India’s beauty and wellness industry is flourishing as there are a large number of people investing in beauty and personal care. This massive demand has transformed the sector into a multi-billion dollar industry.
Gone are the days when beauty was considered a luxury. Today, it has become a necessity. This has led to aspiring investors and entrepreneurs taking the plunge into starting a salon business. However, one key question they all ask is – Is starting a salon business profitable in India?
You’ve probably noticed salons in every nook and corner. From tier 1 and tier 2 cities to small towns, beauty parlours and barbershops are in every area.
If you’re planning to start a salon business in India, this blog is for you. We will be breaking down salon monthly income in India and salon profit per day.
From understanding key numbers to how to track salon income, we will be breaking down everything you need to know.
Key Takeaways
- India’s salon market is valued at 1.02 lakh crore and is expected to reach $22.99 billion by 2033. The industry is witnessing tremendous growth.
- Rising disposable income is the key contributing factor. The upper middle-class is willing to spend more on personal care services such as haircuts, facials and skincare.
- There is also an increased beauty awareness as millennials and Gen Z particularly have started following global beauty trends. The aspiration to look and feel a certain way has created a more beauty-conscious population especially in urban areas.
- The middle-class in India is expanding and they’re constantly on the lookout for small salons that offer a range of services and are affordable at the same time. This again has led to an increase in demand for high-quality beauty parlour services.
Before we analyse beauty parlour income per month, let us look at the recurring expenses every salon owner has to incur and the factors that affect salon income.
Fixed Expenses in Running a Salon
A small salon in India will spend money on the following:
Location & Rent
Depending on the city, the rent can vary. However, the rent in cities such as Bangalore, Mumbai and Delhi is high.
When you’re choosing a location for your small salon, look for prime spots that promise high foot traffic. Only to save on rent, it’s no point opening in a secluded lane where people won’t find your salon at all.
The fixed expense of rent can range from 20000 to 60000 based on the city and location. Allocate 12% to 15% of your monthly expenses on rent.
Staff Salaries
This accounts for a major chunk of your monthly expense. Senior and junior stylists, managers, and helpers are often a big expense. Allocate 25% to 30% of your budget on salaries. A small salon may spend 40000 to 1.5 lakh a month on staff salaries.
Product Inventory
Next there is consumables and product cost. Hair colour, shampoos and facial kits cost anywhere between 10000 to 40000 a month and make up 10% to 15% of the monthly expense. Branded beauty products are an upfront and ongoing expense.
Utilities and Overheads
This includes electricity for heavy machinery, ACs, water supply, lighting and deep sanitisation protocols. This can range from 5000 to 15000.
Marketing
Marketing and tech is not a fixed cost but a variable cost. A few costs incurred under this vertical are local SEO, social media ads, Instagram marketing, Google spends, and salon revenue tracking software. Allocate around 5% on marketing.
After all these operational expenses, you’re left with net profit. Most small salons operate with a 15% to 20% profit margin.
Please note, these are all approximate figures and the initial investment and setup costs can vary depending on the location and size of your salon.
Factors Affecting Salon Income & Different Revenue Streams
Before we talk about if running a salon business in India is profitable or not, let us look at the different factors that affect the income along with the revenue streams.
- Location: This is a major deciding factor. A small salon located in a high footfall area will definitely make more profit than one situated in a low-traffic locality.
- Type of Salon: Small salons can either be unisex, or gender specific. Unisex salons tend to make more money compared to gender specific salons. However, starting a barbershop is always profitable.
- Client Retention: Repeat customers and loyalty is the backbone of a profitable salon. Your income is heavily influenced based on the number of repeats you get every month.
- Retail Sales Per Month: A lot of salon owners only focus on services and completely forget about retail. When you sell retail products regularly, your profit margin shoots up by 20% to 30%. This does not even require any extra service time.
- Service Pricing: Your salon services are usually divided into premium and non-premium services. Compared to a basic haircut, premium services guarantee a much higher profit margin. Thus, your monthly income is even dependent on how many hair treatments and bridal services you’re doing in a month.
Regular services may have lower margins but offer consistency. On the other hand, high-end services including hair spas, hair colouring and skin treatments have higher profit margins.
- Membership Packages: As a salon owner, it is important to diversify your income in order to boost profits. Another important revenue stream that affects your income is the number of memberships and packages you sell in a month. Since your clients have to pay upfront, it guarantees assured revenue.
Thus, these are the factors that affect salon profitability. If you’re starting a small salon business, it is important to strike a balance between high-volume services and premium offerings to ensure the profit margin is healthy.
Average Monthly Income of a Small Salon
Based on the above factors, a small local salon typically earns a net profit of 8% to 12%. However, it also depends on the salon type.
Salon Type | Revenue per Month | Estimated Profit |
Small Barbershop | Rs. 50,000 – 1.2 Lakh | Rs. 10,000 to 30,000 |
Neighbourhood Unisex Salon | Rs. 2 lakh to 4 lakh | Rs. 40,000 to 1 lakh |
Premium Franchise Salon | Rs. 3 lakh to 6 lakh | Rs. 80,000 to 2 lakh |
The estimated profit in this table is the owner profit. These numbers can vary based on the city and client volume per month. However, it is the average salon monthly income in India.
A lot of new or aspiring salon owners assume that salon businesses become profitable immediately. However, the reality is quite different. Salon owners take at least six to eighteen months to build a stable customer base. This is also the time when they recover setup and investment costs.
Only with consistent efforts can you gain repeat customers. When you start a small salon business in India, your income becomes stable and predictable over a period of time.
In Summary
Small salon earnings in India can be quite significant if the business is managed correctly. If you’re taking the plunge and starting a salon business, don’t expect profits from day one. We have discussed the salon profit per day in India along with the contributing factors.
A small salon can scale well only if it is in a good location and if the business owner uses salon software to run it. If you’re wondering how to track salon income, salon billing software is the answer. It gives you a realistic picture of where your business stands along with the key performing indicators (KPIs).
Salon360 is a salon revenue tracking software that is ideal for new beauty businesses or small salon owners. It helps track beauty parlour income per month.
Get started with a free demo.
FAQs
Is a Salon Business Profitable in India?
Yes. A salon business is profitable in India based on an array of factors. The location of the salon matters in determining its profitability. Since the beauty and grooming industry in India is growing, more people are frequenting salons and beauty parlours.
Which Salon Services are the Most Profitable?
The most profitable salon services are keratin/smoothening, hair colouring, hair spa, bridal makeup, facials, acrylic nail extensions and membership packages. Retail sales also contribute significantly to overall profit margin.
What is the Profit Margin of a Small Salon Business?
An average small salon can expect 8% to 20% of profit margin. However, this only applies to well-managed salons that offer consistent services, membership packages, sell retail and have a steady stream of repeat clients.
How Long Does it Take for a Salon to Become Profitable?
Most small salons take six to eighteen months to build a client base, and twelve to twenty-four months to recover the initial investment. With strong marketing, salon owners are able to recover faster.
