A popular choice as a start-up, beauty salons and spas are big business. UK adults spend around £5bn a year on health and beauty products, and much of this cash goes to salons. According to a 2008 report from beautyserve.com, there were over 13,000 salons in the UK, employing more than 30,000 people.
Industry analysts claim that beauty salons have performed well during the recession; a 2009 report from market research leaders Mintel found that only one in 10 women had stopped going to the salon to save money during the downturn. Furthermore a number of recent trends, notably the increasing number of men seeking specialist health and beauty treatment, have provided real benefit to salons up and down the country.
What is it?
According to a study commissioned by the International Spa Association, the number one reason clients give for visiting a spa is relaxation and stress relief. So it’s important to realise that beauty salons and spas are about more than good grooming, massages and waxes. For some, they are a kind of modern-day sanctuary.
As well as providing top-notch beauty treatments, you have to put effort into making your salon a place people want to go to unwind, and be prepared to offer great customer service to make everyone feel welcome.
With top beauty schools and a large talent pool from which to choose staff – as well as steady consumer demand – the UK is a great place to set up a beauty salon or spa. British beauty therapy standards are recognised as being among the best in the world, too. If you’re prepared to put the work in, your spa or salon could really make a name for itself.
Who is it suited to?
Usually, salon owners have a wealth of experience in the beauty industry and are fully-qualified beauty therapists in their own right.
Kim Ford, chairman of the British Association of Beauty Therapy and Cosmetology (BABTAC), an independent industry body, comments: “Generally, the people opening salons are beauty therapists. It’s essential that the person is qualified in this area if they’re going to be delivering treatments themselves.”
Many salon owners will also have management training to enable them to effectively manage the business and their team of staff. But whether they have management experience or not, beauty therapy know-how really is key.
Lorraine Fletcher of Atelier Salon & Spa, Redbourn, says she doesn’t know how someone could run a spa or salon without it: “Anyone can set up in beauty therapy,” she says. “I just don’t know how well you would survive if you’re not experienced enough in the industry to know what you’re doing.”
However, if your background is not in beauty, you don’t necessarily have to rule it out. It is possible to employ a beauty therapist as a day-to-day manager to make up for any shortfalls in specialist knowledge. Kalpana Gurung of the Himalayan Day Spa, Chiswick has done just that.
“My business partner, who is my aunt, is a beauty therapist; I’m from a management background,” Kalpana explains. “We teamed up and we decided to set up a spa together. I don’t think you need to be from a spa background or beauty therapy background, but it helped a lot that she had experience.”
If you do not have a beauty background, you need to ensure the staff you take on are sufficiently qualified, as Kim explains. “If you’re going to open a salon and employ someone, it’s essential the therapist you employ is qualified to at least level three in beauty therapy or holistic treatment.”
Beauty therapy expert or not, the owner of a start-up salon must have unflagging people skills and stamina. Beauty is a service industry. You need to be prepared to put in long hours and settle with very little return for the first year or two.
Depending on how busy the salon is, where your business is situated and how many staff you need to pay, it may take a while before you recoup what is likely to be a hefty initial investment. In other words, you really need to love what you do.
* Image courtesy of Thomas Tribe on Flickr
How much does it cost?
As already indicated, to start up in the beauty industry you need to be prepared to sink a substantial sum into your venture from the get-go. You will need immaculate premises, high-quality treatments, and well-trained specialist staff. None of this comes cheap.
“You need to put a lot of investment into this kind of business,” Kalpana insists. “It depends on how big your spa is and how you would like to be seen, but really, the clients’ experience is the main priority. All of the staff are expensive.”
Whatever type of salon or spa you’re setting up, the general rule of thumb appears to be: expect your beauty salon or spa to cost a lot more to set up than you budget for.
Kalpana’s initial investment was around £150,000 – a figure she was not anticipating. “I wasn’t prepared for the cost,” she admits, “but I was focused and I followed my dream. To set up a business, you should always expect it to be times two or times three of your estimate. Mine is four or five times.”
