Why Salons Fail- From a Beauty Recruiter and Salon Broker’s POV
So, you are wondering why salons fail? While there are a wide variety of reasons salons fail, there are a few consistent behaviors and happenings that make up a large percentage of the salon failure rate.
Hi there, my name is Susan Wos! I work with salon owners, hair stylists and beauty professionals across the US and Canada as the owner of Salonspa Connection.
When I’m not selling salon businesses or helping owners of hair salons hire, I’m providing advice through coaching and blog posts.
What You Will Learn in This Article
Whether you have come to us just conducting salon industry research or your salon is in danger of failure, allow me to provide some insight. I see what works, and what doesn’t, in spas, barbershops, nail and hair salons.
WARNING: I will not hold back my personal advice or opinions in this blog post- it would be a disservice to you if I did. If you are sensitive or faint of heart, be forewarned you may get your feelings hurt if your salon business fail is near.
As a former salon owner, I understand where you are and where you are headed… It is HARD to pay the rent, worry about prices and manage people.
9 ways to have a successful salon business and keep the doors open
Before we get into the failures, let’s detail successful business attributes, first. Salons that have the following attitudes and qualities tend to be those that I see thrive:
- The owner is adaptable.
- Salons that have realistic attitudes and expectations.
- Owners who write a great salon business plan or put plenty of forethought into the business side of salons.
- Owners who understand salon recruitment.
- Salons that offer flexibility and support their team.
- Owners that truly have a great salon to work in.
- Salons that are not toxic or are full of drama.
- Owners who are kind, caring and firm leaders.
- Salons that understand marketing strategies and how to get new clients.
The top 9 reasons why salons fail
Generally speaking, I see salons fail due to a general lack of business sense and financial planning. A typical salon owner is a beauty professional who came into ownership without a clear business plan
Then there are the non industry owners who thought owning a salon would be easy, fun or profitable. The salon industry can be a nasty place if you don’t understand how things work…
Reason #1 salons fail- An inability to adapt
In an industry that loves change, we are often the last ones to embrace change in the way we conduct business. I see a large amount of whining about the new generation of beauty professionals.
Complaining gets you nowhere, adapting and seeking to understand, does. This applies to salon technology, services, people, business model and marketing.
A small caveat to this revelation- some salons do well without adapting much. Examples would be: small town salons, franchises and salon suites.
If it’s working, great! If not, it’s time to change
You know the saying, doing the same thing over and over again and expecting a different result is insanity? I see many salon owners fail because they live in the past.
They are caught up in yesteryear and choose not to navigate today’s employment and customer experience trends.
A company that can’t adapt is destined for failure. A businesses fail is thinking the world will bend to your desires.
Focus on the things that ARE working, and address the things that aren’t.
Reason #2 why do salons fail? Unrealistic attitudes and expectations
Look, if you don’t know this by now, no one cares about the salon the way you do. While owners are busy worrying about paying rent and the future of the salon, clients and salon employees are thinking about totally different things!
Success does not just happen. Unless you are in some kind of fantasy vortex where the stars align, and people carelessly throw money at you, expect to work harder than you can imagine and learn to love it.
Growth and achievement is painful and most lessons are learned the hard way in salon businesses.
The harder you try now, the less you will have to work in the future
Setting the tone early on for employment expectations, salon client rules and what needs to be done in your salon, the happier you will be. Successful salons have a positive attitude in the face of distress and have clear expectations that are clearly communicated and gently enforced.
Try to find that sweet spot- somewhere in between being a doormat and a tyrant. Rational and fair salon owners thrive, irrational and unrealistic owners fail.
It’s not easy keeping all together, especially when you have limiting beliefs. The sooner you understand that running a salon business takes a ton of effort to set up for success, the easier it will be to adjust expectations on everything from the customer experience to hiring and eventually- selling your salon.
Reason #3 for salon owner failure- No Business Plan
Poor business planning is high on every small businesses fail list, in particular with beauty salons. If understanding cash flow, numbers, costs, profit, marketing strategies, prices, culture, recruitment and proper management isn’t your thing, find help.
Expect the unexpected. Writing a salon business plan helps you think through essential expenses, marketing costs and everything in between.
The only thing you have to lose when writing a business plan is time. You have everything to lose, if you don’t think things through.
Why do hair salons fail? Reason #4 Salon Recruitment
If I had a dollar for every salon owner who failed to understand why salon pros aren’t drawn to their salon, I would be filthy rich. It’s not enough just to have chairs, shampoo bowls and a space to work.
Attracting future employees or booth renters is a well thought out process that takes perpetual time and energy. You must market your business not only for new clients, but for hiring as well.
Between salon suites and the vast amount of choices in beauty salons, the competition to hire a great stylist has never been more challenging.
Hair stylists have choices, why should they choose your salon business?
One of the first questions I ask when consulting with owners on hiring is why should someone come work with you? This should be an easy question, right?
Well, it’s not for most salon owners. Recruitment strategy, cost, time and effort should be factored into all salon industry businesses that have more and just one chair.
I could go on and on about this subject. Instead, read our ultimate guide to salon recruitment or at the very least list your salon on our hiring page, if attracting your ideal hires is a challenge.
Reason #5 why salons fail- Flexibility and support
This is really two different topics, but they are intertwined enough to address both issues at once. On the heels of hiring, the beauty industry has choices.
They are choosing salons that provide a less rigid schedule, and desire a supportive environment. This is also true for clients.
Clients love options, even if they don’t utilize all of them. An owner who supports and encourages their staff makes more money because this trickles down to the clientele in the salon.
