HAIR EXTENSION A PROFITABLE SOLUTION

Although short locks have been the style quotient of the urban women, long hair, it seems, never runs out of fashion. Sai M, Chairman of Shine Hair Studio, says, “We have seen phenomenal growth in the last 2-3 years, especially with the number of women wanting to sport long hair increasing and most wanting to express colourful stories through hair.” This demand, according to Sai, is not just from women in urban areas but even from women in Tier II cities, looking for hair replacement solutions. He says, “We have two categories of key customer base – urban women who opt for hair extensions for traditional occasions and festivals, while the second is of those women who use extensions as a fashion statement.”

STARTING A HAIR STUDIO
According to Looks Hair Studio’s Chairman A Venkatesh, the average set-up cost of their franchised outlet is around Rs 25 lakhs for a store in any Tier II city. This cost includes franchising fee of Rs 6 lakhs, property rentals, interiors and other setting up costs. While a studio will need about 4-5 staff members, their salaries could range between Rs 60,000- 70,000 depending on their experience. Further, a franchisee will need an average of Rs 1 lakh operating costs for rentals considering an average store size of 1,500 sq. feet, bills and other miscellaneous expenses, including the salaries.

While a franchisee can generate revenue of Rs 4-5 lakhs every month even with an average of 30 customers, he will have 70- 80% margin. However, there will be royalty sharing with the brand, which varies from region to region. According to Venkatesh, on investing Rs 2 lakhs on raw materials, a franchisee can generate Rs 10 lakhs in revenue. After taking care of all the expenses, a franchisee can earn as much as Rs 3 lakhs or more every month.

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