Interested in buying a salon for sale? Find out what to look for in already existing businesses and when to consider a franchise instead.
Is a Hair Salon Profitable?
Many people need a haircut, usually multiple times a year. For some, it’s almost every month. Performing haircuts take skill and precision, something most of us learned we DON’T have during the COVID-19 outbreak. As a result, hair salons and barbershops bring steady business and usually remain unaffected during economic recessions. Business News Daily notes that the beauty industry is valued at $532 billion annually.
So, if everyone heads to a hair salon or barbershop a couple of times a year, how profitable can they be? According to The Salon Business, the average annual revenue for a hair salon is about $245,000 before expenses. After you factor out expenditures, an average salon can profit about $19,100 every year, depending on marketing efforts and sales made, which makes an average salon profit of about 8%.
It’s not a stretch to be able to increase the profit margins. First, you can grow your client base. Use marketing and special offers to encourage people to walk through your doors. Secondly, increase the amount people are spending per visit. Encourage your stylists to upsell customers on services or retail products. Get your customers to visit your salon more often by asking them if they want to schedule their next appointment before leaving. Additionally, you could start a client loyalty program to entice them to visit more often. Lastly, review your overhead costs and determine where to cut unnecessary spending. Make sure you’re getting the best deals on your products, insurance, and utility bills.
Factors to Consider When Researching a Salon For Sale
If you’re looking at buying a salon for sale, there are some benefits. It already has an established client base, staff, equipment, and existing relationships in the community. Analyze these factors to make sure it’s a profitable investment.
Location. Is it in a well-populated area that many people will see driving past it frequently? Is it accessible not only by car but also by public transportation? Is there plenty of parking for your customers? Of course, you want to make it as convenient for customers to visit your shop as possible. You’ll also want to consider if there are complementary businesses that surround your salon. In contrast, do you have competitors that are too close for comfort? If so, you may need to find a new site.
Staffing. The salon or barbershop is only as good as the stylists and other staff members. They’re the ones that’ll keep customers returning for future haircuts. You don’t want too much staff turnover, or customers will see that as a red flag. Customers want to feel comfortable with their stylist, and that comes with seeing the same one each time they visit. Your staff must stay up to date on their skills and be knowledgeable to share the best tips with your customers.
Customer Niche. Analyze the current salon or barbershop’s customer base. Evaluate their demographics and retention rate and see how you want to transform it to make it more profitable. It can seem like there’s a haircut place on every corner in most U.S. cities, so consider what makes the shop unique. If nothing stands out, then maybe you can change that, or perhaps it’s not the right choice. Once you have that niche, highlight it and make it your advertised focal point. The identity will help your business grow. Growing your business in a niche market is more manageable than growing it in a large, general market.
Legal Landscape. Any pending lawsuits against a salon for sale would be a warning sign not to go through with it. You don’t want to start your new business venture with baggage.
Financials. Understand the financial health of the salon or barbershop that you’re looking to purchase. Review the owner’s salary, stylist and employee perks, rent, and depreciation value of the equipment. Take note of the condition of the real estate and equipment. If structural or cosmetic improvements need to be made, these costs should be factored into your budget.
Growth Potential. Observe and analyze the salon and barbershop market around the shop. Is there growth potential? Is there potential for expansion? Build a vision for the future, talk with the current stylists for their input, and then create a plan to reach new business heights.
Independent Salon Vs. Franchise
The key to going into the beauty business alone is being comfortable taking over the barbershop or salon for sale in its entirety and having 100% responsibility. Or you can buy into a franchise system and receive all the perks of going into business for yourself, while also not being entirely on your own.
Benefits of a franchise include brand recognition and a loyal customer base that casts a wider net immediately. A developed, proven, and location-tested business model is available for you to follow. You won’t have to spend time and money designing logos, storefronts, or other advertising materials because you’ll receive marketing support from the franchisor.
Never run a beauty business before? Not a problem when you buy into a franchise. Most offer training for you, and some even offer training for your stylists, so you can provide the exceptional service customers expect from the brand. Because you’re offered training and a system to follow, there is a decreased risk of failure. Franchisors will often provide business coaches to guide you through the opening year or so to ensure that you are setting yourself up for success.
If you are concerned about the costs that come with a franchise, think about it this way: starting a salon business from scratch or buying a franchise still means you’ll incur costs such as buying or renting a space, purchasing furniture and equipment, and hiring staff. Likewise, if you’re buying a current barbershop or salon for sale, you’ll still face similar costs; they’ll just be included in the sale price.
Sharpen Your Investment With Scissors & Scotch
Defining a customer niche is one way to succeed in the competitive beauty industry. One that hasn’t flooded all markets across the country is the upscale men’s grooming experience that Scissors & Scotch offers its customers. The men’s grooming franchise provides clients a classic grooming service with a modern twist — a stocked bar and a sleek look.
We offer a superior franchise opportunity. From market analytics to defining the perfect territory to site selection and project management, we guide you through the pre-opening process. Then, we offer industry-leading training that provides you with top-notch talent that will want to work with you continuously. Support doesn’t stop after the grand opening. We provide you with marketing playbooks, systems, procedures, and support whenever you need it. And if that isn’t enough, our annual revenue is higher than our competitors, while we see a much better margin of profit that is above the industry average.
Don’t waste any more time waffling. You know we’re the badass business venture you’ve been looking for—request franchise information.