Lorraine Fletcher of Atelier Salon & Spa – who had to renovate her Grade II listed premises before opening her business - agrees: “As with anything, you don’t really know how much money goes into the building work. We started off with a budget of £110,000 and it ended up being £200,000.”
But even if you don’t have to strip out and revamp your business premises, equipment and fit-out still adds up: “Getting in your furniture, but taking away the bills… I would say you’d need between £60-80,000 to set up,” Lorraine estimates. “That includes all your equipment and fit out.”
Fit out really depends on the kind of treatments you’re going to be offering. If it’s just basic treatments, then it’s going to be cheaper to set up: the equipment needed for manicures and pedicures is just a few hundred pounds, whereas laser machines could cost thousands.
The cost of your products and the supplier you use will also depend on what kind of salon you’re going to be, and the constraints of your budget. But you should do everything in your power to search for the best price.
Kalpana had trouble in this regard, because she was new to both the beauty industry and the British business scene. Her network was very limited, so she struggled to find value; she says she had to spend three times her budget on fit-out and equipment because she didn’t have the right contacts.
Kim Ford, of BABTAC, says that trade magazines and tradeshows are really good places to source new suppliers for products and equipment, and advises new start-ups to seek membership of an organisation so they can keep abreast of new products and new trends in the industry.
She also believes trade shows are the best places to negotiate on price: “You have the opportunity to meet the sales rep, and it’s very competitive. These are huge exhibition halls, with lots of people offering the same product and the same equipment. "Rather than go with one company and try to beat them down on price, make them compete amongst themselves.”
However, when picking your suppliers and furnishing your premises, keeping costs down should not be your only concern. Second-hand equipment bought from eBay and liquidation sales, and reduced price lots from suppliers, may look cheap at first - but sometimes it’s better to invest in the best. Buying second hand can be a false economy.
Unless you are phenomenally successful, you should not expect to make any profit for the first year – or even for the first two or three years. In the beauty business, overheads are quite high, and you can’t afford to scrimp if you want to make a good impression and build up a loyal client base.
Lorraine Fletcher says she wouldn't imagine any business could make any profit for the first two or three years, "unless you’re an internet company and your overheads are very low. "I would hope to start reaping the benefits in maybe four years. Before that, I think you have to put everything you earn back into the business.”
Once you are well-established though, your beauty salon or spa is likely to make a very healthy profit.
“The margin is around 65%,” Kalpana of Himalayan Day Spa estimates. “I can earn profit straight away provided I have a certain number of clients coming every month. I’m hoping to sell £300 a day. With that, I should be able to wash my face.”
Lorraine says Atelier Salon & Spa averages 700-800 clients a month, with perhaps 150 new clients within the same timeframe. The trick is retaining new custom.
A small salon tends to retain a higher percentage of clients than a large one, so if you keep a focus on personal customer care, you’ll be doing well. The average number of clients visiting a small salon per week is 125.
Ideally, your salon/spa will be fully-booked from morning till night, seven days a week, but this is unlikely to happen straight off. Generally, salons and spas are quiet at the beginning of the week and booked solid coming up to the weekend.
The location of your salon is of great importance, but even if you’ve found the perfect spot, there are other considerations.
Kalpana Gurung, of the Himalayan Day Spa, spent three months researching different premises for her business before she found the right location. She thought of everything: analysing the demographic of the area, carrying out market research and spending days in the British Library going through the portfolios of adjacent businesses.
However, she didn’t realise just how trying the concomitant hassles of planning permission and licensing would be.
“I was lucky to find the right place,” Kalpana says, “but the other bits took longer. Like finding the right architect: just to get the right drawings it took five months. Then by the time I got my planning permission and business regulation, and did the refurb, it took another three months!”
Even after all that, her troubles were not over: “You have to apply for a license with the Local Council – and they only give licenses if you have qualified staff. It’s a big deal.”
