Opening a Salon During an Economic Downturn


by Tina Alberino

When times are tough, you don’t have to put your dreams or your career on hold. You can open a salon during a period of financial hardship, so long as you keep your expectations (and your debt) reasonable. However, before we proceed, understand that running a business during an economic downturn will not be easy—that does not mean that it is impossible. Doing so requires a bit more than courage, enthusiasm, and optimism, though.  

Entrepreneurs who hope to open a salon that can withstand economic strife will need to do a lot of planning and manage their resources strategically.

Those who hope to succeed will start small and commit to a plan that enables growth over time. In this article, you’ll learn how you can make that happen.

Start small. Nix those plans for a 5,000 square foot facility and 20 employees. During a downturn, your business should be lean and agile, like an acrobat (or a feral cat). Aim for 1,500 square feet or less. Plan to accommodate up to six employees, at most.

When the future looks uncertain, prepare for the worst-case scenario. 

I highly recommend that you come to terms with the fact that coronavirus will likely be with us for a long time even after a vaccine has been approved. I encourage all aspiring salon owners to plan to accommodate social distancing for at least the next few years.

Keep your debt in check. I know you love those $800 light fixtures and that $3,000 reception desk, but keep your debt to a minimum and invest that money into advertising instead.  

Anything that doesn’t generate revenue for the salon is not essential. You can always upgrade at a later date. 

When considering purchases, ask yourself:

Do we need this to perform our services?

Does this item result in efficiency gains?

How long will it take to pay itself off?

Are cheaper alternatives available?

Can we live without it?

Hold onto your money with a death grip. Be stingy. Channel your inner Scrooge. Economic downturns aren’t “rainy days;” they’re tropical depressions. If you want your salon to make it through the storm, spend only when you absolutely have no other choice. Treat your cash as a limited resource that may not be replenished anytime soon, because it might not be.

Focus on efficiency and consistency. Nobody likes to hear this, but during downturns, salons that hope to survive must offer services that fit into cash-strapped budgets. This means creating low-overhead services that can be delivered quickly, but still provide the outcomes clients expect. (Veteran nail techs are well-versed in this strategy, as we all had to implement it during the last recession.)

Evaluate each of your service protocols to identify time-sucks. Ask yourself the following:

Which steps can be eliminated?

Which steps can be outsourced?

Which steps can be combined?

Are any products available to facilitate speedier completion of this part of the service?

Go beyond your service protocols and evaluate your workstation setup. For maximum efficiency, the tools and products in drawers and on counters or shelves should be arranged so that they’re uncluttered, organized, and structured with purpose. Additionally, each station should have a consistent setup. Professionals should know where tools and products can be found in every station in the salon without having to look for them. Establish systems that prevent professionals from having to walk back and forth from their station to the dispensary.

To ensure service consistency and efficiency, each professional should be following the same steps.

Routine, systematic execution will help them maintain a rhythm throughout the day and will make it so clients know what to expect each time they come in. Eventually, the professionals will be able to work without much concentration, making it easier for them to focus on the client rather than the task, resulting in a more enjoyable experience for everyone.

Get your license. A salon owner’s most significant expense is labor. In a strong economy, employers can afford to hire extra professionals to handle an excess of clients. In a downturn, you’ll need to hire and schedule more strategically to keep payroll costs in check. Having another licensed professional on-hand who doesn’t incur additional labor costs to handle those wayward excess walk-ins will not only save money, it will keep you from having to dismiss those customers unnecessarily.

In tough times, your license won’t just be helpful, it will be necessary. 

Should one of your employees quit, you won’t find yourself hastily hiring a replacement from a desperate position. Doing so causes owners to hire the wrong people, which can damage your brand, start a chronic turnover cycle, and generate a ton of excess stress. Instead, you can shift the clients onto your own books and take time to find the best person for the job and for your salon.

Embrace technology. When planning your venture, go digital. 

Automate as much as you can—everything from appointment booking to checkout. 

Clients are becoming accustomed to pandemic protocols. They’re used to waiting in their vehicles until their appointment time, being welcomed in at the door, and paying with their phones. Take advantage of that. Salons that have mastered the virtualization of their reception operations this year have entirely eliminated the need for front desk staff. 

As more salons move in this direction, I expect that waiting rooms will shrink significantly or be repurposed (as retail stores and photo areas, for instance).

Seek additional revenue streams. Every smart entrepreneur understands the importance of maximizing profit potential, but many salon owners fail to think beyond retail. During downturns, every little bit helps, so get creative.

What skills can you use to expand your salon’s offerings? If you’re a photographer, consider adding affordable headshot sessions to your menu. If you’re an artist (or know people who are), turn your walls into a gallery. In my career, I’ve met salon owners who have organized outdoor yoga classes, guided mediation, and personal care classes for young girls. (One even hosts a summer camp program that ends with a fashion show.)

Remember, small business owners can be much more than what their business offers. We can serve our communities in a variety of ways that can also supplement our salons.

As a management consultant, I generally don’t advise taking significant risks, especially during such uncertain times. However, this industry will desperately need job creators. If you’re a financially savvy entrepreneur, you can reap massive benefits by taking advantage of low rental rates and closeout pricing on furniture and equipment, just be sure to move forward with a plan for long-term viability and understand that financial discipline will be absolutely critical to ensuring that. Don’t bite off more than you can chew.

Beauty industry survivalist, salon crisis interventionist, tactical verb-weapon specialist, and the leader of at least a hundred workplace revolutions, Tina Alberino is known as much for her extensive knowledge as for her sarcastic wit and mercilessly straightforward style. She’s the author of the book The Beauty Industry Survival Guide and the blog This Ugly Beauty Business. When she’s not writing, educating, or consulting, she can be found overthinking everything, identifying problems people didn’t know existed, and stubbornly working to change the things she cannot accept. For more information www.thisuglybeautybusiness.com

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