How Hair Salons Stay Profitable In Thailand...

[rakshell]

Have you ever wondered how business make (or don't make) money in Thailand?

I was seriously wondering how hair salons actually make any profit in Thailand. They are all over the place, malls, street side, kilometers down sois.

This is the "go-to" business model after the noodle shop and cofee shop.

But does it make money?

I ran some numbers (caveat, these are just rough numbers They are not based on any extensive market research, just based on my observation. Yes, your hair salon in Isaan or Pattaya will have different numbers. We all get that, these are all variables and they will differ from location to location. I think this business model can make the owner/operator a sustainable income, not a luxury life but if run correctly, possible better than minimum wage.

1) MONTHLY EXPENSES

Rent (reasonably good location) B50,000

Salaries (3 Staff) B45,000

Utilities (Electricity, taxes,etc) B5,000

SUBTOTAL B100,000

2) MONTHLY GROSS INCOME (Customers x B200 x 24 Work Days)

10 Customers/Day 48,000/Month

20 Customers/Day 96,000

30 Customers/Day 144,000

40 Customers/Day 192,000

3) NET MONTHLY INCOME (Income - Expenses)

10 Customers/Day -52,000 (Loss)

20 Customers/Day -4,200 (Loss)

30 Customers/Day 43,800 (Above Break-Even)

40 Customers/Day 91,800 (Proffitable)

4) CRITICAL ASSUMPTIONS

Based on average of B200/Cut:

B250 (Female haircut/wash/style)

B140 (Male haircut/wash/style)

Given that this a relatively low barrier to entry, it makes me wonder if this is at all possible given that there is such market saturation. Its got to be a really competetive market place.

Anyone have any simular guestimations?

[FiftyTwo]

Not forgetting hair dressing salons are a traditional front for prostitution in Thailand.

(along with coffee shops)

By the way

Staff are usually on minimum wage, 9k a month, or less if freelancers.

The boss (one of the staff) may live over and shopfronts are often only 10k a month

So a recalculation

Rent 10k (inc living accommodation, my pals Hair dressing shopfront with 2 bed flat above is 7k))

Salaries 18k (two part time and the boss)

Electricity 3k (my pals salon)

Expenses 31K

Income

........ depends how pretty they are ......

Another pal, also hair dressing

Shopfront 1.7k(3 rooms, shop, bed, kitchen)

Salary 4/6k a month (just her bad/good month)

Electricity 1k

Edited November 2, 2013 by FiftyTwo

[rakshell]

Heck, thoses are low salaries! I had no idea it was that bad.

Still I can see that there is a potential for profit for the owner/operator.

Not sure if the average hair salon employee is able to try this business model given that their wages are so low, it would seem almost impossible for them to ever raise the capital to afford shop space and equipment to break out.

"Not forgetting hair dressing salons are a traditional front for prostitution in Thailand.
(along with coffee shops)"

I have been asking for the wrong haircut!

Edited November 2, 2013 by rakshell

[onthemoon]

Unless you are referring to places with "extra service", the hairdressers usually rent a chair from the operator. The operator rents the space from the building owner and provides the chairs etc. So you don't have employees as such, but only subcontractors.

I pay THB 60 per haircut. Other customers at this shop (in downtown Bangkok) also get a shave or a dye, so they pay more.

[yingyo]

200b average?

Rebonding (straightening) is about 1000b.

Dye is usually double the cost of the dye itself. 2000b using dye that cost 1000b.

5-10 of them a day (for a 50k baht rental location) along with everything else and I'm they do okay.

Now those Chareon opticians on the other hand... ?

[yingyo]

B250 (Female haircut/wash/style)

In a 50k baht rental location?!?

[Torrens54]

Can't imagine my Barber trying to rent out his body?

In fact I think he and the owner/operator in Chiang Mai Land would be rather insulted at any suggestions that their business is a "front for a knock shop."

I've been going there for years and before that I went to another place (which has since moved) near the Moat and again, the Barbers would "go-broke" if they tried to live off "the game."

[brit1984]

Indeed, the THEORETICAL average hair salon in Thailand probably makes little profit (certainly after adjusting for a fair salary to the owner/operator), and similar would be true for most service sector businesses here.

As with any industry, profitability varies between hair salons, and it's not difficult to make a healthy profit with determination and business/common sense (although most hair salon operators lack at least one of these).

[rakshell]

B250 (Female haircut/wash/style)

In a 50k baht rental location?!?

Yingyo, do you mean that they would be charging more for a haircut in a 50k rental place, or that the rental would be too high if their service is priced at B250?

[Thai at Heart]

200b average?

Rebonding (straightening) is about 1000b.

Dye is usually double the cost of the dye itself. 2000b using dye that cost 1000b.

5-10 of them a day (for a 50k baht rental location) along with everything else and I'm they do okay.

Now those Chareon opticians on the other hand... ?

Ah yes. Top Charoen. Never worked that place out in 18 years. Everything permenantly on 50%. Lol

[lemoncake]

Not forgetting hair dressing salons are a traditional front for prostitution in Thailand.

