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It’s a sad reality, but it’s a fact that most hairstyling and salon businesses fail.
In fact, based on different studies, about 80% of salons fail during the first 18 months of operation.
So how do you ensure you don’t become one of the failing 80%?
How can you join the 20% that wins and remain relevant for years, raking in hundreds of thousands of dollars in profit every year?
Despite the competition and the tough market, how do you set up or tweak your business strategy so you can:
- Always stand out from the crowd
- Attract new high paying clients
- Fill up your appointment books to the brim
- And retain your existing clients and get them to bring more people like them to your business?
Well, it all starts by doing things differently.
Avoid the mistakes most salon owners and hairstylists make that lead to their failure down the line.
So what are the things you should do to ensure the success of your salon and hairstyling business? What should you be doing instead?
Below are the 7 biggest mistakes most hairstylists and salons makes and how to avoid them:
Mistake 1: Lack of a well-written business plan
When most hairstylists and salon owners want to start their business, they just start.
No thinking and putting on paper the strategies and roadmap they’ll take to attract new customers, retain them, and get more of them through the door.
No monthly or yearly revenue goals. And no clear and detailed picture of the types of clients that’ll be best for their businesses.
They also don’t make adequate plans on how to sort the essential bills out and keep the business running until the business can start paying its own bills.
They just start, wing things, and hope everything turns out fine along the line.
The truth is, when it comes to bringing customers through your doors, preparation is essential.
More so, building a loyal customer base takes time. Therefore, you must ensure that your turnover is sufficient to pay all of your expenses and more.
Unfortunately, though, most salon owners never consider these things and end up starting to implement the new ideas they have for their salon with no money in the bank.
Assuming that you'll be able to attract customers as soon as you open your doors might lead to complications.
So, salon owners who do not devote enough effort to financial flow to weather those trying times of starting out are more likely to fail.
Therefore, if you’re going to join the ranks of the successful salons, you’ll have to include in your business plan a 6 to 12 months buffer of cash reserves to cover basic business expenses like insurance, rent, retail inventory, utilities, and of course, living expenses.
Mistake 2: Lack of an Effective Marketing Strategy
It’s common to see many salon owners dedicate enough time and mental power to get their storefronts perfect.
Don’t get me wrong, an attractive storefront store display is a terrific marketing tactic, but it’s not sufficient to get you all the customers you need to keep your business afloat.
To become the best in their region, successful salons with top stylists use a range of marketing methods.
And don’t think you need to spend a small fortune on marketing. No, you don’t.
In fact, the ideal method is to use a simplified technique that does not require much money.
For example, many salons with a steady and growing booking list gain a significant number of clients from a well-designed social media presence and consider their Instagram feed as their online storefront.
Also, a well-designed website that is tailored to your target market is an important component of any successful business.
And the best thing about both of them is that they cost little to nothing to set up and manage.
Yet, they can be the difference between the success and failure of your salon.
So start by getting to understand your target clients and design a brand that matches their needs and expectations.
Then use the right marketing channels to spread the word. As you may know, lower brand exposure means lower business.
Mistake 3: Failure To Prioritize Products And Services
You must select if you will be an inexpensive salon or an expensive salon that provides high-quality treatments. You can't be both, unfortunately.
And, while there's nothing wrong with being one or the other, making a choice is necessary.
You can't charge the cheapest haircuts in town while hiring the priciest hairdressers and using the priciest supplies.
Make a list of both high-end and low-cost salons in your neighborhood.
Find out what they're charging, choose a business plan, and set rates that are comparable to other salons in the area.
Also, be realistic about your location and customers.
If you live in a blue-collar community, becoming a premium salon may not be the ideal decision.
You can be restricting your prospective consumer base to just a few individuals.
Mistake 4: Low Customer Retention
Getting new clientele is far more expensive for beauty shop operators than retaining established ones.
Customer retention rates, as a result, may make or break a salon or hairstyling business.
Customer loyalty may be easily built and maintained if you place a strong emphasis on the customer experience.
Small adjustments, such as giving more personalized service or allowing for flexible booking, might yield significant results.
It will help you minimize client unhappiness in the short term while also establishing a loyal customer base that will help you grow your business for years to come.
A winning mix that will keep your company flourishing.
Mistake 5: A high percentage of no-show rate
What’s one thing that can be more frustrating and devastating than having your existing client leave?
Answer - having a high percentage of prospective clients cancel appointments.
We've all seen how people can be. Clients canceling appointments is a common occurrence, but too many no-shows can hurt your salon's bottom line.
Automated online booking systems can help with this: if a customer cancels her eyebrow waxing appointment, you'll be notified immediately away, and someone else can replace her slot at the last minute without you having to do anything.
While you can't manage your clients' commitment concerns, you can save time and money by not wasting them.
After all, keeping your appointment slots full will protect your firm from failing.
Mistake 6: Overstocking on products
Overstocking on products, merchandise, and supplies is one way to go out of business quickly.
You're wasting money if you have too much merchandise and not enough clients booked in.
The money you could have invested in marketing, automated salon booking system, or even on tool upgrades to help you get more clients booked and increase show rate have all been tied up on goods.
More so, some stocks may end up becoming expired or become unpopular with your customers.
Therefore, it is usually preferable to have less stock than too much.
And one way to ensure you have the right amount of stock is by investing in inventory management software.
Keeping track of your sales data can assist you in making educated orders. You won't squander money on unneeded stock if you study your statistics.
And if you already ordered too much merchandise, you can always sell it for a profit at retail. However, this may take some time.
So, always ensure you only order exactly what you need when you need it, and avoid wasting money on things you won’t use immediately.
Order exactly what you know your client will require to prevent expensive storage expenses.
Mistake 7: Believing that you can handle anything on your own
According to the Small Business Administration (SBA), one of the most difficult things for business owners to do is let go of the reigns and delegate to trustworthy workers.
You can't do everything alone; you have to rely on others who have demonstrated their ability to take on responsibility and make things happen, and then trust their judgment.
CONCLUSION
The summary is the number one reason salons fail is the same reason every other business fails: money issues.
Whatever else you have going on, as long as you're in the red, your business isn't sustainable.
Mostly, this is due to a lack of cost-cutting and budgeting for minor things, such as a rainy-day fund, marketing, product inventory, and operational expenses.
Meanwhile, the money issue can be easily solved when:
- You’re getting more than enough clients booking your service weeks and months out
- Getting high show-up rates
- Retaining more of your existing clients and finding a way to make them want to spend more on every visit, and
- Getting your retail products fly off the shelves.
And we’ve prepared a free guide on how to do just that.
In the guide, you’ll learn the step-by-step process Lindsay Kelly, a master stylist and salon owner used to go from making just $100/day to now making over $5000 per day in her hairstyling business.
You’ll also discover:
- The little-known method she uses to attract and book more clients on-demand,
- The one service she added to her business that 15X her income
- The methods she uses to get her clients to stay loyal to her and bring more clients to her willingly
- The non-salesy way she gets her existing and new clients to pick up her retail products on every visit
- And more tips on how to grow your salon and hairstyling business and make it more profitable.