The Ultimate Guide to Buying a Hair Salon Business cover image
09 Jul 2024

The Ultimate Guide to Buying a Hair Salon Business


In the world of beauty, few businesses hold the timeless appeal and consistent demand of hair salons.


According to the Australian Hairdressing Council, the hair and beauty industry in Australia generates over $5 billion annually, with hair salons contributing a significant portion of this revenue.


With over 21,000 hairdressing businesses across the country, the industry is not just thriving but growing steadily, reflecting the enduring importance of personal grooming in our Australian culture.



Buying in a hair salon offers a unique opportunity to enter a stable and expanding market, with reliable consistent reoccuring revenue.


The average Australian spends about $3,600 a year on personal grooming.


Beyond the numbers, hair salons often become local icons, known for their unique style, charismatic staff, and the personal connections they foster with clients.


Whether it's the regulars who come in for a trim every month or those seeking a fresh look for a special occasion, hair salons play a crucial role in their communities.




Exploring the Landscape of Hair Salon Businesses


Health and Beauty businesses primarily offer hairdressing or beauty services, like manicures, pedicures, facials, skin treatments, injectables, tanning, make-up application, hair removal, and non-medical hair restoration techniques.


The Hairdressing and Beauty Services industry continues to navigate the aftermath of the COVID-19 pandemic, facing challenges due to the operational setbacks experienced in recent years and a shift in consumer behaviour and economic pressures.


The surge of do-it-yourself and self-care hair and beauty products has dampened demand for in-salon treatments.


However, rising image consciousness and population growth have cushioned the fall in demand for beauty treatment services.



Industry revenue is expected to contract by an average annual 5.5% over the five years through 2023-24 to $7.5 billion.


This trend includes a revenue drop of 2.3% in 2023-24 amid gloomy domestic and global economic outlooks as consumers cut back on their spending.


The industry is highly competitive, featuring many small salons that can quickly enter and exit the market.


Intense competition has driven down prices, and external competition has intensified, with more day spas, hotels, and airports offering a range of hair and beauty services.


Despite these challenges, hairdressing and beauty services represent a moderate household expenditure, which has supported industry growth in most years.



Looking forward, industry revenue is beginning to recover post-pandemic.


Rising discretionary incomes and population growth in key markets will stimulate demand as consumers return to using hairdressing and beauty services more regularly.


Salons are poised to focus more on the male market and provide beauty merchandise and premium services to expand their offerings and differentiate themselves from DIY treatments.


Customers' shifting preferences toward specialised over generic services will provide a new avenue for innovation within the industry.


Steady demand growth will enhance profitability despite ongoing price-based competition.


Revenue is projected to strengthen at an annualised 2.0% over the five years through 2028-29, reaching $8.3 billion.


The Hairdressing and Beauty Services industry is on the cusp of a revival, with opportunities for growth driven by innovative service offerings and an expanding customer base.


Embracing these trends will be key for businesses aiming to thrive in the evolving beauty landscape.


The hair salon industry is diverse, offering various types of businesses tailored to different market segments and customer needs.


Here is a closer look at the different types of hair salons you might consider:


Traditional Hair Salons

Traditional hair salons offer a wide range of services, including haircuts, styling, colouring, and treatments.

These salons cater to a broad demographic, from children to adults, men and women.

They are the backbone of the hair industry, providing essential services that keep clients looking and feeling their best.

Fun fact: the average person spends around 40 minutes on their hair every day, making traditional hair salons a vital part of daily grooming routines.


Boutique Salons

Boutique salons focus on high-end services and luxury experiences.

Often located in upscale areas, these salons cater to a clientele seeking personalised, premium services.

Boutique salons are known for their unique interior designs and exclusive product lines, enhancing the luxurious experience for clients. 

Fun fact: many boutique salons offer bespoke treatments and one-on-one consultations, ensuring each visit is a personalised retreat.


Franchise Salons

Franchise salons are part of larger brands with standardised services and operational procedures.

They benefit from brand recognition and established marketing strategies, which can attract a steady stream of clients.

Franchise salons leverage nationwide advertising campaigns, ensuring consistent service quality and customer trust.

Fun fact: some of the most successful hair salon franchises in Australia have been in operation for over 30 years, testament to their enduring appeal and business model.


Specialty Salons

Specialty salons cater to specific niches such as curly hair, eco-friendly products, or bridal styling.

These salons attract clients looking for specialised expertise and unique offerings.

The curly hair niche, for instance, is booming, with salons offering tailored products and techniques that cater to the unique needs of curly-haired clients.

Fun fact: specialty salons often become go-to places for clients with specific needs, creating a loyal customer base who appreciate the specialised care.


