3 ms·

It can be more complex than that. My town has a lot of hairdresser salons. It’s hard to make the argument that there’s too many, but that would be my feeling. I

It can be more complex than that. My town has a lot of hairdresser salons. It’s hard to make the argument that there’s too many, but that would be my feeling. It’s a small town and the most popular business type on the high street is a food venue followed in 2nd place by hair salons. I’d have expected convenience stores or pubs. However, there’s actually a lot of demand for hair styling. Maybe even enough demand to fill all those salons given how long my wife waits for an appointment. But there’s not enough staff to satisfy all the demand. Chairs in the salons sit empty as you walk past. So what’s happening? There’s already salons with empty chairs, there’s still excess demand and… new salons are being opened! According to n=1 (i.e. anec-data), staff who used to work at an existing salon are opening their own. Meanwhile existing salon is proclaiming to all customers that no one wants to work. I don’t know how they square this world view with their ex staff opening their own salon.

wrycoder 4y ago
Unless the owners of the new shop are more skilled than average, the shop will be marginal and probably go out of business, as the debts pile up. What about a coop shop?
- mantas 4y ago
  Hairdresser owning his own salon is pretty close to coop.
  - wrycoder 4y ago
    If he owns it, he will want to recover his overhead and make profit beyond that to compensate for his risk and extra effort. That profit typically isn't shared with the other stylists. On the other hand, the owner will likely diligently pursue his own interest in making the shop as profitable as possible by attracting the most customers to the best service, which may greatly benefit the stylists (and make them willing to pay more for use of the chair). If it's a co-op, all expenses and profits will be split among the members. (I'm assuming that the co-op members are limited to the stylists in this case.) The business is not likely to be pursued as diligently as it would be if it was a sole proprietorship, as an individual member will not be proportionately compensated for making an outsized effort. If the co-op is large enough to require a full-time employed manager and other staff, then it's just a privately held corporation, and will perform as such.
    - mantas 4y ago
      I was thinking about a hairdresser having a salon with a single chair for himself. Full-on co-op wouldn't work if 1 hair dresser is super popular and 2 others are not so popular. It's a very personal business and a big part of it is one's own contacts. Now if only salon is co-op and hairdressers have to decide together how much they charge per chair to split among themselves... That may get interesting. If hairdresser pays a %, then worse performers may get a chunk of better-off profits. If hairdresser pays for chair days, then worse performers may be subsidising the better ones.
- CraigJPerry 4y ago
  >> Unless the owners of the new shop are more skilled than average Why? It's the same workers cutting and styling hair. as when they worked in the existing salons. Many of their customers follow "their" hairdresser to whatever new venue they work at. >> What about a coop shop? There's another existing model for temporary hairdressers where they begin working at a salon and they keep all income from all clients they serve. In turn they pay the owner a fixed price to rent their chair for the day. AIUI this is no longer popular but i don't know the specifics. It seems to me that renting a chair should be a lot cheaper than starting up & marketing a salon.
  - wrycoder 4y ago
    Relative to your first point, two shops with two chairs each have much more overhead than one shop with four chairs. Whether or not customers follow is a complex social issue, assuming an average haircut. But, it’s human nature to try to do better. Most small businesses fail fairly quickly. Renting out chairs is a reasonable business model, but it’s not the same as a co-op, because the proprietor gets greedy (or is perceived to be so) and bossy.
    - CraigJPerry 4y ago
      >> Relative to your first point, two shops with two chairs each have much more overhead than one shop with four chairs. I don't think that follows - the business rates, heating costs, energy usage, insurance, etc. will all be cheaper in the 2-chair shops than the 4-chair shop. The 4-chair shop just has extra chairs (but they remain unused since there aren't staff available to fill them) . At the same price point for customers, it's less viable.
      - mantas 4y ago
        Extra chairs need extra space. More space = more heating, probably more insurance too. Extra hairdressers will consume extra electricity too.
VLM 4y ago
Owning a salon was a financially sustainable lifestyle, so you get more salons. Working at a salon for minimum wage + tips is not a sustainable lifestyle, so you get empty chairs in those salons. All it takes to open a salon is the ability to work there and easy credit. So you get a lot of salons. Think of the fast food model. The owner of a McD used to make $200K+/yr, so there is intense demand to open new fast food restaurants. The employees make less than it takes to survive even with massive government program assistance, so the restaurants are empty with help wanted signs posted and early closing hours and drive-thru only. Then the prices have to go up until it takes $25 to take your daughter to burger king for lunch (true story...) so the customers all go away. Its not real food anyway. Then the owners of McDs make $0. "Everyone knows" you'll be a millionaire if you open a fast food restaurant and credit is very easy so there's an infinite line of people trying to make $200K but getting $0K. The cycle takes some time to stabilize. All those people in line have to get educated (LOL thats not happening) or go bankrupt one at a time, it takes awhile. Service businesses always collapse from the bottom up. I've seen this in food stores, when an area has too much grocery store sq footage for its population. The collapse always starts with permanent help wanted signs and poor service, but it ends with "nobody would open a grocery store here, the just go out of business".
mantas 4y ago
Salon owners probably charge obscene prices for a spot. That makes opening your own salon much more lucrative. And customers are probably not willing to pay higher prices to attract more workers into this line of work..

