If you ask us, the hair business is the best business in the world—that’s why we do what we do! But just like any business, the hair business is a business. If you want to be successful in the hair industry, it helps to be informed.
Whether you’re considering opening a salon of your own or you’re simply curious about the industry, below we have gathered some of the most shocking statistics about the salon business, broken out into a number of categories: Statistics about finances, customer behavior, and opening a salon.
1. Operating expenses (mainly in the form of rent and labor) can account for as much as 80% of a salon’s revenue. (Source)
While a salon’s exact expense-to-revenue ratio will depend on a number of factors, including the salon’s location, the size of the salon, and the average “order” size paid by customer, it is important to note that many salon’s operate on fairly slim margins. Excelling in the industry often requires finding new ways of bringing in revenue while keeping expenses low—such as mastering your salon’s retail strategy.
2. Salons currently account for 95 percent of the U.S. hair market, while barbershops (with services tailored more towards men) account for only 5 percent of the market. (Source)
Yes, there are men who frequent salons for their hair services. That being said, it is no secret that salons still tend to tailor their offerings towards women. With such a small portion of the male market being served by businesses specifically tailored to their style and need, and an increased demand for these services, there are increased opportunities for stylists and barbers who can fill that need.
3. While hair styling products often make up only about 5% to 25% of salon sales, they’re much more profitable than hair care services. (Source)
For most salons, treatments and services like balayage, foilyage, etc. account for the vast majority of sales. These services are the bread and butter that keep the lights on and the doors open—but they are not often where the real money is made. Though retail sales typically only account for between 5 and 25 percent of all salon sales, they tend to come with a much higher profit margin: As high as 50 percent, on average. Clearly, it pays for a salon to improve their salon retail strategy and perfect their offerings to their target market.
4. 15.53 million Americans used professional hair coloring 4 times or more within 6 months in 2019. (Source)
According to one recent survey of individuals who use professional hair coloring services, more than 15.5 million Americans visited a professional for coloring services at least four times in the past six months. The largest number of respondents (over 20 million) said they get their hair colored professionally 2-3 times every 6 months. In either case, returning customers and clients are an important source of revenue for most salons—a fact that points to the importance of building strong relationships with your customers.
5. In the first half of 2016, men’s hair lightening sales grew by 110%. (Source)
This number echoes the lessons learned in number two above, but may still come as a surprise for many stylists who focus largely on women’s services. Clearly, there is a trend of men’s hair services increasing in importance and prevalence as more options become available.
6. In that same period of time, balayage services grew by 71 percent. (Source)
This number won’t come as a surprise to most stylists or salon owners, who surely understand the importance that these services have played in the industry. But it’s still important to bear in mind just how popular the services are!
7. Consumers between the ages of 25 and 34 only represent an estimated 16.5 percent of the hair and salon market. (Source)
Many stylists tend to target a younger market. While that’s fine, it is important to keep in mind that other demographics also stand to contribute substantially to your bottom line. Case in point: More than 75 percent of all revenue in the industry comes from those older than 34.
Opening a Salon
8. The U.S. hair care services industry includes more than 80,000 establishments with a combined annual revenue of about $20 billion. (Source)
This number is split between roughly 77,000 salons and 4,5000 barber shops. Either way you slice it, though, it’s a large number that illustrates just how competitive an industry the hair business can be. This is by no means a reason to not open a salon. It does, though, drive home the importance of finding a way to differentiate yourself from the competition.
9. A typical salon occupies about 1,000 to 1,500 square feet. (Source)
This statistic can help an aspiring salon owner evaluate a space as they consider various locations for their businesses. It is important that the space be large enough to cater to the correct volume of customers and the various services you might offer, while not being so large as to drive up your overhead costs to much.
10. Between 2010 and 2020, it is expected that the number of open salon positions will increase by 16 percent. (Source)
Thanks to increased demand and record low levels of unemployment, salon owners may find it harder to fill open positions in their salons. Employees, emboldened by the prospect of higher wages, may be more inclined to transfer to a competing salon, potentially bringing their regular clients with them. This is why it is so important for salon owners to work hard to build a culture of mutual respect with their employees.
Want to learn more about opening a successful salon? Consider purchasing our Salon Business Bundle, or sign up for our Salon Consulting Program, with Society Manager Ashley and SALT's Marketing Manager Sarah. These calls are customized specifically to your business situation! Learn all about creating a healthy and vibrant salon culture, performing a pre-screening consultation video, cancellation policies, and more!