Entrepreneur Magazine 9s Hair Salon & Day Spa 1 Since the dawn of the new millen- nium,the stock market has been in a freefall and the economy has been in the doldrums.But it was a good time to start a hair salon and day spa 4 and it still is today. According to BizStats.com, an online small-business statistics source, in 2002, there were 1.4 million personal care serv- ices in the United States, 313,000 of which were beauty salons. The salon service in- dustry alone had revenues of $55.9 billion, up 3.2 percent from the previous year, while salon product sales rose 3.8 percent to $5.5 billion.
How was it possible for a serv- ice sector like the beauty industry to grow given the state of the economy? No doubt because many of the services offered by salons simply cannot be duplicat- ed at home 4or at least not duplicat- ed well. In addition, in an age where people freely shell out $59.95 a month for unlimited cellular serv- ice or hundreds of dollars to lease the latest SUV model with the most bells and whistles, the price of a haircut probably doesn 9t seem very high considering the lift it ... more. less.
can give your spirits.<br><br> Also, the baby boomers, who now constitute the largest population segment in America, are more than willing and are financially able to spend money on any personal care service they perceive will make them look younger and more attractive. No doubt as a result of their driving desire for a youthful appear- ance, the hair color segment of the salon industry continues to grow, according to Professional Consultants and Resources, a Plano, Texas, marketing and consulting Jrm. Coloring alone brought in $10.4 billion for the beauty industry in 2002.<br><br> The spa industry is faring equally well. According to the 2002 Spa Industry Study published by the International Spa Associ- ation, the industry grew 114 percent be- tween 2000 and 2002, while the number of spa visits grew 71 percent between 1999 and 2001. The U.S.<br><br> spa industry totaled nearly $11 billion in revenues in 2001, a lit- tle more than half of which was generated by treatment rooms like those found at des- Chapter 1 Hair Today, Hair Tomorrow tination spas. The generators of a signifi- cant portion of the remaining revenue were beauty salons and retail products. And if that 9s not enough to make you think seri- ously about starting a day spa when you crank up that new hair salon, consider this: 68 percent of the nearly 156 million spa vis- its made in 2001 were made to day spas.<br><br> Earning Potential What all this prosperity means to you is that the prospects for people who own personal care businesses are bright. The 2003 Job Demand Survey , distributed by the National Accrediting Commission of Cosmetology Arts and Sciences, indicat- ed that average total income (including tips) for salon owners was $53,150 in 2002, although it 9s possible to earn much more depending on where and how you do business. For instance, two salon owners earned $120,000 in 2002.<br><br> Both expect to do even better in 2003. A search of the Internet revealed that there isn 9t any other data available to indi- cate exactly how well the owners of sa- lon/spas are doing. So sufJce it to say that total wages and salaries for the estimated 282,000 employees in the spa industry were almost $5 billion across the entire industry in 2001.<br><br> And the figures keep growing every year. A Look Back Although the recent interest in personal care services may seem like a new trend, the reality is that hair care has long been a part of human culture&in fact, probably for as long as humans have been on the planet. The earliest record of personal hair care dates back 2.5 million years ago, when brushes used to create cave paintings in Spain and France were adapted for use in hair groom- ing.<br><br> More recently, archeologists have found evidence that cosmetics were used by the Egyptians as early as the fourth millennium BC (for proof, just check out the golden sar- cophagus of the boy king Tutankhamen with its heavily painted visage), as well as ancient artifacts of eye makeup. Although hairdressing techniques have evolved throughout the ages, some things have stayed the same. Primitive men, in- cluding Native Americans, tied feathers, beads and other objects into their hair, which they wore long and flowing to de- note status and intimidate enemies.