💇♀️ Considering opening a hair salon in Canada? Explore the profitability and intricacies in our latest video! 🇨🇦 Learn the essential questions to ask, documents to analyze, and typical income statements. We examine 3 salon business scenarios, weighing advantages and disadvantages for informed decisions. Don't miss this insightful guide! #HairSalonBusiness #Entrepreneurship #BusinessAnalysis 📊💼
1. 💡 Questions to Ask: Delve into important considerations before opening a hair salon. These may include market demand, competition, location viability, target audience, startup costs, licensing requirements, and staffing needs.
2. 📋 Documents Checklist for Analysis: Compile crucial documents for thorough analysis. This may encompass business plans, financial projections, lease agreements, licensing and permits, equipment and inventory lists, and market research data.
3. 💰 Typical Income Statement: Gain insights into the financial health of a hair salon through a typical income statement. This statement outlines revenue, expenses, and profits over a specific period, providing a snapshot of the salon's financial performance.
4. 🔄 3 Scenarios of Salon Business: Explore three hypothetical scenarios to understand the potential outcomes of running a hair salon. These scenarios may include best-case, worst-case, and moderate-case scenarios, helping you gauge risks and rewards.
5. 📈 Advantages and Disadvantages: Evaluate the pros and cons of opening a hair salon in Canada. Advantages may include fulfilling a passion, creative freedom, potential profitability, and community engagement. Meanwhile, disadvantages might involve high competition, long hours, staffing challenges, and economic fluctuations.
6. 🔍 Conclusion: Summarize the key insights and considerations discussed in the video. Encourage viewers to weigh the information carefully and seek professional advice before embarking on the journey of opening a hair salon in Canada. Ultimately, make an informed decision aligned with personal goals and circumstances.
#HairSalonStartup #SmallBusinessCanada #EntrepreneurialJourney #BusinessAnalysis #FinancialPlanning #MarketResearch #SalonIndustry #StartupSuccess #BusinessStrategy #EntrepreneurInsights #CanadianEntrepreneurship #FinancialAnalysis #BusinessDecisionMaking #SalonOwnership #BusinessProspects #ProfitabilityAnalysis #HairCareIndustry #MarketDemand #BusinessDevelopment #BusinessTips 🌟💇♂️
4. Questions to
ask
How much is the monthly rent?
How much longer on the lease?
Are the fixtures in good shape? Equipment list?
How high is staff turnover?
What is competition like in your market?
5. Request from
previous
owner
Request 2 year’s salon’s
financials
Analyze the
monthly income
and expenses
Pricing of
services
Rent and
lease
Look into Staff and HR issues
6. Typical income
statement
Revenue
Sales 300,000.00
$
Rental revenue 3,000.00
$
303,000.00
$
Expenses
Bank charges and interest 5,000.00
$
Rent 72,000.00
$
Telephone and communications 4,800.00
$
Interest on loans 3,500.00
$
Insurance 4,000.00
$
Advertising 12,000.00
$
Business licenses and memberships 4,500.00
$
Salaries and wages 96,000.00
$
Office supplies 60,000.00
$
Utilities 2,400.00
$
Amortization 10,000.00
$
Equipment rental 2,500.00
$
Professional fees 3,000.00
$
Training and courses 6,000.00
$
Uniforms 1,200.00
$
Total Expenses 286,900.00
$
Net Income 16,100.00
$
8. Advantages
of hair salons
Hair salons often generate repeat business
from loyal customers who return regularly for
their hair care needs. This helps to create a
stable revenue stream and reduces the need
for costly marketing and advertising.
People of all ages and genders require hair
care services, which means that hair salons
have a broad customer base.
Cross sell and generate income from other
sources
9. Disadvantages of
owning a salon
Lease renewal
Low barriers to entry. Starting a hair salon
requires a relatively small initial investment
compared to other types of businesses,
Costly Equipment
Labor costs are a
significant expense for
the hair salon business
High employee resignation rate
Staff motivation
Payroll management is time
consuming – hire an accountant
10. Additional sources of revenue
Introducing retail for women’s clothing (especially traditional clothes and
jewellery)
Sell retail hair products, and keep your space immaculate
Create a user-friendly website and mobile app for online booking.
Build an email list of clients and send them newsletters with updates, promotions,
and beauty tips
11. Conclusion
Validating the total income of the business is a bit tricky. Validate the provable
portion by comparing bank statements and card processing records.
Sit outside a nail shop they wanted to buy and count customers
COVID-19 closed a lot of the hair care businesses as they were forced to shut the
operations (not an essential service)
People have become social media influencers offering advise on hair care and selling
their own products
Bundle pricing and running promotions
12. Any questions
• Lakshay Gandhi
• 647-987-4025
• Support@accounting
ops.ca
• Subscribe to my
YouTube channel –
Real estate and Taxes
with Lakshay
13. Determining pricing
Rent, utilities, staff wages, product expenses and operational costs
1) Cost plus pricing – cost plus predetermined profit margin
2) Menu Pricing – different tiers or levels (Basic, Silver and Gold Package) each with
its own price range
3) Bundle pricing – consider offering bundled services at a discounted price
14. Typical mistakes in the Salon/Spa
Expensive machines
Over budgeting
Wrong opening hours
Editor's Notes
Each chair must give a revenue of $2,500 for owner to walk away with 6 figure
