For years, the beauty industry has been convinced that the acquisition of salons should be treated as an asset. However, these days with e-commerce gaining momentum and online retailers like Amazon leading the way in changing business models, more and more people are considering selling their own salon instead of going into debt to open one.
So, does this mean that the salon industry will go in loss with the speed of business changing?
The answer to this will be a Big No!
In this blog post, we go through how you can bring cash flow to your salon so that you don’t have to worry about rent, taxes or insurance ever again. This would give you an idea of how lucrative a salon acquisition can be and how can you succeed in such a market.
Biggest huddle salon owners face
The largest nightmare a lot of salon owners face is getting stuck with buyers’ fees and acquisition fees and exit fees. If you are aware of these fees. Also, if you know how to avoid them by not giving them to your seller’s agent or escrow service, then making money from your salon is easy. Well, how to position yourself to avoid these extra fees is a whole another conversation. However, we promise to make a blog over this soon in future. But today we will share how can you build a cash flow that will be consistent in your salon even with these extra fees that entrepreneur sometimes need to cope up with.
Negotiate your way to the top
Whenever you buy any business, make sure you negotiate a price on these fees. They can eat away at a large percentage of your profits. If they refuse to budge, show them the exit and tell them if they don’t grant you a better price.
In fact, almost all the things that could go wrong with your salon can be stopped before ever happening or managed if they do happen. The key is to make sure to have an exit strategy in place before buying a salon. Also, make sure to always have a business plan and/or an exit strategy in place beforehand. This helps strengthen the salon acquisition to become an asset long term.
4 ways to increase your cash flow in your salon
Now, you already know what are problems salon acquisition owners face. However, the solutions mentioned above like negotiating with extra fees would not be enough. The way you can make cash flow in your salon is by selling extra services.
For example, a lot of people have started offering manicures or pedicures as an add-on service to their base service offerings. Or they sell other products like makeup on top of their hairstyling services.
The following is a list of things you can sell and make money off of:
Tanning can be a great service you offer if you live in an area that gets lots of sunlight. The tanning service can be offered by numerous different methods, such as:
- Normal tanning beds: these are less expensive and convenient to use. Customers get an instant tan that actually looks natural.
- Tinted Tanning Lotions is a little investment-driven idea. However, produces a better-looking tan and it’s safer for the person who is tanning
- UV Filters don’t tan but they protect the skin from getting over-tanned.
We understand you might think about how would you afford all this equipment. Salonshark will help you grow your salon with the required resources. Click here to learn more about our funding services.
Hair and Cosmetics Products
Hair products and other cosmetics product can be a very lucrative business opportunity for your salon. You can purchase wholesale hair products in bulk and then resell the products to your clients at a higher price. This will not only give you a higher profit margin, but it will allow you to bring in more revenue and profit over time too! To increase your profits, even more, see if any of the hair product manufacturers offer incentives like coupons or rebates. By this, you can get products at reasonable prices.
Have a great marketing campaign
Go above and beyond in promoting your products and services. Salonshark’s advertising service can help you consulting how can you arrange such ways to promote your business. Hold a cosmetic party. If you want to sell cosmetics, have your staff help you host a cosmetics party. Have the party at your salon and get people interested in attending and purchasing your products. Make up a guest list of women who you know are likely to buy the product and send invitations by mail or phone. Don’t force anyone to come, but do emphasize how they will be able to learn more about what they are buying when they attend the party.
Makeup lessons are a unique and innovative way to earn higher profits for your salon. Although makeup lessons may seem like a luxury item that many salons cannot afford, they are actually one of the easiest ways to make money. You can share some common tricks with your customer about light makeup and also you can promote your hair and cosmetics products as well in the classes. Increased revenue from makeup classes can fuel awesome upgrades such as more creative workshops and replacing the lacklustre coffee with an amazing latte. As a result, you’ll be able to attract more clients who are invested in their experience at your salon.
These were some insights about how having a salon acquisition is still a very profitable asset. Many salon owners get overwhelmed looking at the change in market trends so rapidly that they lose motivation to grow. These were some adjustments that you can make in your salon business and make a constant flow of income coming in. Make sure while doing this when you are pricing your product or service add a reasonable markup to the costs of the products you are selling and then you can make good money also improve your profit margins. If you are facing any difficulty in this assessment you can always turn to us at salonshark.com for consultancy requirement. Remember, if you are going to run a business, make sure that it is profitable and sustainable.