<br><br> Persian noblemen curled their hair and beards, and even used henna to stain them red. Men of- ten wore wigs throughout the ages, in- cluding during the 18th century when their wigs were powdered and styled with a queue, or long ponytail, that hung down their back. Women were equally fashion- able throughout history, using yellow soap to dye their hair blonde in republican Rome, or coiling their tresses into styles that at times were covered by a caul (net) or em- bellished with jewels or golden ornaments.<br><br> Interestingly, many of the innovations in hair design that are still with us today orig- inated in the late 19th century. The Marcel wave, also known as the Jnger wave, was Jrst created around 1890 using heated irons. The hot-blast dryer, which evolved into to- day 9s blow dryer, was also invented at this time.<br><br> Madam C.J. Walker, a former slave, formulated products that could soften and straighten the hair of black women. She lat- er became the Jrst African American woman to earn $1 million.<br><br> The Jrst elec- tric haircutter, consisting of a comb with a platinum wire that was heated and used to burn Chapter 1 Hair Today, Hair Tomorrow 2 Fun Fact The Jrst known school for hairdressing in the United States was established in Chicago in 1890. Entrepreneur Magazine 9s Hair Salon & Day Spa 3 off the ends of the hair, was invented around the turn of the century. A Look Forward It wasn 9t uncommon for hair to be scorched by these hot tools until it was the texture of coarse wool.<br><br> Nowadays, hair-care techniques are much gentler, and the rea- sons people choose to visit salons are di- verse. These reasons include: Ï They want to look great for a special oc- casion, like the prom, a wedding or a party. Ï They want the same 9do as their favorite celebrity (who could forget Jennifer Anis- ton 9s choppy layers or Farrah Fawcett 9s feathered sides?).<br><br> Ï They want to change their look by perm- ing, coloring or straightening their tresses. Ï They want to correct the damage caused by overprocessing done by amateurs (them- selves included). Ï They want to update their look (like es- chewing the Jackie Kennedy bob they 9ve worn since Jackie 9s husband was president).<br><br> Ï They want to look like a new person (like going from mousy brown to ravishing red). All this is good news, considering the bad hairdos that have been popular recently (think mullets and Technicolor mohawks) and the trend toward gleaming chrome domes as sported by NBA players in the past decade. So now your mission, should you choose to accept it, is to start a great new salon with the right rep so people will leave the boring salon they 9ve been frequenting and make a mad dash to your door.<br><br> The Opportunities There are three ways you can make your mark on the hair industry. You can open a franchise hair salon, in which you pay money upfront for the privilege of opening that salon using someone else 9s established name (which gives you an instant reputa- tion) and its resources (like advertising cam- paigns). You can buy an established salon from someone who is retiring from the business, has tired of the business, or has damaged the business and forced it into bankruptcy (all three happen every day).<br><br> A third option is to establish your own salon using your own money, your own inge- nuity and your own optimism that hard work and talent will win out. While you 9ll Jnd a list of well-known hair franchises in the Appendix of this book, the Year Total Salon Industry % Growth Over Revenue (in billions) Previous Year 2002$3.03.8 2003$3.23.6 2004$3.33.8 2005$3.44.0 2006$3.54.1 2007$3.74.2 Source: Modern Salon/Vance Publishing Industry Historical And Growth Projections Chapter 1 Hair Today, Hair Tomorrow 4 Take this short quiz to see if you have what it takes to be a successful salon/spa owner: 1. Can you supervise and motivate giggly teens, chatty 20-somethings, menopausal manicurists and the other 64 common types of employees?<br><br> Q Yes Q No 2. Has your hair been at least two different colors in the past six months? Q Yes Q No 3.<br><br> Can you juggle up to a dozen tasks at once for 12 hours straight and still have enough energy to drive home at night? Q Yes Q No 4. Do you prefer to nap in the nearest hydraulic chair rather than go home?<br><br> Q Yes Q No 5. Do you do windows and fold towels? Q Yes Q No 6.<br><br> Do you like to do windows and fold towels? Q Yes Q No 7. Can you write massive tax payment checks to the IRS every quarter without staging a four-county taxpayer revolt?