Hair Salon SWOT Analysis


One of the foremost strengths as it relates to owning and operating a hair salon is that these businesses are reasonably immune from negative changes in the economic climate. Quite simply, no one can given themselves as styled haircut. As such, the general public turns to licensed stylists and cosmetologists. Although the Covid-19 pandemic required that many of these businesses remained closed for a few months, the demand for these services did not wane.

A major benefit for a hair salon is that these businesses often generate substantially high gross margins from their services. The profits of these businesses can be substantial especially if the owner does a considerable amount of hair styling on the premises (while concurrently having a staff of stylists). These businesses can also generate significant revenue streams from the rental of booths at their facilities (which can produce highly predictable income streams for the owner)


The primary drawbacks to hair salons are that they do have low barriers to entry. The licensure requirements for these businesses are not substantial, and it does not take much capital to launch a hair salon. Within any town or city, there are always numerous of salons in competition with one another. As such, it is imperative that the owners of these businesses engage in high impact marketing campaigns that create substantial awareness of their respective hair salon’s brand. The operating costs for a hair salon can also be significant depending on the size of the facility that is either leased or purchase.


Given the Covid-19 pandemic, the primary opportunity that many hair salons are capitalizing on is the demand among customers to have haircuts and styling services rendered at home. Many salons are acquiring and retrofitting vehicles specific for providing these services onsite. This is one of the foremost ways that many well-run hair salons have stayed in business during the pandemic. It is expected that demand for at home services will remain strong even once the pandemic subsidies (especially among vulnerable populations).

The other opportunity that hairs salons enjoy is simply the establishment of new locations once the initial location reaches its maximum capacity. Most financial institutions are willing to provide the necessary capital to expand these businesses.

Lastly, hair salons seek to become accredited for providing stylist and cosmetology education among people seeking to acquire their licenses. This can drastically boost revenues by charging tuition fees and licensure fees for becoming a stylist or cosmetologists.


The primary threat that most hair salons face is from ongoing competitive issues. As discussed above, there are always numerous competitors that must be faced in any market. The other ongoing threat that is currently facing all businesses stems from the uncertainty surrounding the Covid-19 pandemic. However, many states are taking a measured approach to reopening their economies so that a second major shutdown does not occur.