Owning your dream hair salon is all fun until you have to face the fact that your salon business is an actual business that will cost you. So whether you are running an existing salon business or you are interested in diving into this industry, here are some important hair salon statistics that you need to know.
Let’s start with financial statistics
The operating expense of a salon
Every salon’s exact expense and revenue ratio is based on several factors, mainly the location of your salon, the size of the salon, and the average cost of services per customer. We think that salon services are fairly expensive because operating the salon is fairly expensive as well. The truth is salons operate on a fairly thin margin. According to SBDC, operating expenses, particularly the rent and labor, eat up as much as 80% of revenue. That is why if you are a salon owner, you may need to find creative ways to bring in sales while keeping your operational expenses low. By using a salon management tool, you can easily track the operating expenses of your salon. Check out Zensoft’s features here.
95% of us hair market caters to two women
It is no secret that salons are geared towards women, about 95% according to Salt Society. that is why there is just such a small portion of the male demographic being served by salon businesses. That being said, there is an increased demand for a male geared service for salon businesses and barbershops which is a great opportunity for stylists, barbers, and salon owners to fill that need.
Retail products are more profitable than services
Of course, customers go to salons to get treatments and services like hair care services, haircuts, hair coloring services, and that accounts for the majority of sales of the salons. Well, the services keep businesses open but they are not the way for salon businesses to gain profit. Retail sales are only between 5 to 25% of all salon sales yet they provide higher profit for the salon, according to Salt Society. That is why most salons are working on their retail selling to improve their profit margin. Now you do not have to wonder why your hairstylist is pushing you to buy that extra hair product you don’t need.
Customer behavior & Frequency of visit
Within 6 months, customers visit salons for professional hair coloring services up to four times or more. Over 20 million respondents said that they get their hair colored by a professional in a salon 2-3 times every six months.
Most of the salon customers are at ages 34 and older
You might think that most salon customers are geared towards the younger demographic, but you will be surprised that 75% of salon customers are ages 34 and above, according to Mintel. Keep that in mind when you are selling your products and services, your demographic should be targeting ages 34 and above. It also makes sense because people from the age of 34 and above are financially capable to avail of more expensive services. This age bracket is also in need of more upkeep compared to the younger ones. This demographic tends to buy more personal care items, as well as expensive hair coloring and permanent hair modifications treatments.
Customers between the ages of 45 and 54 years old tend to purchase more costly services as their income tends to be higher. They also spend more on personal care products than other customers.
Customers who are ages 55 and above purchase more nail services and they tend to avail themselves of cheaper hair services.
According to Statista, the hair industry reports that 52% of customers tend to buy natural organic shampoo, and 50% of customers around the world look for hair and beauty products that will save them time.
It goes to show that social media pages really have power over consumers because 63% of people who purchase hair care products and beauty products trust brands that they can find on Instagram. 52% of them are more likely to buy a product if they see advertisements of those products on Facebook.
The likelihood for millennials to use Instagram for inspiration for beauty trends is 40% compared to people at the age of 35 and above, according to Khoros.
When opening a salon
Evaluate your space and location
A common salon usually occupies a space of about a thousand to 1,500 square feet. So if you are scouting for a location for your salon, make sure that you consider these various factors before purchasing or renting a space.
Make sure that you see that your salon’s space would be large enough to cater to your target number of customers per day, and have enough space for the services you will offer. Balance it out with the possible overhead cost of having such a large space.
Also, keep in mind that location plays a great part in how you drive sales to your salon. Make sure that the area you will set up your salon is accessible to both people who have cars and those who don’t have cars. It is great if your chosen location is near establishments such as schools, offices, or buildings so that you have a target market and you have constant foot traffic.
You will need to invest in equipment
It is a no-brainer that opening a salon would cost a hefty amount, especially on equipment and products because your equipment would vary depending on the type of services you are going to offer. You will need to keep in mind that the basics include the hood dryers, scissors, clippers, and styling stations with chairs and mirrors.
Employees
You will need different types of employees when opening a hair and beauty salon such as hairstylists, assistants, colorist front desk, etc.
If you are going to offer other beauty treatments such as skin care services, nail care, or waxing, then you may need more experts for your employees.
Stylists depend on commissions
Employees, mainly stylists, depend on commissions and tips from regular clients for their service revenue. That is one of the reasons why stylists build such great relationships with their regular clients. Receptionists or front desk staff on the other hand can earn commissions by selling retail products of the salon. It is up to the owner on how much commission their employees will get for upselling retail products of the salon.