Thanks you for reading this far, THANK YOU! Please help provide us with some insight. I, the husband, have been working 40-60 hours a week on our business plan for months now. It has reignited an interest that I had in this industry from years ago so much so that I want to become an apprentice or go to school a year after we open to practice this craft myself.
Yes, you read that correctly. My wife was a stylist for 13 years but 3 years ago she decided to pursue another career. She went down to part time for a year and then around 2 years ago stopped working in a salon completely. She did not leave for financial reasons. She was able to build a very nice clientele book and have a great lifestyle while working at an upper class salon for her last 7-8 years. We have chosen to open a salon because we feel we have a lot of the pieces necessary to run a successful salon(s). The only thing that worries us is the last part of this post’s title, “0 clients”. Obviously this is a large contributing factor when it comes to the success of the salon at first. Financially we will just be able to get this thing of the ground but if we ran into problems with profitability we would not be able to flip a $100,000 bill in that area. We already expect it to be half that approximately but double that would shut us down or be almost impossible.
Currently our monthly expenses are around $28,000 and we will be a commission based salon. So to be conservative and say the stylists will take 50% of all revenue we would need to have revenues of $14,000 a week or $56,000 a month. I come from the restaurant industry where we would easily do $18,000 on a Saturday but your industry is foreign to me numbers wise and my wife never saw the management/number side of her/your business. We are in the Pa in an area of considerable wealth were women’s cuts easily “start” at $45-$50 and other services are proportionate.
My main question is this….what should we expect when we first open our doors? Obviously marketing and location will play a large parts as well as hiring stylists with decent client books. I am aware that my wife having a book of 0 clients and her being the only contributing (or maybe noncontributing) owner is a shortcoming off the bat. Using $4,000 a week in revenue (on the high end but very possible around here) that she would be missing I figured we could just pad that into 8 other stylists at $500 a week per stylist since we would need most of our stylists (10 stations total) would need a book to be hired by us. So when you look at it that way it isn’t as bad. I just think my other numbers are off as far as expectations and of course I realize all situations are different. The numbers/expectations I am worried about are as followed….
#1 revenue increase percentage and profitability/break-even
1st month $5,000 a week or $20,000 a month
Then increasing by $275 a week or $1,100 a month until the beak-even is hit at around the 9th or 10th month. From what you have witnessed at a new salon are these number too low or too high? I can’t imagine most salons investing over $90,000 or $100,000 in this start-up area.
#2 Am I seriously just being overly conservative and scared when it comes to salon generated clients? We plan to do heavy social media marketing; an aggressive client referral program; and around $5,000 in initial advertising and then $1,800 a month in advertising and then increasing based on revenue to around 3.5%. Besides the affluent area we will be located in it is also very suburban and built up retail wise. We will have to forgo the pricey SF price of our local “Lifestyle” shopping centers but are not planning on being hidden in an alley. Most likely we will be in a strip mall or stand alone. What are the percentage rages for salon generated clients vs. stylist generated clients? I just have no idea how many clients we will be able to bring in.
So what do you think?
Yes, you read that correctly. My wife was a stylist for 13 years but 3 years ago she decided to pursue another career. She went down to part time for a year and then around 2 years ago stopped working in a salon completely. She did not leave for financial reasons. She was able to build a very nice clientele book and have a great lifestyle while working at an upper class salon for her last 7-8 years. We have chosen to open a salon because we feel we have a lot of the pieces necessary to run a successful salon(s). The only thing that worries us is the last part of this post’s title, “0 clients”. Obviously this is a large contributing factor when it comes to the success of the salon at first. Financially we will just be able to get this thing of the ground but if we ran into problems with profitability we would not be able to flip a $100,000 bill in that area. We already expect it to be half that approximately but double that would shut us down or be almost impossible.
Currently our monthly expenses are around $28,000 and we will be a commission based salon. So to be conservative and say the stylists will take 50% of all revenue we would need to have revenues of $14,000 a week or $56,000 a month. I come from the restaurant industry where we would easily do $18,000 on a Saturday but your industry is foreign to me numbers wise and my wife never saw the management/number side of her/your business. We are in the Pa in an area of considerable wealth were women’s cuts easily “start” at $45-$50 and other services are proportionate.
My main question is this….what should we expect when we first open our doors? Obviously marketing and location will play a large parts as well as hiring stylists with decent client books. I am aware that my wife having a book of 0 clients and her being the only contributing (or maybe noncontributing) owner is a shortcoming off the bat. Using $4,000 a week in revenue (on the high end but very possible around here) that she would be missing I figured we could just pad that into 8 other stylists at $500 a week per stylist since we would need most of our stylists (10 stations total) would need a book to be hired by us. So when you look at it that way it isn’t as bad. I just think my other numbers are off as far as expectations and of course I realize all situations are different. The numbers/expectations I am worried about are as followed….
#1 revenue increase percentage and profitability/break-even
1st month $5,000 a week or $20,000 a month
Then increasing by $275 a week or $1,100 a month until the beak-even is hit at around the 9th or 10th month. From what you have witnessed at a new salon are these number too low or too high? I can’t imagine most salons investing over $90,000 or $100,000 in this start-up area.
#2 Am I seriously just being overly conservative and scared when it comes to salon generated clients? We plan to do heavy social media marketing; an aggressive client referral program; and around $5,000 in initial advertising and then $1,800 a month in advertising and then increasing based on revenue to around 3.5%. Besides the affluent area we will be located in it is also very suburban and built up retail wise. We will have to forgo the pricey SF price of our local “Lifestyle” shopping centers but are not planning on being hidden in an alley. Most likely we will be in a strip mall or stand alone. What are the percentage rages for salon generated clients vs. stylist generated clients? I just have no idea how many clients we will be able to bring in.
So what do you think?