Hair Care Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 76,600 hair care service companies in the US, including beauty shops, hair salons, and barber shops, provide hair cutting, coloring, and styling services. Hair salons may also provide skin and nail care services. Barber shops may shave or trim men’s beards. Companies often sell hair care products. The vast majority of hair care service providers (95%) are beauty salons.
Competition For Ancillary Services
Beauty parlors compete with spas, nail salons, and physician’s offices for ancillary services related to skin and nail care.
Dependence On Skilled Labor
The reputation and success of an individual hair care establishment is highly dependent on the quality of service and staff.
Industry size & Structure
The average hair care service provider operates out of a single location, employs about five workers, and generates about $376,000 annually.
- The hair care services industry consists of about 76,600 establishments that employ 402,000 workers and generate about $28.8 billion annually.
- The vast majority of hair care service providers (95%) are beauty salons.
- The industry is highly fragmented; the top 50 salon firms account for 13.6% of total revenue.
- The hair care services industry includes national chains, franchises, and independent operators.
Industry Forecast
Hair Care Services Industry Growth
Recent Developments
Jul 17, 2024 - Employment, Labor Costs Up
- Hair care services employment increased during the first five months of 2024, according to the US Bureau of Labor Statistics. Average wages for nonsupervisory employees in the hair, nail, and skin care services industry grew during the first five months of 2024, reaching $24.61 per hour in May 2024. Hair care services may see an uptick in customers due to higher consumer spending levels in May 2024, up 0.2% from the previous month, according to the Bureau of Economic Analysis.
- Hair salons are monitoring the progress of a proposed ban by the Federal Trade Commission (FTC) on most non-compete agreements, scheduled to go into effect in September 2024, according to a report in Salon Today. Salons often use non-compete and non-solicitation agreements to protect their assets, per the report. Salons may want to review the contracts of existing employees and new hires to become familiar with who is covered by non-compete agreements. A Texas federal district court issued a preliminary injunction in July 2024 preventing the FTC from enforcing its ban. According to the National Law Review, the injunction applies only to a Texas-based tax law firm and a group of business associations; legal challenges to the ban are pending in other US courts.
- Minnesota and Connecticut have added new regulations requiring hair education training, education, and testing on all hair types and textures to earn a cosmetology license, according to recent reports. Minnesota Senate President Bobby Joe Champion, who sponsored the legislation, said the new law will increase the knowledge base and cultural competence of the cosmetology industry and introduce stylists to new clientele populations and make it easier for black, indigenous, and other people of color (BIPOC) to get the services they need, per Mpls-St. Paul Magazine. Other states enacting similar requirements are New York (2022) and Louisiana (2021). Historically, cosmetology schools have not featured textured hair education as part of their curriculum, and students who desired it needed to pursue additional training.
- Consumer confidence levels fell in June 2024, after an uptick in May, according to data from The Conference Board. The Conference Board’s consumer confidence index was 100.4 in June 2024 from 101.3 in May 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those under age 35 and those in the income category of over $100,000. Plans for large appliance and smart phone purchases rose on a six-month basis, while plans for car purchases stalled.
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