This guide on starting a hair extension and wig company is best for you if you’re wondering how to launch your own hair extensions and wig business.
Wig and hairpiece stores have developed into specialized retailers within the hair care sector.
There are two distinct consumer groups in this industry:
- Those who purchase wigs and hair extensions purely for esthetic purposes
- Additionally, there are those who purchase cranial prosthesis wigs, which are for people hair loss sufferers due to diseases.
According to IBISWorld, less than 923 firms in the wig and hairpiece industry generate $358 million in revenue yearly. By 2026, industry revenue is anticipated to increase by 1.3% annually to $383 million.
Are you still trying to figure out how to launch a hair or wig company in 2022? You are at the right place. You can quickly establish a hair extension and wig business with the help of wise business ideas and a wealth of industry knowledge.
Step 1. Understanding the market, trends, and pricing.
Investigate your competitors online and physical stores nearby. Visit Alexa.com to learn which wig website is the most well-liked. Websites are ranked by popularity by Alexa. Note the aspects of these websites you like.
Market research should always be the first step in every business plan.
To succeed quickly, you must be aware of what your competitors are doing or what businesses that provide similar goods are doing.
While doing marketing research, you can:
- Read magazines or other publications on wigs and weaves.
- Observe advertisements for wigs and hair extensions.
- Attend beauty expos
- Study your rivals, and even discuss wigs and weaves with your friends and coworkers.
- Search for blog posts about beauty.
So that you can gain a thorough understanding of the market, briefly summarize your own significant findings.
It’s critical to remember that your findings should cover trends, competition listings, prices for wigs and weaves, target market demographics, and preferred product types. You must take action rather than just keep talking about it to get the best results out of this step.
Step 2: Find a niche. Study The Product Thoroughly
Wigs and hair extensions can range in price depending on several criteria, including color, length, texture, and the material used (human hair, synthetic, etc.).
After having a good understanding of the market, the next step is to choose the wigs and hair extensions you want to use as your starting point.
Learn what consumers want and what they are likely to pay for. Learn about the many kinds of wigs and hair extensions, how they differ, and their lengths and maintenance requirements.
You should know where to find these things for meager prices. To make a potential product list, you must include all the information you have collected. Include the costs and locations where they can be purchased.
Step 3: Find a Supplier of Wigs and Hair Extensions
Whatever your business plans, you need to follow common-sense procedures, like reaching out to possible partners.
Finding manufacturers or wholesalers who will sell to you at a discount is the easiest method to make money.
Your discounted price must give you a margin of at least 40% to profit.
You cannot accurately assess the wig’s quality from internet suppliers, so do not rely on them.
You can locate the item for less money online, perhaps through AliExpress or a Chinese merchant.
To find out what products are available, check your neighborhood wholesale market.
When you find anything you like, note the name, brand, and specifications.
Go back to the provider and ask for the specific item. It might still be a fake, so that remains a possibility.
As a result, I advise you to establish a relationship with a local vendor with a store where you can feel the wig’s quality and texture.
To be able to exchange a product for another if it isn’t sold within a period, you need to make appointments with wholesalers or manufacturers.
As a result, you can replace a less popular product with one that is more fashionable.
Step 4. Analyze Your Company’s Expenses & Income Potential
Running a wig shop has cheaper overhead than many other beauty businesses, especially if it’s a small or home-based operation.
Entrepreneur magazine states that you need a startup budget of $2,000 to $10,000, with additional costs if you rent a commercial space or purchase expensive goods.
Whether launching an online or physical store, entrepreneurs may keep storefront expenditures minimal.
Online store owners can find an inexpensive, user-friendly platform that lets them construct their own stores.
For their physical store, business owners can choose a low-rent neighborhood.
Wig shops are few, and many customers who need wigs prefer to shop in-person over online.
Therefore, being in a high-traffic or high-rent neighborhood is not necessary.
Depending on your company’s size and your hair business’s aims, startup costs could be minimal or costly.
Less money will be spent if you run your store from home instead of renting space.
A detailed cost breakdown for a hair wig and hair extension business is as below:
- Cost of registering the business
- Costs for accounting services and business license permits
- Costs related to launching a website
- Costs of renting a store
- Equipment costs include phones, computers, display units, and mannequins for the storefront.
- Marketing costs
- Insurance costs
- Employer expenses
- Expenditures such as business cards, signage, and advertising
The business’s primary income should be generated by selling wigs, hairpieces, and hair extensions for a reasonable price.
It will be easier to draw consumers to your store and boost sales if it is conveniently located and stocked with various hair extension goods.
Step 5. Give your new business a name
Business names are not simple to set. Our company name needs to convey more than just what you are selling.
The mindset of your brand should also be conveyed in the name. Check out our articles on choosing a business name if you don’t already have one in mind.
To register a business name, the following are recommended:
- Records of all businesses of the state
- State and federal, and trademark records
- Social media platforms
Securing your domain name before someone else does is also crucial.
Step 6. Create a legal entity
Additionally, incorporation is advantageous, particularly if you wish to separate business assets and personal funds.
The four main business structures are sole proprietorship, which is solely owned by you; partnership, which means the company is co-owned by you and someone else; and limited liability company (LLC). And corporation.
If your wig shop is sued, having a legal entity, such as an LLC or corporation, will shield you.
It is feasible to employ an LLC provider for a little charge or create an LLC while paying only the minimal state LLC fees.
You’ll need a registered agent for your LLC. A complimentary year of registered agent services is sometimes included with LLC formation packages. Either you or a registered agent may represent yourself.
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