Barber Shops

Barber shops focus on haircuts and grooming services primarily for men, often including additional services like beard trims and shaves.

The barber shop tradition dates back to ancient Egypt and has seen a resurgence in recent years with the popularity of classic and vintage grooming styles.

Fun fact: modern barber shops often combine traditional techniques with contemporary styles, offering a nostalgic yet current grooming experience.


Mobile Salons

Mobile salons bring salon services directly to clients' homes or workplaces, offering convenience for those with busy schedules or mobility issues.

These salons provide flexibility and personalised service in the comfort of the client's chosen location.

Fun fact: mobile salons have grown in popularity, especially in urban areas, where time-pressed professionals appreciate the convenience of on-demand beauty services.


Eco-Friendly Salons

Eco-friendly salons use sustainable practices and environmentally friendly products, attracting clients who value green living.

These salons often incorporate renewable energy sources and recyclable materials, making them a favourite among eco-conscious consumers.

Fun fact: eco-friendly salons not only help reduce environmental impact but also often provide healthier alternatives for clients and staff by using non-toxic products.


Pop-Up Salons

Pop-up salons are temporary salons set up for special events, festivals, or holiday seasons.

They offer a unique, trendy experience and can attract a diverse clientele looking for something different.

Pop-up salons can create buzz and excitement, often featuring celebrity stylists or exclusive product launches.

Fun fact: these salons provide a great opportunity to test new markets or products without the commitment of a permanent location.


Children’s Salons

Children’s salons specialise in haircuts and styles for children, often featuring fun, themed environments to make the experience enjoyable for kids.

These salons sometimes offer extra services like face painting or themed parties, making them a hit with both kids and parents.

Fun fact: children's salons often have specially trained staff to ensure a safe and pleasant experience for their young clients, turning a simple haircut into a fun outing.


The hair salon industry offers a myriad of opportunities, each catering to different client needs and market segments.

Whether you aim to provide luxury experiences, specialised services, or convenient solutions, there's a perfect niche waiting for your investment.




Future Trends in the Hairdressing and Beauty Industry


The Rise of Image Consciousness

The Hairdressing and Beauty Services industry is dynamic and highly competitive, requiring businesses to stay current with cutting-edge services that cater to evolving customer preferences.

Demand for hairdressing and beauty services can be counter-cyclical; during economic downturns, many consumers view hair and beauty treatments as affordable luxuries.

Heightened awareness about beauty treatments and image consciousness has consistently supported demand, with customers increasingly seeking personalised beauty experiences tailored to their unique needs and lifestyles.


The Resilience of Essential Services During COVID-19

Despite sluggish discretionary income growth, the industry experienced robust revenue growth before the COVID-19 outbreak.

The pandemic drastically affected salon performance over the three years through 2021-23, compelling many salons to innovate and set new standards for operational efficiency and customer safety.

While mandatory lockdowns and social distancing measures caused temporary closures, most hairdressers and barbershops were deemed essential services by the Federal Government, providing some revenue stability.

Regular haircuts are considered a necessary part of personal grooming, maintaining resilient demand even during periods of weak consumer sentiment and high unemployment.


DIY Kits and Home-Based Alternatives

Volatile consumer sentiment has led to a rise in the adoption of DIY skincare and hair care products, stifling demand for in-salon treatments.

Many consumers are turning to online tutorials and home remedies to maintain their appearance affordably.

Despite this trend, persistent demand for low-cost hairdressing and beauty services, such as manicures, provides consumers with affordable luxuries.

The influence of social media influencers and beauty bloggers has further pushed trends towards home-based beauty regimes, impacting traditional salon visits.


Premium Services Thriving Amid Economic Uncertainty

During periods of low consumer sentiment, many customers indulge in premium hairdressing and beauty services while cutting back on larger expenditures like vacations and retail purchases.

Expanded household debt has indirectly benefited salons, allowing for discretionary spending on beauty treatments even amid financial constraints.

The integration of wellness and holistic services with traditional beauty treatments has attracted new customers looking for comprehensive self-care solutions.

Technological advancements in beauty service bookings, such as mobile applications and online scheduling platforms, have streamlined the customer experience, increasing convenience, customer retention, and acquisition.


Strategic Discounts and Enhanced Customer Experience

To combat intense competition, some salon owners have strategically lowered prices to retain market share, attracting cost-conscious consumers while necessitating innovation in service delivery and efficiency improvements.

Online services like Groupon have been utilised to maximise visibility in a saturated market, attracting a wider audience.

Promoting higher-margin services and products has also offset lower prices, contributing to steady growth despite economic uncertainties.

