10 ways to increase profits in a salon business
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In this article we look at:
Ten ways to increase profits in your salon business
There is plenty of money to be made in both owning and working in hair & beauty salons. Yet for many in the industry, profit remains elusive.
The good news
The good news is, the biggest drivers of profit can often be fixed far more quickly than expected.
Based on hundreds of conversations each year with independent and commercially owned salon businesses – and working directly with owners and managers – we’ve identified the top ten ways salons can increase profitability.
A quick note before we begin:
- not every point will apply to every business
- some will have a greater impact than others
- each point could be debated for hours – this is a high-level overview, and each area requires specific action
Together, they explain why so many salon owners work hard and still struggle to see consistent profit.
The reasons
In no particular order (but roughly in importance) here is a list of the most common issues:
1. Salon service prices are too low
For many salons, prices don’t reflect time, cost, skill, or the level of profit required to run a healthy business.
2. New client retention is weak
The majority of first-time clients – often around 70% – don’t return for a second visit. This creates a constant need to replace lost revenue rather than build sustainable growth.
3. Consultations lack depth and direction
Too few meaningful questions are asked, and little of the conversation connects today’s visit to future work. As a result:
- employee–client engagement is weak
- new clients aren’t inspired to return
- rebooking becomes “someone else’s job”
- retail and treatment opportunities are missed
4. Time and services are given away
Overruns, discounts and “just this once” extras may feel minor individually, but collectively they can have a devastating impact on profit.
5. Pay structures reward the wrong behaviours
Many pay structures are:
- overly complicated
- driven by outdated or meaningless targets
- disconnected from what actually drives profit
6. Outdated management practices
Some salons haven’t evolved their operating model and remain stuck in the 1990s – relying on pressure, numbers and percentages that few people truly understand or engage with, rather than transparency and understanding.
This leaves teams uneducated or unmotivated to engage with the business or the client experience.
7. Breakeven is unclear
Owners and managers often don’t know what it truly costs to open the doors each month, which turns important decisions into guesswork.
8. Chaotic scheduling and poor staffing alignment
Last-minute changes, too many people at the wrong times, or not enough of the right skills when demand is highest all erode margins.
9. Required client numbers are unknown
Many managers don’t know how many clients – at what value – are required for the business to be profitable.
10. Fear
- Fear of getting it wrong.
- Fear of upsetting the team or clients.
- Fear of uncovering problems that then need fixing.
When fear dominates, meaningful change is delayed – or avoided altogether.
The uncomfortable truth
Most salons don’t fail to make profit because:
- staff are lazy
- wages are too high
- clients won’t pay
They fail because there is a lack of commercial structure holding the business together.
When structure is missing there are multiple points of failure – but essentially:
- you work harder to stay in one place
- you make less money quarter on quarter
- you become exhausted – burnout follows
You can make change
There are different ways to significantly move the needle in your business. One of the fastest ways is to work with someone who specialises in salon management.
You will be attracted to different models, maybe private one-on-one coaches, group programmes or clubs, or self-guided learning using online tools.
At Loop HR, we offer a combination of management expertise and specialist HR and salon management software – giving you both the structure to fix the issues and the tools to manage them confidently going forward.
A lighter-touch option - the Tiny Masterclass
For those who prefer a more gradual approach, my Tiny Masterclass focuses on the biggest profit drivers: pricing, pay structures and staff targets – and how they work together.
Across three personalised one-to-one sessions with me, Ian Egerton, you will identify where profit is leaking and apply practical changes directly to your business.
Discover more about the Tiny Masterclass
A full business restructure
For those ready to transform their business operations, the Loop HR Business Restructure & Success Plan address all of the areas above – calmly, logically and step by step.
We put structure around:
- pricing
- pay
- targets
- people management
Our specialist HR software then supports that structure day to day, removing reliance on memory, spreadsheets or constant chasing.
Profit becomes clearer.
Decisions become easier.
And the business starts working for you again.
If you’d like to know more, you can schedule a call with me, or go ahead and learn more about the Tiny Masterclass to begin your transformation journey.