It is likely you will need to register your beauty/spa business with your local authority. Many people setting up their first salon or spa are completely unaware of the many issues relating to licensing and buildings, and do not expect to have to deal with planning authorities.
“I would recommend anyone starting up to go to their local authority as soon as they’ve chosen a property,” Clair Bennett advises, “to make sure that property can be used as a beauty salon. Because people assume it’s the same as a hair salon and it isn’t. It’s a different licence.”
Treatments that may need a licence include aromatherapy, massage, beauty treatments, chiropody, pedicure, reflexology, sauna, sun beds, and manicure.
To offer treatments involving intense pulsed light systems or lasers in
Health and safety is a big issue with beauty spas and salons, too. It’s a good idea to make a list of all hazardous products used in the salon and obtain hazard data sheets from the manufacturers. As some of the products used in spas and beauty salons can contain harmful substances that can cause skin and respiratory problems, it’s essential to assess the safety of your products. The Control of Substances Hazardous to Health (COSHH) Essentials has been developed to help salons and spas comply with safety laws.
If you have a shower or an automatic spray tan booth on your premises, you will also need to consider the risk of exposure to legionella bacteria from water systems.
On a less dramatic note, if you are planning to play sound recordings – whether it’s relaxing birdsong, panpipes or the Top 40, it’s worth bearing in mind that to play sound recordings in public, you need a licence from Phonographic Performance Limited (PPL).
And check out parking allowances for your premises. As Kim Ford, of beauty industry body BABTAC, notes: “Bearing in mind the client has to leave the salon with no makeup, or maybe have some reddening of the skin after a wax treatment and so on, I really think parking is essential alongside the location, for trade.”
Treatments and charges
Historically, massage has been the most popular treatment provided by salons and spas, but the landscape is changing all the time. Indeed the 2009 survey from beautyserve.com found that pedicures were the most popular form of beauty treatment for Britain's salon-goers.
Preferences vary hugely from client to client. Kim Ford, of BABTAC, says that while a no-frills ‘maintenance client’ just comes in for nothing more than a leg-wax and an eyebrow shape, there are many cross-selling opportunities.
“The nail industry is huge, for instance,” Kim points out. “You have to decide whether you’re going to offer more varied treatments, as they require some expertise.”
It’s also worth considering new treatments as soon as they come out, because they can give your salon or spa the edge.
“The national press and the women’s editorial magazines tend to drive the interest in new products,” Kim explains. “Take the tanning pill that came out over the past year; we actually heard about it from our clients. Therapists should get involved in new therapies very quickly so they don’t miss out, but they should make sure they’re approved by an association, such as BABTEC.”
When you’re starting up, you should decide whether you’re going to branch into retail as well, and consider investing in retail stock for your reception.
Kalpana Gurung supplied us with some sample prices from her business, the Himalayan Day Spa in Chiswick:
Express manicure £17 French manicure £35 Hot oil hand and nail treatment £40 Express pedicure £17 French pedicure £40 Pedicure plus reflexology £65 Brazilian wax £30 Half leg £20 Eyelash tinting £15 Eyebrow threading £15 Full face and body tan £30 Aromatherapy facial £50 Deep cleanse facial £65 Ear candling £25 Body mud wrap £65 Hot stone therapy £75 Swedish massage £70
Express manicure £17
French manicure £35
Hot oil hand and nail treatment £40
Express pedicure £17
French pedicure £40
Pedicure plus reflexology £65
Brazilian wax £30
Half leg £20
Eyelash tinting £15
Eyebrow threading £15
Full face and body tan £30
Aromatherapy facial £50
Deep cleanse facial £65
Ear candling £25
Body mud wrap £65
Hot stone therapy £75
Swedish massage £70
These prices may serve as a useful guide for your own business - but bear in mind that the Himalayan Day Spa is in the heart of London, and regional salons and spas may not be able to charge as much.
It's also important to think about how people perceive the beauty industry. The 2009 industry report from Mintel found that spas were more likely to be criticised for exaggerated prices than salons, so, if you're planning on opening a spa, it's particularly important to monitor the amount you charge.