(along with coffee shops)

By the way

Staff are usually on minimum wage, 9k a month, or less if freelancers.

The boss (one of the staff) may live over and shopfronts are often only 10k a month

So a recalculation

Rent 10k (inc living accommodation, my pals Hair dressing shopfront with 2 bed flat above is 7k))

Salaries 18k (two part time and the boss)

Electricity 3k (my pals salon)

Expenses 31K

Income

........ depends how pretty they are ......

Another pal, also hair dressing

Shopfront 1.7k(3 rooms, shop, bed, kitchen)

Salary 4/6k a month (just her bad/good month)

Electricity 1k

hair dressing salons are a traditional front for prostitution in Thailand.

(along with coffee shops)????? Huh????

[lemoncake]

OP it's easier than you think.

In many cases, boyfriend pays rent and wages , while girlfriend keeps the sales.

The more upmarket ones, charge 400-500 for men's cut, which is more than enough to cover all costs( providing enough customers)

Look at central in Pattaya , the upmarket ones always busy

[xen]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

[lemoncake]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

Your observation is pretty much spot on.

There are a few school around Pattaya, where they supposedly learn.

Funny enough I go to one for my haircuts, not only it's free but very amusing listening about their boyfriends.

Edited November 3, 2013 by lemoncake

[yingyo]

I have two friends who own and run 3 salons on Soi Rang Nam. I was friends with them when they only had one around 2 years ago.

They both worked for Toni and Guy in Siam or Silom, forget which, for years and years, then as husband and wife set up by themselves.

From visiting their place for a chat almost daily while I lived there I would estimate a profit of about 15-20k a day. Working long long hours. They bought a 9m condo on Soi Ari, she has a mini cooper and him a 3 series, so they can't be doing too bad out of it.

[onthemoon]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

Wow, I wonder where you get your hair cut. In the past 20 years in Bangkok, I have not been to a single salon where I had the impression that the hair stylists were ex bar girls or ladyboys.

[onthemoon]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

Your observation is pretty much spot on.

There are a few school around Pattaya, where they supposedly learn.

Funny enough I go to one for my haircuts, not only it's free but very amusing listening about their boyfriends.

If there are schools focussing on bar girls / monetybous learning hair styling, that is very good for people wanting to leave the circus. I'm all in favour of it.

Yet, I doubt that most hair stylists (even in Pattaya) come from the horizontal trade.

[lemoncake]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

Your observation is pretty much spot on.

There are a few school around Pattaya, where they supposedly learn.

Funny enough I go to one for my haircuts, not only it's free but very amusing listening about their boyfriends.

If there are schools focussing on bar girls / monetybous learning hair styling, that is very good for people wanting to leave the circus. I'm all in favour of it.

Yet, I doubt that most hair stylists (even in Pattaya) come from the horizontal trade.

Not really sure what point you are trying to make, but i think it is pretty clear your perception and understanding of what is around you pretty screwed up

[lemoncake]

I have two friends who own and run 3 salons on Soi Rang Nam. I was friends with them when they only had one around 2 years ago.

They both worked for Toni and Guy in Siam or Silom, forget which, for years and years, then as husband and wife set up by themselves.

From visiting their place for a chat almost daily while I lived there I would estimate a profit of about 15-20k a day. Working long long hours. They bought a 9m condo on Soi Ari, she has a mini cooper and him a 3 series, so they can't be doing too bad out of it.

Not sure what your friends are charging here,but Tony & Guy in BKK, in MBK about 6 years ago i paid 2700 baht for a hair cut, no wonder they can buy condo's and BMW's

[onthemoon]

From my observations a good percentage, but not all, of hair dressing salons are operated by either ex bar girls or ladyboys as that is what they know best - how to look pretty.

I am not too sure how many are actually trained in using chemicals on other peoples skulls but some of those chemicals are nasty . Just look at the skin whitening industry.That is why i am always concerned when my gf goes to one to have anything more than a hair trim and they always do the hard sell to try some new chemical to extract more money. It is not the money that concerns me as much as her safety. How many of them actually have any training - are there schools in Thailand for the beauty industry or is it a matter of opening up shop and hope for prosperity.

Sorry this post diverts away from the OP's post slightly .

Your observation is pretty much spot on.

There are a few school around Pattaya, where they supposedly learn.

Funny enough I go to one for my haircuts, not only it's free but very amusing listening about their boyfriends.

If there are schools focussing on bar girls / monetybous learning hair styling, that is very good for people wanting to leave the circus. I'm all in favour of it.

Yet, I doubt that most hair stylists (even in Pattaya) come from the horizontal trade.

Not really sure what point you are trying to make, but i think it is pretty clear your perception and understanding of what is around you pretty screwed up

How so? Do you agree with xen that most hairdressers are ex bar girls? - I don't.

[yingyo]

I have two friends who own and run 3 salons on Soi Rang Nam. I was friends with them when they only had one around 2 years ago.

