Salon Suites Business As Real Estate Investment
If you have immigrated to the U.S., you must have considered options safe and stable investment at least once in the past. Especially those who is readying for their retirement have likely had regret for “not making an investment earlier,” or some of you might be considering alternative income sources due to dwindling revenues for your business.
If you run a beauty supply business, you must have shopped around the retail or residential properties. A building of interest that has increased in sales value might trigger your hindsight that you could have made an investment purchase or opened a salon there. In fact, many people have already diverted their investments and own multiple properties that create a stable stream of income.
Several years ago, WeWork has changed the paradigm of real estate industry. Now, the public’s eye is on the salon suites business on its track to change the real estate landscape of the beauty industry.
People say it is successful investment if you buy an undervalued real property, wait for the price to rise, and sell at a premium that surpasses the inflation rate. However, in the market where everything is expensive, there is few real properties that can be purchased at an affordable price. Now, the success relies on how to utilize a small space.
If you lease a space to a single renter, you receive a single payment of rent. If you rent it to several renters, you receive multiple payments for the same period. Here’s an example. Let’s say you own a 10,000 sqft space. You can contract a renter who rent the 10,000 sqft for a certain monthly payment per sqft. However, you can divide the space into 5 sections of 200 sqft each and have five renters. It is needless to say that the five small leases will have higher per-sqft rents. Moreover, there are a lot more people who are willing to rent a smaller space than a single big space, and the risk is also distributed among renters, making the multiple, smaller rents more profitable.
This strategy is widely known for maximizing profit for real estate investors. Although people say the most and best use of a building is hotel, the price competition started with the emergence of house sharing platforms like Airbnb questions its wisdom. Due to the increasing wages, labor-demanding hotel business has fallen out of the list of preferred investment options for real estate investors. You must have seen shared offices, shared warehouses, or storage spaces that started to occupy many real properties in the past few years. As opposed to the high-traffic, expensive commercial properties, more and more places in the suburb are dividing them up into smaller rental spaces. People who need an office address, Amazon sellers, and people in need of storage space for inventory have opted for the sharing options, and the supply is far behind the popular demand.
Either you are a beginner or an expert, you could have missed the opportunity to learn about the salon suites business that has become one of the most highly profitable real estate investment options.
Most people who are not familiar with salons would simply look away when they hear salon suites. Real estate investors are not stylists, nor are they interested in becoming a stylist let alone running a salon business. Let’s translate this strategy of using a small space instead of a large asset or investment to bring profit to your existing beauty supply business.
Having a salon inside a beauty supply retail store or right next to it has been a long used strategy utilized by many smart business owners. When surrounded by a lot of salons, beauty supply business is inevitably filled with customers, and having many stylists around means you can get feedback and advice on new products too. Since the onset of the pandemic, many salons have closed the doors or relocated, leaving many beauty supply business owners in the dark. The at-home DIY trend is also very strong.
Salon suite business shares virtually nothing in common with salon business, and it is almost purely real property rental business. The ownership of salon suite is shielded from the public knowledge, so it has become one of the most lucrative secret passage in the real estate industry. As the beauty business intertwines with the real estate, competition has not reached the severity of the counterparts in other sectors. When the stylists will come out at the end of the pandemic, you can supply the suites to meet their need.
Successfully branding my store and salon suites
Beauty supplies are getting larger, cleaner, and brighter. No less than big chains, they invest in branding, great interior design, and adopting highly sophisticated management systems. Salon suites at the center of attention have welcomed the influx of franchises. They have accumulated experience and built great systems, on which you can simply hop on to your advantage. However, if you have a well-established beauty supply business in an area, the local customers know your brand and may prefer it to salon suites franchise.
It is not to say having a branding strategy beforehand is not required for your salon suites business.Starting a new business and branding it might sound overwhelming at first, but if you consider the followings carefully, you can create great opportunities to expand your beauty supply business.
1. Analyze traffic
To be a successful salon suites business, you should know what demographics are the target customers. Korean-run salons and shops with mostly White clients do not have good synergy with beauty supplies, so you should first think about salon suites targeting African American customers providing growth potential for beauty supplies. You should figure out if there are enough traffic created by your beauty supply business that flows to the stylists occupying salon suites, if your customers would prefer personal one-on-one services, if stylists might be better off in a place with diverse specialists than opening a salon individually. You should get advice from stylists who frequently visit your store.
2. Think competition
You should first look out for competing businesses that could start a salon suites business in a similar context. It does not have to be a salon suite, but a mall with a cluster of beauty service providers or rental properties for salon business, and other related services and facilities. You should gather unique marketing points that can make you stand out from the customers and come up with a few ideas to set apart your business from the competition.
3. Use social media
Social media have become an essential marketing tool for many businesses. You can expose your business to people, promote products and new arrivals, and spread news quicker than any other platforms. It can target current and potential customers at the same time at virtually no cost. Different social media can be utilized in various manners, and if you still do not have business accounts for major social media services, you should set up now.
4. Get brand ambassadors
Your business’s best friend is the local stylist customers who can spread the words about your products. Even the most famous influencers do not make a direct and immediate impact on your business like them, but having a local salon beautician, who might be the star influencer among your local customers, as your ambassador will be of great benefit. You can collaborate with them in branding the salon suites, your business, and the salon business for the mutual benefit of all the stylists occupying the salon suites and your business.
Local stylists understand the local beauty trend and spread trending styles among them better than anyone except the beauty supply business who works in collaboration with the local stylists. As many states lift the mask mandates, we are feeling the approach of the end of the Covid-19 era. Amateur beauticians who are staying low at their homes and professional salons that are looking around for affordable rents will soon welcome the influx of clients, and you should get ready too. When local beauticians look for a retail space, you can be their hero and support their business by providing space. Why wouldn’t you do something good for your great companions in your business journey? Say, “we have it all prepared for you. You do what you love to do!”