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Published On October 20, 2021 , by Natella Zadeh
Is Hair Salon a Profitable Business? | 6 Tips to Earn More

Is Hair Salon a Profitable Business? | 6 Tips to Earn More

Seeing more and more people visiting hair salons, you may ask how profitable are hair salons? Is there a secret to running a successful salon business?

But are hair salons profitable really? 

From the business perspective, a hair salon is a competitive industry, and it is becoming even more throughout the years. The market size of hair salon businesses is increasing all over the world. In 2019, hair salons and barbershops generated combined revenue of $46.5 billion in the US. The numbers are expected to reach $47.4 by the end of 2021.

But to determine if owning a hair salon profitable or not, you must look at the profit margin. It is the ratio of profit to sales which is calculated by subtracting total expenses from total revenues and dividing by total revenue. Revenue shows you much money your salon has made from its sales, but the profit margin shows how much it has made in absolute terms. Simply put, it shows how much money you put into your bank account after deducting the total labor and supply costs involved in operating.

According to statistics, hair salons make an average profit margin of 8,8 %, which is above the average of general business. But, the more energy and effort you put into your salon, the more you can raise it.

How are some hair salons profitable even in periods of economic turmoil? Well, here are

4 reasons why are hair salons profitable?

First things first, everyone needs to feel good. The best way to achieve it is by visiting a beauty salon. But it is not 100% related to the innate nature of people. It is a fact that some salons are successful because:

  • They seek new customers with first-time discounts,
  • They provide services that match the needs of their target audience.
  • Loyal clients that come back due to the friendly service, professional hair care, unique style of nail technicians, and many more
  • Branding that recognized among the network

 6 tips to earn more at salon business

1. Offer exclusivity

offer exclusivity are hair salons profitable

You will not figure out whether a hair salon is a profitable business or not without owning competitive assets in your portfolio. Let it be a product in your sales line, the services you offer, the professional background of your staff that is exclusive in the market.

You cannot be above your rivals if your hairstylists use the same products that random consumers can order from Walmart or Target. If you want to offer exclusive products, look for distributors that are only available for licensed professionals. For hair care or facial treatments, consider organic products that are recommended for the specific needs of customers.

Yet, your inventory is not only input of what you carry in your business. In fact, your professional staff is an even bigger asset. With the level of their skills, knowledge, and cultural value, your employees are the face of your hair salon.

The report given by the US bureau shows the employment of barbers, hairstylists, and cosmetologists are increasing faster than for other occupations. The future of the salon business belongs to the ones that carry professional and well-trained experts on their board.

So, it is vital to invest in upskilling their proficiencies, train them on how to behave with capricious clients, and motivate them to upsell other products or services. The investment made for employees definitely pays back by maintaining a better reputation and increasing sales.

2. Determine a brand identity

As the number of salon businesses is rising, it gets difficult to draw attention to your beauty salon name. This is why you need to develop a Unique Selling Proposition (USP) that will make you better to the rest of your competitors.

It would be appropriate to mention that not all salons around the neighborhood are your competitors. You may have different services, target groups, and pricing options.

By doing market research you can figure out the missing part that your competitors are not even aware of. For example, offer monthly packages that bundle the client’s favorites. This in itself is a sales intriguing standpoint that will give customers the chance to at least try your service.

If you run the business for years, your brand identity can, certainly, will change over time. If you entered the market as the first provider of laser removals, well now almost every beauty salon has it. You may upgrade it to the latest equipment that has not been owned by any of your competitors yet. Or, get your staff enrolled in certification programs that prove the level of expertise you own.

3. Choose the right marketing channels

Just like determining your target audience, it is important that how you market your hair salon marketing is reliable.It is better to start your marketing efforts from the onset of your hair salon business. 
To be successful in your marketing efforts, you need to pay equal attention to existing clients and prospective ones.

The advertising strategy that you can use at the start can be placing a press post on a local news website or popular social media profiles that are related to your niche. Loyal customers have different expectations than firstcomers. Your client retention marketing can involve Google Ads or Facebook ads retargeting.

You need to integrate your advertising and communication channels into a marketing funnel. 
Marketing does not always mean spending huge budgets. How profitable are hair salons without spending a penny on advertising? Well, not all marketing activities involve advertising. Communication is a big part of this game.

Being active in society has an inevitable role in the success of the business. Attend events where you can draw attention to your services, and chase celebrities or influential people to get more recognition out of your scope. How you narrate your brand is crucial for setting clear branding.

Prepare a social media calendar with different types of content ideas. People are crazy about viral TikTok videos or Instagram live streaming. Do not forget to clean up your website while you go social. Place the latest news, and achievements of customer reviews on your site building trust.

