Understanding the Strengths, Weaknesses, Opportunities and Threats involved in a beauty salon business is a crucial step while preparing to launch your own beauty parlor. This guide will show you a sample SWOT analysis for a beauty salon which you can use as a starting point to analyze your own beauty project. It is also very useful while you are building a business plan for your beauty salon venture. Let’s get started:

Strengths of Beauty Salon

A strong brand and reputation: If the salon has a strong reputation in the community for offering high-quality services, this can be a major strength. For example, if the salon has consistently received positive reviews online and has a large and loyal customer base, this can be a major advantage.

Skilled and experienced staff: Having stylists and other beauty professionals who are experienced and highly skilled can be a major advantage for a salon. If the salon’s stylists have been trained by top industry professionals and have years of experience, this can help attract customers who are looking for top-quality services.

A prime location: Being located in a busy, highly visible location can help attract new customers and increase foot traffic.

A diverse range of services: Offering a wide variety of beauty services, such as hair styling, manicures, and facials, can help attract a diverse clientele and increase the salon’s revenue potential. A salon that offers a full range of hair care services, including cuts, coloring, and styling, as well as a variety of spa services may be more likely to appeal to customers.

Strong relationships with suppliers: This can help the salon secure discounts on products and ensure a consistent supply of high-quality products. For instance, if the salon has longstanding relationships with product suppliers and is able to negotiate bulk discounts or early access to new products, this can help the salon maintain a competitive edge.

A clean, welcoming atmosphere: Creating a clean, relaxing and welcoming atmosphere can help attract and retain customers especially if the salon has a warm and inviting décor, a comfortable seating, and a friendly and helpful staff, which can help create a positive experience for customers and encourage them to return in the future.

Weaknesses of Beauty Salon

Limited services: A narrow range of services is less appealing to potential customers who are looking for a full-service salon. As an example, if the salon only offers hair styling and does not offer services such as manicures or facials, it may not be as appealing to customers who are looking for a one-stop beauty destination.

Lack of skilled staff: This is undoubtedly a big weakness that can kill your business before it even takes off…

A Poor location: If the salon is located in a less visible or less convenient location, it may be less likely to attract new customers and may have lower foot traffic.

Limited hours of operation: Busy working ladies always complain about not being able to go to beauty salons because of work. Well, if the salon is only open during standard business hours and does not offer evening or weekend appointments, it may be less convenient for customers who have busy schedules and may be less likely to visit the salon.

A Lack of marketing budget: This is a common weakness experienced by new ventures including newly opened beauty salons. However, raising the appropriate amount of funding should take care of that.

Outdated equipment and products: This can be a weakness as customers may not be satisfied with the quality of the services they receive and may be more likely to go to a salon that offers more modern and advanced services. For example, if the salon is using hair styling tools that are several years old, customers may not be as satisfied with their haircuts and may prefer to go to a salon that uses newer, more advanced equipment.

Poor customer service: A history of staff being rude or unprofessional with customers, or a reputation for being disorganized or running late can be a major turnoff for new prospects and may even lead to a loss of business.

Opportunities of a Beauty Salon

Expanding the services: There may be an opportunity to expand the range of services offered in order to appeal to a wider customer base. As an illustration, if the salon currently only offers hair styling services, there may be an opportunity to add services such as manicures, facials, or makeup application to the menu. This could help the salon appeal to a wider range of customers and increase its revenue potential.

Partnering with other businesses: In case the salon is located in a busy area, there may be an opportunity to partner with other businesses in the vicinity to cross-promote services and attract new customers. To give an example, if your salon is located in a shopping center, you can partner with nearby retailers or restaurants to offer discounts or promotions. This can help you reach a new audience and increase footfall.

Offering online bookings: Assuming your salon does not currently offer online booking or appointment services, you can introduce these services in order to make it easier for customers to schedule appointments and hence increase sales. As a case in point, if your salon introduces an online booking system, customers will be able to schedule appointments at their convenience, which means more business.

Introducing new products and services: You can introduce a new line of hair care products or offers new services such as lash extensions or brow shaping which can help you unlock new revenue streams.

Entering new markets: There is always an opportunity to enter new markets or target new demographics. As an illustration, if your salon is currently targeting a younger, female customer base, there may be an opportunity to expand your marketing efforts to reach older women or men.

Threats of a Beauty Salon

Competition from other salons: If there are many other salons in the area, this can be a threat as it may be more difficult for the salon to attract and retain customers. For example, if there are several other salons in the same neighborhood that offer similar services at similar price points, the salon may have difficulty standing out and attracting new business.

Changing consumer preferences: Consumer preferences may change over time (such as a shift towards more natural or organic products) and this can be a threat to the salon if it is not able to adapt its offerings to meet these changing preferences. For instance, if there is a trend towards more natural and organic hair care products, and the salon does not offer these types of products, it may be less appealing to consumers who are looking for more natural options.

Economic downturns/recessions: Difficult economic times and recessions can be a threat to the salon as consumers may be less willing to spend money on non-essential services such as salon treatments. When the economy is in a recession and unemployment is high, people may be more hesitant to spend money on beauty treatments and may opt for less expensive options.

Changes in regulation: New licensing requirements or changes to health and safety standards can be a threat to the salon as it may be difficult and costly to comply with these new requirements. If the government introduces new regulations requiring salons to use certain types of equipment or to follow specific safety protocols, the salon may need to invest in new equipment and adapt…or be out of business.

Conclusion

The above Beauty Salon SWOT analysis is just a sample you can utilize to conduct the same for you own beauty salon venture. Remember, a SWOT analysis should be included in your beauty salon business plan. We recommend also you check our ready-made beauty salon business plan template that includes a pre-written business plan in Word and an easy-to-use, automatic financial plan in Excel tailored to the beauty salon industry.