Entrepreneurs continue to seek out opportunities to take their cut of the $64 billion hair care industry. The average hair salon owner in the United States generates about $245,000 in revenue each year, touting a higher profit margin than businesses in other verticals. Additionally, the average salon business profit margin continues to increase annually, with topline revenue growth of nearly two percent last year.
By comparison, Pigtails & Crewcuts franchisees have seen an average unit volume (AUV) of $294,143.* Through offering a memorable experience in a niche market, as well as capitalizing on multiple revenue streams, Pigtails & Crewcuts salon owners are able to boost their bottom line.
Here’s more behind the demand and profitability of kids haircut franchises and how Pigtails & Crewcuts franchisees can diversify revenue streams to maximize sales:
Strong Demand for Kids Haircut Franchises Fosters Profitability
Specialized kids haircut franchises are a niche business within the salon and hair care industry, which is otherwise highly fragmented and competitive. Whereas typical salons can be found at almost every turn, kid-friendly concepts fill a substantial yet specific void within many communities across the country. Parents spend more than $7 billion annually in the children’s haircut segment – a figure that continues to grow each year.
Plus, by focusing on the right regional markets, kids haircut franchises are able to tap into a target demographic of millions of children under age 12. With strong demand in a niche industry, Pigtails & Crewcuts franchisees are set on a path toward profitability from the start.
Building a Business with Strong Brand Equity, Affinity, and Awareness
Strategic marketing can help franchise owners keep their customer acquisition costs down. Community outreach and local partnerships are some of the most effective marketing tactics for local children’s hair salons. This kind of local marketing approach is also much more cost-effective for owners, creating opportunities for stronger potential net profits. Many Pigtails & Crewcuts franchisees have leveraged their business to get involved in their communities, which serves both altruistic and business-oriented purposes.
For example, North Carolina-based Pigtails & Crewcuts franchisee Angel Putnam sponsors the kid’s club of the Greensboro Swarm, a local basketball team. Through this program, kids are able to come and watch the games, meet the players, participate in various activities, and even shoot hoops with the team.
“When you give back to your community, they take care of you,” Angel said.
Grassroots initiatives to get involved in the local community can cost next to nothing, but they pay in dividends when it comes to brand awareness and affinity. By cultivating strong interest for your local business through partnerships, sponsorships, and other outreach, you’re able to bring in more customers while keeping marketing costs down.
Diversifying Revenue Streams to Maximize Cash Flow
Haircut and styling services are undeniably the primary revenue source in any salon business, but owners are also able to generate sales from other streams. Retail products, such as children’s hair care products and accessories, as well as birthday parties and event programming, offer additional options with uncapped revenue potential. In fact, these supplemental sources typically comprise roughly 20 percent of our franchisees’ revenue.
Unlike food service and other concepts, there’s minimal waste and higher profit potential with a retail line that features hair care, accessories and other products, which tend to last longer than other categories.
Offering complementary hair products and events at a kid’s haircut franchise provides parents with more than just a one-time service. Instead, salons with diverse revenue streams serve as a one-stop-shop for parents to take care of all their kids’ hair care needs at once. This, in turn, fosters stronger client relationships, while increasing opportunities to meet customer needs and add value to their experience.
Beyond amplifying long-term profitability, diverse revenue streams also protect cash flow, fuel broader business growth, and boost customer relationships and retention.
With built-in demand and diverse revenue streams, Pigtails & Crewcuts franchisees are positioned for success in the booming kid’s haircut industry.
Minimizing Startup and Ongoing Expenses to Boost Your Bottom Line
High demand, brand affinity, and diverse income sources can help salon owners generate higher revenue, but that’s only a part of the battle to foster a solid profit margin. The other key lies in keeping initial and ongoing costs as low as possible. Real estate and staff management are top business expenses, meaning these are also some of the first places you should look to minimize costs and optimize your investment.
For example, securing second-generation real estate helps keep construction and build-out costs low, while allowing for greater net gains. During the site selection process, we favor properties that already feature many of the essentials to run a salon business – from paint-ready walls to functional plumbing, HVAC and electrical systems. Not only does this circumvent additional labor and construction costs, but turnkey sites also help franchisees get up and running faster.
Similarly, by focusing on strong employee retention, franchisees are able to further reduce their overhead costs. Many Pigtails & Crewcuts stylists and other staff members have been with the brand for several years. Franchisees who focus on retaining the best employees have the chance to avoid the high expenses associated with recruiting, hiring, and training new employees every year.