Time to Take the Plunge?

Why there has never been a better time to open a salon – and how to get started.

Hair and beauty, nail bars and barbershops. They have long been staples of the high street, but in recent years, new businesses have been opening at an exponential rate.

In fact, according to a register of UK businesses produced by the Office for National Statistics, the number of hair and beauty businesses in the UK grew by 16,000 between 2010 and 2017.

That growth shows no sign of slowing down. There are over 42,000 hairdressing, barbering and beauty businesses in the UK and, between them, they make a huge contribution to the economy. Salon-based businesses now employ 260,000 people, and generate more than £7.5 billion for the UK economy.

The question is ‘why?’. Why is the hair and beauty sector growing so strongly, while around them, high street names in retail continue to struggle? The answer seems to lie in in that fact that modern hair and beauty businesses offer high value services rather than just products.

As Bill Grimsey, former boss of Iceland and Wickes, and author of an independent review of the high street Wickes explained [highlight]in the Dorset Echo[/highlight]: “Nail bars, hairdressers, even spas on the high street are experiential, so they are growing.”

So, with consumers continuing to spend on hair and beauty, and clearly able to support a growing number of businesses it seems there has never been a better time to take the plunge and open a salon.

But taking that step from employee to owner can be a dauting prospect, so we have put together a few tips on starting your own salon business:

1. Build a business plan: Think carefully about the kind of salon you want to run, any specialisms you want to focus on, how you will run and grow the business, and the prices you will charge. It’s important to be realistic and understand that opening a business is hard work and the financial rewards may take a little time to arrive. Remember too that you don’t have to start from scratch, you also have the option of taking up a franchise with a big brand like Saks or Toni&Guy – you may get more support that way and the recognition that comes with being associated with a recognisable brand, but possibly less control over things like the products you use or the services you offer.

2. Find the perfect premises: Location is crucial but it is also really important to strike a balance between the right premises and the cost of things like business rates, which will eat into your profits. A high street location may be best, especially if it has good transport links, car parking, and is surrounded by complementary businesses like cafés and restaurants., That way, you could get ‘passing trade’, be more visible, and more attractive because customers will be able to extend the whole experience by grabbing a bite to eat or a coffee before or after they visit.

3. Get help from an accountant: There are some legal jobs to complete as part of starting your own business. You’ll need to decide on a company structure – be it sole trader, partnership, limited liability partnership and limited company – and get registered at Companies House. A good accountant should be able to advise on all these aspects and complete the registration for you. You might be surprised to find out how quick, easy and inexpensive this is when you have the right advice – for instance, you can buy an ‘off the shelf’ company for as little as £39.

4. Get social media savvy: Marketing is vital to getting established and attracting customers but you don’t need to be a marketing expert and it doesn’t have to be expensive -in fact, you may just need a smartphone and social media accounts like Facebook, Instagram and Twitter. There are lots of examples of start-up hair and beauty salons relying on photos and social media to build up their customer bases – The Powder Room in Liverpool, The Beauty Guru in Salford, Salon M in Wirral, and Boris & Co in Leeds are just a few examples.

5. Know your risks: Clearly, hair and beauty salons face quite particular business risks over and above the standard people, property and premises risks facing most shops – from break-ins, theft, and vandalism to slips and trips. Treatments, the use of chemicals and sharp blades, and customer complaints can all create risk to your business for instance. It’s important to identify all these risks and try to reduce them as far as possible, as well as appropriate salon insurance.

It goes without saying that every high street and every business is different so success can never be guaranteed, but there has never been a better time to take the plunge and go it alone – and using the five points above to start your thinking will help make sure you get off on the right foot.

If you’re ready to go for it, good luck!

This is a marketing communication.

The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.

SME Insurance Services is a trading name of Jelf Insurance Brokers Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services offered are regulated by the FCA. Registered in England and Wales number 0837227. Registered Office: Hillside Court, Bowling Hill, Chipping Sodbury, BS37 6JX.