Salon Suites: The new era of Salon ownership
One of the fastest growing segments in the salon industry are “Salon Suites”. According to Professional Consultants, & Resources owner, Cyrus Bulsara, “the state of our salon industry is now in a slow growth mode and is positively trending up. With the economy trending upwards and issues impacting the salon industry abating, we should see good growth. High performance, innovative new products, better larger salon suites and new management at top manufacturers are key."
Salon Suites are “mini salons” within a large commercial space, that’s typically occupied by either a hair stylist or a barber. It’s similar to a “co-working” space, where you work under the same roof as other stylists. Barbers and hair stylists, or “franchisees”, pay a monthly fee, to rent a private “mini salon” space, rather than the traditional booth rental. What makes this type of co-working business structure unique, is that the owners of the Salon Suite, have the ability to rent out spaces, at a fairly affordable price, while earning a decent amount of money.
There are also opportunities to eventually franchise your Salon Suites. Take Sola Salons, a large Salon Suite franchise with over 240 locations. Their model is slightly different than the typical Salon Suite owner. Sola Salons gives franchisees the opportunity to buy into a franchise, without having to build a business from scratch, like a traditional salon. The space is already up to code, newly renovated, and has all of the equipment needed so that the franchisee can start working in their business immediately.
WHAT IS A FRANCHISE?
Franchising is simply a method for expanding a business and distributing goods and services through a licensing relationship. In franchising, franchisors (a person or company that grants the license to a third party for the conducting of a business under their marks) not only specify the products and services that will be offered by the franchisees (a person or company who is granted the license to do business under the trademark and trade name by the franchisor), but also provide them with an operating system, brand and support. A brief separate glossary of franchising terms is available on IFA’s website
Some of today’s top performing Salon Suite franchises include, Top suite rental organizations like Sola, Salon Plaza, Salon Lofts, Solera, Phenix, Salons by TJ and Salon Concepts. How are these brands able to “get it right”? Their mottos are relatively the same; to provide stylists and barbers the opportunity to focus on growing their business by reducing the pressures of overhead costs, high commission splits, and other retail salon demands that comes with owning your own business.
Salon Suites allows hair industry entrepreneurs the ability to earn a living, while doing what they love the most. Are you looking for the right business opportunity to invest in? Franchising or owning a Salon Suite, is another way for you to diversify your portfolio.
How do I start my Salon Suites Franchise?
Write out a business plan. I know, I sound like a broken record considering I literally type this on every single, freaking blog post, but I’m going to keep saying it for this very reason: you have to plan for success. Forget jumping into a business head first without a plan in place, that's working backwards!
Choose a business name
Choose and register your business, as wells as trademark your brand name.
Conduct market research on what’s trending in the salon industry, from products to services, including prices. Have a clear understanding of your market; city, location, demographics of salon owners, hairstylists, barbers, include their customers in your research. Who’s utilizing their services? What is their age group? What the typical salary for clients in your area?
A great resource for starting and running a franchise is the IFA, International Franchise Association.
Find out what insurance you will need to cover liability issues. Are your tenants required to have an insurance policy in place?
A couple of things to pay attention to when searching for a location:
Is it a high traffic area?
Are there shops around?
Are there currently redevelopment plans in your area, where you can take advantage of having your Salon Suite?
Hire a local realtor to help you locate commercial space
Understand, and thoroughly read about tenant laws, particularly when it comes to running a salon space.
Licensing and Permits
Get your licensing and permits in place to run a Salon Suite.
You have multiple options to fund your business, use your own funds, or crowdfund to raise capital for your business. Another option is to finance your business endeavor. Now before you have an anxiety attack about taking out a business loan, understand this, if you plan accordingly, the risk may be worth it!
Here are few lenders that specialize in financing Salon businesses:
BFS capital has years of experience in financing beauty salons, nail salons and spas so we understand the seasonal nature of your business. With a small business loan or business cash advance, you can prepare for peaks in business or improve cash flow during the slower times between the wedding season and the holidays.
Beauty salons and spas require a significant stream of working capital to keep your operations running smoothly. In addition to the costs of getting your salon or spa business off the ground, the day-to-day expenses of running a small business can leave you wondering how you’re going to navigate short-term gaps in your cash flow.
Beauty salons are becoming more sophisticated. And so are their interiors and equipment costs to service an ever-growing and diverse client base. Salons are becoming more like day spas in order to raise margins and provide a one-stop self-care experience for their clients. This means adding in new equipment such as massage tables, spa chairs, tanning booths, showers, and even hot tubs. And that doesn’t begin to cover the expensive skin care lotions and creams, or the maintenance of the equipment, towels and laundry, and scrupulous cleaning needed to keep the facilities looking pristine, beautiful, and welcoming. Read more
Small business funding has quickly become one of the nations best alternatives for finding Salon owners fast salon financing. We find working capital every day for salon owners to use for expansion, new hires, or just additional working capital. Small Business Funding has multiple options available to you to suit your needs for fast capital. Working capital from $2500 to $500,000 will help you continue to grow your salon into the future. Inventory purchases at a reduced discount can really spark profits or it can be used for additional marketing to bring in more customers.
Develop a marketing strategy that entails, attracting and maintaining hair stylists. Don’t forget to incorporate a unique offering and or selling point. Include the benefits of working in a Salon Suite for a Stylist or Barber into your content marketing strategy.
Turnover is inevitable in the hair industry. Many stylists leave the industry for various reason, from burn out, poor business planning, to lifestyle changes. You should also prepare for turnover, when stylists eventually leave the salon suites, to branch out on their own.
If you’re thinking of franchising your business, it’s critical that you create systems, so that the franchisee can get fully acclimated with the business, understand rules, what they can and can’t do as a franchisee.
It’s always a good idea to speak with someone who’s owned a Salon Suite, also Salon owners. Having a mentor who understands your business, will help you navigate through some of the challenges of owning and running a business.
One things for sure, should you decide to open your own Salon Suites, or invest in a Franchise, there is an opportunity to find success in the hair industry. Salon Suites is a non-traditional way for stylists to run and operate their business, without the typical overhead costs of owning their own salon. Are you thinking of opening your own Salon Suite? Let us know in the comments section! Shoot us an email in the Contacts tab, for any questions, and success stories, we’d love to hear from you!