Effective Salon Business Model

If you are looking to open a salon with the least amount of risk and highest chance of success.  Booth rentals are key.  One of the ways we found to keep renters longer is to offer commissions on product sales.  To do this it’s important to stock and educated products that people can sell.  Make it easy to sell the product and offer a tiered payout.  Typical work week is 5 days a week.  If your renters could sell one product a day that would translate into 20 sales per month.  Typical rental rates run about $200 per week.  If you offered a bonus for selling 25 products per months to the renters they could push your products and in exchange give them half price rate for the month.  This does two things it makes it easier for them to pay rent.  It increases your product sales even paying out a huge commission.  If you have 20 renters that sell $25 products each even if your profit is only $20 per item after commissions at the end of the month that is an extra $10,000 in profit.  Best of all you make sure to also collect rents.  If you have 20 stations all rented for the month that is $16,000 month in revenue.  Do the math can you make a net profit after expenses with $26,000 in revenue. If rents and over head cost you $6,000 per month that’s 20k month or almost a quarter million per year.  This should fit into a 2,000 square foot salon.  Average national rent would be about $4,000.  Add in utilities, taxes, accounting ect and it’s possible to keep expenses at about $6,000 month. 20 renters isn’t such an impossible number if you have the right location. Of course other types of operations such as Medical Spas have larger upside but there is a lot more risk and overhead.