If your dream is to open a hair salon, you’re in luck… the salon industry is growing. Since the most recent recession, the industry has rebounded and is expected to continue growing for several years.
While the timing might be right, you’ll still face a lot of competition, as there are nearly a million salons across the country. However, don’t let that number deflate your ambition…those salons are generating over $40 billion a year in sales.
If you’re committed to opening a salon, you’ll need more than determination to get started. Here are a few things you’ll want to do before you open your shop:
Step 1: Plan, Plan, Plan
Business Plan
The point of a solid business plan is to figure out what your business is, how it will be successful, and how you’ll troubleshoot problems. If you need a little help getting started, here are some great resources for you including
free business plan templates and business planning software called
LivePlan that can get you on the right track.
Funding
Whether you’re borrowing money through a traditional bank loan or have teamed up with investors, you need to figure out how much money you need to get started, and where it will be coming from.
Find a Mentor
As you’re planning your business, it’s a great time to find a business mentor. It’s best to find someone in the salon industry that can answer questions for you as you start and grow your business.
Accounting
To keep track of your money, inventory and project growth, you’ll want to implement an accounting and inventory program. On the accounting side, you’ll need a program to track your revenue and expenses. You’ll also need to figure out how you’ll pay Uncle Sam. You should sit down and chat with an accountant to help you get started.
Location
The right location makes all of the difference in the world. You want to select a spot with good traffic and high visibility that is located where your target demographic shops or lives. Enlist a realtor for help or drive around and look for vacancies in areas you are considering.
Know the Area
Know the demographics, the local competitors, and think about how your customers will get to your salon. How is the parking situation? Is a construction project planned on your block? You want to know everything you can about the area before you select a place.
Step 2: Implement
With the planning stages complete, you’ll move on to details of actually opening your salon.
Design to Your Market
Before you start painting the walls and picking out furniture, make sure that your design matches the kind of clientele you want to attract.
If your customer base is the younger generation, go with fun, bold colors and furniture. For a higher-end vibe, go for a modern and sophisticated look. In other words, tailor your look to your intended client base.
Customer Service Standards
After you’ve created an environment that your clients will love, you have to follow through by offering excellent customer service, which will make them want to come back.
Marketing
To be successful, you need clients. To attract clients, you need a marketing plan, so set aside a budget to promote your business. Without it, you’ll struggle.
Consider hosting an event like a ribbon cutting or a small charity event to attract more customers. For example, sponsor a school play or have the staff volunteer at a local baseball game. You want to get the word out about your salon, and getting involved in your community is a great way to do that.
Web Presence
Before you dive into a design for your website, take a look at the sites of your competitors and try to design something that sets your salon apart. Your site should be attractive, easy to navigate, and ideally include helpful information for your customers, such as hours, location, contact info, and pricing. If you have the money, hire a professional to create your site, but if you’re tight on cash, there are plenty of DIY website platforms to consider.
Get Social
Social media is an important component to your marketing plan. You can use as many platforms as you’d like, but make sure you post regularly and engage with your customers.
Retail
As an owner, you’ll need to select products to retail. Consider one to three lines that take care of all needs for your various clients. Don’t expect it to be a big moneymaker right up front, as you’ll need to buy inventory and it will take time to sell it, let alone you’ll need to reinvest in the next batch.
Now that the planning stages are over, new salon owner, it’s time to get to work….
Successful salon management involves keeping a tight ship and making sure you know what your clientele wants. Here are several great tips to help you manage:
Trends
Keeping up on current hairstyle trends in your area is a must. Make it a priority to know what looks are trending so that you and your salon can stay current by learning new techniques to appeal to your market.
Look and Listen
Pay attention to your clientele. To what they say, and moreso what their body language says. What does it say if a customer says they love their new look, but you never see them again? Some people are hesitant to voice their opinion, so you have to watch them closely. If their body language is telling you something, or their facial expressions look concerned or disappointed, politely offer another option.
Pricing
While you may not want to offer your services at prices so low that customers see it as sub-par work, you need to make sure you aren’t charging so much that they can’t afford to come back a week or month down the road. Look for a balance between too high and too low.
Variety
Think about turning your hair salon into a full service salon. Look into offering facials and other spa services, as well as manicures and pedicures. Also, be certain you cover all of your bases with hair by offering cutting, coloring, styling, and texture services and even some specialties like extensions.
Dress Code
Set a dress code with clear and defined limits for your staff. If in doubt go for all black or even neutrals. In addition to helping hide hair color stains, black is a very universal color that is easy to fit into any wardrobe style.
