When you are searching for business opportunities, you want to find something that offers a good profit margin. Your profit margin is calculated by taking your total income and subtracting your expenses. Your business expenses could include:
- Rent you pay for your space
- Equipment and supplies
- Utilities bills
- Labor costs
And anything else you spend money on that’s required to run your business. There are ways to cut down on expenses in any industry; maybe you only need one employee on the clock during the day instead of two, or maybe you can switch from a name-brand supply to a generic one. However, some industries are simply less expensive to run and offer a higher profit margin thanks to the amount people are willing to pay for the service. The beauty industry is filled with low-cost business opportunities where people are happy to pay top-dollar for the service. So what are some of the most profitable areas of the beauty business?
Add-Ons Offer Big Margins
One of the biggest areas of profit inside a hair salon are the beauty sales made at the end of the service. Stylists and encouraged to introduce their clients to new ranges and products that make their hair look amazing when they walk out the door, and for a very good reason. Salons make a lot of money off of the sales of those beauty products. Salons are able to purchase these product lines for low prices and resell them at the suggested retail rate to their clients, who are excited about having a high-quality product that can give them that “fresh from the salon” look every day. If your hair salon isn’t always using this business opportunity to expand your profit margins, it’s time to bring in a few product lines to your salon and start selling. It’s a win/win for salon and clients.
Offering More Services and Products
Offering more services and products can be a great thing for your bottom line. That’s partially because you already have the space; you’ll be paying the same amount of rent whether you are only offering hair salon services or if you are offering hair salon services as well as waxing, tanning, manicures, pedicures and more. So adding on more services will require less of a capital investment, plus you’ll be attracting new clients to your salon and be able to sell them more personal care products.
How a Beauty Mall Can Increase Profits
This is where the concept of the beauty mall can help, too. When you have a lot of beauty businesses in one space, they will only have to pay rent on their small portion of it. Each business can cut down on marketing and advertising expenses by joining together with other beauty mall businesses on joint campaigns and increase word-of-mouth recommendations to other businesses in the beauty mall.
Want to learn more about beauty mall business opportunities? You could help you own beauty salon increase profits while helping others succeed, too. Learn more about our franchise opportunities today