<br><br> Q Yes Q No 8. Would red ink on your balance statement make you sob more than the Jlm cAn Affair to Remember d? Q Yes Q No 9.<br><br> Would you cringe if someone playfully referred to your salon as a cclip joint d? Q Yes Q No 10 . Do you automatically rotate hair-care product bottles on the shelf so the labels are facing out, even in the grocery store?<br><br> Q Yes Q No Scoring: 9-10: You 9re a shear genius. 5-8: Your career is lookin 9 good. 1-4: Better get set for a long learning curl.<br><br> 0: Keep buying those lottery tickets. Salon Savvy Survey Entrepreneur Magazine 9s Hair Salon & Day Spa 5 real focus of this how-to guide will be on starting your own salon/spa from scratch. And just as a side note: When we say csa- lon d throughout the book, we mean salon and day spa, as the title on the cover of the book indicates.<br><br> Since the tools necessary to open both are basi- cally the same, it seemed redundant to say csalon/spa d over and over. The speciJcs re- lating just to the spa end of the business, from the types of equipment needed and the types of services you can offer, are dis- cussed in detail in Chapter 8. By the way, before we move on to the nuts and bolts 4or shall we say the sham- poo and conditioner 4of the salon industry, there is one more type of salon that bears mentioning here because it 9s so prevalent in the beauty business.<br><br> Booth rental salons are owned by a person (or persons) who basically is the landlord for a group of hair- stylists and other service providers working under his or her roof. As the landlord, the salon owner/operator collects a Kat monthly fee from the service providers, for which they have the privilege of using salon space and nonremovable equipment like a styling station and chair. The renters, in turn, are considered independent contractors who must provide their own supplies (everything from hair dryers to perm rods), set their own hours, book their own appointments and have their own key to the building.<br><br> Or at least that 9s the way the IRS expects booth rentals to work. If you pay your renters a commission, provide items like backbar supplies and towels, schedule ap- pointments, process credit card transactions, and/or offer beneJts like paid vacations and insurance, then you have employees rather than independent contractors. And you can be sure that the IRS will not smile benev- olently upon your Kedgling business ven- ture if you try to pass them off as inde- pendent contractors.<br><br> If you 9d like to know more about the dis- tinctions between employees and inde- pendent contractors like booth renters, pick up a copy of Publication 1779: Independent Contractor or Employee , from the IRS Web site at www.irs.gov or your local IRS Jeld office. But for the purposes of this book, we 9ll assume you are not establishing a booth rental operation, but rather a full- Kedged salon and day spa. So what does it take to be a successful salon/spa entrepreneur?<br><br> First, it helps to be a risk taker, says John Palmieri, owner of Scizzors in Shrewsbury, Massachusetts. cIt 9s to your advantage to jump in and just do it, d Palmieri says. cDon 9t overanalyze the process or you won 9t get anything done.<br><br> Take a chance 4open the door and start let- ting customers in. d Leslie Rice, co-owner of Goldwaves Sa- lonand Spa in Fort Worth, Texas, believes you have to be willing to try anything to succeed. cIf you 9re scared, you 9ll hinder your growth. Instead, go for it, then re-evaluate what doesn 9t work and Jx it, d Rice says.<br><br> cYou have to be able to see the big pic- ture and not get bogged down in the de- tails, d says Sasha Rash, owner of La Jolie Salon in Princeton, New Jersey. According to Vander E. Harris Jr., presi- dent of the National Black Hair Association, cYou have to have determination and an entrepreneurial mind-set to be successful.<br><br> You also need vision and goals. d Take the cSalon Savvy Survey d on page 4 to Jnd out if you 9re cut out to own and run a salon. A thirst for knowledge, a strong constitu- tion and an indefatigable spirit are also traits Stat Fact There are approxi- mately 1.6 million cosmetology pro- fessionals employed in salons and barber shops in the United States. the entrepreneurs interviewed for this book said were necessary for success.<br><br> Now add a dash of humor and a pinch of determination to that mixture, and you definitely have a recipe for success. We 9ll help you get cook- ing with the advice found in this book. Chapter 1 Hair Today, Hair Tomorrow 6<br><br>