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5 questions to ask yourself before investing in a beauty salon

BusinessesForSale.com highlights the opportunities in this cutting edge sector

As a multibillion-dollar industry, the South African beauty salon sector has a lot of potential for entrepreneurs.

‘Wellness’ took off as a trend in 2014 and has continued to grow ever since, showing no signs of slowing down. As the beauty salon sector continues to expand and an increasing number of people build health and beauty treatments into their weekly routines, it's a perfect time to invest.

However if you’re still not sold on the industry, take a minute and ask yourself these five crucial questions…

Is there an ideal location for a salon?

There are two things you need to keep in mind when considering the location of a beauty salon: the type of establishment it will be located in and the level of footfall.

Most salons choose to operate out of free-standing buildings rather than through shopping centres due to the high rental prices. Salons are also sometimes located on the bottom floor of office buildings, or in a string of shop-front properties, to maximise on the footfall of workers and / or shoppers.

But just how important is footfall in choosing a location?  Beauty salons are often considered ‘destination businesses’ - meaning that most customers will book in advance and are unlikely to ‘pop in’ off the high street for a beauty treatment.

However, it is likely that loyal customers will travel to the same salon based on good previous experiences, rather pop into an unknown establishment.

So buying a salon in a city centre with a high amount of passing traffic may seem like a great idea initially, but it is often not worth the higher costs.

With a less central location, your success will be down to your marketing. Attracting a solid customer base can be achieved through internet marketing and advertising in the local area (newspapers, magazines, leaflets, ad boards etc.)

Ideally a salon sould be located on the edge of a town or near a small, local community. However if your salon is aimed at quick treatments for 9-5ers, it may be more suited to being a concession within a gym, or in the business district of a city (if you can afford the rent!)

What are the start-up costs for a salon?

These will vary depending on the size and location of the salon you would like to buy or rent. At BusinessesForSale.com, asking price figures for hair and beauty salons range from R198,000 to R2,300,000. On top of that, extra capital will be needed to pay for staff, maintenance, stock and tax.

What treatments should I include and how do I determine their price?

In order to establish which treatments you would like to include at the salon and the subsequent price, look at the area’s demographic. Who are they? How much disposable income do they have? What’s the average age range?

For example, if the surrounding area is comprised of  families with limited disposable income, basic hair and limited beauty treatments should be offered at an affordable price. However, if the neighbourhood is wealthier, you can afford to increase your prices and provide more elaborate treatments.

Factors to consider when setting prices should be: overhead, labour and profit.

What are the regulatory bodies in the industry?

No licences are needed to open a beauty salon, however there are associations that help regulate the industry and provide guidance for businesses. The main ones that you should think signing up to are:

The Beauty Health and Skincare Employers Association (BHSEA) – aims to provide business owners with labour, legal and business advice.

The Afro Hairdressing and Beauty Association of South Africa ( AHBEASA ) – formed with the purpose to promote and develop the standard of the afro hairdressing industry. 

The South African Association of Health and Skincare Professionals (SAAHSP) – as the South African branch of CIDESCO (Comité International D’Esthétique et de Cosmétologie), which represents 30 countries worldwide, it is an association that offers high standards of education in the sector.

Who should I employ and should I offer training?

Hiring is difficult in the beauty industry because employees must have the right skills, experience and charisma.

A majority of salons are built on the reputation of their staff members, and repeat custom is often due to the merits of specific employees. Hiring the wrong person can have a very negative effect on a salon.

You will most likely need: a salon manager, receptionist, hairstylists, beauticians, salon assistants and electrologists (for hair removal). Hair stylists, beauticians and electrologists should all have qualifications in their respective fields from a credible institution.

If you decide to take on apprentices, you will need to provide training for them. Most technical colleges offer a Hairdressing and Cosmetology Services Industry Education and Training Board (HCSIETB) modular training system for Afro and Caucasian hair. The college you choose for training must have the HCSIETB accreditation from the board.

After the training, apprentices will need to take the Trade Test to become a qualified hairdresser.

Still interested? Take a look at our beauty salons for sale in South Africa.

 

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Rose Hill

About the author

Rose Hill is an in-house journalist and writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.

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