Hair Salon Market Research to Assess Your Business Idea

Before opening a new beauty business, you need to evaluate your idea using hair salon market research to determine whether your plans are viable. Taking the time to consider each aspect of your potential business idea can help make sure everything runs smoothly once you open. You’ll also need a solid understanding of the market when you prepare your business plan and approach lenders.

Getting Started with Hair Salon Market Research

Your main goal with hair salon market research is to get a general sense of the overall market in your area and how you can fit into that local business ecosystem. You should start with a list of questions and then use the answers you discover to determine whether to pursue your idea as-is or make changes before implementing your salon business plan and opening your salon. Here are some of the specific questions that you should consider:

• Who is your target customer?
• How many similar businesses already exist in your area?
• What products or services do your competitors provide?
• What differentiates you from other salons in your area?
• What are the projected upfront and ongoing costs of running your salon?
• Are there available stylists in the area with the necessary training to work in your salon?
• What equipment and resources are necessary to start your salon?
• What distributors carry the product lines and styling tools you plan to use?
• What is your projected sales forecast and does it match the numbers other local salons achieve?

Identifying Your Customer Base

A big part of your hair salon market research involves identifying your primary customer base. You might want to create client personas to make it easier to focus your marketing efforts. Focus groups can help you learn more about what salon clients in your area want in a new beauty business and what is missing from their existing salons.

One aspect you should pay attention to when researching your future client base is how much the people in your area are willing to pay for the services you offer. There may be a reason that no one in your region offers particular higher-end services or retail products, and you need to know that before committing yourself to a certain hair care product line or styling specialty.

Researching the Competition

In addition to knowing who your customers are, you should also research your competition. A market analysis can show you how many salons are already in your town or city, who they serve, and whether there are any unmet needs or under-served populations in your area. If your area is already saturated with salons, it could be difficult to draw clients away from their favorite stylists.

During your competitor research, you might also consider researching similar businesses that you might be able to work with in the future. A large number of beauty spas or nail salons may indicate a large population of potential customers who want to look their best, so you might be able to work with those businesses to give those clients a comprehensive set of beauty services.

Determining Your Unique Selling Proposition

To stand out in a competitive market, you need a unique selling proposition, also known as a USP. Your USP might be a focus on particular techniques or types of hair, or you might plan to position yourself as the go-to salon for wedding styling or an economical alternative to other local salons. A salon that caters specifically to a niche group of clients may excel where more general beauty businesses struggle, so look at what competitors are failing to do and use that information to fill that local need.

Assessing Your Business Finances

Money matters when you’re starting a new business. Before you can secure financing for your salon, you need to know the upfront costs of your equipment, location lease, employee salaries and retail inventory. You also need to determine where you will get your salon financing, so you may need to talk to banks or other lending agencies before you can make any specific buying decisions.

Researching Salon Locations

The right location can be the deciding factor on whether your salon has a consistent flow of foot traffic or difficulty drawing in new clients. Identifying a promising potential location is an essential part of hair salon market research. You should look at where other salons and associated beauty businesses are located and the neighborhoods where your target clientele lives or works. Vehicle access and parking may be other things to consider when determining whether there are suitable available locations for a new salon in your area.

Testing Your Idea

If you still aren’t sure whether your hair salon idea is workable, or you need to decide between a few different niche options, consider testing your business on a small scale first. Work with an existing beauty business to offer pop-up hair cuts and coloring in their shop for a weekend, or establish a mobile salon service that travels to the client’s home before opening up your own permanent location. Lean into your USP and establish your brand during those test sessions to build buzz and get people excited about your eventual grand opening.

Revising Your Plans

Sometimes market viability research indicates that your original plan isn’t feasible for your area. This may just mean that you need to revise some of your plans to make them better suited for your regional business environment and local client needs. One big benefit of running your own salon is that you can fine tune your operations along the way.

Hair salon market research takes work, but having everything well defined before you open is worth the effort. Once you’ve established the viability of your idea and opened your business, check out Groupon Merchant Services to learn how to reach new customers and manage bookings online.