Top 15 Challenges Faced by Salon Owners
Owning and running a salon can be a profitable business when you have a good management system. If you are thinking of setting up a salon business, it’s a great choice of business because there are excellent solutions for many of the issues owners of salons encounter. After all, there is no business without some level of risks. What matters is how prepared you are to face the challenges and win.
Some advantages of running a salon are as follows;
1) You are your own boss
2) There is potentially a high-profit margin for services offered in a salon
3) With the right ideas and implementation, your salon can exist for many years.
4) High patronage, you can make much money daily with good marketing and customer retention strategies.
Running a salon profitably will require you to be physically involved while sourcing and managing your capital and staff. In this article, I will be writing about the common issues many salon owners encounter and simple tips to address problems.
In this context, by the salon, I am referring to beauty salons, hair salons, spas, and establishments that offer all three services.
Over the years, the salon business has thrived. There is high demand for the services of a stylist or cosmetologist. The transformation people undergo after a visiting a salon will make salons a highly patronized business, and one of the long-term investments anyone can have.
Here are the top fifteen challenges you may encounter while running a salon and possible solutions;
1. Hiring staff
Recruitment should have been a simple task for salon owners; however, some factors have made this process quite different when compared to other businesses. In a salon, there are different types of services. This means you will need to hire experts to offer a variety of services you have chosen to sell in your salon. Some tips to ensure you always have the best employees are as follows;
1) Find out the standard rates paid as salaries for experts with different skill sets.
2) You can outsource recruitment to professionals or interview all applicants personally to identify the best candidates
3) Always keep a list of potential candidates after a recruitment exercise, who can be invited to work when there is a vacancy.
2. Staff training
Hiring people who already have an idea about hair styling and makeovers is one thing. You will need to train your staff regularly to learn your preferred methods and to keep up with the trends. People visit your salon to look trendy; if your staff cannot deliver as expected, you may be losing customers. The high costs of staff training can discourage salon owners, but there is a way out. Here are some tips;
1) Include costs of staff training in your initial annual budget
2) Bargain with consultancy companies for lower rates since you will be using their services often
3) Ensure an assessment is done after training to know if it has been impactful
3. Choosing the right products
Many customers will visit your salon demanding for particular products. If the product is not in stock, you may lose them as customers. However, it is going to be expensive to stock up on a variety of products to meet your customers’ needs. This is what you can do to address such issues;
1) Study customer behavior to know what they really want.
2) Stay updated with the trends to know which products are needed for trending styles
3) Buy products wholesale; you can get much lower prices
4. Customer loyalty
It is difficult to have and maintain loyal customers when running a salon because it is a highly competitive business. The chances that there is another salon down the road, offering similar services is high. To encourage customer loyalty, you can consider these tips;
1) Create an email list to send personalized messages to your customers
2) Ensure that all customers are aware of a direct channel to contact you when necessary
3) Create a social media page and encourage customers to follow your page
4) Fill your social media page with educative and entertaining content regarding your salon business.
5. Price distortion
In a bid to win more customers, newly opened salons can lower their prices, making it almost impossible for you to make a profit. There’s no need to sell services at a loss because of the competition. Instead, point out the value you are offering and take necessary measures to improve customer experience when they visit your salon.
6. Marketing your services
Salons mainly offer their services locally. This means it is necessary to develop the best marketing strategies targeted at your local audience. If it is done right, your business will thrive, but many salon owners encounter issues with local marketing.
The best option is to engage the services of a digital marketer who can run local advertising campaigns for your salon. Also, consider registering with the local business directories.
7. Maintaining consistent income
The unpredictable scale of patronage can be shocking. Salon owners record different income figures each month, depending on patronage. Inconsistent income can make it difficult to have long-term plans.
With better money management skills, you can maintain high standards even with irregular income from sales.
8. High bills
Salons require many types of equipment that consume much energy. Consequently, the energy bill will soar and lower the expected income from sales. Some tips to lower energy bills include;
1) Get smart switches and sockets to lower energy consumption.
2) Install LED bulbs; they consume less energy
3) Speak with an engineer about installing insulated fittings in your doors and windows to keep the interior areas comfortable.
9. Keeping up with the trends
Salons are expected to be pacesetters regarding the latest trends in the beauty industry. To attract more customers, it is necessary to ensure that your salon features the latest designs regarding furniture, equipment, and style. However, remodelling a salon is going to be expensive.
While remodelling is often necessary, with the financial projection, you can invest in remodelling your salon and recoup the funds from sales over the next few months.
10. Staff motivation
Working in a salon is a tough job. The employees are expected to stand for long hours and still deliver their best. The strain can lower staff motivation and productivity. Salon owners can spend more money to hire motivational coaches, psychologists, or use incentives to keep the employees motivated and happy.
11. Payroll management
Many salon owners attempt to manage their payroll independently. This is a difficult task and requires much time.
The solution is hiring an accountant at extra costs or learning how to use payroll management software.
12. Difficult customers
Some customers are impossible to please no matter how hard you try. On such days, staff may feel less motivated and ready to quit their jobs.
This is what you can do; ensure all your employees are properly trained so that they can provide quick and accurate answers to customers’ questions. Also, avoid compelling employees to work longer hours; this can make them irritable and impatient with difficult customers.
13. Salon maintenance
Many of the equipment used frequently in salons must be regularly maintained, or they will malfunction. It is also necessary to maintain a hygienic environment in the salon. The problem is that maintenance costs can be very high, eroding profits.
Maintenance is important, and the costs can be included in annual budgets for the salon. Also, it is a great idea to establish a good working relationship with a maintenance company to get lower charges for long-term services.
14. High employee resignation rate
This can be a problem. Some employees quit the job after learning how to deliver the best salon services. A shortage of experienced staff can cause longer wait times and delays in service delivery. Customers who have a poor experience may not return.
Make your employees happy to stay by improving welfare packages and creating a work schedule that allows them to have a better work/life balance.
15. High start-up costs
It may cost a fortune to open a salon, regardless of the scale of business. The high costs can put salon owners in debt when they borrow funds and then get under pressure to pay off loans. However, there are some great funding options, government grants for start-ups that could also be explored. Find out the options in your city and apply.
As a salon owner, you will soon realize that it is not that bad business at all. The secret is identifying potential issues that can arise and reducing the risks.