 Download the 2011 Salon Today 200 (PDF) |
“We felt elated, affirmed, excited and proud! We have all worked hard to prevent a slumping economy from affecting our business culture, which in turn would affect our client experience. We feel good about our accomplishments to that end, and it is so wonderful to receive recognition from an industry leader like SALON TODAY.”
—Paula Coll, general manager, Zanya Spa Salon in Lambertville, New Jersey
“I had a vision for a salon, and over the past five and a half years I have felt like the little train that said, ‘I think I can, I think I can.’ This recognition validates my dream and rewards the warriors who have joined my team.”
—Barri Allen, owner, A Signature Hollywood Salon in O’Fallon, Illinois
“While I really wanted to run through the salon in Paul Revere fashion shouting, ‘We won, we won!’ instead I closed my eyes for a moment and went on a journey into the past. As the movies played back in my mind, I felt all the people who had touched my life and how happy I am to be in the best industry in the world.”
—Jacque Leonard, Salon Roux in Paso Robles, California
Honoring Best Practices
For many years, the SALON TODAY 200 measured growth, honoring the fastest-growing salons in North America. Growth is a positive reflection on the overall health of a business, and as such, continues as a big force within the ST200. As a result, 100 of the 200 salons profile fast-growing salons. But, last year, we expanded our mission, to more closely examine the best salon management practices that contribute to a strong business. In addition to growth, the 2011 competition profiles 10 salons each in 10 different best practice areas including:
• Compensation & Benefits
• Retention & Referral Programs
• Customer Service
• Recruitment & Training
• Advanced Education
• Marketing
• Environmental Sustainability
• Philanthropy (New for 2011)
• Retail & Merchandising
• Technology
A Recession’s Impact
While as a whole, the ST200 salons continued to exhibit growth throughout 2009, the rate by which gross revenues have grown dramatically slowed as a result of a sluggish economy. From 2008 to 2009, gross revenue grew 10% (to an average of $1.95 million) compared to growth rates of 21%, 20%, 25%, 29% and 30% in the five preceding competitions.
In addition, the price for an average shampoo, cut and style dropped, from $48.75 to $47.45, for the first time since we began measuring it. Profile of a ST200 Salon Collectively, the information from the ST200 honorees gives a snapshot look at the health of salon business during 2008 and 2009. If you took a composite picture of the typical ST200 owner, you would see a salon and spa that …
• Opened its doors in 2001.
• Occupies 4,967 square feet.
• Earned an average of $1,915,071 in gross revenue in 2009.
• Experienced a 10-percent increase in revenues between 2008 and 2009.
• Received roughly a third of their gross revenues from hair coloring services, and a third from hair cutting services.
• Charged an average of $47.45 for a shampoo, cut and style.
• Charged an average of $63.96 for a single-process color.
• Employed an average of 41 employees.
• Spent 47% of their expenditures on labor costs.
Expansion Plans
The majority of the ST200 salons (76%) maintain only one salon location. Not surprising, salons with gross revenues of $2 million or more are significantly more likely to operate multiple salons, but interestingly, salons located in the midwest or the south also are more likely to have secondary locations. Of salons that do have more than one location, on average they operate three to four sites.
The Age Game
Over a third of the applicants (38%) opened their salons between 2000 and 2005, and 2005 was the year listed most frequently for year opening.
Size Matters
While a typical ST200 salon occupies an average of almost 5,000 square feet, there are some marked differences per region. Salons in the midwest tend to be larger than those in other regions, with an average of 7,200 square feet, compared to 4,900 in the south, 3,700 in the west and 3,200 in the northeast.
A Look at Gross Revenues
While salons with gross revenues of $2 million or more generate significantly more of their business from skin care, body care services and nail services than other salons, hair color and hair cutting brings in the bulk of the money for all salons.
Who’s the Boss?
In 2008 and 2009, the ST200 pulled their weight in providing jobs to the US economy. In fact, the average number of employees among the ST200 increased from 35 to 41. Salons grossing more than $2 million have almost four times as many employees at those grossing from $1 to $2 million. Salons in the Midwest have an average of 63 employees, significantly more than the average of 29 in the west.
ST200 Behaviors
As a group, the ST200 exhibit some common behaviors that contribute to their success. For example:
• The great majority of the ST200 (84%) consider themselves to be a salon and day spa.
• Two in five ST200 salons or 39% have hired a salon coach or consultant.
• At 69%, most ST200 belong to one or more industry associations.
• Among the ST200, 71% of owners continue to perform client services. Of the salon owners who work behind the chair, they spend an average of 28 hours a week performing services.
A Geography Lesson
The south topped the charts with the largest percentage (35%) of ST200 salons, followed by the midwest at 27%, the west at 20%, and the northeast at 18%. When you look at the number of ST200 honorees geographically, six states reign supreme: California (8%), followed by Florida (7%), Texas (7%), Ohio (6%), Tennessee (5%) and Illinois (5%). Evaluating the ST200 data by region, reveals some interesting geographical differences. For example:
• Salons in the south experienced a much higher growth rate than salons in the northeast or west.
• On average, salons in the midwest charge the least for a shampoo, cut and style compared to salons in other parts of the country.
• Salons in the west charge significantly more for a single-process color than salons in the northeast.
• Hair cutting services represent a significantly higher percentage of gross revenues for salons in the south than those in the midwest and west.
• For salons in the west, rent/mortgage expenses continue to be a higher percentage of total salon expenditures.
Breaking Down the Costs
ST200 Criteria
To be eligible for consideration in the ST200 for 2011, salons had to meet the following criteria:
- Establishment: The salon or spa opened on or before January 1, 2008. Professionalism: The salon is primarily a provider of professional salon or spa services including, but not limited to, one or more of the following: hair care, skin care, body care and spa treatments.
- Volume: The salon/spa generated annual service and product sales revenues of at least $250,000 per year since 2008.
- Willingness to Share: The owner completed the applicant information portion of the form, providing statistical information about the business, and completed at least one of the Best Practice sections.
- Verification: If the applicant competed in the growth category, the owner submitted documentation to verify financials for 2008 and 2009.
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