They both worked for Toni and Guy in Siam or Silom, forget which, for years and years, then as husband and wife set up by themselves.

From visiting their place for a chat almost daily while I lived there I would estimate a profit of about 15-20k a day. Working long long hours. They bought a 9m condo on Soi Ari, she has a mini cooper and him a 3 series, so they can't be doing too bad out of it.

Not sure what your friends are charging here,but Tony & Guy in BKK, in MBK about 6 years ago i paid 2700 baht for a hair cut, no wonder they can buy condo's and BMW's

Yes, as with many professionals they learned their trade, worked hard, got a good customer base through hard work and using their head, went out on their own and took many of their clients with them.

They work long hours, often they will be over to see a client at 4am for some work/graduation/presentation or whatever the client is doing that day. From seeing the one shop they had back then a profit of around 20k a day would be about the average for the shop. They have since expanded to 3 shops.

They're both from Ubon and grew up not wealthy in anyway. They work hard and deserve everything they have.

[Ajaan]

200b average?

Rebonding (straightening) is about 1000b.

Dye is usually double the cost of the dye itself. 2000b using dye that cost 1000b.

5-10 of them a day (for a 50k baht rental location) along with everything else and I'm they do okay.

Now those Chareon opticians on the other hand... ?

Hahaha...a dye job at a Bangkok salon for 2000?? Maybe if the salon is located in Paragon Mall! I regularly get my hair dyed in Bangkok salons, and I never (and would never) pay much more than 500 baht...800 MAYBE. Upcountry I get it done for 350. And I have long hair. Standard wash/blow dry is anywhere from 50-80 baht...maybe 100 if the salon is off Sukhumvit. For salons in tourist areas, well, you're talking tourist prices, which bear absolutely no resemblance to average Thai salon prices.

[stickylies]

Ah yes. Top Charoen. Never worked that place out in 18 years. Everything permenantly on 50%. Lol

including the salaries i guess!

and funnily i went into one Top Charoen once to get a miniscule screw for my sunglasses and they charged me... ZERO (on the house!).

[maanoi]

Im friends with a hair salon owner in chiangmai. On week days she grosses 20k baht. On weekends 50k. I think your estimations are way off.

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app

[bushwacker]

I most be picking the wrong places as all the ones that I have tried either serve coffee or cut hail. Once and awhile a shop will offer me coffee while my hair is cut. .....

[brit1984]

Im friends with a hair salon owner in chiangmai. On week days she grosses 20k baht. On weekends 50k. I think your estimations are way off.

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app

i don't think the op's analysis was specifically focused on your friend's hair salon in chiang mai

[jackflash]

> Not forgetting hair dressing salons are a traditional front for prostitution in Thailand.

In China, yes. very common.

Not so in Thailand however.

[TheFishman1]

Wow in CM haircut 50-70 bht

[brit1984]

I have two friends who own and run 3 salons on Soi Rang Nam. I was friends with them when they only had one around 2 years ago.

They both worked for Toni and Guy in Siam or Silom, forget which, for years and years, then as husband and wife set up by themselves.

From visiting their place for a chat almost daily while I lived there I would estimate a profit of about 15-20k a day. Working long long hours. They bought a 9m condo on Soi Ari, she has a mini cooper and him a 3 series, so they can't be doing too bad out of it.

Not sure what your friends are charging here,but Tony & Guy in BKK, in MBK about 6 years ago i paid 2700 baht for a hair cut, no wonder they can buy condo's and BMW's

Yes, as with many professionals they learned their trade, worked hard, got a good customer base through hard work and using their head, went out on their own and took many of their clients with them.

They work long hours, often they will be over to see a client at 4am for some work/graduation/presentation or whatever the client is doing that day. From seeing the one shop they had back then a profit of around 20k a day would be about the average for the shop. They have since expanded to 3 shops.

They're both from Ubon and grew up not wealthy in anyway. They work hard and deserve everything they have.

lots of ambitious and talented hairdressers quit from the branded salon chains and take their clients with them - it's almost inevitable given the economics involved and the personal nature of the service

what is impressive / unique about your friends' story is that they managed (as demonstrated by opening additional branches) to create a business / brand that extends beyond their own use of scissors

this is not easy and few Thai entrepreneurs (not just hair salon operators) do so (often due to lack of motivation as much as anything else), or even make "profit" more than they could make from working as many hours as an employee

well done to your friends

Edited November 3, 2013 by brit1984

[maanoi]

Op's salary estimations are off as well. Only staff with 5yrs+ experience will be getting 15k a month. A salon with say 6 staff will only have 2 maybe 3 getting 15k. The noobies will be lucky to get 8k. Most trainees only get 5-6k until they are skilled up.

Your rent estimate is kinda blah as well. Your talking about a place with only 200 baht average transaction (which is way to low for 90% of salons btw). A place charging so low would be a tiny shop maybe in a market or something. I cant imagine them paying more than 15-20k a month. A big real salons average transaction is around 600-700 baht.

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app