Expectations vs. Reality: Everything You Need to Know About Beauty Entrepreneurship

The dream of "being your own boss" in the beauty industry is enticing, synonymous with independence and creativity. However, this entrepreneurial journey, while fulfilling, can also present significant challenges. Beyond the traditional path of salon ownership, the industry offers diverse opportunities for those prepared to explore.

This guide sheds light on the various career paths in beauty entrepreneurship, providing insights to help you identify the right fit for your ambitions and skills. We aim to equip you with the knowledge necessary to navigate the complexities of this dynamic field.

Whether you're stepping into the beauty world or seeking to redefine your current role, this article offers a realistic yet encouraging overview of what to expect and how to thrive in beauty entrepreneurship.

Running Your Own Salon: Expectations vs. Reality

It’s apparent that more and more women are venturing into the business world, especially when it comes to small and micro businesses in the beauty industry. Over the last 2 decades, women-owned businesses have grown by 114% in the US.

Let’s get into what you might expect when starting your own business and some of the obstacles you could face along the way.

Career Independence

Expectation
The first thought many have when they picture themselves as a business owner is that of independence. It’s understandable — being your own boss means that you only answer to yourself and get to work how you want. Your schedule can fluctuate as necessary and you don’t really have to check in with anyone.

Reality
While autonomy is attractive, it's not without its challenges. Running a successful salon demands not only beauty skills but also business acumen, from team management to operational understanding. This might mean taking on various roles yourself in the early stages, from marketing to accounting, which can be overwhelming.

Quick tip: Set boundaries early on for yourself. Just because you own a business does not mean you should do whatever you want. Be prepared to put in a ton of work at first. Having a good sense of urgency and not procrastinating will help your business go so much further. While everyone is cruising, you will thrive if you continue to learn and grow as a business owner so you can help your business thrive.

Income and Profitability

Expectations
The transition from a commission-based job to business ownership often comes with the expectation of increased financial gains. The logic is simple: in a commission role, you earn a fraction of the income, but as a business owner, all earnings are yours.

Reality
In practice, the financial picture of owning a salon is more complex and variable. While a fortunate few might find immediate success, it's more common for businesses to not see profitability for 2-3 years. Therefore, financial stability and a savings buffer are crucial before embarking on this venture.

Upon opening a salon, astute financial management becomes key. This includes careful budgeting, cost analysis, and financial planning. Utilizing available resources and expert advice is vital for the initial years.

Quick tip: Understand the difference between gross and net sales. High gross sales don't necessarily equate to profitability. Monitoring expenses is crucial for new business owners. Partnering with a skilled CPA can be invaluable, offering insights into business structure, taxes, and payroll, and often proving to be a worthwhile investment.

Business Skills and Knowledge

Expectations
While this might not be true for the majority of people, it can be tempting to jump right into the world of running a business without the proper education or experience. After all, you’re a great lash artist or hairstylist; how hard could it be to rustle up a few more clients create some cute graphics for your Instagram pay some business bills, and run payroll for a few people?

Reality
The truth is, it can be quite difficult. As a salon owner, it’s all on you. You probably won’t be able to hire staff to help you out at the beginning, so it’s up to you to make sure your business succeeds. This means that managing inventory, finding clients, customer service, marketing, and more, all depend on your actions. If this sounds like a lot of work — it is! Running your own business comes with many challenges, which also means less time to focus on your technical skills and continuing education.

Quick Tip: In the initial stages of running your business, you'll find yourself balancing various aspects. To navigate this successfully, focus on three key areas:

1. Exceptional customer service. Prioritize creating an outstanding customer experience. Satisfied customers are not only likely to return but also to become advocates for your business, bringing in new clientele through word-of-mouth. This will keep people coming back over and over again.

2. Financial insight. Develop a solid understanding of your business's financial health. This includes knowing your income and expenses in detail and strategizing ways to improve your profitability. A clear grasp of your financial status is crucial for making informed decisions.

3. Effective marketing. Establish a strong marketing strategy. Utilize both referral programs and digital marketing tactics like targeted ads and engaging content to increase your salon's visibility. A robust marketing plan is essential for attracting new customers and retaining existing ones.

Barriers to Success & How to Overcome Them

Marketing Skills and Customer Service

While running a salon, you are not only the owner, there will be many times you’re wearing the hat of marketer, customer service, and more.

Remember to treat your customers as if they are your most important customer. Customers will always remember a positive experience so make sure you’re giving them the ultimate experience at each appointment, and each interaction with your business.

As a salon owner, you will not only run your own books if you’re still behind the chair but also the appointments of your staff. Ensure that you’re marketing to keep books filled. Don’t be afraid of promotions and referral programs to keep everyone’s schedules filled!

As a salon owner, you need to find a way to connect with your local community. This will help build your customer foundation and support your growth. Community Facebook groups and neighborhood groups are great sources for new customers.