Enhancing the customer experience with value-added services such as complimentary beverages, ambient music, and comfortable seating has become a standard practice to attract and retain clients.

Future Outlook: What Lies Ahead for Hairdressing and Beauty Services


Talent Wars: Rising Wages and Competition for Skilled Staff

Industry revenue is set to bounce back as economic conditions improve and key markets' populations grow.

Rising household incomes will increase consumers' discretionary spending, fostering demand for premium beauty services.

However, ongoing high staff turnover rates will disrupt service continuity and quality, potentially harming salon reputations.

Competition for talented staff with unique skill sets will intensify, driving up wages over the next five years.


Combining Hairdressing and Beauty Products with Services

Many salons will promote premium services and broaden product sales to boost spending per customer and better differentiate their offerings from DIY treatments.

Salons will actively bundle complementary products and services together.

More salons will advertise their brand through social media and photo-sharing platforms like Facebook and Instagram.

Salons will mainly attract younger customers (aged 15 to 34) through social media marketing campaigns, recognising the importance of this age group's influence and their propensity to share experiences online, amplifying the salon's reach and brand awareness.

Salons will enhance their digital presence and online booking systems to cater to the convenience and tech-savviness of younger customers.


Male Grooming and Permanent Hair Removal: New Growth Areas

The expansion of male grooming specialty salons will fuel demand growth from men over the period.

Demand for permanent hair removal services, facial fillers, and injectables will elevate over the next five years driven by increasing consumer awareness and the growing acceptance of minimally invasive cosmetic procedures.

The popularity of hair removal services will be constrained by the increasing popularity of DIY hair removal methods and harsher regulations relating to lasers and intense pulsed light (IPL) used for cosmetic and beauty therapies.

Technological advancements and the rise of at-home devices for beauty treatments will challenge traditional salons to innovate and offer superior or unique services that consumers cannot easily replicate.


Specialised Services Over Generic Offerings

Many salons will expand and innovate their service offerings to remain competitive in a highly crowded market.

Salons will increase the breadth of treatments and provide bundled packages to appeal to time-poor customers.

Hairdressing and beauty services specialised to specific target groups, like men's or blonde specialist salons, will be very popular.

Popular youth-focused beauty trends will sustain demand for anti-ageing beauty treatments, supporting revenue growth.

Australia's population will continue to age, bolstering demand for hair-colouring services and skincare treatments.

The rising awareness and emphasis on personal well-being and mental health will push salons to integrate wellness and self-care elements into their offerings.


Targeting Tourists: A New Revenue Stream

Salons will actively target domestic and inbound international tourists in the coming years.

Travellers are considered an additional market for salons, making them lucrative. 

Capitalising on this market requires salons to adapt their marketing strategies and service offerings to cater for the traveller's needs and preferences.

Increasing traveller numbers will allow the industry to expand.

Premium salons located in high-traffic areas will benefit from tourism growth.

The trend towards experiential tourism, where travellers seek unique and local experiences, will create opportunities for salons to offer bespoke beauty and wellness packages tailored to the cultural or regional specialties, appealing to tourists wanting to indulge in destination-specific luxury treatments.




Advantages of Buying a Hair Salon Business


Investing in a hair salon comes with several attractive advantages that make it a compelling choice for entrepreneurs.

Here’s a detailed look at why buying a hair salon is a smart investment:


  • Consistent Demand
    Hair services are a staple of regular self-care routines, ensuring a steady stream of clients.
    The average person visits a hair salon about 5 times a year, which translates to consistent business.
    Repeat clients form the backbone of a salon's revenue, returning regularly for maintenance and new styles.
    This constant demand provides a reliable income stream and helps build a loyal customer base.


  • Community Engagement
    Salons often become integral parts of their local communities, fostering loyal customer bases.
    They serve as social hubs where clients not only get their hair done but also engage in conversations and build relationships.
    Opportunities for local partnerships and community events enhance visibility and reputation.
    Hosting charity events, participating in local fairs, or offering student discounts can further cement a salon’s role in the community.


  • Creative and Personal Fulfilment
    Owning a hair salon provides a platform for creativity and personal interaction.
    Salon owners often enjoy building relationships with clients and seeing the tangible results of their work.
    The creative nature of hair styling allows for continuous learning and artistic expression, making the business both personally and professionally rewarding.


  • Scalability
    Hair salons offer significant scalability.
    There’s potential to expand services to include retail sales of hair products, beauty treatments, and more.
    Successful salons can open additional locations or franchises, increasing revenue streams.
    For instance, adding services like manicures, pedicures, and facials can attract a wider client base and enhance customer loyalty.


