James Iodice - Commercial Real Estate Michigan

Salon Ownership - What are the costs?

Starting or buying a Solon, how does pricing compare?

There are a lot of questions and considerations when starting any business, but there are some specifics that need to be considered when owning or starting a Salon Business.

Following are some considerations to think about when planning your own business.

What is your plan? Are you looking to open a Salon or a hair cut shop. Either can be a lucrative business choice, but each will require a different look, set of equipment, and client base.

What does it cost to launch a New Business and a New Location?

Let's take a look at a business with approximately 1,500 square feet, 3-5 cutting stations, 1-2 wash stations, and support services.

The Metro Detroit area is providing some good deals for retail space in this market. Landlords are making aggressive deals and they will require a little more from start up companies with no tenancy record than from those that have leased space before.

Retail spaces are leased on an "as is" basis. That means that the tenant is required to build out the space to their needs. The Landlord only provides the "four outer walls". All the interior finishes need to be completed. These costs generally average about $27 dollars per square foot to complete. That would calculate to total for build out costs of $40,500.00.

Furnishing your space is next. This is where it is important to have your plan and know to understand your market. Successful hair cut shops utilize more Spartan chairs and stations. These would run from about $5,500 - $9,500.00. Cutting and wash stations suitable for a Salon business will run from $9,500 and up.

Stock and Sale Products. The average salon carries supplies of $7,000 to $8,000 in stock. This is both for use on the client and that is are sold through the store. These costs can vary if you brand your salon.

Do not forget the business basics. You will need all the necessary office supply products, forms, machines. Business signage on your building can run $3,000 - $10,000, depending on size and style. Many Salons also have a washer and dryer.

Marketing, marketing, marketing!! You will need to get the word out about your new business. There is of course a whole industry devoted to marketing, and the sky is the limit on how much you spend to get your name out.

• Total Costs for a Typical Salon
• Build Out Costs $40,500.00
• Equipment $12,500.00 (4 cutting, 2 wash, manicure, reception. No pedicure, no additional shelving,)
• Stock $ 7,500.00
• Office Equip. $ 5,000.00 (computers, register, phone system and Fax)
• Office Supply $ 1,500.00 (yearly)
• Signage $ 5,000.00
• Total $72,000.00

The purchase of an existing salon will require the capital to purchase the assets, take over the lease, and manage the personnel. Many existing salons, provide an immediate client base. An established name, or a business that has already branded itself in the community will shorten start up times, and dramatically reduce start up marketing costs.

I hope this information answers some of the questions on starting a salon business. Here is an excellent example of a high profile opportunity in Troy, Michigan.

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