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May, 16 2013


Investors are keen to invest in a beauty salon business because they take pride in making their clients feel good and look good while make a living for themselves. Before investing in a salon business, it is important to first evaluate the business and th

DO you fall under the profile of investors who want to own or operate a swanky salon? If yes, then are you through with your homework of drafting a business plan for launching a salon?  Irrespective of the profile one belongs to (a mompreneur, an IT person, existing franchisee, a trader, etc.), one must do a detailed research before investing one's hard-earned money.

Rita, an IT professional, failed to run her beauty salon franchise business because she did not do any research.  To open a salon, one needs to first have a proper business plan which should cover all the aspects of beauty salon. It should list all factors from location to promotion to branding.

An investor, who is all set to own a salon, must also do some research about the category or services he wants to cater to. As the industry is growing, consumers are keen on experimenting with new services. For an aspiring salon owner, the time is just right to start his/her new salon venture. To come up with a full-service salon, one needs to decide on the following key-to-success parameters:

Services: Investors are investing according to the changing demands of services at salons. Make up your mind regarding the kind of clientele you would like to cater to, whether it is men, women, children or all the three categories. Also, decide whether you would like to diversify into other services, such as nails, waxing, tanning and other full-service options, including certain spa treatments and services.

Location: Location always plays a significant role whether it's an F&B outlet or a salon. Being a service- based business, salons have a high probability of earning big profits in densely populated areas. A salon must be in a high quality location with good retailers and neighbours. Factors like parking areas, continuous water and electricity supply are also important factors that a franchisee must take care of before finalising any location.

Interiors: A franchisee should not poke his nose into the issue of deciding the interiors of a salon. A consumer would always appreciate similar ambience and surroundings for a brand's salon, irrespective of the region or place it is located in. Therefore, similar interiors with facilities for good lighting and ventilation should be considered.

Furniture & fixtures: Expenses incurred on furniture and fixtures of a salon are almost half of the total expenditure. Consultation with the franchisor before spending on furniture and fixtures is mandatory unless the franchisor provides the same.

Beauty equipment: Equipment and supplies in a beauty business hold similar importance as the service itself. Partnering with the correct suppliers is vital for the success of a salon.

Human resource: Manpower is a great challenge in this industry. Either a direct support from the franchisor or a tie-up with a training school is a must-have to run a successful salon biz.

Brand promotion: After setting up a salon, one needs to create a competitive advantage in the market. Also, a salon must do its branding and promotion via various means at regular intervals. After associating with an established brand, a franchisee is comparatively not that worried regarding brand promotion.

Competitive edge: Choose an established brand. Further, to ensure the brand's salon stands out among other beauty salons, one needs to identify its USP and strengthen it further. Its USP could be anything  amicable staff, great services, various services under one roof, having renowned beauty professionals, quality products or its strategic location. Work on its USP and it could be a winning deal for you.

Salon start-up analysis

A franchisee needs around 1,000-1,500 sq ft of minimum area to set up a salon business. The total capital investment is Rs 30 lakh. The working capital required every month is Rs 1,85,000. Hence, the total fund required to start a salon is around Rs 35-40 lakh. This business plan is for tier-I cities and can be marked down to 15-20 per cent for tier-II and III cities.

If you are worried about the start-up cost for launching a salon and concerned about the risk involved, choosing an established salon may be a good option. Opting for a franchise of an established brand will allow you to skip the hurdles of a start-up business. Go through our analytical charts available in these two pages which will make it easier for you to invest in a salon business.

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