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southafricanharisalon

Sector Spotlight: Hair Salons

Purchasing a fully-fledged business is one way to avoid the risks associated with starting a new business venture.

Even though research on hair care salons in South Africa is limited – and skewed by much informal activity – the hairstyling sector is a high-profile presence in many towns and cities.

As urban areas continue to grow, so does the size, influence and disposable income of the professional middle classes – as well as the number of people employed in appearance-conscious environments.

Facts and figures

  • A report from news24 suggests that relaxing is the most popular hair-care treatment in South Africa’s hair salons. This is estimated to constitute up to 80% of all business.
  • A global market leader in all aspects of hair care, L’Oréal opened South Africa’s first Professional African Salon Institute (LPASI) at Braamfontein in 2014. Students receive practical and theoretical training, and after graduation are offered placements in L’Oréal salons or help to open their own salon. (Information from the French Embassy in Pretoria).
  • The South African hairdressing industry divides into two main sectors: a large Afro sector and a much smaller Caucasian sector. It is estimated there are around 34,000 Afro salons and some 3,000 Caucasian hairdressing salons in the country. Though the Afro turnover is unknown, Caucasian salons are reckoned to turnover R150 million per month on services alone. 

Overview

The black hair industry is the largest sector and continues to grow. Employees are mostly women,

who also make up the majority of the informal segment of the hair care market.

Salon activities mainly fall into two broad categories: ‘dry hair’ processes such as wigs, weaves and hair extensions, and ‘wet hair processes which include chemical relaxers as well as shampoos and conditioners. Relaxing and African hair styling are the most-requested services.

There is also a demand for newer service combinations, for example, adding a colour to relaxed hair, with such styling options commanding high prices. In addition, black women are much more likely to change their look and styling on a regular basis – perhaps as much as every six weeks. This includes radical shifts such as from weave to braids or curly to straight.

Trends

Hair is a key aspect of personal appearance and people adopt suitable styling, cuts, and colours to enhance their look. The choice of salons varies according to income, with only the more affluent groups opting for upmarket salons and high-quality materials.

Consumers are also becoming more discerning and health-conscious in their choice of services. This has created an increasing demand for products which are less damaging to hair, as well as a shift towards more natural, chemical-free styling and a tendency for women to want to grow their hair out.

Challenges

Market growth in South Africa is restricted by the rising cost of living, as well as by the need to increase education and training facilities.

And even though hair relaxing remains big business, there is now a global trend towards natural hair and treatments.

As more and more women adopt natural styling (some estimate the numbers may soon be approaching 50%), there is a further concern that natural treatments and chemical-free products are considerably more expensive, a fact which may well serve to depress growth.

Licences and permissions

Even though no trading licence is required to run a South African hair salon, it would be wise to register with an industry body such as the Afro Hairdressing and Beauty Association of South Africa (AHBEASA).

Not only will this give access to important industry facts and knowledge, such associations can often offer valuable support if you encounter business problems.

If you are planning a new business start-up, or wish to modify an existing location, it’s also imposed by business zoning laws. Company registration will still be necessary, and of course, you will also need to notify the tax authorities.

Your business will also need insurances (e.g. public liability cover) and if you hire staff you must also comply with employment legislation.

Essential skills

South African hair salons are expected to deliver a broad range of stylings and treatments. And though hairdressing qualifications such as the National Certificate in Hairdressing are available, workers will also need to develop additional skills.

These may include hair colouring, relaxing and the use of hair extensions, weaves, and braids. In addition, client consultation skills are an essential requirement for working in an upmarket salon.

Buying a business

Purchasing a fully-fledged business is one way to avoid the risks associated with starting a new business venture. However, this means you must do your homework carefully to ensure any enterprise you hope to buy will be suitable. For example, is it in the right location to match the image you wish to create, and is there space to carry out all the services you wish to offer?



Bruce Hakutizwi

About the author

USA and International BusinessesForSale.com Manager for BusinessesForSale.com, a global online marketplace for buying and selling small medium size businesses. The website has over 60,000 business listings and attracts over 1.5 million buyers to the site every month.

@BizForSaleUS

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