Cosmetic Salon - How to Achieve Success?

Key information:

• Cosmetics industry is one of the more profitable sectors to start a business, despite the challenges posed by the COVID-19 pandemic.

• Market and competition analysis is a key step in setting up a beauty salon, including customer segmentation, unique value proposition and outreach channels.

• Business Plan should take into account the cost of renting premises, purchasing equipment, salaries of employees and profitability analysis.

• Business registration in the CEIDG (Central Register and Information on Economic Activity) and a decision on VAT payer status.

• Rental of premises: The premises should meet sanitary requirements, have a suitable location and provide easy access for customers.

• Purchase of equipment: The equipment should have the required certifications, and the salon must be properly equipped to accept cashless payments.

• Pricing: Pricing of services should be based on market analysis, location and demand.

• Building recognition: A website, social media activity (Instagram, Facebook, TikTok) and a presence on appointment platforms (e.g. Moment.co.uk, Booksy.com) will help attract customers and build reputation.

• Validity of the concept: Before launching your business, focus on developing a solid business model, marketing strategy and financial plan.

Analysis of the cosmetics sector

Despite the slump caused by the COVID-19 pandemic, there is no doubt that the beauty services industry is one of the more profitable sectors to start a small business. In 2020, about 25% of women used a beauty salon a couple of times a year, and 12% of ladies visited as often as once a month. In addition, according to data from the Credit Information Bureau, the degree of indebtedness of this industry in 2019 was less than 2%, equivalent to 5% of indebtedness in the construction industry, for example. Unfortunately, the positive aspects of this market involving low barriers to entry and increasing public interest in beauty services are fostering the development of competition in the form of large franchise chains and independent salons with good locations. How, then, do you find your way in this market environment and achieve success by setting up your beauty salon?

Build the right business plan

The first element in developing a strategy for establishing a beauty salon, should be to build a business model based on market and competitive analysis. The basic elements we should include in it include customer segmentation, unique value proposition, outreach channels and cost and resource structure. By specifying these elements, the budding entrepreneur will be able to map out a development path to estimate the chances of success and expand the business. It's also worth specifying at this stage exactly what services our beauty salon will provide - the target audience for hairdressing establishments is much larger than for manicure or makeup salons. Of course, we can combine these services, but we have to reckon with the costs resulting from increased staffing and the purchase of specialized equipment. Fortunately, these costs are not particularly high and a financial model will help us in estimating the potential of investing in them. The basic elements we should include in it are: the cost of renting premises, salon equipment, the purchase or rental of equipment, tools and products and, depending on employment, the salaries of employees.
In case the business model and the development of profitability issues seem complicated for us, we can always use an external company to help us. The road to success is difficult and full of unexpected twists and turns. As ConQuest Consulting, we have advised budding entrepreneurs many times on how to start a business and build the right business model based on market analysis. With years of experience, we can help you develop accurate documentation that will not only allow you to develop a strategy for the further development of your salon, but also to apply for funding from the Labor Office or another entity.

Register your business and complete the paperwork

After developing the concept and selecting the range of services offered by our beauty salon, the next step should be to apply to the city or municipal office to obtain an entry in the CEIDG (Central Register and Information on Economic Activity). We should also remember at this stage to decide whether to become a VAT payer. If we assume that our business will not earn more than PLN 200,000, we can write off this tax on purchases of equipment for our salon.

The standard practice in the market is to open a sole proprietorship, whose establishment procedure is easy and does not require a capital threshold. The rules are the same if you want to belong to a franchise network - in this case, too, you are obliged to set up a business or a partnership or a corporation. The only variation is further formalities after the establishment of the enterprise. After filing an application with the CEIDG, the prospective franchisee signs a franchise agreement with his business partner, whose trade name and trademark he will use in further building his career.

Rental of premises and equipment

The next step on the path of opening your beauty salon is to find suitable premises that meet our requirements and those of the sanitary authorities. The foundation of a thriving business is a location that allows us to reach our target group of customers. Depending on the direction we choose for our beauty salon, we can focus on women who are constantly following trends, who will be loyal customers looking for innovation for their style, or if we want to establish a barber shop, we should focus on middle-aged men looking for a relaxing and classic haircut. In both cases, we should study well the demographics of the region in which we are choosing a location and its layout in order to make the most effective use of its space. In addition, the location should be easily accessible by public transportation and by car. It's also a good idea to check nearby parking lots so that customers can easily leave their vehicle for the treatment.

Our attention should also not escape the sanitary requirements that will ultimately determine whether we will get a permit to operate a beauty salon from the State Sanitary Inspectorate. The leased premises should be divided into areas that will include a reception area, waiting room, back room and treatment room. In addition, efficient ventilation and air conditioning are the basis for approval. Especially during the COVID-19 pandemic, we should also pay attention to hygiene and sanitation requirements such as cleanliness in the living room and the possibility of disinfection.
After ensuring all the above-mentioned elements, we can move on to equipping our beauty salon with equipment that will allow us to work. In pespective of sanitary inspections during all purchases of cosmetic chairs, hair dryers, manicure equipment and others, we should pay attention to whether they meet the required approvals and certificates that allow them to be used safely in the salon. At this stage, we must also remember to equip the salon with hardware and software to accept cashless payments from customers at the reception desk. It's also worth investing in a system that allows you to easily schedule clients for treatment and check the schedule of individual employees.

Pricing

One of the final steps in achieving success in the beauty industry is setting prices for the services our employees perform. DThe cover price list should be based on the results from our market analysis and the experience of the specialists we employ. Depending on the treatments performed, clients can pay from PLN 15 for a basic eyebrow adjustment to thousands for a hair or makeup service. Usually, however, we should determine prices based on the location of the salon (whether it's a city or a village), an analysis of demand and information on how much customers are willing to spend on a particular service.

Build recognition

The first step toward building recognition will be to build a website that is professional and easy to navigate. The basic information that should be included on our beauty salon website is:

- Offer with a description of the treatments we perform
- Price list
- Contact and access
- Online enrollment form

We can set up a website ourselves with the help of online tools that use already-ready templates, such as WordPress, or with the help of a developer-freelancer.
The next step is to start operating within social media. With accounts on platforms such as Instagram, Facebook and TikTok, we can show clients the results of our work and they can tag us and build a brand online. A strong social media presence for our beauty salon can ensure our success, maintain customer loyalty and their recommendations to their friends, which will broaden our potential audience. Creating an account on these platforms is very easy, but when sharing content, we should focus on maintaining a consistent aesthetic that reflects the nature of our business.

As a final component of building recognition, it is worth considering adding our salon to platforms that allow for easy appointments and are profiled for cosmetic treatments, such as moment.pl or booksy.com. These platforms have a much broader reach than our website and allow for reviews of selected salons, which can also build a company's online reputation.

In conclusion, setting up a beauty salon is a venture that can ensure our success and relatively high earnings. However, before moving forward, we should focus on developing the right concept in the business model and financial model, so as not to be left out in the wave of competition in the market. Moving on to action, we also need to pay attention to all the elements related to formalities, renting the premises and setting prices. At the final stage, we can focus on building recognition and start receiving customers!