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Why Are So Many Hair Salons Failing?

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“If we are to find s0lutions to our challenges of salon ownership, we must clearly define our challenges.”  – Jon Gonzales

If there are three words that best describe the beauty profession and in particular, the challenges of owning a successful and profitable business; I’d say apathy, change, and turmoil. I’m sure you will all agree that  salon owners are facing many challenges and obstacles due to an uncertain economy  and a changing and difficult business environment. While other professions have adapted to a changing and competitive economy, sadly in my opinion the beauty profession has not adapted to change.

Some of these challenges of owning a successful and profitable business  are rising business costs, price and commission wars (we should be raising prices), finding and keeping committed hairdressers, lack of business management skills, increased competition, lack of information, turnover, price wars, an educational system that is outdated, staff pirating and competition from other industries offering better benefits to name a few of the obstacles affecting the beauty profession.  The new generation of young hairdressers and  salon owners are especially vulnerable during these difficult times.

So, who is at fault?  Is it our profession, salon owner apathy, our beauty schools, government agencies, hairdressers, product companies?  I’d say probably all of the above.

Salon owners face the following challenges on a daily basis in isolation and these challenges contribute to the failing of many salons:

Poor Salon Owner Business Management Skills — lack of business skills is one of the leading causes of salon failures.

Salon Owner Apathy and Denial — it is easier to stay in your comfort zone because it doesn’t require effort.

Poor Leadership and Mentoring skills on the part of the Salon Owner — excellence starts at the top.Your ability to inspire and motivate your team to share your vision and business goals requires great leadership skills.

Lack of Unity Among Salon Owners — as salon owners we have no voice that focuses on our business and educational needs. Our Salon Owners Alliance Network for Salon Owners will meet our needs.

A Gap between Employers and School Owners — a better dialogue between our beauty schools and salon owners.

Staff Turnover — how can we expect to raise prices and maintain business growth and stability  with a merry go round of business instability ?

Create an Equal Playing Field — where everyone plays by the same rules.

Booth Rental Issues — causing a lot of turnover and business uncertainty.

Lack of an Apprenticeship Program — would help solve our labor challenges dramatically.

A Growing Gap between Hairdressers & Salon Owners — we need to open a better dialogue to better understand each others needs. We are all in this together.

Unrealistic career and earning expectations — by our young hairdressers (many who want to run before they walk)

Building a successful career in the beauty profession is a journey, not a sprint.

Lack of honesty and a code of ethics (among salon owners & hairdressers) — we must stop recruitment wars among one another. There is enough business for everyone.

The list of challenges go on and on. While other industries and professions are finding solutions and adapting to changes in the market place, sadly the beauty industry and salon owners and hairdressers in particular continue to struggle. Due to poor business management skills on the part of many salon owners;excellence does start at the top. Many of our hairdressers are just getting by ,far too many are leaving the profession . Most hairdressers and salon owners do not have meaningful health insurance, retirement plans or additional benefits compared to other professions.  Most hairdressers and yes many salon owners are struggling to grow and build a profitable business,while many hairdressers  walk on a financial tightrope living pay check to pay check.

The beauty industry is product driven and is not responding to the educational and business needs of the working hairdresser and salon owner.  Everyone has their own self-interests. We need realistic educational content that also focuses on our educational and business needs. If we are to raise our standard of living,we must raise our standard of educational excellence.

As I travel throughout the United States and Canada, one of the top questions I’m asked by salon owners is, “how do I meet and overcome all of these challenges?”  I feel that we need less glitter and hype within our industry and more substance in education and employee training in order to better meet job market and consumer demands.  Without business education and employee training programs, the salon industry and salon owners will continue to struggle and fail at a disturbing rate. It is time for change and a new beginning.

Despite these challenges,I feel high end and well managed salons will be in high demand. Adversity always present fantastic opportunities for those of you who are well informed and determined to succeed. Hairdresser Career Development Systems is committed to help you address and overcome these challenges.

You are welcome to leave your comments or opinions.

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7 Responses to Why Are So Many Hair Salons Failing?

  1. Dan November 19, 2010 at 2:05 pm #

    I believe that what is missing today is to get back to basics.Every one is in such a hurry to get to the top, no one is taking the time to do it right. What I mean by this is that first we must slow down and make sure we are doing the job right. Service today is a dying breed and those that give exceptional service will come out on top.
    Secondly when times are tough you have to give back. What I mean by this is that every store today should have a loyalty program that gives something back to the customer. We all love getting something for free.
    Thirdly as a small business you don’t have the brand recognition that the big boys have and you have to stand out over the rest. Ask yourselve what is you unique selling proposition, if you can’t answer that quickly ,then you need to work on that. If you would like more help send me an e-mail at lmmarketing@shaw.ca

  2. Chris Marshall Salon February 16, 2011 at 8:55 pm #

    I think turnover is a big issue as well which is why you have to take care of your employees, especially when you have a good one. We offer ours different incentives and keep things fun, plus we employ different social mediums (facebook) and text message interaction marketing. Its not easy but it helps the bottom line for sure.

  3. Tony Miller February 4, 2013 at 10:59 am #

    Very good article. Also, the California welfare department is sending every idle person they can through beauty school.They pay tuition, babysitting etc. I am all for helping people and HAVE helped more hairdressers get started than most others. I try to help mothers with kids as well. I pay $20 hr to my assistants but some complain that with baby sitting, food stamps , section eight housing they make more on welfare. I understand how they feel but as a single employer I can’t compete with the unlimited funds of The Welfare dept. The government is creating a “what are you going to do for me attitude’ which is that attitude that makes you fail.(I have heard it is over 90%) “How can I help” is a winners attitude.

  4. what are ereaders July 20, 2013 at 7:46 am #

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  5. Kenya January 16, 2014 at 9:20 pm #

    I like this topic & article, but a concern I have is in reference to the employee benefits issue. If the beauty industry is struggling, how is a salon owner suppose to support such an additional investment on top of a pre-existing one (meaning opening & running the salon)?
    Another issue of concern is the motivation factor. How does one motivate hairdressers to understand that as a salon owner, waiting for us to give them clients & waiting on walk-ins isn’t going to benefit either of us? Should there be training for such or how should one approach this?

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  1. Your Salon Management Tested: Moving Out of the Recession…Next Steps… | - November 14, 2010

    […] to assume that you’ve taken special steps to counter the pits that Jon Gonzales describes in Why Are So Many Hair Salons Failing? As we emerge from the economic slump, look around and see how you can capitalize from your […]

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