Environment
Your customers are looking for a warm and inviting salon so that they feel comfortable. It’s important that you provide them with a welcoming environment that is clean and well kept. Remember that first impressions are everything!
Controlling Overhead
Another important factor in successfully managing a hair salon is to keep tight control of your overhead. Do your research and know what retail products your clientele will purchase to avoid having a surplus of merchandise.
Limit the number of employees your salon hires to just what’s needed and then hire accordingly as you grow. While it is sometimes a good idea to have stylists that specialize in a specific area, it is also important that most stylists have the necessary skills to meet most every customer’s needs.
You can also improve your bottom line by reducing office work or eliminating overly redundant employees. Ask yourself, are your stylists really too busy to take time between clients to tidy up themselves? That would lessen the need for a cleaning crew or for them to come as often. Also, consider salon scheduling software to help eliminate the need for a dedicated receptionist or as many receptionists.
What other ideas can you think of to help effectively manage your salon? 
Owning a successful salon facility is a journey and the learning process simply never ends. David Bickle of The David Salon in up-scale Orange County, California knows from first-hand experience and is a shining example of how well the evolution can work.
After much research and consulting with others David found that his already busy salon could improve its color business, both in eliminating color waste and in providing a more efficient facility to accommodate the growing market.
To minimize color waste, David decided to become a certified HeadMapping salon. The HeadMapping system specifically defines areas of the head into sections, creating a “map” that determines exactly how much time, product and cost is required to perform each service. Stylists can then dispense the right amount of color for specific color techniques as well as amounts of hair being colored. In addition to minimizing waste, it helps clearly define pricing for color services.
As far as improving the facility itself, David found that the space allocated for a large color dispensary, nails and spa treatments could instead be used to allow expanded and more effective color services. It made sense to his bottom line to drop nails and part of the spa services to accommodate the growing color market.
The plans were drawn up and David moved forward with the renovation. He had the 217 square room foot enclosed color dispensary room, employee break room and laundry facility that originally floated in the center of the salon removed and instead opened it up into a spacious color bar. The laundry facility was moved into a former massage room and the break area into an enclosed nail space. Three of the walls of the dispensary were removed completely and in its place a seven-station, island-style color bar was added.
“Years later we’re still very pleased with the change,” states David. “ The color bar was the perfect solution for us not only offering the best use of space, but also opening the salon up visually and offering yet more opportunity to interact with our clients. The place looks so much larger and we are so much more efficient even on our busiest days.”
He adds, “Doing our homework, seeking the professional advise of others and always looking ahead has really made a difference in the effectiveness and profitability of the salon. The lesson here is that we as salon owners are never done growing and changing. To be successful in any business one has to evolve as needed and should always be searching for how to make improvements. There is ALWAYS room for improvement. Being in the beauty business we proudly preach change to our clients, but must lead even this part of business by example. Our business is a living, breathing entity and like our clients, is in need of a new, fresh look once in awhile.”
Photo credit: 
Salon owners and booth or suite renters, do you ever wonder how you can tell if your business is a success? Is it enough to put in 12-14 hour days or to promote your services endlessly? While only time will tell if a business is successful or not, here are five simple ways to determine whether or not yours is on the right path.
In the Black
Profitability, or running your books “in the black,” is probably the first thing people think about when measuring success. Basically, is the business making money? If there’s any money left after paying your monthly bills, then you are doing something right. However, if you find that your bottom line is always running “in the red,” your chances of success become much less likely.
A Growing Clientele
Having a clientele that is growing is a sure sign of success. It says that you are reaching your target market. The long-term growth of your salon is tied directly to your ability to not only reach your target market, but to expand your clientele to accommodate your long-term goals. Without an ever-expanding customer base, your success will be limited, at best.
Customer Satisfaction
The satisfaction of your customers is an indication that your company understands the needs of your salon clients, which is crucial to the strength of your business. Just remember: Happy clients tell a few people about their positive experience while unhappy ones tell at least 20. Having strong customer service polices will help insure the success of your company.
Employee Satisfaction
If you have employees, it’s important to do everything in your power to keep them happy with their job. Employee satisfaction spills over into the work environment and is contagious to others. Unhappy employees, on the other hand, become a major problem for moral. Develop a work environment that rewards employees for their hard work and let them know that they are appreciated, that way they are much more likely to go the extra mile for you.
