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How to Grow a Hair Salon Business


Whether you’ve been dreaming about opening your own hair salon for years or are jumping on a good business opportunity, it’s an entrepreneurial adventure. There are a lot of assets and skills you need to quickly attain to make it through the first few vulnerable years. If you’re struggling to bring in a stable revenue stream or are just starting out and trying to establish yourself, this article is for you. It focuses on how to combat minimal or slowing growth to ensure a sustainable and healthy hair salon business.


Identify the reason for slowing growth

If you’ve already opened your doors and don’t have the sales numbers you need to break even or make a profit, look for reasons why you aren’t growing as expected. There are a few questions you can ask yourself to double-check you’re on the right track and not losing revenue unnecessarily such as:

• Are you offering the products or promotions your consumers want? Do you need specialists to offer a more comprehensive beauty salon service such as waxing, tanning, or nails?
• Is there more competition than there used to be and they’re taking part of your available market?
• Do you have a competitive advantage? What makes your hair salon different to other hair salons in the area?
• Are your existing customers happy with your services? Would they recommend you to their friends?
• How is the customer service in your hair salon?
• Is your staff happy? How is the turnover?
• Does your location or your facilities need an upgrade? If you have toilets, are they clean?
• Are finances/business expenses poorly managed?
• Do you simply need to ramp up your marketing?


Decide on how you want to grow

Once you’re fairly confident there aren’t any major holes in your hair salon business plan, the next thing to do is determine the best way to grow your company. Strategic growth will increase your capabilities and allow your hair salon to take on more customers and/or charge more for each service.
Two main ways you can do that is by renewing or expanding your current hair salon as well as opening a second location.


What to do when renewing / expanding your hair salon

If your hair salon sales and growth have slowed down, you could be operating at the maximum capacity for your current location and services. It’s important to take note of what you’re currently doing and make sure you’re still catering to what your existing and new customers want. If you’re doing everything right and are completely booked out, then it might be time to expand. If you still have capacity to take on more clients, then consider expanding your service offerings to include more options for customers. This is especially important if your competitors are successfully operating differently to you and taking away potential new clients.


Collect feedback

One way to decipher which option is most relevant to your hair salon if you aren’t sure or want a second opinion is by asking your customers and employees what they think.

Collecting feedback can help you better understand what parts of your current hair salon need to be renewed or upgraded. Here are a few different types of people that can assist in painting an accurate picture:

• Customers: What are they saying about your products, décor / interior, range of services (should you be offering a larger range of hair services or other things such as nails, tanning, waxing, etc.?)
• Staff: Are they regularly complaining about the POS system, outdated computers, other clunky software, or the salon equipment?
• Competitors: What are your local salon competitors doing that seem to be resonating with your ideal customer?
There are a couple ways you can collect feedback both formally and informally. Formal feedback can come as online reviews or testimonials. Ask your customers to upload before and after pictures of their hair on Instagram/Facebook and tag your salon. If they’re happy with their results, they can share the location of the salon in their posts. Another way is to leave your business card at the checkout counter with links to your social media pages and review pages for them to leave their own comments. Informal feedback can come from conversations they have with you or amongst themselves. Ask your staff what their clients are telling them about the salon and competitors.

Negotiate with your suppliers

One way you can grow the salon business is by managing the invoices and negotiating better prices where possible. While bills such as water usage and electricity might be a standard fee (though you could get deals for bundling!), the price of your inventory could be negotiated if your supplier offers bulk deals. Proactively ask for a discount based on your loyalty and recurring purchase orders. Lowering the price of your regular inventory – such as shampoo, conditioner and dyes – without decreasing the service price to your customers will allow you to pocket a larger margin.


Consider not having your expansion store adjacent

If your business is running at full speed, you might be outgrowing your space and need more room to service more customers. When looking at the adjacent buildings to see if the store owners will let you take over their lease or buy them out, you might come across some resistance. If the timing isn’t right and your neighbours aren’t interested in moving, this doesn’t mean your expansions plans are over. Hop over them and talk to other stores/property managers within walking proximity as an extension of your hair salon. As long as it isn’t an inconvenient distance, having separate parts of your salon can still allow you to achieve your business goals.


Plan your renovation period for off-seasons

Unless you’re taking over an existing hair salon, there is a good chance you’ll need to remodel the space to fit your desired layout and equipment. If you haven’t started your hair salon yet, this can easily be done before opening your doors. But if the existing layout was good enough and you’re looking to renovate after building a customer base, try to plan the construction during your natural off-season such as during holidays. For your loyal and recurring customers, consider finding a way to continue providing services to them. This could be temporarily moving your salon equipment into your home or a small rented space in the meantime. The point is to eliminate the need for them to find another solution during the renovation and risk losing their service entirely.


