The barbershop and hair salon franchise industry provides hairdressing and related services. Hairdressing services include hair washing, trimming and cutting, setting, dyeing, tinting, blow drying, straightening and similar activities.
Per a 2022 Statista report, “hairdressers are growing in number in the United Kingdom, and so is the amount consumers spend at hairdressers and personal grooming establishments. The Office for National Statistics recorded that in the fourth quarter of 2021, consumer spending amounted to around 1.99 billion British pounds.”
Financial reporting for the industry is commonly combined with other beauty services. As a result, it can be difficult to obtain the outlook for just hair care services. However, the market size of the hairdressing & beauty treatment industry, according to market researcher IBISWorld, is expected to increase 54% in 2022 following an unprecedented dip during the lockdown phase of the pandemic.
Advantages of a Barbershop or Hair Salon Franchise over Independent Operation
People buy into franchises for many different reasons. Suppose you are enthusiastic about owning your own business, but can’t quite come up with a business idea of your own.
Or, maybe, you know exactly what you want to do, but the idea of doing all of the legwork in setting of a business – such as brand development, writing a business plan, learning the rules and regulations of the industry, finding how to supplement your existing skills in the area, figuring out marketing, etc. – makes your head spin.
For either case, franchising may be the best method for making your dreams come true.
When you invest in a franchise, you take on the methods of a business that (1) understands its established target market, and (2) has proven itself profitable and sustainable. These are two of the primary reasons many people find the prospect of a driving franchise very attractive.
Independent companies that go into business without the support of an established partner often struggle to penetrate the market. They often misunderstand what their customers want and how to fulfill that desire. It can take a long time, along with trial and error, for an independent company to get their service offering right.
On the other hand, franchises tend to enjoy more immediate success because the parent company has done their market research. The franchisor has spent time developing their services and products to meet the standards expected by their customers.
When you invest in a franchise, you inherit not only the immediately recognizable branding of the parent company but the tried-and-tested business model focused on a client base who already know and trust their service model. In addition, the franchisor, typically, already has an existing supply chain and vendors that already know what the business needs. You also take on the parent company’s hard-earned reputation—and reputations are hard to build in the marketplace.
It should also be noted that some prospective franchisees are worried about not having the skills needed. Not a problem.
In franchising, your franchise parent company typically provides a training package for you and your employees to ensure that you can maintain their hard-earned reputation. In addition to training, many franchise partners offer a range of business support functions, including HR assistance and help in your business and employment regulation compliance.
Furthermore, franchisors tend to set their franchises up in territories they have faith the business will succeed in. After all, their ultimate success is dependent on the success of their franchisees.
What You Should Seek When Choosing a Barbershop or Hair Salon Franchise
When deciding which franchise to invest in, you should compare how much and what types of support the franchisors offer on an initial and ongoing basis. The most common services offered by the franchisor include but are not limited to the following:
- A well-known brand name
- Use of operating manual
- Training
- Assistance in choosing and developing the franchise location
- Grant of a territory with a level of competitive protection
- Advertising and marketing strategy guidance
- Advice and business support from headquarters
With a recognisable brand name and logo, high-quality signage, and other support materials provided by the franchisor, you will be able to focus your efforts on the everyday aspects of running the business. This includes staffing and managing the company and ordering supplies, and selling and passing on the service.
It’s important to remember that even with the guidance and support, franchises are still independently-owned businesses. Therefore, whether your franchise is a success or failure is based entirely on you and your ability to run the company.
Money Matters: Franchising vs Independent Businesses
For the smallest salons, start-up costs can be anywhere between £5,000 to £7,000 when moving into a space that’s already mostly fitted out. But the majority of salon owners will spend considerably more than that though, usually between £45,000 to £60,000 in order to create a more sizable and sophisticated business that will draw in customers. But that still trails the investment level in some more popular industries like foodservice.
If you do need help coming up with your start-up funds, though, becoming a franchise owner can potentially serve you well. Investing in a franchise is often considered a safer option than creating an independent business from the ground up. This is certainly the case for those needing some financial help from lending institutions. Traditionally, franchises have been more likely to appeal to banks and moneylenders and draw the necessary capital to start the business since franchises have a more demonstrated history of feasibility and market sustainability.
Independent companies often find it a challenge to obtain loans with sensible borrowing rates since they have no evidence that their business will reach potential. This lack of faith from lenders has the potential to jeopardise their company from the start.
Having enough money before you start is important. The first couple of years of any business can bring challenges, placing most independent businesses at imminent financial risk. Without the ability to generate enough revenue to cover initial and operating expenses, independent business owners will likely find the venture unviable. In fact, more than half of all independent start-up companies go out of business within the first two years in the UK.