Why Some Hair Salons Fail (And What You Can Learn from It)

When someone is starting a new hair salon business, it is often an exciting time in their life. They are finally leaning into a dream they may have been holding onto for quite a while. They likely had to overcome multiple obstacles to get to this place. The last thing these new hair salon owners want to consider is the fact that their hair salon might fail.

Some hair salons fail because they do not plan out their business ahead of time, they are not profitable, and they do not constantly innovate and adjust to the current needs of their community. We can learn from this that successful hair salons must plan, establish profitability, and continually prioritize the needs of their community.

While it is unfortunate that some hair salons had to fail for others to learn these lessons, it is a privilege to be able to grow beyond their mistakes into a successful business. Do not let their failures be for anything. After reading our explanation, you will be able to avoid their mishaps and instead develop your own successful business. 

Plan Ahead to Avoid Failure

Planning is one of the best things you can do to ensure the success of your hair salon business.

Just because you have a passion for hair and a desire to start a hair salon does not mean it is going to be an easy road ahead.

There are many bumps in the road with any business, but many of them can be avoided if you plan far ahead of where you need to be.

Why Some Hair Salon Owners Fail for Not Planning:

• • They act on emotion or intuition rather than statistics and forethought. 
  • They follow their interests rather than the needs of their community.
  • They cannot get approved for funding.

Let’s break down each of these potential failures.

Emotion vs. Statistics 

First, some hair salons fail because their owners allow their emotions to guide them in day-to-day operations rather than basing their decisions on statistics and forethought.

For example, a hair salon owner who does not plan may find themselves making gut decisions such as not hiring staff because they want to do everything themselves. Unfortunately, they could do this only to find themselves overrun when more customers than they can handle register for their services.

Instead, a hair salon owner who planned would know that they need multiple staff members to handle the amount of interest the community has in their business. 

Similarly, when an owner doesn’t plan, they may buy supplies out of impulse or decorate with the flashiest décor without knowing if they have enough to afford their purchase. 

A prepared owner will know how much money can be spent and on what.

What You Can Learn from It:

This is why we encourage many new business owners to write up a thorough business plan. A business plan is a document that outlines as much information as possible for your new endeavor. 

It should include everything from where your business will be located to how you plan to make money.

A clear business plan will guide you in your decision-making so that you always keep the big picture of your business in mind.

Personal Interests vs. Community Needs

Another reason why some hair salons fail is they prioritize their interests over what their community cares about. 

Often business leaders are so excited to dive into their new endeavor that they forget that their business is not actually about them at all. Your business must be about your customers to keep them coming back again and again.

What You Can Learn from It:

To combat your desire to serve yourself, conduct exhaustive market research before you make any major decisions. Market research is when you interview the community your new business will be located in.

Ask your community all about their thoughts and feelings surrounding a new hair salon coming to town:

• • What are they most interested in in a hair salon?
  • Do they already regularly go to a hair salon?
  • What do they love about their current hair salon?
  • What would make them consider changing salons?

Asking these questions outright gives you a deep look inside your future customer’s priorities. 

This is important because their priorities might not be the same as your priorities, but theirs must come first. Just because you’ve always wanted to make a health-focused hair salon, does not mean anyone in your town would attend it

Understand your community’s wishes before moving forward.

Lack of Funding

Finally, a hair salon that does not plan may find themselves without the funds needed to get their business off of the ground.

This is something a business plan would help. A lack of a business plan makes you riskier for investors or lenders to offer money to. Some hair salon owners would not be able to move forward in their endeavor without these loans.

What You Can Learn from It:

Create the best business plan possible and apply for whatever money you need proudly knowing you are truly giving your best effort. 

Check out our guide for creating a business plan HERE.

Prioritize Profitability to Avoid Failure

Just because you plan in your hair salon does not mean that it will be smooth sailing for you once you finally open your doors.

Unfortunately, some hair salons fail because they do not prioritize being profitable sooner.

The timeline for when you need to be profitable will vary depending on your personal and professional financial situation. Some owners will need to be profitable immediately, others will be able to ride along for a year or more without making any profit from their business.

If you are not intimately aware of how long you can continue your work without being profitable, you risk failure in your hair salon business. This must be something that you check in on regularly.

What You Can Learn from It:

To learn from this failure, you can prioritize checking in with your financial situation as often as needed. 

Some hair salons may analyze where they are in their profitability daily. For others, a daily check-in is a bit excessive. Weekly or monthly may be more manageable for you.

Whatever you decide, make sure you give your financial check-in the time that it needs. It may also be worth hiring an accountant to sit down with you regularly to help you understand how on track you are with your journey to profitability.

Do not neglect to look at your profitability until the end of the year. Most people cannot handle negative surprises at that point. If you want to avoid failure, you need to prioritize this year-round.

Innovate and Adjust to Avoid Failure

Finally, to find continued success in your business, you must continue to innovate and adapt to the needs of your community.

Some hair salon owners get started on the right track. They plan ahead and even stay in touch with their financials regularly. 

However, they do not pay any attention to the way their community’s needs may change as they move forward in their business. 

For example, consider movie rental companies. At one point, everyone was renting movies at an actual physical store. However, over time, people began streaming their movies online. 

This did not happen all at once, which means companies that sold movies in stores had lots of time to either adjust along with the demand or die out and embrace failure.

While your community’s needs will likely not change this drastically, this is a prime example of why you must constantly keep close tabs on their wishes and desires as you move forward in business.

What You Can Learn from It:

Your customers must be more than just customers to you.

They are your guides. 

They possess all of the inside knowledge to help your business thrive. You just need to be willing to listen to their needs.

Pay attention to their pain points and consider how you might be able to play a part in fixing them. Ask your community questions, never become complacent with the way things are, and remember that there is always room for improvement.

Related Questions

How will I know what my community needs at any given time?

One practical way to understand what your community needs is to keep a few customers particularly close. Try to make sure these select customers make up the general demographic of your clientele. In a way, they will be able to speak for the masses with their thoughts, hopes, and dreams.

You could also host a contest where your customers can win a prize for submitting feedback or ideas to your business. Develop a form for them to fill out and promise that one or two winners will receive a free or heavily discounted service from your hair salon.

How soon should I be profitable?

As mentioned, only you know exactly how long you can survive without being profitable. You will want to be profitable way before that point, but it is important to know exactly how long you can last.

Profitability is when your income exceeds your expenses. This could be calculated on a monthly or annual basis.

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.