nail salon

[florida2001]

Hi,
I am thinking about opening nail salon, but I am wondering how much profit it would make aproximately. I was thinking to have 6 stations plus 3-4 pedicure station + waxing. Lets say average mani+pedi is 35$ and rent 2200/month. How much do you think is possible to make every month? (profit). In south florida. Just trying figure out.

thank you

[Patrysha]

Well that's going depend enormously on more than a few factors from your location, equipment, specialties and staffing - who and where are your competitors, who is already leading the market...

If you're selling mani-pedi's at $35 unless your pricing is significantly different from what's charged in Canada you'd be running at a huge loss especially during non-peak periods.

Have you ever worked in the nail/beauty industry before?

[John-AthenaAnalytics]

Hi Florida2001,

Patrysha makes a great point about 'who and where are your competitors'. If you haven't already, I would do a little market research to get a better understanding of how many establishments are in your area and what are the average number of employees per establishment. You could start by taking a look at the Bureau of Labor Statistics (BLS) and Census data. The NAICS code for Nail Salons is 812113.

If your area has a high number of nail salon establishments you might have some challenges attracting customers. If this is the case, then you may have to think about providing incentives to build a customer base. This could initially cut into your profits. Just something to think about.

I wish you much success!

John

[Fulcrum]

Rather than look at what the other guys are doing, take a look at what you need to do and make to break even. I have no clue as to what it takes to staff or operate a salon (or any salon for that matter) of this type. Use the process to figure out what kind of money you need to pull in.

Rent = $2,200/month
Hydro/water = let's assume $500/month
Employees = let's assume 4 people earning $2,000/month including your portion of the government's take, so $8,000
Insurance (fire/theft/liability/etc) = $400/month
Non-salable inventory = $1000/month

Adding up the expenses, I come up with $12,100.

After plugging in some real numbers, how much business do you think you will need to do just to cover your business expenses? How much more will you need to do to earn a profit and keep your personal bills paid?

[florida2001]

thank you for advices Im going to make some deep research

[John-AthenaAnalytics]

thank you for advices Im going to make some deep research

florida2001,

Although a break even analysis is an essential component in your business planning process, I would still recommend that you look at what your competition is doing. One of the most common questions we get is "how do I compare to my competition?" More specifically: Do I have too many employees? Am I paying my people too much? What should a business like mine be bringing in revenue?

They also ask about their potential to grow and acquire new customers and do I have the opportunity to expand my business? Businesses today are using the answers to these ‘types’ of questions to better understand their market and gain a potential competitive advantage.

Aspiring business owners are using this information to better understand the marketplace before making a full commitment. We often see people believing or having a perception of what is ‘needed’ only to be surprised that what they thought is not necessarily true. Honestly, I am sometimes also surprised. However you choose to do it, making the most informed decision about your business can potentially decrease the number of ‘surprises’ in the future.

Don’t give up. Always keep learning about your business…become the expert.

John

[PayForWords]

What everyone else said and...


I see a lot of places around here renting out space to others?


That would save you from paying employees, would get you some initial income, and you could take a cut.


Would need to make sure they are good and act as employees though.


This is very common in nail places here as well as barber shops.


Also, find out what your competitors charge and why they should come to you instead.

[BIZDEV]

To me even more important than the break even analysis from the business plan is the monthly cash flow statement. That will tell you everything at a glance (detailed expenses inc rent, payroll, taxes, supplies, inventory, bank fees, utilities, insurance and incoming cash revenue). That will tell you if you will make enough (projected) to meet expenses month over month. See below for detailed instruction how to write a cash flow statement (and the break even analysis). Also lots of detail about how to start a business.

[Harold Mansfield]

You should do all of the legwork that you are doing, but when it comes down to it, no one ever knows if they are going to make any money when they open a business.
All of the projections in your business plan are just that, projections. Hypothetical hope, and BS.

Aaron Patzer, found of Mint has reaffirmed this on more than one occasion: (See 9th slide)
Mint Founder Institute Accounting (http://es.slideshare.net/weblover/mint-founderinstitute-accounting)

The best you can do is look at all of the variables, patterns, and local demographic and business info and come up with probabilities, and a plan on how to meet projections ( advertising. marketing. promotions and so on.)
But what usually happens is that it doesn't go as planned on paper and you make adjustments along the way based on reality.

So that means, have more than one plan, leave yourself some wiggle room, and be able to think on the fly to come up with contingency plans.

It can take years to get it down to a science where you know that spending so much on marketing, yeilds so much in business+repeat business and new marketing and/or expansion.

[BIZDEV]

The best you can do is look at all of the variables, patterns, and local demographic and business info and come up with probabilities, and a plan on how to meet projections ( advertising. marketing. promotions and so on.)


Well you just described a classic business plan. Call it BS if you want, but try walking into a bank to ask for a loan with anything other than a formal, traditional business plan. You won't get very far.

[Harold Mansfield]

Well you just described a classic business plan. Call it BS if you want, but try walking into a bank to ask for a loan with anything other than a formal, traditional business plan. You won't get very far.

When I say BS, I mean that they are numbers that you pretty much make up based on goals that you want to reach. Some business plans include details on how they plan to reach those goals, but it's still a crap shoot. The numbers aren't based on anything that is a definite.

[BIZDEV]

When I say BS, I mean that they are numbers that you pretty much make up based on goals that you want to reach. Some business plans include details on how they plan to reach those goals, but it's still a crap shoot. The numbers aren't based on anything that is a definite.

If a business plan's numbers weren't based on anything definite no bank would ever issue a loan. Of course the numbers are "definite". You should have definite numbers for rent cost, inventory cost, supplies cost, utilities costs, insurance costs, payroll costs, etc, etc, etc. The unknown definites are revenue. But you damn well better have a good estimate or you shouldn't be starting a business. The whole point of creating a formal business plan is to get all these numbers.

[Harold Mansfield]

If a business plan's numbers weren't based on anything definite no bank would ever issue a loan. Of course the numbers are "definite". You should have definite numbers for rent cost, inventory cost, supplies cost, utilities costs, insurance costs, payroll costs, etc, etc, etc. The unknown definites are revenue. But you damn well better have a good estimate or you shouldn't be starting a business. The whole point of creating a formal business plan is to get all these numbers.

OK, maybe I'm not being clear enough. Let me narrow it down to just projections. No matter what you put on paper, there is no formula or guarantee that you will make a dime and ever reach those numbers.

They are goals. Not guarantees. And they are not revenue.

Actual cash money coming in is revenue. What you put in paper is NOT revenue. It's projections. It's hope. You hope to meet those goals.
You are basically saying to a bank or investor, "Here's what we're hoping to make". And if you're smart, you'll have a realistic plan on how you hope to make it.

[Fulcrum]

Well you just described a classic business plan. Call it BS if you want, but try walking into a bank to ask for a loan with anything other than a formal, traditional business plan. You won't get very far.

I actually tried this when looking for a 5K credit card or a Visa working LoC for 20K, albeit with a formal business plan, and all I got were directions to the exit (I had no debt and a 750ish credit score). Even though they say the opposite, banks do not want to put "their money" at risk in a start up unless there are going to be guarantees from government or private equity firms.