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Contents
- Operating practices
- Jargon and special features
- Sales mix
- Seasonality
- Factors affecting sales
- Prime records
- Customers, terms offered
- Suppliers, terms obtained
- Trade specific legislation
- General legislation
- Health and safety legislation
- Employment legislation
- Licensing requirements
- Sources of further information
Performance indicators
Ratio trends
According to analysis of company accounts by Dun and Bradstreet International in Key Business Ratios, the average gross profit rate achieved by businesses in the personal services sector (including hairdressers) rose by over 6 percentage points between 1989 and 1996.
Government figures included in Business Monitor (SDA 29, Service Sector), however, suggest a different trend, with the average gross profit rate for members of VAT Trade Codes 8891, 8892, 8950 and 8891 (hairdressers etc) falling from 90% in 1992 to 88% in 1994. More recent government statistics, collected on a different basis and included in ONS Sector Review: Service Sector, suggest that the average gross profit rate for businesses engaging in hairdressing and other beauty treatment remained fairly stable between 1994 and 1996. The average for the sector rose somewhat in 1997, when according to government statistics it stood at 93.5%. However, the average fell back to 91.4% in 1998. 2000 data, which is not directly comparable with previous years' figures, gives an average gross margin percentage of 94.7%.
The average gross profit rate for the hairdressing sector may be highest during times of economic prosperity, when demand for expensive, 'added value' hair styling services tends to increase. In terms of historic financial performance, individual hairdressing salons might fall into one of the following broad categories;
- basic, traditional outlets, in which operating practices and the range of services offered have changed little over the years; these are likely to have experienced little or no significant variation in the gross profit rate
- upmarket, fashionable salons (particularly ladies' and unisex outlets), which adapt to changes in consumer demand; the gross profit rate achieved by this type of salon may fluctuate considerably from one year to the next, as a result of changing fashions, trends in consumers' expenditure and a number of other factors (see Performance indicators: Factors affecting ratios).