Being an entrepreneur takes a vast amount of leadership, heartiness and bravery. This week I am giving you the straight-up, no-sugar-coated goods on the hardest parts about opening up a salon or spa. I’m all for looking at the bright side, but when it comes to investing time, energy and money, I want you armed with honest feedback about what it takes to open a business in the salon and spa industry.
1. You will have to personally fund your startup & operating costs.
The biggest cost of opening your new salon will be the facility’s leasehold improvements. Those costs cannot be recovered from the bank if you should go out of business, so it’ll be up to you to find the money to fund your start-up from personal resources. Savings, family, personal lines of credit are the most common ways for seed money.
2. It’s not as easy as “build it and they will come."
Don’t get too caught up on how beautiful your space is going to be. The salon consumer is incredibly savvy and if you’re banking on what your space looks like as your only client retention strategy, you’re in trouble.
3. You should NOT open your salon straight out of cosmetology school.
I know you’ve been dreaming about your new business for some time, but you need real-world experience for at least a few years. Become a master at your vocation before you attempt to open your salon. Then work on becoming a master in business.
4. It is not enough to open a salon with talent and passion alone.
I have said it before. The business side of the salon and spa industry is pretty broken. Most salon owners learned what they knew about business from watching their previous employers, who learned from watching their employers. It has been a lot like “the blind leading the blind” for decades.
If you want a fulfilling salon or spa business where you can blend your talent plus enjoy the financial rewards that can come with it, you’ll need to learn & excel in the financial side of your career.
Which leads me to my next point…
5. You WILL need business training specific to this industry.
If you are focused on becoming an entrepreneur in the salon and spa industry, look at business training as the second part of your cosmetology education. If you choose to learn the business ropes by yourself, it can be done, but it will be a long, exhausting road ahead. Been there. Done that. I don’t want that crappy t-shirt, thanks. Find a mentor or coach who can tell you exactly what you need to do. There is no need to reinvent the wheel.
6. The easiest part of being a salon owner is starting up.
I remember those exhilarating first months of starting-up. Finding the perfect space, watching the décor come together, designing my website and telling anyone who would listen that my dream is coming together.
But the hard part comes when the doors are finally unlocked and the open sign is lit. Now you really feel the pressure; knowing all the expenses needed to be paid the first month alone, let the added debt that can pile up with a few slow quarters alone.
This is the point, if you don’t have a business background, in which panic sets in: “What the heck did I just get myself into?”
7. There is a very low profit margin in the salon and spa businesses.
Because this industry is heavy in hands-on services with product use, the cost of doing business is very high. You can be profitable, but you need to learn exactly how to do that and how to improve it year after year.
Just because you have more clients coming into your salon than 6 months ago does not mean you’re profitable. You have got be smart about managing your numbers or you’ll end up on the hamster wheel; exhausted, burnt out and broke.
8. Expect it to take at least one year to build a stable clientele.
This is where it really helps to be realistic. Before you open, have a solid plan for marketing and client retention because you will be alarmed and disheartened when your schedule is heavily peppered with empty spaces for months at a time.
When you have a plan and a detailed strategy you won’t be tempted to throw money at ineffective advertising. You will also be able to remain calm amid the bumpy first year of business as you learn the ropes.
9. You will need to be nimble.
Very rarely do things work out exactly like you’d planned. Just as there are multiple ways to cut and style hair, there are just as many techniques to running your business.
If a Facebook ad campaign isn’t working as you thought, pause it, analyze and make changes. If a referral program could be simpler for clients understand, tweak it and launch again.
Take what DOES work and repeat it. Don’t be afraid to make mistakes, it is how we learn.
10. Being an entrepreneur is hard.
It makes me really sad when someone puts their heart, sweat and soul into opening a salon only to discover that they really do not have the grit and determination for the long haul of leadership. That’s ok! If the industry were full of tycoons, it would be really hard to find great staff to build our empires!
Every salon owner I’ve spoken to has days when they would love nothing more than to throw in the towel. Perfectly normal. The difference is when we think about closing the doors for real, we know we simply cannot give up being an entrepreneur. There is a deep knowing that this is “our path," no matter how bumpy the ride can be at times.
Being honest about how much determination you have for your business will save you from a lot of heartache and shame if you realize it just isn’t for you.
For those of you who do have the grit for being your own boss, this list will not deter you in the least. In fact, it will most likely be empowering to be armed with the knowledge of what to expect and tailor your thoughts and processes to help you succeed as an entrepreneur.
For you veteran salon & spa owners, would you add anything to this list? What was your biggest surprise when you opened your business?