The Most Successful Types of Salons

Author: John Massers
Just like many industries, the salon business is highly competitive. However, the salon industry is very fragmented meaning the industry has many small competitors and only a small number of large companies. According to research analysts, there are over 70,000 salon businesses in the United States alone and the top 50 largest companies only account for a measly 15% of the overall revenue generated in the industry. It is estimates that professional salons generated $19 billion in 2011 in the US alone.
Many talented, creative, and highly motivated Hair Stylists find great success in starting their own salon. Success is driven by a number of factors including management skill, marketing savvy, technical expertise, and overall motivation. Salon clients heavily favor the "boutique-model" over franchises or large multi-location salon operators, and consumers are willing to pay a high premium for better service. This is why big companies find it difficult to compete against small, highly skilled, salon owners who have developed a superior image and favorable market positioning.
While the overall salon industry has been shrinking by almost 2% per year in the United States in terms of overall revenue, highly successful niches do exist. Highly specialized salons that cater to the affluent and provide specialized services like keratin based hair straightening, hair extensions, and hair accessories such as feathers have faired particularly well through the recent economic downturn. However, the fasted growing segment of the salon industry has been seen in the incredible growth of natural or organic salons, which have demonstrated astoundingly strong revenue growth of over 16% annually over the last five years in the United States.
Driven by the broader demographic trend towards healthier, more natural, and organic lifestyle choices; consumers have been turning to salons that offer natural and organic products as alternatives to chemical treatments. This trend has only been accelerated by the recent controversy over products like Brazilian Blowout, whose manufacturer was ordered by a California court to pay $600,000 for misleading its clients about the dangerous levels of formaldehyde contained in its products. While Brazilian Blowout has taken commendable action to remedy their ingredients and practices, the controversy, compounded by the media attention that accompanied it, raised public awareness and sensitivity over the ingredients found in professional salon products.
Organic salons not only benefit from auspicious growth trends, but also more attractive profits. Just like we have seen in the organic food market with the hugely profitable organic grocers like Whole Foods or Trader Joes, consumers understand that organic products will cost slightly more and they have demonstrated that they think this premium is worth it. This same phenomena has definitely transferred over to the organic salon industry segment as salons charge anywhere from 17% - 20% more for services provided with organic salon products than the same service provided with a chemical based product. Because the product costs of salon services is usually only 10% - 13% of the service fee, this translates directly into salon professionals being paid more for their time and enjoying much higher profits. Also, organis salon products are priced competitively compared to their chemical based alternatives.
If you're considering starting your own salon, or are frustrated with the slow growth or general chellenges of your current salon, you should really consider the organic salon approach. While many other factors, such as location and availability of talented stylists, will have an impact on your salon's ultimate success, being in this faster growth, more profitable, and premium makret segment can only help ensure your salon success.
Article Source: http://www.articlesbase.com/hair-articles/the-most-successful-types-of-salons-5638253.html
About the Author
John Massers has been an Internation Master Hair Colorist for 20 years and owned and sold several successful salons throughout the world. He is an evangilist for Organic Hair Color and provides consultation and advice regarding the rapidly expanding organic salon industry segment. Mr. Massers is also an global expert on Natural Hair Color and restoration.