Balancing Personal Workload vs. Delegation

It’s not uncommon for new salon owners to see a dip in their personal salary when they limit the number of clients they are seeing. Many salon owners who keep a booth or rental structure continue to see clients at the same rate as before they owned a salon. If you move to a commission structure you will be more hands-on with the business, limiting how many clients you can take.

When you first open your salon, be open to continue seeing clients. As a salon owner, it’s important to work hard to bring in clients and push your easiest clients to your new staff.

If you find yourself spending more time answering phones and booking appointments, be open to hiring a receptionist. Understanding the value of your time working versus the cost of hiring a receptionist will free up your time.

You also have the option to charge more for services to see you! As the salon owner, you likely have more experience than many of your staff, and clients will want to see you! Due to your busy availability as a salon owner, you can increase the price of your services to see clients.

Time Management for Technical Skills

Many great cosmetologists move into a salon ownership position and lose time to see their clients. If you are not practicing your craft daily as you once were, it is still crucial to keep up with your skills and trends. Set out at least a few hours/week to practice so you don't lose muscle memory.

To help overcome this, be sure to schedule continuing education for yourself. If you schedule classes for your staff, take them yourself!

Consider inviting educators or vendors to your salon to teach your entire staff new skills and new trends.

Building Your Own Beauty Product Line

In the beauty industry, product development typically signifies the creation of a distinctive product line. This process can range from innovating new formulas to adopting an existing product and branding it under your label (also known as white labeling or private labeling). Many beauty professionals start their journey into product development by initially seeking to reduce operational costs in their salons or to retail their unique products to other beauty enthusiasts. This venture isn’t about inventing something entirely new; it often involves selecting the right products from vendors or manufacturers and then skillfully branding them.

Career Progression and Timeframe

Embarking on a career in beauty product development doesn’t follow a predetermined path. It’s a journey that might start from the point of being a beauty practitioner to evolving into a brand owner. The timeline for achieving success varies from person to person. For some, it may be a matter of a few years of strategic development and marketing, while for others, it could take much longer. Success in this arena is not just a function of time but also of continuous effort, investment, and adaptation.

Characteristics of Successful Beauty Entrepreneurs

Individuals who thrive in beauty product development often share certain traits. Creativity is paramount, not just in product design but in problem-solving and marketing. A solid understanding of the beauty market, trends, and customer preferences is a must. Successful entrepreneurs in this field also have strong business acumen, which includes the ability to network effectively, manage finances, and navigate the complexities of product manufacturing and distribution. A deep passion for beauty and wellness, combined with resilience in the face of challenges, often sets apart those who succeed from those who don’t.

Expectations vs. Reality

Expectation: Instant success and profitability

Reality
Many enter the beauty product line with the expectation of quick success and substantial profits. The reality, however, is that the beauty market is highly competitive and saturated. Differentiation becomes vital in this crowded space–having a unique product or an innovative approach can set your brand apart.

Aesthetics also play a significant role as effective branding and appealing packaging are as important as the product quality. Achieving recognition and sales is a gradual process; it involves handling initial rejections and persisting despite them. It’s also important to understand that profits may not be immediate. Establishing a brand and gaining customer trust can take months, if not years.

Expectation: Swift Product Line Launch

Reality
The expectation that a product line can be launched quickly is often met with the reality of intricate and time-consuming processes. Selecting a reputable company for manufacturing your products involves extensive research and negotiations. It's not just about seeing samples and testing products, but also about tweaking them to meet your specific needs.

Product testing is another area where reality diverges from expectations. Testing needs to be comprehensive and involve a variety of individuals, not just the entrepreneurs themselves. The development process can be protracted, emphasizing the need for patience and thoroughness.

Expectation: Instant Market Recognition

Reality
There's often a misconception that a high-quality product will immediately attract buyers and recognition. However, in the absence of a well-known name or celebrity endorsement, building brand awareness is a gradual process. Effective marketing strategies are critical in making a brand known and respected in the market.

Entrepreneurs must also be prepared to face challenges related to their products, including inquiries about ingredients, handling negative feedback, and addressing customer concerns. Understanding your product inside out and believing in your brand’s mission is key to navigating these challenges and educating your customers.

Barriers to Success & How to Overcome Them

Barrier 1: Market Competition and Saturation

The beauty industry is notably competitive and saturated. Standing out requires more than just a good product; it requires a unique value proposition.

Tip 1: Identify a Niche Market. Focus on a specific segment of the market where you can offer something unique or fill a gap.

Tip 2: Innovate Constantly. Continuously evolve your products to keep them fresh and appealing.

Tip 3: Build a Strong Brand Identity. Develop a brand story and aesthetic that resonates with your target audience, making your products memorable and desirable.

Barrier 2: Financial Management and Resource Allocation

Starting and sustaining a product line often involves significant financial investment and resource management challenges.

Tip 1: Create a Solid Business Plan. A well-thought-out plan helps in managing finances effectively and attracting potential investors.

Tip 2: Optimize Costs. Be strategic about spending, especially in the early stages. Consider options like crowdfunding or small-scale launches.

