Salon Profitability

One of the most significant factors that will determine the success of a business concerns its operations. In relation to this, entrepreneurs and business owners must consider the number of hours that they allocate for accommodating the maximum number of clients every day.

All people involved in various business industries that they work goes beyond the designated business hours. In case of hair salons, their operation hours normally lasts from 10 am to 9 pm everyday or 10 am to 6 pm in smaller areas. Business hours are commonly the same for establishments located in malls or department stores, whereas others just run until 5 pm during weekends. Salon owners should also particularly pay attention to lunch hours and early evening hours, which are considered the busiest times for such businesses. Meanwhile, in other cases, salon owners may have to open earlier or set a specific time for important clients.

Thus, salon owners who properly manage time in operating their business are expected to earn more profits and be more successful. In relation to time management, salon owners should focus on ensuring that their businesses are in constant operation, that is, all the staff are performing their jobs and everyone in the salon, including them, is doing something worthwhile.

Aside from time-management, correctly priced services also contribute to the success of a salon. Extremely high prices may dissuade clients from making an appointment. However, very low prices may put at risk the profits of a salon business.

Thus, salon owners should ensure that they only offer competitive prices for their services. Likewise, they should consider factors, including labor and supplies, overheard, and profit, that influence prices.


The salary of owners is a part of the total labor costs, which can be the salary paid to a staff per hour. Labor costs for different salon employees may differ depending on the time they allot for rendering their services to customers.


Other contributing factors to costs include mortgage, lease payment, and budget for utilities. Estimate overhead costs should reach 40% to 50% of labor and material cost.


The normal expected profit lies around 11% to 15% of the net profit. When computing for the target net profit, salon owners should take into account the markup percentage factor.

On the other hand, salon establishments must be regularly maintained to ensure smooth operations and clean image. Salon employees should not settle with just sweeping or mopping the floor. They should thoroughly check all nooks and corners to ensure the cleanliness of their workplace.

Meanwhile, in some cases, salon owners avail the services of maintenance crew who are tasked with handling almost all maintenance tasks in an establishment. Such services normally come with a steep price but salon owners are assured that their businesses will end up sparklingly clean. Others prefer hiring one or several employees who are tasked with just tasks related to cleaning or maintaining salons.

Some salons earn additional profits by selling retail products. In such case, staff are trained to promote the beauty products offered by their salons.

On the other hand, gift certificates are another source of income for salons. These businesses may offer gift certificates which their customers can give away as presents to their families or friends. Moreover, production of gift certificates only requires a small capital and thus can be used in generating more profits.