I am often asked the question ‘How long does it take for a salon to become profitable?’ My answer is always ‘4 to 5 months’, which sounds surprising to many. But yes, it is absolutely possible to break even in month 4 and I have personally succeeded many times in my previous roles of managing and expanding salon chains. I have also successfully assisted my clients in achieving their own ‘month 4’ goals. The good news is you can too!
My motto is very much ‘break even month 4, make profit from month 5’ – and here’s how…
Building solid foundations for your business and making sure those foundations are there upon opening your salon is key. Building solid foundations includes all things from knowing what your business stands for, who your target market is, where the best location to cater to your target market is, the pricing of your products and services, and lastly, the work environment that you create for your employees—not forgetting your dedication and eagerness to make it a success.
One of the most important things that must be completed before opening any sort of business is creating your financial plan. This will show you exactly how many sales to generate, how to control your expenses and how to become profitable as soon as possible. Since starting VR Beauty Consulting, it has been proven that a Feasibility Study, which includes a 3-year financial plan, is one of the key factors to success. The key is not to just open and see what the business will bring or wait until there is a financial problem within the business; it’s important to be prepared and look so far forward that you eliminate any risk altogether. Know every detail of your salon, including the number of employees you need to hire. Do not simply hire without a plan in place. It is far more beneficial to start with a smaller team and build the team as and when the business requires it.
To prepare your financial plan, you need to know what your business stands for, its key message and positioning. Where will your salon be located? Once you have figured out who your target audience is, and where they are located, only then can you decide where your salon is best situated. Location is key! Following this, a competitor analysis should be established where you should decide on your pricing according to your fellow competitors in the area. Once you have decided on your pricing then you can create your financial plan.
As the saying goes, ‘content is king’ – and marketing is queen! It is crucial to have your social media pages set up well in advance of opening your salon, particularly Instagram and TikTok for the Middle East region. Creating buzz, awareness and excitement for your impending opening is key to driving footfall to your salon. Think about opening offers and aspirational posts, showcase your knowledge and educate your followers to solidify you as experts in your field. Think about working with relevant influencers to create beautiful content that can be reshared and bring potential new clients to your salon.
Last, but most certainly not least, an inspiring work environment and impeccable customer service is fundamental in order to run a successful and profitable business – essentially this is what keeps your clients coming back. A well-respected team who feels valued, with their management taking an active interest in their personal and professional development, equals a happy team. A happy team in turn makes for happy clients! I strongly recommend putting a customised client journey in place so that the team are clear on what to deliver. It also ensures that clients feel pampered and taken care of throughout their whole salon experience.
Taking these key points into account will help lead your salon to success and ensure a quicker break-even point. It is worth noting that a salon should not be breaking even any later than 8 months into operation. This is a big red flag, and your business should be analysed in depth to ascertain what is going wrong. A new strategy can urgently be put in place to help lead your salon to profitability.
Starting any business comes with its trials and tribulations, but the good news is that if you’re motivated and dedicated to opening your new salon, it’s more than possible to have a successful business using these few helpful tips and tricks. Opening your own business is tough but do not be disheartened – you’ve got this!