The Rise of the Beauty Industry

Situation in a Hair salonNowadays, beauty services worldwide continue to grow at a fast pace. The industry includes services like massages, skin care treatments, and makeup application. Some spas offer tanning, nail care, and non-medical hair restoration. The wide range of services presents salon franchise openings for entrepreneurs.

The Competition and Its Significance

In the United States, more than 750,000 beauty services shops are considered as spas, barbershops and beauty salons. About 70,000 hair salons collectively generate $19 billion in revenue. The nature of salons, spas, and other beauty services resulted in a highly fragmented market where the top companies have a total revenue equivalent to only 15% of the industry’s overall income. Large companies do not scale well in comparison to smaller single-shop operations. The smaller shops can compete due to their excellent locations and ability to keep customers. Large companies cannot just open a branch and capture the market. Beauty services are still a touch-related business based on the personal interaction between the regular customers and their favorite service personnel.

Labor Intensive

The business itself is labor intensive. No technology on the horizon can replace the service personnel. They are experts at cutting, shampooing, and perming. Each of the other services requires additional training and sometimes certification. Specialty treatments include facials and massages. Franchise salons have a distinct advantage in highly urbanized areas and retail hubs. An individual or a group of investors can operate these businesses.

Overall, the beauty industry requires personnel who have a good understanding of their customers. It is a personal business that relies on specialized training in manual labor. Each of the services needs skills that are difficult to acquire.

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