Health and Beauty Businesses on the Rise...What Does It Take to be a Successful Owner?
The health and beauty service market is one of the country’s most successful industries, generating $445 billion annually in sales. It is a diverse space which includes barber shops, beauty salons, health resorts and spas, weight loss centers, nail salons and personal care services (tanning salons, massage parlors, etc.).
The largest segment in the industry is haircare as hair salons bring in $44 billion annually. Even the haircutting space itself is being divided into men-only, women-only, kids-only and different specializations. Due to the nature of the service, the field is somewhat recession-proof and continues to grow. According to the Bureau of Labor Statistics, barber, hairstylist, and cosmetologist employment is projected to grow 13 percent from 2016 to 2026, faster than the average for all occupations.
In addition to being part of a large and growing industry, many health and beauty businesses are franchises. A lot of people are familiar with large franchise brands in this space such as SuperCuts, Smart Styles, Massage Envy and The Joint Chiropractic, just to name a few. There are endless opportunities for entrepreneurs looking to own a business in this space.
Now that we’ve established the positives of the health and beauty industry and cited the numerous attractive franchise opportunities that come with it, let’s look at some important qualities people must have when owning a business in this area.
Let’s begin with some traits potential health and beauty business owners must NOT possess.
Are You a Health and Beauty Professional…Or a Franchise Business Owner?
As a franchise coach, I work with many entrepreneurs who have a history in the health and beauty industry and want to start their own business in that field. They may have experience in cutting hair, doing nails and may even be a licensed cosmetologist. In some health and beauty franchise systems, that can actually be considered a negative.
Franchisors are not looking for cosmetologists. They’re seeking professional, seasoned business people who can run a successful business. They know that successful franchisees understand how to hire, manage and motivate employees and run a P&L. If you look across some of the larger brands out there in the economy haircutting space, almost none of their franchisees are cosmetologists. Their franchise owners are people who have financial resources, business expertise and management skills.
Last year, I wrote a Franchising USA article about children-based franchises and cautioned potential franchisees about their motivation behind pursuing this type of business ownership. Just like people who enjoy working with children shouldn’t open a business for that reason, people who like cutting hair or treating nails should not start a business simply because they like that line of work.
Are You Interested in Running and Scaling the Business to Multiple Locations?
Franchise owners in this field, like many others, are responsible for managing the payroll, schedule and inventory. Rather than being behind a chair cutting hair, a successful owner needs to actively market their business within the community to bring in customers and increase sales.
It is also important to remember that most franchisees in this industry often own multiple locations. In SuperCuts, the average franchisee owns 6 locations. Franchisees who thrive in this space have a vision to develop and scale businesses and possess the expertise and resources to do so.
Being a cosmetologist is not a calling card. If you are licensed in this area, I would not go to these companies and rely upon your firsthand work in the field. You are more likely to be hired as an employee. While it is great to have experience and knowledge of the industry, my recommendation is to highlight one’s management skills, personal resources and ability to build a business.
Are You Comfortable with a Semi-Absentee Model?
Although it is necessary for franchise owners in the health and beauty industry to have skills and experience in business management, it is important to note that many owners use managers to operate the day to day operations on their behalf. Most owners are professional business people who are looking for ways to own and operate multiple locations over time while retaining a separate, full-time job as a semi-absentee franchisee.
Most of the franchisees in the health and beauty space work under this semi-absentee business model. That means they can keep their job and hire managers to run the business on a day-to-day basis. The owner will typically need to spend 10-15 hours per week, often working at the location in the evenings or on weekends, to oversee the manager and monitor all aspects of the business.
With this semi-absentee business model is being used by many franchises in the service industry, it allows people to gradually acclimate to business ownership. It also reduces some of the financial risk in starting one’s own business by allowing them to continue their full-time job. However, it also requires the franchise owner to be flexible in balancing their schedule and places an increased importance on their ability to hire and train a strong manager and staff to run the business in their absence.
Health and beauty businesses are a thriving segment that continues to grow each year. There are many dynamic franchise opportunities that currently exist with strong financial track records. For those people who have good management skills, some financial resources and a firm understanding of P&L’s, this business model can be very profitable…and the future continues to look bright for the industry!
Rick Bisio is a leading franchise coach with FranChoice, the creator of the FDD Exchange and the Franchise Glossary and the co-host of Rick Bisio’s Franchise Focus. Since becoming a franchise coach in 2002, Bisio has assisted thousands of aspiring entrepreneurs nationwide explore the dream of business ownership.