Imagine being someone who has always enjoyed helping other people look their best. You decide, after considering all your career options, that you want to become a licensed cosmetologist, and eventually, to own your own salon. You go to work in a high-end day spa, and you slowly build a client base. Once you decide to go out on your own, you have a sufficient client roster to keep the income steady. But when it comes to the business side of your operation, you’re unprepared, and it shows. You’re not familiar with marketing, and you don’t know how to handle business finances. Before long, the salon has shut its doors, and you’re right back where you started, only now you have a lot more debt than before.
This scenario paints a dismal picture, but it’s one that’s all too familiar in the cosmetology industry. In fact, more than 90 percent of cosmetology graduates in our country will either own a salon or become an independent contractor. Yet within five years, more than half of them will fail. An article on entrepreneur.com blames failure of beauty businesses on factors including inadequate cash reserves, failure to clearly define and understand the customer and his or her buying habits, failure to properly price services and products, lack of or improper response to changes in the marketplace and a belief that you can do everything yourself.
When a salon fails, like any business failure, it affects more than just the owners. As the doors close, there is a domino effect. The staff can’t pay their bills, the clients have to go elsewhere, vendors may suffer and the economy is also affected. Because of the high business failure rate, many cosmetology graduates will end up defaulting on their student loans. According to the Department of Federal Student Aid, cosmetology schools have the second-highest student loan default rate in the country.
How can you avoid these problems? Entrepreneur.com suggests that you learn as much as possible about business management before you open your salon. It’s not enough to learn everything you can about cutting and styling. You also have to be familiar with finance, accounting and marketing.
One option for learning these business basics is to complete your cosmetology education and then pursue a business degree. A better option for people who want to get an education and get to work is a program that incorporates both the creative skills and the practical ones.
“It’s not enough to learn everything you can about cutting and styling. You also have to be familiar with finance, accounting and marketing.”
Yet this combination is rare. In South Carolina, cosmetology education must be approved by the South Carolina Board of Cosmetology. Until a few years ago, if business practices were taught as part of the cosmetology curriculum, the board required that they be taught by cosmetology faculty.
In 2013, Greenville Technical College (GTC) approached the board with a different educational model. Since GTC has experienced faculty with MBAs and other relevant degrees teaching accounting, finance and business courses, the college asked the board to consider allowing these faculty members to teach the skills that future salon owners need to succeed as part of the cosmetology program.
The board welcomed this change. Now, cosmetology students learn business communication, marketing to a diverse clientele, exceeding customer expectations, researching and compiling sales information, developing a client database, making effective sales presentations, establishing financial security, developing a business plan, identifying tax information and much more.
As a result of these changes, implemented in the fall semester of 2014, graduates leave with cosmetology skills and business skills. They can set their sights on opening a business knowing what’s involved. They have the knowledge to make a positive change in the failure rate common to the cosmetology industry.
The job outlook for barbers, hairdressers and cosmetologists is strong, according to the Bureau of Labor Statistics, with employment expected to grow 10 percent from 2014 to 2024. With a comprehensive education that prepares graduates to assist clients while succeeding in business, the outlook should be even better.