  • Economic Resilience
    The beauty industry often remains stable even during economic downturns, as people continue to prioritise personal care.
    Haircuts and basic grooming are considered essential services, which helps maintain steady business.
    Historical data shows that beauty and personal care services recover quickly after economic slumps, making hair salons a resilient investment.


  • Diverse Revenue Streams
    Salons can diversify their income through various streams such as selling professional hair care products, offering specialised treatments, and hosting workshops.
    Product sales alone can account for 20-30% of a salon’s revenue.
    Additionally, offering memberships or loyalty programs can ensure a steady flow of income and encourage repeat visits.


  • High Profit Margins
    Hair salons can operate with high profit margins, especially if they manage overhead costs effectively.
    Services like colouring and specialised treatments often have higher margins than basic haircuts.
    By upselling these services and products, salons can significantly boost their profitability.
    Efficient management and customer retention strategies further enhance these margins.


  • Personal Branding Opportunities
    Owning a salon allows for personal branding opportunities.
    A salon owner can create a unique brand identity that resonates with their target market.
    This could be through a unique salon atmosphere, signature services, or a strong social media presence.
    Building a strong brand helps in attracting a loyal clientele and standing out in a competitive market.


  • Flexible Work Environment
    A hair salon offers a flexible work environment where owners can set their own hours and create a schedule that suits their lifestyle.
    This flexibility can lead to a better work-life balance, making the business not just profitable but also personally satisfying.
    Moreover, employing a team of skilled stylists allows for delegation, giving owners the freedom to focus on business growth and innovation.


  • Technological Integration
    Modern hair salons can integrate technology to enhance customer experience and streamline operations.
    Online booking systems, digital marketing, and social media engagement help attract and retain clients.
    Advanced technologies like customer relationship management (CRM) software can provide insights into customer preferences and behaviour, enabling personalised marketing and improved service.


Investing in a hair salon is not just about capitalising on a profitable opportunity; it’s about entering a dynamic industry that offers both financial rewards and personal fulfilment.
With strategic planning, a focus on quality service, and a commitment to community engagement, entrepreneurs can build a thriving business that stands the test of time.




Market Prices for Hair Salon Businesses


A dive into the current market on reveals a wide range of investment opportunities in the hair salon sector. Here’s a detailed snapshot of the market values:


  1. Lower-End Investment
    Small, established hair salons can be found for as low as AUD 30,000.
    These salons often come with a loyal customer base but might need some updates or marketing boosts to reach their full potential.
    For example, a suburban hairdresser in Milton, QLD, is listed for AUD 49,990, offering an accessible entry point for aspiring salon owners who are willing to invest in growth and improvements.


  1. Mid-Range Investment
    Well-established salons with a solid reputation and client base typically range from AUD 100,000 to AUD 250,000.
    These businesses often come with trained staff, quality equipment, and a good location, ensuring steady revenue and room for growth.
    For instance, a well-established hairdressing business in South Perth is priced at AUD 195,000, reflecting its profitable operations and prime location.
    Another example is a hair salon in Brisbane's vibrant heart, priced at AUD 95,000 plus Stock at Value (SAV), boasting strong financial performance and a loyal clientele.


  1. High-End Investment
    Large, high-revenue salons in prime locations can be valued at AUD 500,000 to AUD 1,000,000 or more.
    These salons often offer extensive services, luxury experiences, and have a strong brand presence.
    A luxury hair salon in the Perth region, known for its exceptional service and loyal customer base, exemplifies this category, although the exact price is typically disclosed upon inquiry.


Tips for Maximising Investment


  • Invest in Updates and Marketing:
    Even lower-end salons can become highly profitable with the right investments in modern decor, updated equipment, and targeted marketing strategies.
    Enhancing the customer experience can significantly boost client retention and attract new customers.


  • Focus on Customer Service:
    Exceptional customer service and personalised experiences can set your salon apart.
    Regular training for staff on the latest trends and techniques can ensure your salon remains competitive and appealing.


  • Diversify Services:
    Offering additional services like beauty treatments, spa services, or retailing high-quality hair care products can create multiple revenue streams, increasing overall profitability.


  • Leverage Technology:
    Implementing online booking systems, customer relationship management (CRM) software, and social media marketing can streamline operations and enhance customer engagement, driving growth and efficiency.


  • Consider Location:
    The salon's location plays a crucial role in its success.
    High foot traffic areas, proximity to other popular businesses, and easy accessibility can attract more clients.
    Investing in a prime location may come with higher costs but can lead to greater returns.




Franchise vs. Independent: Choosing Your Path


Deciding between a franchise and an independent hair salon depends on your preference for structure versus autonomy.