Owner Satisfaction
Much like with your employees, if you’re happy, the work environment is happy. On the other side of things, if you’re not pleased with your business, it won’t be long before your dissatisfaction affects everyone else, including salon customers. Every once in a while do a reality check to identify the source of any dissatisfaction and then make the needed changes before it’s too late.
Have you always dreamed of owning your own salon? Before signing that lease or ordering your business cards, ensure your success by avoiding the risks and pitfalls faced by many small businesses during the startup phase.
Here are some of the main reasons small businesses fall short right out of the gate:
Not Enough Capital
Many new salon owners launch their businesses with the misconception that the business will grow and profit despite major under-funding. Without proper funding, you will not have all of the needed resources to help your business properly launch, let alone prosper and you risk potential failure.
To acquire the required resources, capital will need to be raised from various sources. Beyond your own savings, consider financing through a bank or private funds, and even from family and friends. Do be careful not to put all of your funds into the salon, as you’ll have nothing should things go south, so to speak.
Lack of Planning
Informed planning is essential in starting your salon so begin with market demographics and cost estimates, which can be resourced from your local chamber of commerce.
Bad Location
For a salon, location is everything! Lower rent payments mean nothing if you don’t have any customers or if clients, let alone staff, have nowhere to park. Before deciding on a location, check into what major draws are around you (for walk-in traffic), how secure the area is at night, what sort of issues or even planning the city or shopping center has for any developments that may affect you and your location.
Not Knowing Your Competition
You have to be prepared to deal with competition, which can be tough when you’re the new guy on the block. It’s best to know what you’re up against, so take the time to get to know your competitors. Take note of what they’re doing right, and how you can position your business to get a piece of the same market.
Not Getting the Word Out
Even though word-of-mouth promotion is the most credible way to grow a loyal clientele, it does not pay your rent while trying to initially build. Be sure and allocate funds for advertising, promotions and social media to spread the word even faster.
Not Anticipating Growth
Although you shouldn’t count on it to happen right away, you do need to be ready with a plan in case your business grows quickly. Otherwise you could have chaos on your hands or, even worse, it could cause your business to self-destruct from the inside out. The only way to avoid this problem is to plan early on for growth so you will be prepared for it when it does come.
Do you have any other words of advice for those looking to open a salon?
Whether you are just launching your website or have been online for years, here are some ways you can easily take your business to the next level.
Continued from
So, you’ve finally decided to create a salon website. Good for you…And welcome to the 21st century, by the way. Having a website for your business is a valuable tool that not only informs existing clients, but is also a draw for potential clients.
Here are some suggestions for getting the project going and marketing it once the site is up and running.
Research
Prior to building your website, check out what your competitors are doing for their online presence. Analyze what does and does not work and then, short of copying the look and feel of what they are doing, draw on the experience to make your site the best it can be. After you’ve launched, revisit competitor websites at least once a month to see if they’ve updated.
Simplicity
Today’s web user wants information quickly but does not want obstacles on the way. Instead of an elaborate site that has many levels and a ton of information, consider a simple structure that’s easy to navigate with visuals that speak to your market. In addition to pretty images of hair and even shots of your salon, be sure and include the following information on your site: Salon contact information including how to book an appointment, a simple “about us” statement, pricing for your services, and access to press pieces, testimonials and reviews.
If you want to include information about the talent within the salon, do individual headshots of your crew and assemble a quick bio or statement for each one. Be sure and list experience and areas of specialty for each one.
Access to social media is also important on your site. Be sure to include a “follow us” or “like us” button and link for each of the various social media platforms in which you have a presence for your salon.
Copy
Although there needs to be enough written information to make your site useful, avoid the temptation of long blocks of copy or a writing style that does not suit your market. Since the wording is how search engines call up information, you want any wording on your site to be readable (versus just in a graphic) and well targeted so your salon can be found. In addition to using a voice that your market will appreciate, make sure you are using terms in the copy that reflect how a client might search for your services.
Market
Your salon website will be useless unless your market knows it exists. To attract visitors, market your site through search engines, on your business cards, in your salon (like at the front desk, on receipts, etc), and on every business listing or form of advertising you do. To reach further, consider setting a budget aside for online advertising and or to consult with a digital marketing professional.
Monitor
To monitor traffic on your site, be sure and use any number of free web analytics tools such as Google Analytics.
Update
There’s nothing worse than building an online presence and then, no matter how beautiful it is, not updating it. Your salon’s website is a valuable tool that needs to be kept up to be truly efficient. Set up reminders on your schedule to revisit and update your site on a regular basis.
Looking for ways to help market your site? Check out part 2 here!
