basic equipment because of their cost. While planning your finances, explore the markets for different types of equipment you will need to set-up your business like signage, phone, sound system, desks, workstations, chairs, wash stations, cabinets, dryers, washers, display cases, mirrors, furniture for the backroom, etc. Your costs vary significantly from one shop to another, and will also depend on how much you’re willing to spend. Of course, we understand that you want to buy the best equipment for your business, but finalize the best trade-off between the cost and quality to make sure you have something to match your requirements. Consider the cost of hiring new staff members for your salon and the rent of your salon location while planning your finances, because it will impact the cost of your services.
Stage 3: Starting Your Salon Business
Now that you have completed the planning, research and budget-financing for your business, you’re ready to get started with your salon. You have set up everything and you’re ready to tell the world, but before you do make sure you have thought about the following aspects of your business. It’s easy to neglect these steps therefore hindering the success of your salon.
Step 1: Get your own online booking system
In the modern world, where everyone stays online majority of their time, you want to be accessible to your customers 24×7 and adopting an online booking system is a great way to save costs and stay accessible at any time or place. You can sign up for a free trial for an online booking system like SuperSaaS, which is economical and provides a lot of amazing features at a very affordable price. The system allows you to send automated SMS/email reminders and set down a cancellation policy which will help you reduce no-shows. With your own pricing rules, you can easily generate more revenue by offering additional services to your customers. It’s also very easy to create your own promotional and discount coupons for seasonal offers. In addition, they offer a lot of other customizable features like various layout colors, your own custom domain, integration options with your website, access control, adjustable views, setting availability for your staff and automated integration of multiple calendars. The basic plans for SuperSaaS start at $8 per month for access to all features, unlimited registered users and unlimited schedules and the system grows with your business, so you never have to worry about migrating your account when your business grows. You can sign up for their lifetime free trial for getting your online bookings started.
Step 2: Create Your Business Website
Once you start building a customer base, you want to allow them to find your business online and you can start by building your own website. Don’t worry if you do not have a technical background, because, with a website developer like Wix, you can simply select a template you want to customize and replace the text with information about your business. Integrate your booking system into your website and urge the users to create a booking with you. Share additional information about your staff members, add the products you sell to your webshop and add an “about us” section to tell the world your story. You can set up your website within a day, and in the long term, it will help you attract more customers and build credibility with new customers.
Step 3: Invest in marketing
Once you set up your website, build your presence on different social media accounts like Facebook, Instagram, Pinterest and more. It’s easy to get tempted and build your business account on all social media channels but it’s even more important to select the channels where a majority of your customers hang out. In this way, you are not burdened later to maintain your presence across multiple websites and can create content specific to certain channels. Test out a few posts with different combinations of timing and content to see what works the best for your audience. Invest in marketing efforts at the very beginning of your business and you will reap the benefits in the long-term. Since a lot of salon owners ignore this aspect, it will also help your salon stand out from the crowd.
Just opening a salon is easy, but running a successful salon business is an art, and you can make sure that your salon business stands apart from others by planning it in the right way. Successful salon-trepreneurs understand that having a widely-loved brand means you have to invest your time, money and efforts into building your business.
About the Author:
Sneha is currently working as the Marketing and Customer Service Manager for SuperSaaS Online Booking System and is also a blogger at Mr n Mrs Sachdeva where she blogs about food, travel and music. In her years of experience as a marketing professional, Sneha has learned the tricks of managing marketing for small and large businesses alike. Now, she helps small businesses set up their marketing teams and helps them achieve success without spending a fortune.