Here’s a detailed comparison to help you decide:


Franchise Hair Salons




  • Brand Recognition: One of the significant advantages of buying a franchise hair salon is the immediate brand recognition.
    Established brands attract customers who trust and are familiar with the services offered.
    This brand loyalty can translate to a steady stream of clients from day one, reducing the time and effort needed to build a reputation from scratch.


  • Support and Training: Franchises typically provide comprehensive training programs for new owners and their staff.
    This training covers everything from daily operations to advanced styling techniques.
    Additionally, ongoing support from the franchisor can include marketing assistance, operational guidance, and bulk purchasing agreements, ensuring that the salon runs smoothly.


  • Proven Business Model: Franchises operate on a tested business model that has been refined over time.
    This reduces the risk associated with starting a new business, as the franchise has already ironed out many of the common operational kinks.
    For example, franchise salons often have established systems for booking appointments, managing inventory, and handling customer service.




  • Initial and Ongoing Fees: The cost of purchasing a franchise can be significantly higher than starting an independent salon.
    There are upfront franchise fees, which can be substantial, along with ongoing royalties and marketing fees that must be paid to the franchisor.
    These costs can impact overall profitability.


  • Operational Restrictions: While the structured approach of a franchise can be beneficial, it also means that there is limited flexibility.
    Franchisees must adhere to the franchisor's guidelines regarding services offered, pricing, salon layout, and even the suppliers used.
    This can stifle creativity and prevent salon owners from adapting quickly to local market trends.


  • Market Saturation: In areas with many franchise salons, brand dilution can occur.
    If multiple franchises from the same brand are located nearby, they may end up competing for the same customer base, which can reduce the overall profitability for each salon.

Titans of the Hairdressing and Beauty Industry


  1. LCA Franchising Pty Limited
    Sub-brand: Laser Clinics Australia
    Market Share: 2%
    Revenue: $149.2 million

    Laser Clinics Australia (LCA) stands out as a leader in the hairdressing and beauty services industry, boasting a significant market share and impressive revenue.
    Known for their advanced cosmetic treatments and state-of-the-art clinics, LCA offers services ranging from laser hair removal to cosmetic injectables.
    The brand's strong presence and reputation have cemented its place at the top of the industry, consistently attracting a loyal customer base and delivering high-quality results.

  2. Hairhouse Warehouse
    Sub-brand: Hairhouse
    Market Share: 1%
    Revenue: $74.6 million

    Hairhouse combines professional haircare and beauty product lines with salon services, creating a robust business model that drives significant revenue.
    The brand's offerings include an extensive range of shampoos, conditioners, nail polish, and styling products like hairspray, gels, and mousses.
    Hairhouse's leadership, under General Manager Steve Terry since 2018, has focused on enhancing digital visibility and customer-oriented service.
    The rebranding from 'Hairhouse Warehouse' to 'Hairhouse' reflects this strategic shift, emphasising both retail and service excellence.
    The company's new store designs and improved service provisions leverage its position as one of Australia's largest employers of hairdressers, ensuring superior expertise and customer service.

  3. Just Cuts
    Sub-brand: Just Cuts
    Market Share: 1%
    Revenue: $74.6 million

    Just Cuts has revolutionised the customer experience through the integration of technology and robust franchisee support.
    The brand's contactless check-in feature, widely adopted across their global salon network, and a loyalty app with over 130,000 registered users, highlight Just Cuts' commitment to innovation.
    The company offers comprehensive franchisee support, including in-salon training and a digital platform called 'Just Online,' making it accessible even to those without prior experience.
    Just Cuts' expansion into global markets and its recognition as the 2021 Best Lifestyle Franchise by the Global Franchise Award underscore its strong franchise model and industry leadership.

Independent Hair Salons




  • Operational Freedom: Owning an independent hair salon gives you complete control over all aspects of your business.
    You can choose the services you offer, set your own prices, design your salon's interior, and select the products you sell.
    This freedom allows for a highly personalised business that can quickly adapt to changing market conditions and customer preferences.


  • Flexibility to Innovate: Without the constraints of franchise guidelines, independent salon owners can innovate and experiment with new styles, services, and marketing strategies.
    This agility can be a significant advantage in a dynamic industry like hairdressing, where trends can change rapidly.


  • Personal Brand Building: An independent salon allows you to create and grow your unique brand identity.
    This personal touch can attract a loyal customer base who appreciates the distinctiveness of your salon.
    Building a strong local reputation can lead to word-of-mouth referrals and a solid community presence.




  • Brand Building: Starting from scratch means you need to build your brand and reputation from the ground up.
    This process can take considerable time and effort, requiring effective marketing strategies and consistent high-quality service to attract and retain clients.


