Hair Salon SWOT Analysis (How To Know Your Business Better)

When you are looking to open a hair salon, or you already have one, you need to consider everything about it. To plan out the risks, creating a SWOT analysis will help. A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a list of the Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis is typically made for marketing and works best when you’re newly opened or have been open for a short time. The best time to write a SWOT analysis is during your marketing strategy or anytime during operation. 

When you want to know your business on a deeper level, no matter how new or old your business is, conducting a SWOT analysis is a good way to start. 

With the SWOT, you will sit down and write out your business’s current strengths, weaknesses, opportunities, and threats. When you write out your strengths and weaknesses, you will be looking at the internal factors at playthings you can change to make your marketing and operations run smoother. When you analyze the opportunities and threats, you are looking at things that are partly (or even fully) out of your control. Think of the threat of a slip and fall accident- the wrong person could trip over their own feet and injure themselves on your floor. That would be out of your control but a potential threat. 

Make sure to be real with yourself. You may even want to keep the list from each time you do it so you can compare and see how much your business has changed.


Your strengths should examine what makes your salon better than the competition. You may pride yourself on having more services or having the best staff. You may have one hairdresser who has been better than most others and they are your star performer. You may have a reputation as having the most relaxing spa or the trendiest salon. Whatever they end up being, strengths are what makes your salon stand out from the crowd and what makes you the best value for your price. 

When looking at a hair salon, look at the client base. Do you have a steady stream of returning customers and referrals? One of the biggest strengths in any service business is the skills of the employees. If you have a lot of five-star reviews, referrals, and repeat customers you can see that the employees are skilled enough to keep people happy and coming back. 

A steady stream of new clients can show that your marketing campaign is working. A strong marketing campaign is especially important with new salons but can be equally important for established salons when you’re wanting to grow your business. 

Having a strong staff is important as well. The hairstylists and any other professionals you hire need to be strong candidates with good people skills. The better their skills (both in hair/skin/nails/make-up and with people) is what will keep customers coming back. 


Hair Salon SWOT Analysis (How To Know Your Business Better)

The next thing you need to look for is what your salon’s weaknesses are. For this one, you need to be brutally honest with yourself and maybe even ask other workers you trust. Some weaknesses could be staff that isn’t pulling their weight. If you have one hairdresser who comes in late, never cleans up, and is almost always crabby, this is a weakness that will influence all parts of your salon. Your customers will not feel welcome, and others will tire of having to pull his/her weight. 

Another weakness could be that you are not offering enough services. You may only offer hair while the salon down the street offers a full menu. You can add other services and pick up more customers. You may also be using a weaker product to save money and customers could go to the salon down the road to get higher quality products. 

All of those are under your control. If an employee isn’t working out, you may fear losing money but firing and hiring/training a new professional may save you money in the long run. You may want to evaluate your products and make sure you’re using the highest quality you can get. This may cost more, but if you can sell more, that will make you more in the long run. 

The important thing with the W is to keep in mind that weaknesses are primarily under your control and they are things you can change to make your salon better. 


We are now heading outside of your immediate control. Look at what is trending when it comes to hair, nails, and skin treatments. Look at how other salons are thriving and look at the opportunities you can adapt. When you determine these, look at what options are available that you are not using currently. You may have internet access and you can offer wi-fi. Look into social media- can you advertise on any social networks you’re overlooking? 

Can you offer home visits for people who can’t leave their homes for whatever reason? Maybe there is a market for Yoga instruction or energy healing (Reiki) and you can hire a Reiki master or Yoga instructor. Look into popular services that you’re not currently offering and see how those could work in your salon. 

Anytime your business is starting to suffer, or you feel stagnant, there will be countless opportunities you may be missing. Look at the changing times and the new technology. There is a constant stream of new skincare services coming out, so adding skincare or a small spa to your salon adds a lot of room for growth. Adding nail art, makeup artistry or lash extensions can also add plenty of new ways to get more customers to your salon. 



Hair Salon SWOT Analysis (How To Know Your Business Better)

This one is one of the more important aspects to look at. You have some threats that could ruin you financially, reputation or they could just simply prevent you from reaching new clients. You need to look at all potential threats. 

Fires– Do you use new and upkeep equipment or do you keep trying to use old and outdated supplies? If you have equipment that could catch fire, that could cause you to lose your salon. Not all fires are preventable but if you have frayed cords or old machines that haven’t been properly cleaned, that could be a fire hazard. Be careful not to overload sockets and also make sure chemicals are stored safely. Those are two major causes of salon fires. 

Slips and falls– This could result in legal action and cause financial loss for your salon. This is something that can’t always be avoided but make sure there are no cords out in the open and there are signs up warning that the floor is wet after mopping are good ways to help some of the obvious ways of slipping. 

Legal action may be taken from customers who feel they were damaged due to the wrong chemicals or even if they feel they didn’t get the results they expected. Make sure your employees are fully qualified- including all certifications, training, and licensing (along with CE) they need and check all qualifications, as well as references and experience and you, will likely have less to worry about. Some people will always look for a way to profit from problems and will go to lengths to fake problems but keeping consistent records and making sure things are documented can help. 

Making sure you have adequate salon insurance can help with a lot of problems, from frivolous lawsuits to fire damage. Some states require salons to be insured and some places require each hairdresser or skin therapist to have insurance as well. Those can help ease financial burdens that may not be foreseen. 

Check out our tips for creating a business plan HERE.

Related Questions

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How is SWOT Analysis different from a GAP analysis?

A SWOT analysis is for marketing to determine where you may be better prepared than other salons, where you fall short, and what your potential for growth lies. A GAP tends to help determine why sales are stagnant or falling and what you can do to help get back on track. 

When Should A GAP Analysis be used?

A GAP analysis shows you where your shortcomings are. Where a SWOT analysis is good to do on a regular or semiregular basis, a GAP should be done when sales are slipping or customers are not coming back to see where your salon needs to improve. 

What is an Internal analysis vs an External analysis?

An internal analysis covers what can be handled with the inside of the salon- staff, products, cleanliness, and services. 

External covers what can’t be easily controlled by the salon owner- competing salons, break-ins, external threats like an old building catching on fire or random trip, and falls from a customer tripping over their own feet. 

They are both important to evaluate but should be handled slightly differently. While internal can be fixed by changing prices, adding signs, adding services, or firing/hiring the right staff; external needs to be looked at from a preventative standpoint. How to handle competition or how to deal with accidents or fires. 


Looking to start your own Salon? Get the documents you need to get organized and funded here.

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.