Salon Expansion: Larger Space, or Second Location?

As excited as you may be about your salon expansion, remember that this is a big decision. You should be very aware of what you’re getting yourself into along with everything that comes with it.

Your goal as a salon owner is to make sure that your clients are leaving happy and that your day-to-day operations are running smoothly enough that you’re able to turn a profit, and then some. As long as you keep that engine running, sooner or later you’ll be debating different methods of expansion and how you can keep the profits coming in.

There are two main methods of salon expansion. You can either move into a bigger space, giving you more room for clients, or you can invest in a brand new second location. You may be confused on which would be the best move for your salon, so we’re going to break it down to give you confidence in your decision.

Writing a business plan

It’s likely that you’ll need a loan to secure that salon expansion. and in order to get a bank or an investor to take you seriously, you’ll need an in-depth business proposal that outlines how you plan on drumming up profits along with all of the services that you’ll be providing.

Even if you don’t need to write one, it’s a great exercise to get all your plans down on paper. You’ll feel a lot more confident in your salon expansion with a detailed business plan in place.

Read our guide on writing a business plan.

Strong social media presence

Although your original location may be doing great, if you move to a new location or open up a second, you’ll need a reliable avenue to let your fans know what’s going on. The last thing you want is for your loyal clients to show up to your old salon wondering where you all went.

So make sure that you’re on all the major social media platforms and that you’re posting updates about your salon expansion, along with the exact open dates and your new location.

Read our guide on using social media to deliver great customer service.

Moving into a bigger space

If you’re considering moving into a bigger space, it’s important to do plenty of planning to ensure that you don’t end up losing money on your new investment.

The first step is to know that a bigger space DOES NOT always equal more money. Unless the rent is significantly lower, you need to make sure that you’re getting more beauty rooms or styling chairs.

The next step is to do the numbers to figure out how much of your business relies on foot traffic vs. scheduled appointments. If foot traffic is your bread & butter, then you’re going to want to make sure to be in a location with plenty of shops nearby (malls are great for this) or a place in the city if you can foot the bill.

For tips on choosing a location, read our guide on salon business strategy.

Answer these questions to make sure that you’re making the right decision:

Why do I want a larger location?

Although the benefits of a bigger location may seem obvious, understanding your overall goal is crucial for creating a plan for sustainable growth in your new location. It will also make the process of finding a new location easier because you’ll know exactly what you’re looking for. So make sure you take the time out to understand WHY you’re pursuing the larger location.

Are your systems, practices, and culture exportable?

Is your salon a staple of the community you’re in? How many of your current clients do you think you’ll keep?

Along with that, will your new location and clientele be receptive of your business style? You may play certain music, have large street facing windows, stylists with tattoos & piercings etc. You need to ensure that your new location will be open to your version of business as usual, and not force you to change your entire workplace culture.

Opening up a second location

If you’re considering opening up a second location, you need to be confident that your first location’s success will carry over to the second store. You also need to be confident that your first location will bring in enough revenue that you won’t have to worry if your second store takes 6 months up to a year to turn a profit.

Although your original location may have grown quickly, you need to approach your second location with caution. You don’t want your profits getting tied up into supporting the second store.

Along with the info above, answer these questions:

How are you choosing your second location?

This is going to require a lot of homework but should be answered nonetheless. You’ll need to find an area that lacks an existing salon presence and is also similar enough to your old area that you’ll be confident in finding a new, but similar client base.

Is your first location at its peak?

It’s going to take a while for your new location to break even, so it’s crucial that your first salon is running smoothly and is consistently turning a profit because you’re going to have to rely on it while your second location picks up speed.

Not only that, but your first location should be stable enough not to need you around because you’re going to be spending all of your time at your new salon.

How are you going to fund the location?

If you can fund it yourself, then congrats!

If you can’t, then you should think hard about whether taking a loan is the best decision for you right now along with how long you think it will take for you to pay it back. The successes of your first salon aren’t promised for your second. So if your first was already making a profit at three months in, don’t base your calculations on your second also turning a profit that soon.

Whether you chose to move into a bigger location or to open up a new location all together, keep in mind that you’re making a large decision that has heavy implications for the future of your salon as well as your stylists.

So make sure to thoroughly go over this page to figure out which decision is right for you and start doing your research. As excited as you may be to continue your process of growth, you need to tread carefully to avoid any bigger issues down the line.