How Profitable is a Hair Salon (2024 Stats)?

In a rapidly evolving beauty industry, the age-old question remains: just how profitable is a hair salon? With fresh data for 2024, this post dives deep into the financial intricacies of the U.S. hair salon market, which boasts a revenue of $49.7 billion and is expected to grow to $53.3 billion by 2028.

Our insights are grounded in a comprehensive study involving more than 10,800 franchised salons, offering an accurate picture of the salon landscape.

From there, we’ll delve into the startup costs, which range from $229,000 to $430,000, itemizing expenditures like marketing, training, and professional fees. Finally, we’ll dissect the average salon’s revenues, expenditures, and profit margins, shedding light on what it truly takes to make a salon venture successful in today’s fiercely competitive market.

Hair Salon Market Overview

As per IBIS, the hair salon market in the U.S. represented revenue of $49.7 billion in 2023 and is expected to grow to $53.3 billion by 2028.

Haircutting and styling service represents the largest share ($29.5 billion), followed by hair coloring services ($10.7 billion), resale of merchandise and cosmetic products ($5.2 billion), other services ($2.5 billion), and other services ($1.7 billion). Yet, with over 953,000 hair salons across the country, the competition is also fierce.

How much revenue does a hair salon make?

Using the same source earlier, it’s safe to assume that the average turnover for a hair salon is around $52,000. Indeed, the U.S. hair salon industry is worth $49.7 billion in 2023 and there are about 953,000 hair salons across the U.S.

Now, using data from more than 10,800 franchised hair salons, a hair salon earns $317,000 in gross revenue per year on average. This number is the average gross revenue per salon from 10,800 salons of the largest 14 hair salon franchises in the U.S.

With an average cost of $55 per visit, that’s a total of ~5,700 visits per year. Assuming 250 working days per year, that’s on average 23 visits per day per salon. Naturally, you can assume that this would require about 2-3 cosmetologists, each tending to an average of 8-12 customers per day.

Yet, not all hair salons have the same yearly revenue. Logically, some will earn more than others because of many factors like location, clientele, quality of services offered, and the overall marketing strategies implemented.

How much does it cost to start a hair salon?

On average, it costs between $229,000 to $430,000 to open your own hair salon.

This includes various costs such as marketing, training, professional fees, insurance, licenses, leasehold improvements, rent, fixtures, salon technology, inventory, working capital for the first few months, etc.

Marketing (11%): Funds designated for promotional activities to attract and retain clients, enhancing the salon’s visibility and reputation.
Training expense (1%): Allocated for ongoing education and skill development of salon staff, ensuring they stay updated with industry trends and techniques.
Professional fee, insurance, business license, and permits (3%): Covers essential legal and operational aspects, including architect fees, construction management fees, insurance coverage, and necessary business licenses and permits.
Leasehold improvements (43%): The majority is invested in enhancing the physical space, ensuring a comfortable and aesthetically pleasing environment for clients and staff.
Rent and security deposits (2%): Reserved for the first 3-6 months of rent of the salon space and security deposits.
Salon technology hardware, fixtures, and signage (22%): Funds for technological investments, fixtures, and signage, contributing to the overall functionality and visual appeal of the salon.
Opening inventory and supplies (2%): Budgeted for initial stock and necessary supplies when launching or restocking the salon.
Working capital (15%): To cover day-to-day operational expenses, like salaries, supplies, and other admin expenses for the first 3-6 months.