Bring On the Beauty Start-Ups?

Beauty Salon For Rent Main Street USA Virginia Sole-Smith

A few weeks ago, Inc.com listed beauty salons as one of the best start-up businesses for 2011.

According to AnythingResearch.com, the cosmetology and barber schools (that educate salon-entrepreneur-hopefuls) grew at 29 percent last year, and nail salons grew at 9 percent. Inc.com’s reporting shows an industry with a low barrier to entry for salons and barber shops. Pair that with a recent resurgence in barbershop nostalgia—and with a return to beauty-service spending by consumers—and it’s a perfect storm for rapid growth in the salon and beauty industry. Bring on the beauty start-ups.

Well. Let’s take a look at that, shall we?

I suppose, by some measures, the $10,000 and 4 to 12 months it costs to get through beauty school add up to a “low barrier to entry.” For sure, it’s not medical school. But neither is the average post-graduation income ($9 to $15 per hour) anywhere close to what doctors make.

The statistics that Inc.com forgot to factor in to their analysis are ones that I learned my second month in at Beauty U from Simon Scott: Beauty salons have the second highest failure rate of any business. And 80 percent of students who graduate beauty school leave the industry after five years.

So let’s look again at the numbers that have Inc.com in a lather about beauty start-up potential. Beauty schools grew at a rate of almost 30 percent last year. Nail salons — as in, the places of business where beauty school graduates can actually earn a living — grew at less than 10 percent.

Trade schools always thrive during a recession (or a post-recession, if that’s what we’re in now) because if you’re out of a job, quickly retraining to qualify to do something else makes some kind of sense. Unless that “something else” is a job paying not much better than minimum wage for a business that’s likely to fail.

On my post-Beauty U road trip last summer, I saw beauty salons and barber shops on practically every corner of the Midwest. I did not see a lot of customers in them. I did see a lot of “For Rent” and “For Sale” signs.

Meanwhile, my Beauty U friends are having varying degrees of success in the business. A few of my classmates have landed part-time spa jobs. Most are still working the non-beauty-industry jobs they had when they arrived at Beauty U. One of my former teachers is now working at Sephora, while another is doing office temp work. That’s not exactly the rocket ship success that beauty school admission officers like to promise, or the “recession-proof career” that the beauty industry trade groups brag about.

It might not cost much to start up a beauty business. But to keep it going? That’s another question entirely.

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6 Comments

Filed under Beauty Labor, Beauty Schooled, Beauty U, Career Opportunities

6 responses to “Bring On the Beauty Start-Ups?

  1. oliviacw

    Even if people are spending more on beauty services than they did, say, a year ago, I think it’s still a lot less than it was 3 years ago or so. This is very true for me, for instance – I used to go to a nice salon every 8 weeks for a cut. Now – well, my personal circumstances have changed a lot, and I just got my first haircut in 6 months (Fortunately for me, my usual style is a short bob that grows out well). And I got it at Supercuts. Which, incidentally, was showing signs of very low volume – only 4 of the 10 stations showed signs of active use and when I was there there were only 2 stylists working. It will take a lot for that store to build up to full capacity!

    • Olivia, agreed. I’ve also been going longer between cuts/other salon services and when I do go, not seeing packed salons. It’s going to take awhile to build back up — which is why I think Inc really missed the boat with their story. Why encourage people to go into start-ups without a strong chance of survival?

  2. Sad but true. I do better as a freelancer because I can travel to people and it keeps my overhead low, but still, it’s a pain doing hair in my house or in someone else’s. But paying for a retail space would be madness right now! Even with the price per square foot in NYC being “low” (and still laughably high for the rest of the country), I’d be struggling just to stay open between paying my rent and electric bills, not to mention keeping color stock and doing laundry!

    • Chrissie — Exactly. I think freelancing is definitely the way to go right now in the beauty biz. Although there are obvious trade-offs (irregular work, having to do all your own marketing to build up a clientele, etc) that make it not ideal for a lot of beauty school grads. But with salons struggling so much, it definitely seems like the better option! Thanks for weighing in!

  3. I went to my own”beauty U” six years ago and have spent the last 4 years owning my own skincare salon. It doesn’t surpise me that the schools are doing well. I was disappointed at how little “beauty U’s” prepare thier students for a career in this buisness. Out of my class of 16 I believe only three of us are doing this for a living that I know of and many quit right off the bat. Renting out rooms in my salon has saved me along with operating on a shoestring budget, doing EVERYTHING myself and having a VERY supportive husband. I can only speak for what I see in my own biz, but it seems there are still plenty of customers out there, they are just better shoppers now and more particular about what they want. I’ve found that by setting myself apart from the competition and really offering a different and valuable service I’ve created a loyal following. Like anything else in life, working super hard at it has helped. Economically it’s a struggle but it’s still a great job that I love. I’m hoping it has no where to go but up! Realistically though it’s not for everyone, it takes alot of work and sacrifice and the schools make it sound easy and cheap to get into and it’s totally NOT!

    • Pam, thank you so much for sharing! It’s great to hear what it’s like in the trenches. Sounds like your incredibly hard work is paying off and I’m so glad. And yes, Beauty Us everywhere could do a MUCH better job of educating students on what running a beauty business will really be like — their marketing pitches can be pretty shameless.

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