March 1, 2019

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Opening A Salon? The Costs of a Salon that will Thrive

salon

So you’re thinking about opening your own salon? Maybe you’ve been a mobile stylist for a while and have built a strong following? Or you’ve been renting a chair in another salon and want to have a go at running the show.

Opening your own salon won’t be cheap, but it can be hugely rewarding. Running your own businesses allows you to shape your future, build a team and share your vision for what a salon should be.

If you’re ready to start your own salon, you need to consider the following…

Do you know your numbers?

It’s so easy to underestimate the real cost of opening a salon! The costs quickly add up, so you need to be on top of your game every step of the way.

In general, you should think about the following start-up costs:

  • Rent
  • Business rates
  • Utilities
  • Insurance
  • Staff costs
  • Loan repayments
  • Accountant
  • Products
  • Your wage
  • Salon software
  • Refreshments
  • Decorating
  • Cleaning
  • Furniture
  • Advertising

This is a basic list, and your individual business might have further expenses which you need to consider.

Once you have a total monthly amount, you need to calculate how many clients you need to cover your expenses. So, if your monthly expenses are £2,000 and you charge £30 per treatment, you will need to book in 67 treatments per month to cover your core expenses.

Expect the unexpected

It takes time to build momentum. Make sure that you can keep the business afloat for a few months without meeting your sales targets.

You might also need to cover unexpected expenses such as repairs to the building and decorating. You may also need to dedicate more money to advertising in the first few months while your business grows.

Hire an accountant

Accountants don’t just handle your tax returns and VAT. A good accountant can help you plan your business, look for areas where you can save money and offer experienced business advice. In the first few months of running a business, your accountant should be your best friend.

Don’t just go for the most affordable accountant you can find. Look for someone with experience in your industry. Or, at the very least, experience working with start-up companies.

Building your client base

It would be crazy to open a salon without an existing client base. But you also need to be confident that they will follow you. If you’ve been mobile for a while, they might not automatically jump at the chance to visit your salon. For many people, a mobile stylist is more convenient, so they might not follow you.

Before you make the switch, ask your core clients if they would be interested in visiting your hypothetical salon. Dip your toe in before taking the plunge.

Don’t forget client retention

Imagine you bring in 30 new clients per month. 50% of these come back for another appointment every 2 months. So your monthly client amounts would be:

Month 1: 30 clients

Month 2: 30 clients

Month 3: 45 clients

Month 4: 45 clients

Month 5: 60 clients

Month 6: 60 clients

Month 7: 75 clients

In this scenario, it would take you 6-7 months before you reach your client target. If you increase client retention to 75% then you would reach your goal in 5 months. This will make a HUGE difference to your bottom line

Putting steps in place to not only attract new clients but to bring back existing clients is essential in the early stages. If you get these processes right from the start, you will be well placed to quickly scale your business.

Location is everything

Renting space in an area with no footfall might be cheaper, but walk-ins can add significantly to your bottom line.

If you’re hoping to create a high-end salon, your location needs to reflect that.

Location is everything, so don’t be afraid to wait for the right property. Keep your ear to the ground, but also make sure you are pounding the pavements. Walk around your favourite areas and look out for signs that businesses are moving out. You might be able to snap something up before it even goes on the market.

Conclusions

If you are determined, realistic and hard-working, there’s no reason you can’t grow an incredibly successful salon. Provided you keep a close eye on your start-up costs and don’t assume you’ll be busy from day one, you should have a good chance of success. Surround yourself with the right people and you’ll be on track to running your own salon.

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