Hair, the 20 Billion Dollar Seasonal Business
It’s no surprise that the hair industry enjoys nearly $20 billion in revenue per year. With annual growth projecting to more than double that number by 2019, this already competitive landscape is becoming increasingly challenging for new, and even well-established business owners. With these challenges comes a variety of ways to overcome the obstacles of starting, or expanding your hair care business; some of those solutions are more conventional than others.
Here’s a few tips to help you get started with your new business, or give you some ideas on how to grab new clients from an overwhelmingly competitive local landscape.
Focus on Men
There has been an unparalleled resurgence in the traditional barber shop. It’s safe to say that this once bygone corner of the hair care industry isn’t just the gathering place for old men and hipsters any longer; young dads, teens, middle-aged businessmen, and even fashion-conscious trendsetters are flocking to the post-modern barber shop to experience the revitalization of a centuries old tradition. And although you might assume that your salon isn’t equipped to mimic the “locker room” environment of your local barber, you’d be surprised to learn that many modern barber shops favor the same elegance and customer experience of a high-end salon.
Here’s some methods you can use to compete with your local barber:
- Hire a real barber, someone that doesn’t just understand the term “tape-up,” but knows how to pull one off efficiently, and with precision.
- Don’t be afraid to dedicate a corner of your shop to your male audience. Add masculine decor, and celebrate that masculinity — encouraging the male persona will not just empower your male customers, but it will provide them with a comfortable space that feels natural for them, which will lead to repeat business.
- If you don’t want to change the look of your salon to garner new male customers, team up with a popular local barber shop and develop an affiliate relationship. Encourage their customers to send their wives to your shop, and vice versa.
No, we’re not just talking about scheduling appointments on your smartphone. The greatest part about hair care is it’s one of the easiest businesses to take on the road; most of your favorite tools fit neatly in one bag. Meet up and network with other local businesses, attend workshops, and local events where you can set up promotional “chairs” and advertise your service offerings to cold clients. Consider renting a truck to do on-site services for weddings, dances or proms — this will also help boost revenue, as proms are often staggered throughout the season, allowing you to commute to regions where you have fewer customers after your local shop has been through the lion’s share of its seasonal clients.
With weddings and proms covering most of the fall and spring, summer and winter are by far the lowest performing months for most salons. While there are exceptions, revenue can dip low enough that the coffers you filled during your seasonal months are quickly emptied. For some new businesses, this can spell disaster, as there may not yet be an established cliental to generate that seasonal revenue. In these cases, you might find yourself turning to family and friends to help bridge the gap between seasons, or you may look for a traditional bank loan to make things easier. Instead, consider a merchant cash advance, which doesn’t just have easier approvals with less stringent requirements than traditional loans, but it’s based on your business’s income, meaning that when you’re between seasons, your repayments are much easier. Some of the benefits of Merchant Cash Advances include:
- Repayments that are based on sales, meaning off-season revenue doesn’t suffer as you struggle to make inflexible bank loan payments.
- Applications have much higher approval ratings for newer businesses.
- Low credit requirements as most approvals weigh your business revenue higher than your personal credit score.
- Faster approvals, as quick as the same business day.
- Faster funding, with approved accounts receiving funds in as little as two business days.
- Revolving lines of credit.
Whether you’re a new or established hair care business, it’s easy to fight the seasonality of your industry, cater to the needs of this growing and changing market, and find new and interesting ways to garner new clients without resorting to the often expensive, and sometimes frustrating process of using traditional advertising sources.
Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.
Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.
Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.
Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.
Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.
A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.
After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.
EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.