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AU Business Analysis

Hair Salon ROI Calculator

Analyse hairdressing salon economics and stylist retention.

Hair salons are people-businesses. The asking price largely buys you stylist relationships and a client book — both of which can walk out the door.

Wages % of revenue
35–50%
Typical range
Rent % of revenue
8–14%
Typical range
COGS % of revenue
6–12%
Typical range
Net margin %
10–18%
Healthy band

Sources: ATO Small Business Benchmarks — Hairdressing · IBISWorld — Hairdressing and Beauty Services

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1

Business Details

2

Revenue

3

Annual Expenses

4

Purchase & Loan

5

Owner Details

Owner salary already in expenses?
Toggle off to deduct a replacement wage.
6

Scenario Testing

Sales Drop0%
Rent Increase0%
Wage Increase0%
Interest Rate Rise0pp
Live Analysis

Hair Salon

Hair Salon · benchmarks: Australian industry data

HealthyLow Risk
Net Profit
$80,900
Margin 18.0%
EBITDA
$155,900
Before owner & loans
ROI
67.4%
Payback 1.5 yrs
DSCR
3.42
Debt cover ratio
Monthly Repayment
$3,801
$45,609 p.a.
Cashflow After Loan
$35,291
Break-even Revenue
$401,949
$7,730/week
Owner Earnings
$155,900
Profit + replacement salary

Investment Risk Score

100/100
Low Risk

Higher score = safer investment

Revenue Breakdown

  • COGS7.1%
  • Wages38.9%
  • Rent9.3%
  • Other26.7%
  • Net Profit18.0%

Industry Benchmarks · Hair Salon

vs Australian averages
Wage RatioHealthy
38.9%
Benchmark: 35%–50%
Rent RatioHealthy
9.3%
Benchmark: 8%–14%
COGS RatioHealthy
7.1%
Benchmark: 6%–12%
Net MarginHealthy
18.0%
Benchmark: 10%–18%

Loan Repayment Projection

Outstanding balance over loan term

Insights

Strengths
  • • Net margin 18.0% is within healthy range for Hair Salon.
  • • Strong ROI of 67.4% relative to asking price.
  • • DSCR of 3.42 indicates comfortable loan serviceability.
Weaknesses
  • No major weaknesses detected.
Red Flags
  • No red flags.
Buyer Questions
  • • Can you provide 3 years of tax returns and BAS statements?
  • • What is the remaining lease term and rent review schedule?
  • • Are there any key staff dependencies or pending resignations?
  • • How transferable are supplier and franchise agreements?
  • • Why is the current owner selling?
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General information only. This calculator provides general information only and does not take into account your personal circumstances, financial situation, objectives, taxation position, or business needs. Please seek independent professional advice before making financial or business decisions.

What makes a healthy Hair Salon business?

Wages dominate at 35–50% of revenue. Commission-based stylist models reduce wage risk but cap profitability.

Client retention is the core asset. Insist on a clause that key stylists stay 6+ months post-settlement.

Retail product sales (shampoo, conditioner, styling) add 5–15% revenue at 40%+ margin — a key profitability lever.

Typical asking-price multiple

1× – 2× SDE (Seller's Discretionary Earnings). Owner-stylist salons trade at lower multiples; salons with strong second-tier stylists higher.

Red flags
  • • Top stylist with > 40% of client revenue
  • • No employment contracts or non-competes
  • • Lease shorter than 3 years
  • • Retail product sales < 5% of revenue
Green flags
  • • Stable team with 3+ year tenure
  • • Strong retail product attach rate
  • • Online booking system with rebooking >65%
Key due-diligence questions
  • 1. What's the revenue concentration by stylist?
  • 2. Are there employment contracts and non-competes?
  • 3. What's the client rebooking rate?

Frequently asked questions