  • Higher Marketing Costs: Without the backing of a franchisor, all marketing efforts and costs fall on the salon owner.
    This can include everything from developing a website and social media presence to local advertising campaigns and promotional events.
    Effective marketing is crucial to standing out in a competitive market.


  • Supply Chain Management: Independent salon owners are responsible for establishing and maintaining their supply chains.
    This includes negotiating with suppliers for products and equipment, which can be time-consuming and might not benefit from the bulk purchasing discounts that franchises often receive.


Examples and Considerations


For instance, an independent salon owner in Melbourne might decide to specialise in eco-friendly hair products and services, catering to a niche market of environmentally conscious customers.

This unique selling proposition can help differentiate the salon from competitors and build a dedicated client base.

On the other hand, a franchise salon in Sydney might benefit from national marketing campaigns and established booking systems, ensuring a steady flow of clients and streamlined operations.


When deciding between a franchise and an independent salon, consider your personal goals, available resources, and willingness to adhere to structured guidelines versus the desire for creative freedom.

Each path offers distinct advantages and challenges, and the best choice will depend on your business aspirations and operational style.




Cracking the Cost Code in the Hair and Beauty Industry


Salon Profitability Rises with Premium Services and Efficient Business Models

Navigating the financial landscape of the hair and beauty industry involves understanding the nuances that affect profitability.

Non-employing owner-operators, who often draw their income directly from business profits rather than a traditional wage, contribute to higher profit margins at the expense of wage costs.

Franchisees, despite higher start-up costs and ongoing royalties to franchisors, enjoy significant profit margins due to economies of scale and bulk purchasing advantages.

After the pandemic-induced closures, many salons have strategically shifted towards more expensive offerings, boosting profitability.

Over the past five years, industry profitability has grown, underscored by a focus on premium service offerings.


Wages Rise as Earning Structures Change

Wages are the largest expense for hairdressers and beauty salons, typical of service-based industries.

However, the average wage for hairdressers and beauty therapists remains relatively low compared to other service sectors.

Over the past five years, wages have increased as a share of revenue, largely due to a rise in industry employment.

This increase reflects the significant number of trainees and apprentices who often earn minimum wage, sometimes supplemented by government wage subsidies.

Additionally, personal income generated by non-employing salons is sometimes accounted for within the industry’s profit segment, further influencing wage statistics.


Salons Consuming Premium Beauty Supplies Face High Purchase Costs

For hairdressers, purchases include essential salon supplies such as shampoos, hair dyes, treatments, and other hair products, as well as items resold to customers.

Beauticians' purchases encompass dermal fillers and other injectables.

These purchase costs can vary significantly based on service offerings. 

To maintain margins, salons must effectively manage stock and minimise waste.

Despite industry trends toward reduced costs through bulk and overseas purchasing, salons that prioritise high-quality supplies to differentiate themselves from DIY alternatives will continue to face significant purchase expenses.

High-quality supplies are crucial for salons aiming to stand out, ensuring that purchase costs remain a substantial part of their expenditure.


Understanding and managing these major costs is essential for any salon aiming to thrive in the competitive hair and beauty industry.

By focusing on premium services, efficient wage management, and strategic purchasing, salons can navigate financial challenges and maximize profitability.




Common Potential Problems Encountered by Buyers


While owning a hair salon can be a rewarding venture, it comes with its own set of challenges.

Prospective buyers should be aware of these common pitfalls to make an informed decision. 

Here’s an in-depth look at some of the key problems you might encounter:


  • Skilled Labour Shortage
    One of the most significant challenges in the hair salon industry is finding and retaining talented stylists.
    Talented stylists are the heart of any successful salon, and their skills and personality often drive repeat business.
    However, the industry often experiences high turnover rates, which can disrupt operations and client satisfaction.

    Solution: To attract and retain top talent, offer competitive wages and a positive work environment.
    Consider providing benefits such as health insurance, retirement plans, and continuing education opportunities.
    Creating a supportive and motivating workplace culture can also enhance job satisfaction and loyalty among employees.


  • Location and Rent
    Securing a prime location for your salon can be costly.
    High rental costs can eat into your profits, especially in busy urban areas or high-traffic shopping centres.
    Additionally, lease terms and stability are crucial for long-term success.

    Solution: Carefully negotiate lease terms to ensure they are favourable and sustainable.
    Look for locations that balance cost with foot traffic and accessibility.
    Sometimes, slightly less central locations with lower rents can still attract a steady stream of clients if marketed effectively.


