Before You Open a Second Nail Salon, Make Sure the First One Can Afford It
By ProfitWise - a Visa Business Plans company
A nail salon owner came to us with what seemed like a good problem to have.
Her salon was busy. Saturdays were booked, many of her nail technicians had regular clients, and she often turned away walk-ins during the busiest hours. When a space became available a few miles away, she started thinking seriously about opening a second location.
“If this salon is this busy, imagine what we could do with two.”
It made sense.
But before talking about the new location, we wanted to understand exactly what was happening at the first one.
The salon was generating good revenue, but the owner was also doing a lot of the work herself. She handled scheduling problems, ordered supplies, covered the front desk when needed, helped manage the technicians, and kept a close eye on the customer experience.
That raised an important question. If she spent much of her time getting the second salon started, what would happen at the first one?
This is something that’s easy to underestimate when a nail salon expands. A second location isn’t simply another lease with more manicure tables. Someone has to manage it. It needs technicians, front-desk coverage, polish and supplies, furniture, equipment, licenses, insurance, utilities, and enough cash to carry the business while the new location builds its clientele.
Meanwhile, the original salon still has to run.
That’s why we like to understand how profitable the first location really is before an owner commits to another one.
For example, if the salon’s profits depend heavily on the owner personally seeing clients, some of that income may disappear when she starts spending time at the new location. If several technicians have strong personal followings, it’s also worth considering whether clients are loyal to the salon itself or primarily to the individual technician.
Staffing brings another issue into the conversation.
Finding enough good nail technicians for one salon can already be challenging. Opening another location may mean hiring several people at once. If experienced technicians from the original salon move to the new one, the first location may temporarily lose some of its capacity while the second is still trying to build revenue.
Then there’s the cash required before the first manicure is ever performed.
A new salon may need deposits, build-out, manicure and pedicure stations, ventilation, furniture, signage, inventory and marketing. Once the doors open, payroll and rent begin immediately, even if it takes months for appointment books to fill.
At ProfitWise, this is where we help business owners slow the decision down and put numbers behind the idea. We can look at what the existing salon is really producing, how much cash it generates, what the new location is expected to cost, and how long the owner can reasonably expect to support both locations while the second one gets established.
Sometimes the numbers confirm that it’s a great time to expand.
Other times, they show that the first salon needs a little more time. Perhaps the owner needs to build a stronger management structure, accumulate more cash, improve margins, or make sure the business can operate successfully when she isn’t physically there every day.
Opening a second location can be an exciting step for a nail salon owner, especially when the first one is constantly busy.
Just make sure you’re duplicating a business that works on its own, rather than a business that works because you’re always there.
