Salon Owner Defined

A serious professional career is not lost if you’re a hairstylist. You can become a business owner as many cosmetologists have. Because the demand for cosmetologists continues to grow, there are very real opportunities to become a successful salon owner.

What it Takes
It’s not required, but it’s recommended that you have a few years of experience working in a salon before you venture into starting one of your own. There is no more valuable education than real-world experience in a salon. Don’t fool yourself into believing that opening your own business requires nothing more than talent and money. Quite the contrary! Just because the beauty industry is fun doesn’t mean it isn’t a serious business…and as such, being successful requires serious business skills.

First, you should take some general business courses to learn about the basics of marketing, human resources, and business fundamentals. You’ll also need to hone your delegation skills, as you’ll most likely need a manager to handle the day-to-day aspects of your business. Finally, make sure you have strong organizational skills to keep everything flowing smoothly.

What You’ll Make
There is no way to quantify what you will earn as a salon owner. There are many variables that will determine your level of success. The best advice is to make sure you’ve looked at all the options and have a solid plan moving forward – and always practice common sense.

Working World
Once you’re ready, there are three basic ways to become a salon owner, and we’ll break down the pros and cons of each:

1. You can purchase an existing salon for sale and take over their already established business;
2. You can purchase a franchise;
3. You can start your salon from scratch.

Option 1: For Sale by Owner For any number of reasons, you may find a privately owned beauty salon for sale. Perhaps the owner is retiring, relocating, or has decided to sell for health reasons. Whatever the reason is for the sale, purchasing an established salon can have a great outcome if you do your research.

Item	Pro	Con
Staffing	Employees are already in place	Staff may not be representative of what you want in your salon.
Clientele	Already built & established	May not include your target market.
Location & Equipment	Already researched and purchased2	Equipment may be outdated or in poor working order.
Word-of-Mouth	Neighbors already know about the salon, reducing the dreaded “dead time” that sometimes accompanies new businesses.	Salon may have a less-than-stellar reputation; re-vamping a poor image can be very costly.
Business Model	Already in place, eliminating the need for you to re-invent the wheel. you already have the “bones” of your business, eliminating the need for some start-up costs such as building permits, office equipment and signage.	Business model may be poor, forcing you to re-invent the wheel high or higher than starting up your own business. Repairing a problem can be costly.
Finances	Purchasing an existing salon may be extremely cost-effective because you already have the “bones” of your business, eliminating the need for some start-up costs such as building permits, office equipment and signage.	If the salon or equipment are in poor condition, costs can be just as high or higher than starting up your own business. Repairing a problem can be costly.

Steps You Should Take: Go on a fact-finding mission and ask lots of questions.

• Talk to the stylists who work there.
• If you’re not familiar with the neighborhood, do some homework. Check out any local competition and find out the area demographics. If you want to cater to young families, you probably won’t be happy purchasing a salon in an area that is predominantly occupied by senior citizens, and vice-versa.
• Have a financial professional thoroughly review the books.
• Evaluate the current condition of the salon. Does it require updating or remodeling? If so, how much will that cost?

If you decide to buy the salon after you’ve delved a little deeper, have an attorney review your purchase agreement before you sign on the dotted line – even if you are purchasing from a friend. Making sure that all the i’s are dotted and the t’s are crossed will protect both you and the seller from any potential snags down the road.

Option 2: Franchise Salons
There are many franchise salons in the U.S. ranging from haircutting stores to full-service salons. Franchising is not for everyone, but if you like the idea of having company structure and branding as well as the ability to work for yourself, a franchise may be the perfect fit for you.

Item	Pro	Con
Staffing	There is never a shortage of stylists who want to work for a franchise because of the guaranteed hourly wage.	Typically you will experience a higher turnover; as stylists learn more, they generally want to move on to a higher-end salon.
Clientele	Generally, franchises have a set type of clientele that will come to your shop automatically when they see you’ve opened.	May not include your target market.
Location & Equipment	Pre-determined by the corporate office through intense research and studies. Equipment is usually identical as other locations to maintain the brand image.	You may not have your first choice of location and you have very little flexibility in bringing in other products or equipment.
Word-of-Mouth	It’s not unusual for franchises to have national marketing campaigns that include coupons and commercials.	If someone received a bad haircut at another location, it may affect your reputation.
Business Model	Lots of money and research has gone into the creation of the ideal business model, from recruiting to product pricing.	You’ll have virtually no leeway in prices, promotions and specials, or marketing. Everything’s decided for you.
Finances	Obtaining a loan is usually easier because franchises are less financially risky; higher volume of clients can lead to higher profits.	Franchises generally require a large up-front payment as well as a share of your profit in exchange for the national marketing, business plan, and support they offer you.

Steps You Should Take: If you’re interested in franchising but you’re not sure if it’s for you, contact the corporate office of the chain you’re interested in. Review all the material they provide you and ask to be put in touch with a current franchisee in your area so you can ask some “off-the-record” questions as well. If you’re satisfied that their business model is a good fit with your vision, then go for it! But if you’re in doubt, step away and regroup.

Option 3: Start from Scratch
We feel pretty secure in saying that when most cosmetologists think of owning their own salon, they’re envisioning their very own place – decorated the way they want, located where they want, and offering the services they choose.

While building your salon from the ground up can be challenging and risky, it’s also immensely rewarding.

Item	Pro	Con
Staffing	You can choose your employees and hire more as you need more.	You may have a hard time recruiting and finding qualified staff.
Clientele	You can target the clients you want. Your existing clientele will already be in place as well.	It could take some time before people know you’re open and feel confident enough to give you a try.
Location & Equipment	It’s up to you! Pick what you want, where you want, and design it the way you want.	Purchasing all-new furnishings, computers, and salon equipment can become very expensive.
Word-of-Mouth	You don’t have any bruised reputation to overcome. Since your salon has no history yet, nobody can bad-mouth it.	You don’t have any reputation at all. You’ll need to market your business heavily.
Business Model	You can build your business to suit your vision and take it in the direction you intended.	With no experience or track record to go on, your model may not convert to business success.
Finances	Your profit is just that – yours. As salon owner, you can determine when to spend money and on what.	Starting a new business is expensive, plain and simple. Permits, licenses, marketing, and other start-up costs can add up quickly. Most businesses lose money in their first year. 3

Steps You Should Take: If you’ve decided to start your own salon, talk with a financial advisor about your business structure (incorporating, etc.) to make sure that you are personally protected against any business or legal problems. Then, have a business attorney help you draft up employee agreements, booth rental contracts, or any other contracts that you’ll need to protect yourself.

Whether you’re a corporate-type or a free spirit, if your dream is to own your own salon, there are many avenues that you can take to get there. Make a smart plan, do your research, and go for it!