wrycoder 4y ago

Unless the owners of the new shop are more skilled than average, the shop will be marginal and probably go out of business, as the debts pile up. What about a coop shop?

mantas 4y ago
Hairdresser owning his own salon is pretty close to coop.
- wrycoder 4y ago
  If he owns it, he will want to recover his overhead and make profit beyond that to compensate for his risk and extra effort. That profit typically isn't shared with the other stylists. On the other hand, the owner will likely diligently pursue his own interest in making the shop as profitable as possible by attracting the most customers to the best service, which may greatly benefit the stylists (and make them willing to pay more for use of the chair). If it's a co-op, all expenses and profits will be split among the members. (I'm assuming that the co-op members are limited to the stylists in this case.) The business is not likely to be pursued as diligently as it would be if it was a sole proprietorship, as an individual member will not be proportionately compensated for making an outsized effort. If the co-op is large enough to require a full-time employed manager and other staff, then it's just a privately held corporation, and will perform as such.
  - mantas 4y ago
    I was thinking about a hairdresser having a salon with a single chair for himself. Full-on co-op wouldn't work if 1 hair dresser is super popular and 2 others are not so popular. It's a very personal business and a big part of it is one's own contacts. Now if only salon is co-op and hairdressers have to decide together how much they charge per chair to split among themselves... That may get interesting. If hairdresser pays a %, then worse performers may get a chunk of better-off profits. If hairdresser pays for chair days, then worse performers may be subsidising the better ones.
CraigJPerry 4y ago
>> Unless the owners of the new shop are more skilled than average Why? It's the same workers cutting and styling hair. as when they worked in the existing salons. Many of their customers follow "their" hairdresser to whatever new venue they work at. >> What about a coop shop? There's another existing model for temporary hairdressers where they begin working at a salon and they keep all income from all clients they serve. In turn they pay the owner a fixed price to rent their chair for the day. AIUI this is no longer popular but i don't know the specifics. It seems to me that renting a chair should be a lot cheaper than starting up & marketing a salon.
- wrycoder 4y ago
  Relative to your first point, two shops with two chairs each have much more overhead than one shop with four chairs. Whether or not customers follow is a complex social issue, assuming an average haircut. But, it’s human nature to try to do better. Most small businesses fail fairly quickly. Renting out chairs is a reasonable business model, but it’s not the same as a co-op, because the proprietor gets greedy (or is perceived to be so) and bossy.
  - CraigJPerry 4y ago
    >> Relative to your first point, two shops with two chairs each have much more overhead than one shop with four chairs. I don't think that follows - the business rates, heating costs, energy usage, insurance, etc. will all be cheaper in the 2-chair shops than the 4-chair shop. The 4-chair shop just has extra chairs (but they remain unused since there aren't staff available to fill them) . At the same price point for customers, it's less viable.
    - mantas 4y ago
      Extra chairs need extra space. More space = more heating, probably more insurance too. Extra hairdressers will consume extra electricity too.

VLM 4y ago

Owning a salon was a financially sustainable lifestyle, so you get more salons. Working at a salon for minimum wage + tips is not a sustainable lifestyle, so you get empty chairs in those salons. All it takes to open a salon is the ability to work there and easy credit. So you get a lot of salons. Think of the fast food model. The owner of a McD used to make $200K+/yr, so there is intense demand to open new fast food restaurants. The employees make less than it takes to survive even with massive government program assistance, so the restaurants are empty with help wanted signs posted and early closing hours and drive-thru only. Then the prices have to go up until it takes $25 to take your daughter to burger king for lunch (true story...) so the customers all go away. Its not real food anyway. Then the owners of McDs make $0. "Everyone knows" you'll be a millionaire if you open a fast food restaurant and credit is very easy so there's an infinite line of people trying to make $200K but getting $0K. The cycle takes some time to stabilize. All those people in line have to get educated (LOL thats not happening) or go bankrupt one at a time, it takes awhile. Service businesses always collapse from the bottom up. I've seen this in food stores, when an area has too much grocery store sq footage for its population. The collapse always starts with permanent help wanted signs and poor service, but it ends with "nobody would open a grocery store here, the just go out of business".

mantas 4y ago

Salon owners probably charge obscene prices for a spot. That makes opening your own salon much more lucrative. And customers are probably not willing to pay higher prices to attract more workers into this line of work..