Salon Support & Flexibility Math
Stylists are happy because they aren’t stuck at the salon when they have family obligations or important things to tend to. Clients pick up on the fact that their stylist is happy to be in the salon.
Happy stylists + Happy clients= More sales.
You started selling new products to make some more cash. The stylists don’t care for the less than great, new retail stock and are uncomfortable selling it to customers. The profit margin is high with the new products, you get an immediate payment and they help to keep company costs lower. You require stylists to use and promote the products and reduce paychecks if they don’t sell.
Resentful stylists + Clients that are being pressured to buy = An empty salon.
By being flexible with things like schedules and supportive of people’s feelings, salon failures can turn into successful salons, overnight.
Reason #6 The Salon Failure Rate is High- The salon just isn’t that great to begin with
The salon industry is full of day spas, barbershops and salons that are barely mediocre. What do I mean by this?
No salon brand identity has been established, the decor is just OK and the potential for a great client experience is limited. Stylists are expected to do more than what your offer is worth, and the pay isn’t that great to begin with.
I meet countless owners who think their baby is the best, just because they have gone to the effort to open a salon. Unless there is something special or extraordinary about your business that isn’t available in your area, the salon may not be that great of an opportunity for clientele or for staffing.
It’s up to the owner to turn things around
Reputation and perception is quite literally everything in the decision making process for customers. If people, (beauty pros and clientele), have already become familiar with your salon and it’s not a great perception, make an effort to change this.
If you “look” like the picture of happiness and success but the reality is totally different inside the salon, the local market won’t trust you. Create a great environment, outpace competitors with a unique value proposition and make your salon a desirable place to be.
What qualities do you look for in a successful hair stylist?
The qualities to look for in a successful hair stylist are accountability, drive, great customer service, creativity, willingness to learn, adaptability and an ability to lead the conversation without being overbearing.
What training opportunities do you offer your hair stylists?
Expecting stylists to work for an hourly or commission salon without training is a road to nowhere! Our best tips?
Offer a variety of ongoing educational opportunities, in and outside of your location. Manage expectations of attendance and don’t be afraid to make attendance mandatory if you are paying staff to attend.
Glaring facts that we as an industry can not ignore
Most salon owners don’t have business, leadership or skills to run a business, before opening their salon. In a people powered industry like ours, seeking guidance or training from salon coaches should be a prerequisite to ownership.
There is no excuse to come unprepared to business ownership, yet most owners open salons because they think it will be fun.
Poor marketing plan and strategies- Reason #9 Salons Fail
Marketing for both customers and staff are key components of a successful salon. While some salons are just in an awesome location or naturally attract employees with a great reputation, generally speaking, you need plans and marketing strategies in order to thrive.
Failing to participate in social media, paying for a great salon website or not constantly creating new relationships hold salons back from success. ALL 3 of these marketing strategies pay off and are common themes in every successful salon I see.
A Facebook Business Page is Just Not Good Enough
Let me tell you a little secret…I personally create, optimize and list several of the jobs in salons we have on our website. Many salon owners don’t have a website for me to get photos off of, and about 1/2 just have a Facebook business page or salon software booking page.
Worse yet, when our social media manager, Lindsay, goes to craft beautiful posts for owners, she often struggles to find decent content! Digital marketing with a website and great socials is an absolute must, to avoid failure in salon ownership.
Don’t expect people to guess how amazing your salon is unless you are putting your business out there!
Q&A
What is the failure rate of salons?
2 out of 3 salon businesses fail within the first two years of opening their doors. The highest failure rate are individually owned, (non franchise), salons, spas and barbershops.
Why is my salon not making money?
Salons struggle to make money when income from services is less than or equal to the cost of doing business. To make more money in a salon consider raising prices, marketing for new clients, cutting down on spending and hire more staff.
What are the common problems in a salon?
The most common problems in a salon are:
- Recruitment issues- not enough hair stylists to work in the salon and high turnover.
- Rising product costs.
- Financial mismanagement.
- Not having enough clients.
- Exhaustion from physical labor and long days behind the chair.
- Lack of effective marketing.
- Poor locations.
- Lack of attention to sanitary requirements.
- A filthy salon.
- Oversaturation or too many competing salons in the area.
What is the toughest thing about owning a hair salon?
The toughest things about owning a salon are:
- Not enough quality and high achieving salon staff.
- New client recruitment/ lack of effective marketing tactics.
- Client dissatisfaction and low client retention rates.
- Rising cost of doing business.
- Keeping up with cleanliness, bookkeeping, laundry and all of the duties required in running a salon.
Why is my salon failing?
Your salon may be failing due to the following factors:
- The salon hasn’t adapted to current trends and service demands.
- The owner set their income expectations too high for current salon expenses.
- There was no salon business plan, prior to opening.
- Struggles with salon staff recruitment.
- The salons don’t offer flexibility and support for their team.
- The customer experience is lacking.
- High turnover in salon staffing.
- Lack of good leadership.
- Ineffective or no marketing strategies and how to get new clients.
What do salon owners struggle with?
Salon owners struggle with implementing strategies for budgeting, dealing with rising costs of retail products and back bar, hiring salon staff or booth renters, getting new customers, pleasing clients and handling the pressures that come with business ownership.
Conclusion
Hey, hi, are you still with me? I hope you have found this information more helpful than harmful. My passion is helping not just salon owners but all business owners who need help with recruitment, marketing or just general great advice.
We have a ton of free resources to help you manage cash, marketing, or just fun things to read. Hit us up on Instagram if you have any questions, or just browse our website for the assistance that fits your needs!
Yours in service,
Susan Wos