  • Client Retention
    Maintaining a loyal client base requires consistent quality and excellent customer service.
    High turnover in staff can impact client satisfaction and retention, as clients often build relationships with their preferred stylists.

    Solution: Implement loyalty programs and personalised services to encourage repeat business.
    Regularly train staff to ensure consistent service quality.
    Gather feedback from clients to continuously improve their experience and address any concerns promptly.


  • Regulatory Compliance
    Ensuring compliance with health and safety regulations is vital in the hair salon industry.
    Non-compliance can result in fines, legal issues, and damage to your salon’s reputation.
    Regulations can include sanitation standards, occupational health and safety requirements, and licensing.

    Solution: Stay updated on local regulations and ensure your salon meets all health and safety standards.
    Regularly train your staff on compliance requirements. Investing in high-quality, hygienic equipment and products can also help maintain a safe and professional environment.


  • Economic Fluctuations
    While the beauty industry is generally resilient, hair salons can still be affected by significant economic downturns.
    During tough economic times, clients may reduce the frequency of their visits or opt for less expensive services.

    Solution: Diversifying your services and products can help mitigate risks.
    Offer a range of price points for different services to accommodate clients with varying budgets.
    Consider introducing products and services that cater to at-home hair care, which can maintain client engagement even during economic downturns.


  • Competition
    The hair salon market can be highly competitive, especially in urban areas where multiple salons vie for the same clientele.
    Standing out among competitors can be challenging.

    Solution: Differentiate your salon by offering unique services or creating a distinctive brand identity.
    Specialising in niche markets, such as eco-friendly products or curly hair expertise, can attract specific client segments.
    Strong online and offline marketing strategies, including social media engagement, can also help attract and retain clients.


  • Technological Integration
    Integrating new technologies such as online booking systems, CRM software, and digital payment methods can be daunting but is essential for staying competitive.
    Technology can streamline operations and improve customer experience.

    Solution: Invest in user-friendly technology solutions that can enhance efficiency and customer satisfaction.
    Provide training for your staff to ensure smooth implementation.
    Leveraging technology can also offer insights into client preferences and behaviours, allowing for more targeted marketing and service improvements.


  • Inventory Management
    Maintaining an optimal inventory of hair care products, tools, and equipment can be challenging.
    Overstocking ties up capital, while understocking can disrupt services and sales.

    Solution: Implement an efficient inventory management system to track stock levels and usage patterns.
    Regular audits and just-in-time ordering can help maintain balance.
    Partnering with reliable suppliers ensures timely delivery and availability of essential products.


  • Financial Management
    Managing finances effectively is crucial for the success of any hair salon.
    Poor financial management can lead to cash flow problems, debt accumulation, and eventual business failure.

    Solution: Maintain detailed financial records and regularly review them to monitor the salon’s financial health.
    Consider hiring an accountant or financial advisor to manage finances.
    Budgeting for operational expenses, marketing, and emergencies can help maintain financial stability.


  • Seasonal Fluctuations
    Hair salons often experience seasonal variations in client volume, with peaks during holiday seasons and lulls during off-peak times.
    These fluctuations can affect revenue consistency.

    Solution: Develop marketing strategies to attract clients during slower periods, such as offering promotions or hosting events.
    Building a loyal client base through excellent service and loyalty programs can also help maintain steady business throughout the year.


By being aware of these common challenges and implementing strategic solutions, prospective hair salon owners can better prepare for success in this vibrant and rewarding industry.




Key Questions to Ask When Buying a Hair Salon


When considering the purchase of a hair salon, it’s crucial to perform thorough due diligence.

Here are key questions to ask, along with the reasons for asking them and the specific documents or items you might need to procure:


  1. What are the financial records from the last three years?

    Reason: Reviewing profit and loss statements, balance sheets, and cash flow reports will help you assess the financial health of the business.
    You need to understand revenue trends, expenses, and profitability.

    Documents: Request the last three years' financial statements, tax returns, and any relevant financial reports.
    These documents will give you a clear picture of the salon's financial performance and stability.

  2. What is the reason for selling the business?

    Reason: Understanding the seller’s motivation can reveal potential challenges or opportunities that may not be immediately apparent.
    The reason for sale could indicate whether the business is in distress or simply a personal decision.

    Documents: Obtain a written statement or a discussion record explaining the reason for the sale.
    Also, look for any patterns in the business's performance that align with the reason given.

  3. What are the terms of the current lease, including duration, costs, and conditions?

    Reason: The lease terms will affect your long-term operational costs and stability.
    Unfavourable lease terms could increase expenses and risk of relocation.

    Documents: Ask for a copy of the current lease agreement, including any amendments or addenda.
    Review the terms carefully to understand your obligations and rights as the new tenant.

