Are you considering launching your own hair salon or working as an independent hairdresser? This $12.4 billion a year industry is still going strong, even amidst a cost-of-living crisis.
Despite this, with one in three new businesses failing within the first year and nearly half not making it to their fourth year, savvy planning and preparation are a must for any would-be hair salon owner. Partnering with broad-scale fast-moving consumer goods (FMCG) suppliers is one way to improve business survivability.
Why FMCG Suppliers?
What are FMCG suppliers, you ask? They are wholesalers who offer reliable high volume, low-cost salon supplies, such as bulk shampoos and conditioners, styling products, minor equipment and refreshments. A large-scale warehouse model allows them to supply not only metropolitan cities, but also regional and remote salon locations that would normally miss out on important business savings.
Launching a Hair Salon
Whether you’re launching a shopfront salon or a home business, the requirements are the same; only the scale changes.
For business viability, salon buoyancy is dependent on having adequate start-up capital, a well-developed business plan and the ability to adapt to market conditions. When developing a plan, explore options of salon location, budgeting, salon design and equipment, supplies, staff, operations and marketing.
Salon Location and Design, Budgeting, Marketing and Operations
Firstly, choose a hair salon location that has high visibility and easy accessibility for your clients. Research existing similar businesses in your area to ensure that you’re not saturating the marketplace. Free generative AI tools like Google Gemini or Google Maps can do this work for you. Check with the council what permits will be required, even for a home salon.
Beyond initial set-up costs and marketing expenses, allow for contingency funds for unexpected expenses or new opportunities. When designing a salon, consider business branding and space functionality. Keep online marketing costs manageable by combining them with word of mouth and client automated reminders. Salon software tools can also identify slow business days to better time promotions and manage workflow.
Salon Supplies and Other Cost-Savings
Salon profitability is often leaked through poor inventory management of “consumables”, such as shampoos, cleaning supplies, sanitisers, stationery and even the refreshments served to clients. One of the most effective ways to protect your profit margins is to look beyond specialised beauty wholesalers. Many successful entrepreneurs partner with broad-scale FMCG suppliers to source their high-volume cleaning products and refreshments at a fraction of the usual cost.
Other means of saving on business costs and therefore increasing profitability include reducing waste, optimising electrical energy and water use and maximising staff roles.
Staff
For shopfront hair salons, staff costs are usually the largest expense. Beyond hiring the right staff, it’s vital to keep them engaged within the industry.
Also, by sourcing high-volume essentials through a business-to-business model like JTC Import Export, salons can significantly reduce their “cost per service.” This allows salon owners to reinvest savings into premium take-home products and staff incentives.
Trends and Insights
In preparation for launching your hairdressing business, online data platforms such as IBISWorld and Mintel can provide invaluable insights. Recent findings show that the hair industry is adapting to consumer demands, with an emphasis on personalised wellness-focused treatments. To be competitive, hair salons are providing hybrid services and offering discounts while enhancing customer experiences.
Research indicates that while haircutting and styling services remain central, there is a growing demand for male grooming and treatments, such as colouring. Although these demands are high, they are often undercut by faster-growing home cosmetic treatments. This presents an opportunity for hair salons to sell higher-quality home treatments, enabled by cost savings from FMCG purchases.
There is also data to indicate that while niche, high-end salons can charge premium prices, profitability is driven by customer loyalty and strategic marketing. To remain competitive, implementing regular package deals and promotional days will enhance salon profitability. Boost profits further by sourcing both consumable and non-consumable items from an FMCG supplier.