Looking good is big business. There are about 80,000 hair salon establishments in the U.S., according to a report released this year by Dun & Bradstreet's First Research. It's also become a powerhouse industry that generates retail sales of $63 billion in this country alone, according to the 2017 Professional Salon Industry Haircare Study by industry consulting firm Professional Consultants and Resources. So how does your hair care salon hold up against this sea of competitors, ranging from independent shops to major chain operations? A SWOT analysis, an acronym made from the words Strengths, Weaknesses, Opportunities and Threats, is a useful tool to find the answer.

What a SWOT Analysis Does 

A SWOT analysis identifies these four key factors that directly influence your business. Strengths and weaknesses are internal factors that are most likely within your control and are linked to the daily operations now. Opportunities and threats point toward the future and are external factors that tend to be out of your control but can be somewhat manageable. Identifying these components as they apply to your salon will help you build on your strengths, take advantage of opportunities and limit or resolve your weaknesses so that your business is less vulnerable to outside threats.


List what you've got going for you. This could be a centralized and convenient location downtown or in a high-end district of the city. If you're operating out of a new facility, working with cutting edge equipment and instruments or using a well-known line of products, those count, too. Perhaps you offer expanded hours on Sunday and stay open past 7 p.m. a couple of nights a week. Low overhead, immaculate appearance, and an experienced and enthusiastic staff are strengths, as are creature comforts like complementary coffee or wine for clients.


Compiling this list won't be easy, but taking a hard look at what might be weaknesses work best. The aforementioned strengths could become weaknesses with regard to location, age of your facility, quality of your equipment and staff members that aren't capable of or willing to deliver an effective customer experience. Are customers enduring lengthy wait times? Have you noticed more people requesting certain services that you do not offer but that competitors do? Devise counteractive methods to stop these weaknesses, whether it's upgrading your equipment, expanding the services menu or adding additional staff to accommodate a high volume of clients.


Take your strengths and brainstorm ways to transform them into unfulfilled possibilities. Designate evening hours once a month as a promotion night to offer half-off on your new blow-dry service and provide complementary small bites and wine. Get travel sizes or gift sets of the respected product line that you use and sell them to clients for at-home use. If you have stylists that are especially great with kids, consider adding a special children's menu and pricing. That way, dad and son can conveniently get shorn at the same time, and you capture part of that growing family-economy salon segment.


There's little you can do when that big-box chain offering fast, cheap cuts opens across the street, a dour economy discourages once-faithful regulars from coming in as often or a trend that has more women embracing their natural gray locks renders your hair-coloring station quiet. Acknowledging these threats, however, enables you to devise a ready-to-go strategy if or when the need arises. Evaluate your marketing budget and create a plan to increase your visibility and social media reach. Identify which services have been vulnerable to trends in the last few years and consider alternatives that can generate revenue in their place if needed. And that client who returns every six weeks for a color? Give her another reason to return that doesn't involve hiding her gray, like a signature deep conditioning mask or blowout.


If your hair salon needs some freshening up, consider these ideas:

Blow-dry bars grew 25 percent in revenues and also in number of locations over the last year. If you offer a blowout service, think about expanding it.

Aggressive promotions and special offers with deep discounts can energize sales and move products that have been on the shelves for a while.

Men’s hair color services are experiencing an uptrend. Promote this service if you aren't already.

Gift certificates generate revenue and account for about 10 percent of overall sales. Keep a good supply of plastic or paper versions on hand for gift-giving seasons like the December holidays, Valentine's Day and Mother's Day.