| Beautifying Your Community One Client at a Time: Opening a salon or day spa |
If it's your passion to provide self-esteem and serenity to the hard-working people of your community, then opening a Salon or Day Spa could be your next move.
In a culture that prides itself with appearing younger and more attractive, beauty salons have historically fared well. Consumers will often consult professionals to handle their personal care needs. Because these services are often difficult to duplicate at home, a well-trained stylist can become indispensible to clients, especially those who have more money than time.
For the convenience of these hard-working customers, most salons keep late hours, work weekends and even overtime during peak seasons. Generally, these businesses stay open from 10 a.m. to 9 p.m. six days out of the week. Sunday is also an optimal day to be open and many shops keep hours from noon to 5 p.m. While the average revenue for salon owners in 2007 was $60,770, top performers took in an average of $160,000.
There are a number of routes you can take as a new owner of a salon or day spa. One is buying into a franchise. This path will allow you to take advantage of the franchise name and prestige as well as their advertising and loyal customer base. Or you may choose to build from the ground up. This will ensure your place has your special flair. Alternately, you could buy an existing shop. Maybe someone is retiring or wants out of the business. If you take this direction, make sure that there wasn't a fatal flaw in the former business' location or other structural problems that could have caused the salon's demise. Be wary of areas that are saturated with competition. The last option is to operate as an independent contractor. In this instance, you have a key to the establishment and use of fixed equipment, but all other essentials are your responsibility.
Location
Whichever business model you choose, location will be an important factor. You have your choice of locating in a shopping mall, a storefront shop or a free standing building. However, your salon must be in a safe, well-lit area with plenty foot traffic. A site among other retail stores is ideal. With other stores nearby, customers can conveniently shop for what they need and patronize your salon all in one trip.
Typical salons use about 1,000 to 1,500 square feet of space. This includes an area for salon services, a shampoo area in the back, a storage space, a restroom and reception area. If your plan is to open a day spa, your facilities may need to be more compartmentalized for privacy. Showering rooms and areas for consultations and treatments will need to be partitioned. In some cases it is advisable to use a custom decorator to plan it all out. The layout of your salon or day spa will depend on the services you will provide and the range of services will depend on the potential customers in your area.
Services
In a salon, most services will center on hairstyling and cutting. This includes perms, flat iron presses, blow dried styles, roller dry sets, hair and scalp treatments, braiding, coloring, highlighting and other dimensional effects. Some owners also have nail services available in their salons including, manicures, pedicures, skin exfoliation, nail tipping, acrylic nail application, sculpted nail application and paraffin treatments. Keep in mind the average nail shop patron is accustomed to receiving these services at a specialized location, so you may not want to invest in the equipment, space and labor of the technician. Nevertheless the convenience of having a range of services in a salon is an allure.
Day spas typically have a range of treatments that fall into three categories: skin and body care, hair removal and makeup. Some of them are listed below.
Skin and Body Care
Facials and body exfoliation (which may involve the use of salt glows, body polish, enzyme peels, and body masks like mud or paraffin)
Massage (full body massage, facial and/or hand/foot massage)
Wraps and packs (used to combat cellulite and reduce water retention)
Hydrotherapy treatments (whirlpool baths, Scotch hose--a type of massage that uses a hose to direct streams of water on the client to improve circulation--and hot tub treatments)
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Hair-Removal
Electrolysis
Waxing (face, legs, arms, bikini, back and underarms)
Eyebrow arching
Makeup
Cosmetics application
Color analysis
Eyelash tinting
Eyebrow tinting
Ear piercing
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If you locate in a part of town where potential clients have more disposable income, you can price accordingly and offer more high-end services. Granted some people will travel across town for a trusted beautician but generally, your prices should be affordable to the surrounding community and reasonable enough for you to turn a profit. At the outset, you may want to limit your services to those that do not require substantial investment in equipment such as Hydrotherapy machines. These “wet” services may require higher capacity plumbing and more space. It may be that the demand for these services will not justify your expenditure.
Staff
To provide these extensive services you will need trained professionals. Your state will require most of these technicians to be licensed. Verify their documents with your state's cosmetology board. Each license should show which services the applicant is certified to perform. Depending on the services you plan to offer, you may need among your employees a Salon Manager, Hairstylist/Cosmetologist, Shampoo/Salon Assistant, Receptionist, Manicurist, Massage Therapist, Electrologist, and Aesthetician. You may choose to hire an independent contractor for any of these positions. However, as a salon owner, one of your most important tasks will be to hire and keep skilled and personable employees. Their work will be a representation of you and your establishment.
The Bottom Line
Besides paying hourly wages to your style technicians, administrative staff and yourself, you will need to cover expenses for your overhead and supplies. Your overhead includes your operating costs besides labor including rent or mortgage, utilities and supplies. You should estimate this expense to be around 45 percent of your total labor and materials costs for the year. After you have your costs figured out, you can determine what profits you will aspire for.
Typically salon owners earn between 11 to 15 percent returns, but these numbers are not set in stone. To earn your desired profits, you'll have to add a mark up fee to your services. To calculate this figure start with what your salon will need to operate for the entire year. Say $65,000. Divide by the number of weeks you plan to be open. Then divide by the hours your salon is open each week. Then multiply this hourly operating rate by the percentage of your desired profit margin. Say 10%. This is your mark up fee.
$65,000/52 weeks = $1,250 per week
$1,250/100 hours the salon is open each week = $12.50/hr × 10% profit margin=1.25 mark up
Total = $13.75/hr
When pricing your services, you will need to take all of these figures into account as well as research your specific market. Don't settle for just information on incomes. Find out what kind of jobs people of have. Are there more industrial workers, service industry workers or corporate professionals? Depending on their job, they may be more willing to cut back on your services when times are tight. Consult your city's economic development office to get more specific information.
What to Expect
As many salon owners will tell you, expect to be on the phone a lot. You will need to order supplies, help book appointments, talk to salespeople and coordinate training sessions. Tracking your orders, adjusting costs and creating advertising will also be in your purview. You will be charged with recruiting and hiring staff, mentoring less experienced stylists, managing different personality types and performance evaluations. Sometimes you will have to pick up the pieces when a junior stylist fails to deliver on his/her promises. On top of it all, you may have personal clients of your own. This long list of undertakings is why many owners who are stylists themselves hire administrative support.
Get the Word Out
Among your mile-long list of duties is the task of getting the word out. Many salon and spa owners attract business by listing in directories, passing out flyers and business cards and relying on word-of-mouth referrals. It is often a good idea to have a Web site as well. When designing your site, answer all the questions you might have if you were the customer. List location, hours of operation, services provided, prices, hair care product lines, methods of payment accepted, contact information and gift certificates information. Many consumers will want to know if you can duplicate a style from a celebrity photo or where your stylists studied. Your website should not be merely a business card but should give the customer a sense that she or he is in your establishment.
Pictures can have great effect, especially for spas. Concerns foremost on your potential clients mind may be if your employees are licensed, whether your masseuses are male or female, how you sanitize your equipment and how long a treatment may take. Explain the benefits of some of your more high-end services.
Running your salon will, indeed, be a labor of love. As with most start up companies, the hours are long and intensive. However, having the proper planning and investment and good management of your operations will land you closest to your goals.
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