Beauty Salon Investments

Beauty Salon Investments

The number of people wishing to become the owner of such a business continues to grow. Not everyone knows how to organize a beauty salon, where to start, they find it difficult to choose between creating a new establishment and buying an existing one.

Middle level for beginners

The starting point is always either a concept, under which the room is then selected, or a room, taking into account the characteristics of which the concept is developed. With the first, as it is not paradoxical, usually begin professionals developing networks, or beginners who have certain preferences. They are often based on stereotypes that are not related to the realities of the market and the understandable desire to repeat the place that they have seen and liked. As a result, a mistake is made leading to the loss of potential opportunities and lost profits – the effectiveness of the concept of the salon is directly related to its location, size and demands of the target audience.

Many people, wanting to open their own business and having sufficient financial resources, will certainly want to create an elite and expensive establishment. Sometimes the consultant has to make a lot of effort to convince the inexpediency of such an intention. A reasonable question arises: why is this option bad? Answer: Only a very limited number of buildings, rooms and locations are suitable for the opening of an elite beauty salon. In addition, this segment of the services market is already quite saturated – 60–65% of all salons belong to it. In the provinces, the situation is somewhat different – the beauty business is only being formed there, there are plenty of free niches. However, the standard of living is not so high that any large percentage of the population can visit expensive beauty salons. This, of course, does not mean that it is impossible to create a new premium class facility. Simply, the funds invested in it will pay off for quite a long time: 4–5 years – twice the average market indicators for average salons. Therefore, at the present time, the opening of an elite establishment is more a prestige factor than a profitable business.

Opening such an institution does not require a large amount of funds: at the moment when there is space, it is enough, for example, starting $ 30-50 thousand to open a small one. The design and equipment of a mid-level beauty salon require about $ 100,000, top-class up to $ 300,000, and aesthetic medicine center up to $ 650,000.

It’s more profitable to start here either simply with a high-quality hairdresser with an expanded set of services, or with a European-style beauty salon – a completely democratic institution “for everyone”. In this case, prices will be available to a wide range of consumers, which will have a positive impact on the formation and expansion of the customer base.

How much can you earn on beauty?

The income of the beauty salon consists of the cost of all the procedures and the retail mark-up on professional cosmetics, which is sold to customers for home use, minus the costs (rent of the room, payment of staff, depreciation of equipment, cost of cosmetics, etc.).

Typically, the cost of equipment pays off for the third, fourth month of its use, after which each procedure brings 20-50 dollars of net income. If by this time the salon has a regular clientele, at least 30–70 people, then you can count on income of 6–10 thousand dollars a month. Another 1-2 thousand dollars a month brings trade in cosmetics. Thus, having invested 40–60 thousand dollars in the salon start, in half a year it is possible not only to return the invested money, but also to reinvest the funds in the development, moving to a higher category.

It must be borne in mind that only networks are capable of really large profits. Here we have to choose between settling down on the achieved results, investing in business expansion and joining one of the existing networks on the basis of franchising. In addition, not every beauty salon brings profit – the location of the business, its advertising, the professionalism of the masters, etc. are of great importance.

How to buy a beauty salon

The option of buying a beauty salon is considered by most people who want to become the owner of this kind of business. For investors interested in purchasing a beauty salon, the following factors are important:

  • the ownership of the premises or lease agreement for a period of at least three years;
  • a crowded place;
  • original interiors, repairs;
  • workable and morally new equipment;
  • no loss from the activities of the salon;
  • the staff;
  • availability of all permits;
  • the area from 100 to 400 square meters.

These requirements are not all match the existing offers for sale. Sometimes customers have to be content with less. The main criterion characterizing the positive results of the salon is its profit. However, a potential investor should take into account several indicators characterizing the work of the business. This is the efficiency of the use of space (12–13 sq. meters per workplace), production from one workplace (2.5–4 thousand dollars per month), the share of wages in revenue (no more than 30%), part of the revenue going to the purchase of consumables (no more than 10%).

If the institution you are buying can meet these standards, then you can be sure that the profit will be maintained, but you can expect a further increase only after expanding your business or increasing your customer base. If the indicators are less, then the salon has room to “grow”, and certain organizational changes can only increase its efficiency.

Leave a Reply

Your email address will not be published. Required fields are marked *