Focus on "product mix"

A survey of salons in four British cities by the Hairdressing and Beauty Industry Authority (HABIA) established that the following mix of sales was 'typical' in 1993 (note: no subsequent national survey of this kind has been undertaken and these are still the most recent figures available):

Source; Planning for the Future (1993) Hairdressing Training Board

Trade sources suggest that these figures are unlikely to have changed significantly during the 1990s and early 2000s, although the percentages of turnover accounted for respectively by beauty treatments and beauty products, children’s hairdressing and possibly men’s hairdressing may have increased somewhat since 1993.

The 'typical' figures shown above only give a composite picture. An individual outlet's mix of sales might differ from this to a marked extent. An Afro-Caribbean salon, for example, might derive over 90% of turnover from the sale of core services (Afro-Caribbean hairdressing). Similarly, another salon might not even offer this type of service. In many instances, the product mix alters regularly to reflect changing fashions.

Different services may return different gross profit rates. Men's hairdressing, for example, includes barbering (which requires few or no hair products), wet cutting (which requires shampoo, conditioner and possibly gel or styling mousse) and services such as perming and highlighting (which require a number of expensive products).

The difference between the gross profit rates returned by each type of service may be particularly marked if prices have not been costed accurately and the pricing policy is inconsistent. Similarly, the extra time required to perform certain complex styles may not be reflected in the price charged.

Retail sales of hair and beauty products typically return a gross profit margin of between 20% and 33%. Although many salons make few or no retail sales, the overall gross profit rate may fall if these account for an unusually high percentage of turnover.