Choosing a New Location

While you will become more business-savvy and comfortable running a hair salon over time, it’s important to remember that each new location requires the same amount of research as the first. Take the time to carefully stake out every potential salon space before committing to the right lease. As with your first salon and taking that success into consideration, here are a few mandatory aspects the new location needs to tick off:

• Is it by your existing clientele or a similar market? Analyse your current salon customers to see if they – and others with similar interests, income, etc. – are already in the area.
• Is this store going to offer the same services & sell the same, supplementary, or a smaller/wider range of hair products compared to your original hair salon? Decide what you need from the new location regarding physical space and interior layout.
• Are you going to use this location as additional inventory management? Ensure there is extra storage space if needed.
• Will there be a lot of competition close by? Will you have to fight to establish yourself and win over customers?
• Will it be easy for people to stumble across your new hair salon, giving your large organic foot traffic, or will people have to go out of their way to find you?
• Based on the area, is it a low crime neighbourhood? This will help you determine the level of security and insurance needed.
• Is the rental rate within your price range? Ask nearby stores and consult other property agents to grasp a market rate. Also get a feel for historical business success regarding other hair salons or similar businesses in the area. If there’s a high turnover rate and new businesses don’t last more than a couple years, it’s important to understand why they didn’t work and make sure you can avoid those pitfalls.
• What utilities will come with the space? Will you have bathrooms for your customers, or do they need to go to a separate location, such as the shopping centre you’re located in? Consider how well maintained the outside facilities will be if they’re out of your control.


Build Your Brand Online

It’s important to put similar effort into your business online as you do to the physical store. If you don’t exist online, you are losing out on a large portion of customers that rely on online reviews and research before making a purchase. To ensure you capture those tech-savvy customers, make sure your site has these components:



o Service & product offerings
o Contact information
o About the team / business history (tell the story about how you started and what makes your different)
o Link to your social media accounts
o Current promotions


Google My Business

o Website URL
o NAP: Business Name, Address, Phone
o Opening hours
o Description of your business
o Service area
o Reviews
o Logo
o Photos


Social Media Accounts

Along with a website, social media will make it easier for people to find you. There are dozens of platforms you can choose from, but don’t overextend yourself. The only thing worse than not having an online presence, is having abandoned accounts that never get used. Pick one or two social media platforms that you can commit to posting regularly (at least one a week). The way you pick the right ones for your hair salon is by being where your customers are. If you’re appealing to young, new professionals then that might be Instagram or TikTok. If your ideal customer is a middle-aged parent, then you could focus more on Pinterest or Facebook.


Email Marketing

Besides social media, another way you can keep in touch with customers in between salon visits is by creating an email list. Email marketing allows you to stay front of mind with promotions, new services/products and business updates. You can create email lists by adding it to your website, sending online receipts and creating loyalty programs.


Hair Salon Business Loans with OnDeck

Renovations, new locations, increasing services, paying staff wages and marketing budgets are only a handful of the expenses that come with owning a hair salon outside of basic inventory stock. A hair salon business loan can help you create the ultimate experience for your customers by giving you access to the necessary cash flow and resources you need to do so. In order to qualify for additional funding, consider the following:


Understand your credit profile

When looking at a loan application, banks and lenders will reference the applicant’s credit profile to see if it hits their qualifications. A credit profile looks at your credit score and report, which comes from your credit history. It helps them determine things like how good you are at paying bills on time or how reliable your income is. Credit scores can also give you a sense of your business’ financial position. Figure out your business credit score now.


Minimum requirements

If you’re wondering whether you’re eligible for a small business loan or not, here are key requirements to get a loan with OnDeck:
• Minimum $100,000 gross annual turnover
• Minimum 1 year in business
• Minimum 3 monthly deposits
• No bankruptcy (prior or recent)
• Minimum 500 business credit score


Your purpose for a loan?

There are a variety of different kinds of loans and even more reasons why you might want one as part of your hair salon financial plan. A loan might be the right option if you’re looking to:
• Purchase inventory
• Hire additional staff
• Start or increase your marketing ideas and initiatives
• Expand your store, to a new location or online
• Cushion cash flow in preparation for a slower season


About OnDeck

OnDeck offers flexible business loans that solve a need for extra funding. Whether it’s the cost of materials, covering a cash flow shortfall or getting some new equipment for a project, OnDeck can help you.


With an easy online application process, loans of between $10k and $250k, and terms of 6 to 24 months, we make it simple for businesses to get the extra funding they need.


Apply online in minutes at or call our helpful team on 1800 676 652 today.


Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at February 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.