  4. What is the structure of the current staff, including roles and employment contracts?

    Reason: Evaluating the experience and stability of the team helps you understand the human resources aspect of the business.
    High turnover or a lack of skilled staff can be problematic.

    Documents: Request a detailed staff list, including roles, salaries, employment contracts, and any non-compete agreements.
    This will help you plan for payroll and ensure smooth business operations post-purchase.

  5. Who makes up the customer base, and what is their loyalty level?

    Reason: Assessing market penetration, customer satisfaction, and repeat business potential is crucial for forecasting future revenue.
    Loyal customers are a key asset.

    Documents: Obtain customer records, loyalty program details, and feedback surveys.
    Analysing this data will provide insights into customer behaviour and loyalty.

  6. What marketing strategies have been effective for the business?

    Reason: Understanding past successful promotional activities and areas for improvement can guide future marketing efforts.
    Effective strategies can boost client acquisition and retention.

    Documents: Ask for marketing plans, campaign reports, and analytics from social media and advertising efforts.
    These documents will help you identify what works and what doesn’t.

  7. What is the condition of the equipment and inventory?

    Reason: Evaluating the state of assets helps you avoid unexpected repair or replacement costs.
    Knowing the age and condition of equipment is essential for budgeting.

    Documents: Request an inventory list with purchase dates and maintenance records.
    Conduct a physical inspection if possible to verify the condition of the assets.

  8. Are there any outstanding debts or financial obligations?

    Reason: Ensuring you are aware of any liabilities that may impact the business is critical for financial planning.
    Unexpected debts can affect cash flow and profitability.

    Documents: Obtain a list of all outstanding debts, including loans, supplier credits, and pending legal matters.
    Review any agreements or contracts associated with these obligations.

  9. What growth potential does the business have, and are there any expansion plans?

    Reason: Understanding scalability and future profitability helps you plan for growth.
    Knowing existing expansion plans can save you time and resources.

    Documents: Request business plans, market analysis reports, and any documentation on expansion plans.
    This will help you evaluate the potential for growth and your ability to capitalise on it.

  10. How is the inventory managed, and what systems are in place?

    Reason: Efficient inventory management is crucial for maintaining smooth operations and avoiding stockouts or overstocking.
    The right systems can improve efficiency and reduce costs.

    Documents: Ask for details on inventory management systems, stock reports, and process documentation.
    Understanding these systems will help you maintain operational efficiency.

  11. How much does your company advertise online?

    Reason: Marketing through search engines and social media platforms has grown increasingly popular, as these channels have been more effective in displaying promotional materials to intended audiences.

    Documents: Request information on online advertising expenditures and performance metrics.
    This includes data on search engine marketing, social media campaigns, and digital ad placements.

  12. How does your company diversify its revenue streams beyond hairdressing and beauty services?

    Reason: Some industry operators sell cosmetic products, including specialised shampoos and facial creams.
    Diversified revenue streams can enhance profitability and business resilience.

    Documents: Obtain a list of products sold, sales data, and any marketing strategies used for these products.
    This will provide insights into the business’s additional revenue sources.

  13. How do regulations apply to beauty services that your company provides?

    Reason: In Queensland, Western Australia, and Tasmania, the use of lasers and Intense Pulsed Light (IPL) sources is regulated.
    As a result, permanent hair removal service providers in these states are subject to stronger regulation than those in other states.

    Documents: Request copies of relevant licences, certifications, and compliance records.
    Understanding regulatory requirements will help ensure that the business operates within legal parameters and avoids potential fines or shutdowns.


By addressing these questions and procuring the necessary documents, you will be well-equipped to make an informed decision when buying a hair salon.

This due diligence process will help you understand the business's strengths, weaknesses, opportunities, and potential risks.




Stepping into the hair salon industry is more than just a business venture; it's a journey into a world where creativity meets community impact.


As Vidal Sassoon famously said, "The only place where success comes before work is in the dictionary."


Imagine creating a space where clients leave not just looking better, but feeling more confident and uplifted.


The joy of building relationships, seeing the tangible results of your work, and becoming an integral part of your community's fabric is unparalleled.


The hair salon industry is resilient, even in challenging economic times.


With Australians spending over $5 billion annually on hair and beauty services, the potential for growth is significant.


Whether you're dreaming of a boutique salon that offers bespoke experiences or a bustling franchise with a loyal client base, there's a niche for every entrepreneur.


The ability to adapt to trends, invest in your team, and deliver outstanding service will set your salon apart.


As Audrey Hepburn said, "Investing in beauty is always a good idea."


Ready to cut your way to success?

Find your next hair salon business here