A haircut franchise opportunity can be a smart investment, but there are some things you should know.
Learn the good, the bad, and the ugly about buying a beauty business.
Are Hair Salons Profitable?
Running a hair salon or barbershop can be very profitable. There will always be a demand for haircuts,
no matter the state of the economy. IBISWorld measures the hair salon industry to be worth $48.5
billion in 2023. While Booknetic, an appointment booking website plugin, finds that hair salons make an
average profit margin of 8.8%. Investopedia says a healthy small business operates between a 7% to
10% profit margin.
Haircut Franchise Opportunity Pros
Besides the industry size, what else makes investing in a hair salon or barbershop a savvy investment?
First, it’s a recession-resistant business. As mentioned above, people will always need their haircuts.
Many of us know what happens when salons are forced to close, and people go months without haircuts
(aka Spring of 2020)! True, customers might begin to skip out on some extra services when money
becomes tight, but they’ll almost always come in for their routine haircut.
Next, you collect recurring revenue from your routine clients. Once you and your stylists build
relationships with clients, they’re more likely to return continuously for their next cuts. Plus, when
you’re investing in a franchise system it provides you with automatic brand recognition. Brand
recognition will help you attract customers quicker than an independent business would. It will also help
build trust because if they’ve been to another location and you provide them with the experience they
were expecting, they’ll have more confidence in you to do it again next time.
Another pro to investing in a franchise system is the reduced failure risk. When opening a barbershop or
salon franchise, you automatically start with a leg up because you’re receiving a proven business model.
You should also receive training, support, and resources to help smooth out business ownership’s trials
and tribulations.
Lastly, lenders tend to consider a haircut franchise opportunity a less risky investment than a startup
meaning that they’re more likely to offer up more funding for you.
The Not-So Con Cons of a Haircut Franchise
The upfront investment costs are one of the blaring differences between investing in a franchise and
building a startup. They can sometimes be high. It’s important to remember that costs include your
construction and lease fees, equipment, furniture, and other business setup expenses. You would also
face these same costs when starting an independent salon or barbershop. On top of paying for those
buildout expenses, when investing in a franchise you’ll also receive a tried and tested business model,
training, resources, and marketing support. With a business plan to follow, you can likely open the shop
quicker, earning money sooner and making a more significant return on your investment.
You’ll have to follow and abide by the franchisor’s rules. If you’re set on marching to the beat of your
own drum, then maybe franchising is not for you. But, if you want to make money by owning your own
business, but not face many of the trials and errors of starting a company, invest in a franchise system.
It’s the perfect way to jump into the industry and entrepreneurial world because you’re not alone.
Plus, by following the systems of your franchisor, your customers know what to expect when they walk
into your salon, making them feel like they are getting what they paid for and will more likely become
loyal customers.
When operating as a franchisor there are ongoing fees such as the royalty fee and possibly require
contributions to an advertising fund. Think of it as the franchise system is doing it for you instead of
paying your own marketing firm to handle advertising. On top of that, the franchisor’s wider reach will
help put you in front of a larger audience of potential customers.
Cut to the Chase and Invest with Scissors & Scotch
It’s hard to worry about the negatives of opening a business when you could open a barbershop
franchise with an elite brand like Scissors & Scotch. Our model takes the old-school spirit of a
barbershop that people love, but with a sleek new look and exceptional services our customers enjoy.
Getting their haircut is no longer a task for Scissors & Scotch customers to check off their to-do list.
Instead, it’s their self-care time.
Our brand is rapidly growing across the country. Now is the time to jump in. So, if you’re looking to dive
into a haircut franchise opportunity, let Scissors & Scotch help you. Get Started.