We all shutter at the thought of an IRS audit but sometimes it’s unavoidable. To lessen your chances of this nightmare happening to you, study up on the practices that make the possibility of an audit more likely.
Salon owners and booth renters: Consider the following to help reduce your chances of the A-word:
Cash Transactions – Businesses that have a lot of cash transactions, including tips, are among the most audited. Be sure and keep detailed records, including your tips and don’t forget to declare income.
Unprofitable Businesses – If your business doesn’t earn a profit for three out of five years, the IRS may consider it a hobby.
Business Expenses – As tempting as it is to write off personal expenses as business expenses, don’t do it. The IRS will dig even deeper if the records aren’t clearly separated.
Round Numbers – If all your amounts have zeroes at the end, such as $2500, etc., it may be a red flag, as the IRS may think that your business is estimating versus using actual figures.
High Deductions – If your business has relatively high deductions compared to the amount of income it generates, it might raise a red flag. Keep careful records to show all such deductions are legitimate.
Home Office Deduction – For some reason, the IRS is particularly interested in enforcing the provision that involves the deduction for a home office. Carefully weight the benefits of such a deduction over the increased likelihood of an audit.
The Right Help – Other suggestions to help avoid an audit include hiring professionals to help. A certified accountant is worth the expense and using a good bookkeeper and payroll service will make the recordkeeping and tax preparation a breeze.
Have you ever been audited? Any suggestions to help others avoid an IRS visit?
Many salons work with local artists to cross promote their talents with the salon’s clientele receiving services. Bare salon walls are livened up with new works of art that rotate out every few months to give a fresh breath of life to the salon interiors all while offering great exposure to budding artists. And the gallery opening events in your salon are a perfect opportunity involve and grow both sets of clientele.
All in all it can be a win /win for both parties, but beware the pitfalls should something go wrong.
It seems like an easy exchange: They hang their artwork and your salon gets a new look, not to mention a new topic for conversation with clients. But what happens if they damage your walls during installation? What if there is a break in, or color splashes on the artwork, or a client or gallery opening attendee punctures the canvas? Who is liable?
Naturally that would depend on the insurance both you and the artist have purchased and what coverage for which you have each made provisions. In the absence of the artist having specific insurance for the artwork that would cover gallery installations or other showings, the liability in such cases would likely fall upon the salon owner. Gasp!
Before allowing artists to hang (or showcase) their work in your establishment, take a moment to talk with your insurance provider to see what, if anything, would be covered. Consider asking the artists to provide their own insurance and request a certificate of insurance from them that specifically names your business in the coverage.
Also, come up with an agreement in advance as to how installation is done, who covers expenses for gallery openings (parties) in the salon and how sales of any artwork would be handled. Discuss and agree (in writing) upon what percentage, if any, the salon will receive for such sales and who is responsible for what for all aspects of the arrangement. Being prepared will eliminate the surprises down the line and allow you and the artists to benefit from the alliance. 
We all have THOSE clients…you know the ones. They are perpetually late, cancel often, and typically, as fate would have it, complain the most. In this multi-part “The Delicate Issues” series, we offer some proven tactics to deal with cancellations, no-shows, and that client you wish would just go away.
Cancellations & No-Shows
It happens. Life throws a few curve balls and causes us all to have to alter our schedules to accommodate. For those one-in-a-while glitches, we accommodate the best we can and simply look the other way. However, when cancellations become habit, or worse, no-shows start to happen a little too regularly, we have to look at a solution.
As salon professionals we all know that services are broken down into units of time, and time wasted on no-shows or last minute cancellations can be costly to our business and the salon’s bottom line. To help minimize the issue, let’s look to the restaurant industry to see how some eateries are coping.
For some high end restaurants and almost all hotels a policy has been implemented to keep cancellations and no-shows to a minimum. When a patron makes a reservation, a credit card must be given (or kept on file) and a strict cancellation or no-show policy is enforced. The policy does not eliminate the issue completely, but has proven to drastically curb the problem.
How to Implement Such a Policy
Since we are in the service business, we can’t just arbitrarily start a policy that may make clients feel singled out…even the ones that should be. It’s best to pick a specific point in time, like the New Year, and start the policy as of a certain date with ample planning and notice. Send out an email or newsletter letting patrons know of the change, the need for a credit card to be on file and what the charges will entail should there be a last minute cancellation or no-show. Keep in mind that you need to specify what constitutes “last minute” and what the charges might entail should a cancellation or no-show happen.
It may be a little rocky at first, but you will most likely find that your bookings will be taken more seriously once a dollar figure is attached.