While opening a hair salon is undoubtedly a costly endeavor, it doesn't have to break the bank completely. There are several ways to save money without compromising the integrity or quality of your business, even while sticking to a tight budget. The secret ingredients lie in preparedness and careful planning.
Begin With a Business Plan
A business plan is a document that you will use to guide your efforts as you set up your new hair salon. Before you start budgeting or spending money, it's important to carefully write out what the first year of your business will look like and the necessary expenses to get your salon up and running.
Research Competitors
Your business plan will include establishing the services you offer and choosing where you'd like your salon to be located. It would be best to research competitors in your area to find out what they're charging, what services they offer, and what types of clientele walk through the door.
Define Your Vision
Some salons are located in commercial buildings, while others are based out of people's homes. What type of salon are you imagining? What kind of experience do you want your clients to have? Will you offer more complex services, like chemical treatments and extensions, or will you stick to the basics of cutting and coloring? Clarifying your vision upfront will save you money in the long run.
Establish Your Budget
Once you have created your business plan, the next step is to create a realistic budget. Establish a budget that you will be able to adhere to, and don't forget to leave room for unexpected costs, which are an inevitability when opening any business.
Startup Costs
The primary start-up costs to consider when budgeting for your new salon include some form of a POS (point of sale) system, building a website, paying for your salon license, legal business fees, and product inventory.
There are various ways to save on some of these essentials. For example, consider how simple or complex you need your website to be. Creating one yourself can cost under one hundred dollars after purchasing your domain and web hosting, but hiring a professional web designer can cost four or five figures.
Keep Your Team Small
One way to cut back on expenses is to keep your team small. Hiring fewer stylists requires lower upfront equipment costs, and less staff means smaller payroll. Begin with the leanest team you need to keep your business running and add additional staff only when you can sustain the costs.
Select Equipment and Products
After your location is secured, the second biggest expense you will incur is the cost of equipment and products. Combs, brushes, scissors, hair cutting shears, hooded dryers, blow dryers, flat irons, curling irons, shampoo, conditioner, and other hair products add up very quickly.
Remember that you don't always have to purchase the most expensive option to ensure good quality. Finding the right balance can help you save quite a bit of cash. A perfect example of this is hooded hair dryers, which are considered more professional-looking; however, the portable version works almost as well and is far more cost-effective. The price difference is substantial, and the added benefit of portability doesn't hurt, either.
Choose Your Location
Rent and location-related costs will undeniably be the most substantial expense for new salon owners and one that can easily make or break your budget. Choosing a location that is best suited to your clientele is vital. Consider where your potential clients live and look for a space that makes your salon an accessible destination.
Size and Space
Think about how much square footage you need to run your business efficiently. A rookie's mistake is thinking that renting a larger space will bring in more money. However, a larger space means higher utilities and often a much higher rent.
Buy Insurance
Some people consider insurance an unnecessary expense, but it could save you money in the long run, especially if your salon experiences the unexpected. Compare prices between different vendors, and remember that protecting yourself today ensures your hair salon's security in the future.
