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Sector spotlight: Beauty salons

Want to buy a business that makes you happy? BusinessesForSale.com overviews one of the most positive industries to invest in.

Ever noticed how salon therapists are always smiling?

Beaming and chatty beauty workers are the norm; they make customers feel good about themselves, and in doing so, get instant job satisfaction. But there may be another reason for those constant smiles.... 

Several businesses said to be recession proof: toothpaste, weddings and making people look good!

And when it comes to business in Canada, the beauty industry is thriving like never before. According to a report by Industry Canada in 2015,  there are 15,635 beauty salons across the country including the Yukon Territory, Nova Scotia and the Northwest Territories.

So, for those with an eye for beauty and who don't mind a good conversation or two, setting up a beauty salon may not be such a bad idea.

If you’re thinking about indulging yourself in one of the most positive industries to be in, take a look at our overview of the beauty sector.

Do you think you have what it takes to buy and run a beauty salon?

Treatments

Many beauty salons offer a range of treatments, depending on who their potential target audience is. One of the main procedures carried out is hair removal, which exists in two variations: temporary (through techniques such as waxing, tweezing and threading) and permanent (laser and permanent electrolysis).

Massage is another consistent in the beauty salon – including the famous (or infamous) Swedish massage, Indian Head Shiatsu and Thai.

The practice of hydrotherapy can be rather costly and needs sufficient space and resources   you often need large baths and powerful jets to massage the muscles. The Vichy shower, for example, involves the customer lying on a table with a row of shower jets cascading from above. Sometimes plunge pools are involved - so think carefully about how you want to utilise your space (and if it will be financially beneficial) before you include such treatments in your repertoire.

You will have to cater to a range of different skin types when offering facials. Anti-ageing, hydrating, deep cleansing, antioxidant, microdermabrasion and glycolic peels are just a few of the facial treatments you could offer your customers.

Micropigmentation is essentially a semi-permanent tattoo and is offered in some beauty salons. Mainly, this is used for make-up treatment – for example, a darkening of the lips or brows.

Manicures and pedicures are provided in most salons and come in the form of gels, fake nails and standard painted nails.

Eyebrow and eyelash tinting are another set of treatments offered regularly in salons. This consists of tinting the eyebrows and eyelashes a permanent colour until it grows out.

Licencing, permits and regulations

When starting a salon, checking that you have the right permits and are following regulations is essential. Many treatments offered will require appropriate staff qualifications. It would be unusual to buy a salon with no professional qualifications or prior experience in the industry of your own, but it is possible - you will just have to employ excellent staff and have great management skills!

In Ontario, for example, masseurs have to have been educated through a recognised institution and registered with the College of Massage Therapists of Ontario.

There are also tanning salon guidelines that you need to follow, as well as recognising infection prevention and control.

If you decide to sell or distribute cosmetics and care products, you need to do the following: guarantee the safety and ingredients of the products, submit a Cosmetic Notification Form (CNF) to Health Canada and make sure that the labelling of the products adheres to Health Canada Regulations.

For more information on the regulations for cosmetics and personal care products, click here.

Selling beauty products

Alongside offering beauty treatments, many salons offer beauty products such as face creams, shampoos, skin products and more. Selling an exclusive brand in the salon, for example, Clarins, could mean a cheaper bulk deal and therefore the ability to gain a higher profit.

Making the most of your beauty salon

There are five main success drivers in a beauty salon:

1) Demographics : the type and age of the people in the surrounding area of the salon will heavily influence your income stream. However, if you cater your salon specifically to that target audience, rather than disregard them, then you could increase your business exponentially. 

2) Taxes: Some beauty salons may rent stations to each stylist to gain extra revenue. However, this can mean some unwanted tax extras as the state authority could acknowledge the stylist as an employee rather than a contractor. Revenue Canada should assess for amounts owing under EI and CPP legislation.

3) Quality of staff: The reputation of stylists is often what sells a beauty business, however there is often a large turnover of staff in a salon. If you keep your staff happy and have a low turnover with loyal customers, you have a winning formula.

4) Multiple revenue streams: Essentially, if you provide more treatments to customers, you’re not placing all your faith in one product. A larger variety means more revenue streams – but make sure that you have the correct licences for those you do offer.

5) Competition: Is the salon competing with many others in the area? An establishment will struggle and be worth less in a more crowded market.

If you’re passionate about buying a salon but want to be completely confident that you know what it takes to run one, you could shadow another salon owner for a month or two. If, after that, you’re excited by what you’ve seen and have the drive to succeed… take the leap! 

Interested? Take a look at our beauty salons for sale at BusinessesForSale.com

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Rose Hill

About the author

Rose Hill is an in-house journalist and writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.

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