Your beauty salon or spa is only as good as your staff, so it’s important you find competent therapists to man your business.
At the very least, all of your therapists will need a qualification from a recognised government body. Just to secure insurance for your organisation, your staff will need either a level 2 or 3 NVQ or exam equivalent. Standards are developed and set by Habia.
Whether you decide to take on experienced staff is up to you: there are pros and cons. If you are a very experienced therapist, it might be a good idea to bring in therapists with fewer qualifications and pass on your own knowledge. However, if you are less experienced or qualified in therapy yourself, you may want to take on someone with skills to offer.
Kim Ford, of industry body BABTAC, has had success in taking on very well qualified staff, but also advocates taking on therapists straight out of training school.
“The pro with someone unqualified is that you can then train them in treatments, how you’d like them done,” Kim explains. “You’d almost have a sort of corporate team of therapists to train in-house towards a recognised qualification in post-graduate training. But the benefits of bringing someone qualified in is they have skills that you may not have.”
Available qualifications are dizzying. They include: NVQs; City &Guilds; SVQs; Vocational Training and Charitable Trust (VTCT) certificates; BTEC HNDs; Confederation of International Beauty Therapy and Cosmetology (CIBTAC); Comite International d’Estethique et de Cosmetologie (CIDESCO); ITEC and Edexcel qualifications.
It’s important to note that training offered by a product company will not result in a recognised qualification.
Kalpana Gurung of the Himalayan Day Spa says the minimum she requires is NVQ2 and 3, but her staff generally have additional certificates for things like holistic massages.
She believes it’s always better to check your staff’s qualifications with the education department. “Some have BTEC, some have ITEC qualifications,” she explains, “or even overseas qualifications. You really need to verify your staff are qualified.”
Therapists usually work a five-day week of 37-40 hours, but some salons operate on six and seven days. Salaries for beauty therapists start at around £10-15,000 a year, while experienced therapists can earn between £15-20,000. Salon managers can earn over £20,000 a year. (Apply ‘
Commission is typically 10% of a therapist’s takings.
Consider speaking with a consultant
“If you don’t really have a lot of experience, my advice to anyone starting out and going into a business is to find a consultant to work with. There are lots of pitfalls, so you’ve got to get it right.,” Lorraine Fletcher of Atelier Salon and Spa advises. “If you go through the Hairdressers’ Journal, there are lots to choose from. You should find a consultant who’s qualified in setting up in this industry because they’ll have the contacts, they’ll know where to go and they’ll know the best deals you can get.”
Don’t allow yourself to be bullied by advertising agencies:
“The best form of advertising I ever did was business breakfast networking – which every local authority has,” Kim Ford, of BABTAC, says. “Most local press will negotiate an advert plus editorial too, if you invite a journalist from the paper down. But be aware: in this business, advertising agencies are very aggressive. In my first year of business I wasted £11,000 on advertising. I was bullied into it. You don’t realise you’re being bullied, but they’re very aggressive sales people.”
Don’t be afraid to delegate administrative and book-keeping work:
“If you can employ the services of someone you trust to look after the books for you and to be quite clear about your job role, then that would be very good from the start,” Kim advises. “I learned in the early stages of my business that I’m a great therapist, but I didn’t really understand the accountancy side. And the best thing I did was take on an expert in all of that to guide me.”
Hairdressing and Beauty Industry Authority (Habia)
British Association of Beauty Therapy and Cosmetology (BABTAC)
The Guild of Professional Beauty Therapists (GPBT)
Qualifications and Curriculum Authority (QCA)
The British Association of Electrolysists (BAE)
Association of Nail Technicians (ANT)
Association of Reflexologists
British Federation of Massage Practitioners (BFMP)
The British Reflexology Association
Federation of Holistic Therapists (FHT)
General Council for Massage Therapy (GCMT)
International Federation of Aromatherapists (IFA)
International Federation of Reflexologists (IFR)
Hive of Beauty
Health and Beauty Salon