Focus on "other salon costs"

Hairdressing salons incur a range of overhead and operating costs. These might typically include;

• rental and maintenance of premises
• Uniform Business Rate
• printing and advertising costs
• utilities costs, including heating fuel, electricity and metered water charges
• insurance (buildings, public liability and professional indemnity)
• repair and maintenance of appliances (for example hood dryers)
• laundry costs (some salons use a textile rental service)
• purchase of consumable items, including towels, scissors and combs (the average life of a towel is 3-18 months, while scissors may be replaced annually and combs several times a year; in some instances, however, the individual stylist might supply small tools such as scissors and combs)
• bank charges and professional fees (including expenditure on training courses and consultancy)
• other fees, including a licence from the Performing Right Society
• sundries/miscellaneous expenditure (such as surface cleaning materials)

Other regular outgoings might include staff wages and employment costs (including commission). According to Annette Mieske, author of Hairdressing Business Management (Blackwell 1990), employment costs typically account for between 50% and 80% of all costs.

Some outlets pay a monthly franchise fee (for example 10% of takings), while freelance hairdressers may pay a fixed sum to rent a chair (and to use salon equipment) in an established outlet. Mobile hairdressers may incur considerable travelling expenses (ie fuel and maintenance of a vehicle).

According to a report by the Department of Trade and Industry, the target level for occupancy costs (ie rent, rates, services and utilities) in some hairdressing chains is as low as 10% of turnover. The report suggests, however, that the actual figure in many such concerns is typically closer to 25% (occupancy costs are fixed and the percentage of turnover for which they account will fall as takings increase). Labour costs might account for at least a further 30% (but often as much as 50%) of turnover. These figures may be considerably higher in a small salon which is not managed efficiently.