Or, you can leave it to professionals to express their organic views on your brand. Reach out to influencers with awareness or affiliate programs to increase your brand exposure and sales.

4. Build empathy with clients

how profitable are salon businesses empathy with clients

Is owning a hair salon profitable when you do not possess a large clientele? To earn more in this industry you need to build empathy with the clients. Think about how you want them to feel about your services, which words would you like to hear when they leave your office? As we  stressed above it is important to meet the needs of clients. But, you also need to be creative in what you offer. As a businessperson, you might know that it is still controversial whether demand drives supply or vice versa. But the truth is it does not matter.

You can go outside of customers’ wills, and come up with solutions that even they do not feel the need yet. Sure, you heard about small refrigerators that are made for keeping beauty products. It has the same function as the regular one you use for keeping eggs. But, you can place it next to your bed and feel pampered.

Today’s consumers want to feel connected to the products and services they purchase. The best way to develop bonds with your clients is by extending your service out of the walls of your hair salon. Instead of providing a small service until their improbable visits, offer a hair care program that will enhance the effectiveness of your service and help them achieve their beauty goals.

Do not be pushy to upsell your products, but offer a couple of useful tips by mentioning ingredients that they can add to their hair care routines. If they are interested they can try the products your hair salon provides. This is a native way of increasing money spent per visit without fooling customers. Once you focus on customer satisfaction your customer retention rate will increase.

Is hair salon a profitable business if you do not have a salon retail system?

Of course, YES. Just like in the other case, concentrate on building lasting relations with customers. Whenever you decentralize your focus from the clients, you will see stagnation in your profit. When there is trust in your approach, customers will definitely come to your door next time. In fact, loyal clients can be a big part of your marketing by leaving a genuine review on your website or directory websites.

Encourage them to visit your office, the native way of doing this is to ask them to book their next appointment within the current one.

5. Charge fairly 

While the above-mentioned steps were hypothetical, now we move on to two important practical steps to increase the profitability of your salon.

The most visible sign of revenue is the price you charge for your services. It is particularly difficult to set a price when you just start out. Based on your level of training and the cost of inventory that you own, determine a fair price that will cover your expenses and generate a profit.

You may be wondering, are hair salons profitable while offering increased prices? Too often, hairstylists are afraid of raising the prices, thinking it may scare new or existing clients. Like economic reasoning, it also has self-esteem going on the determination of the fair price. Savvy entrepreneurs and hairstylists are aware of their skills and know their value.

The rational way of increasing your price without damaging your profitability is running discount campaigns during the price increases. Let’s say you increase your prices by 10%, but you offer a “bring with me discount campaign” for 15% off. From your referral program, you manage to increase the perceived value of your services amongst the loyal clients and charge higher prices to the potential new clients.

Yet, we do not recommend increasing your prices up through the roof which will eventually result in the loss of the number of clients.

6. Take care of your costs

How profitable are hair salons if they do not increase the price? Make sure your spending is in line with your hair salon business plan.

An alternative way to increase your profit is the cost-deduction approach. The first way is to be resource-efficient. Turn off energy-consuming types of equipment that are not frequently used, reduce the number of products that are not preferred by clients so often. Do not forget to educate your team on the importance of your initiative.

You can further tweak this vision by investing in appointment scheduling software. The system allows you to replace manual booking and one-on-one calls with a centralized management system. These tools provide additional features that are beyond booking an appointment. If you use WordPress, you can easily get these solutions with the help of WordPress plugins. The best thing about plugins is that you pay a very small proportion of the payment you would otherwise pay for some other tools.

Booknetic is an appointment booking plugin for WordPress sites to automate their appointment booking with clients. The system offered by Booknetic is ideal for utilizing your salon management and increasing profits. The calendar integration enables users to book time slots that do not cross with your staff’s busy hours.

As a salon owner, you know no-shows suck. In order to minimize their impact on your revenue, you can send automated reminders through email, SMS, or WhatsApp. Additionally, you can simplify transactions with PayPal or Stripe. This is another extra security step against no-shows.

Plus to reducing your costs, Booknetic helps to nurture customer relations by recurring and group appointments that can be enabled with the click of the finger. Speaking of finance, the plugin has a built-in reporting system that gives a snapshot of your financial overview by revenues per service, employees, and the number of appointments scheduled. For more information, check the Demo in practice.


For entrepreneurs that ask is hair salon a profitable business, as long as the human specie exists there will always be a need for professional hair salons that deliver excellent service. Hence, the question “is owning a hair salon profitable?” requires a subjective response upon the experience of varying salon owners. In order to be seen amongst other great salons, you need to work hard and make your own fortune first.

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