Tip 3: Leverage Economies of Scale. As your business grows, seek ways to reduce costs per unit through larger production runs or better supplier deals.

Barrier 3: Building Brand Awareness and Customer Loyalty

Gaining recognition and developing a loyal customer base in a crowded market can be challenging.

Tip 1: Invest in Marketing. Utilize digital marketing, social media, and influencer partnerships to increase brand visibility.

Tip 2: Prioritize Customer Experience. Offer exceptional service, engage with customers, and gather feedback to improve your products.

Tip 3: Use Storytelling. Tell the story behind your products and brand to create an emotional connection with your audience.

Alternative Career Goals

Now that we’ve covered what you might run into when choosing to run your own business, we can dive into some of the alternatives you might consider.

While some might think that running a salon is the ultimate goal for everyone, it’s important to realize that none of these options are inherently better or worse than the others. Not everyone strives for the same career goals, so it’s more important to focus on figuring out what works for you individually.

Commission-Based Jobs

Commission-based jobs often serve as an entry point for many in the beauty industry. Despite keeping only a percentage of earnings, these roles offer significant benefits. They provide access to high-quality products and a supportive environment, often surrounded by seasoned professionals who can offer mentorship. Salons handling marketing and client relations allow beauty experts to focus on honing their craft. Additionally, many salons offer continuing education, an invaluable resource for staying current with trends and networking.

Booth Rental or Salon Suite

This might be considered the sweet spot between the two options discussed so far. Booth rental allows you to operate your own business without having to completely start from scratch. It’s much less expensive to rent out a building or suite from an owner than opening a brand-new location.

In this scenario, you’ll get to set your own schedule and run your business how you want. This is a great option for those with an established clientele, as you would otherwise need to find and retain clients on your own. The same goes for marketing and finances, so if you’re still a bit iffy in these areas, you might want to consider waiting until you can boost these skills. Additionally, booths and salon suites can be somewhat isolating, as you won’t necessarily be working with others in your industry every day.

Learn more about the difference between Commission Salons and Booth Rentals.

Mobile Services

Mobile beauty services present an attractive alternative for entrepreneurs who prefer flexibility and lower startup costs compared to a full-scale salon. This model involves providing services directly to clients at their location, requiring reliable transportation and vehicle maintenance. Like booth rental, running a mobile beauty service means managing all aspects of your business – from finances and client acquisition to marketing. While offering unique opportunities for personalized client experiences, this path also tends to be more solitary, with less day-to-day interaction with other beauty professionals.

Feeling Overwhelmed?

Thinking about your future career goals all at once can be quite overwhelming and a bit stressful.

It’s important to not feel locked into just one career path. This is a flexible journey that can be tweaked along the way–there’s not one way to approach entrepreneurship in the beauty industry. You might bounce around from position to position, or find that you really prefer commission-based jobs in the long run. Take the time to experience different types of jobs before settling down so you know you’re making the right choice.

Additionally, while owning a salon might seem like the end goal everyone is striving for, it doesn’t necessarily have to be. If you do pursue this, make sure you’re doing it for the right reasons and not just because you feel like it’s what everyone else is doing. If owning a business is something you want — go for it! And if not, you should feel perfectly content sticking to what works for you.

Additional Resources

Professional Beauty Association
The Professional Beauty Association provides resources for salon owners, individual cosmetologists and estheticians, beauty students, as well as beauty brand owners. Their focus is to help elevate the careers of all beauty professionals, including training and even insurance.

Beauty Launchpad
Beauty Launchpad is the magazine for professional hairstylists & salons, aiming to be the ultimate source for owners and stylists, providing articles on trends in the beauty industry and information on events across the country for salon owners and hair stylists. They also cover industries such as nails via NailPro.

17 Free Resources for Small Businesses to Leverage Year-Round
This list from the US Chamber of Commerce includes a wide variety of resources for small business entrepreneurs in any industry.

Resources for Small Business Owners
For even more general information and resources, take a look at this extensive article from the Consumer Financial Protection Bureau.

US Small Business Administration
With resources ranging from funding information to local assistance, the US Small Business Administration can help you take the leap into starting your own small business.

International Association of Women
The International Association of Women strives to empower and elevate women seeking to be successful in their small businesses.

Ladies Who Launch
Another great resource for female and non-binary entrepreneurs, Ladies Who Launch provides opportunities to learn, network, and receive funding.

International Salon and Spa Business Network
An organization specifically for salon owners in the beauty industry working to provide resources for chain salon and spa owners. Great for salon owners that open franchise salons.

American Lash Association
The American Lash Association (ALA) is a resource for those in the lash industry looking to gain access to networking and the latest on the lash industry. Their goal is to have a supportive group for the lash industry.

Online Communities
Facebook offers a diverse range of groups for beauty professionals, catering to various specialties, such as the 'Lash Queens' group run by expert Michelle Nguyen. These online communities are excellent for networking, sharing knowledge, and building brand loyalty. Creating your own group can further enhance your industry presence and establish a dedicated customer base.