A hair extension business is a business that is into the production of different designs and types of hair extensions for both aesthetic and medical purposes. Hair extension is synthetic or natural hair attached to the hair on someone’s head to give the appearance of longer hair.

According to the Fortune Business Insights™ report, the United States hair extension market size was valued at USD 1.72 billion in 2020 and is anticipated to grow from USD 1.92 billion in 2022 to USD 3.44 billion by 2028, at a CAGR of 8.71% during the 2022-2028 period.

Steps on How to Start a Hair Extensions Business

  1. Conduct Market Research

The first step in the market research process for your hair extension business is to develop market-based research questions in line with your overall business goal and objective. Please note that market research helps businesses measure their brand reputation in the market over some time.

It is a great way to measure progress for your business as well as compare your status to your competitors to see where you are trailing or where you have an advantage.

a. Who is the Target Market for Hair Extensions Business?
  • Ladies
  • Hair salons
  • Retailers
b. Is Hair Extensions Business a Profitable Business?

Yes, the hair extensions business is profitable and this can be supported by the fact that the industry is anticipated to grow from USD 1.92 billion in 2022 to USD 3.44 billion by 2028, at a CAGR of 8.71 percent from the 2022 to 2028 period.

c. Are There Existing Niches in the Industry?

No, there is no niche idea when it comes to the hair extension business.

d. Who are the Major Competitors?
  • Scru Babe Hair Extensions
  • Cinderella Hair Extensions
  • Hotheads Hair Extensions
  • Great Lengths Hair Extensions
  • Donna Bella Hair Extensions
  • Klix Hair Extensions
  • Halo Hair Extensions
  • Heat Free Hair Extensions
  • Galaxy 5000
  • Boho Exotic Studio
  • Indique Hair Extensions
  • The SACH & VOGUE Hair Extensions
  • The Weave Shop
  • SW Hair
e. Are There County or State Regulations or Zoning Laws for Hair Extensions Business

Yes, there are county or state regulations and zoning laws for the hair extension business, and players in this industry are expected to work with the existing regulations governing such businesses in the county or state where their business is domiciled.

f. Is There a Franchise for Hair Extensions Business?

Yes, there are franchise opportunities for the hair extensions business, and here are some of them;

  • The SACH & VOGUE Hair Extensions Franchise
  • The Weave Shop Franchise
  • SW Hair Franchisees
g. What Do You Need to Start a Hair Extensions Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Production facility
  • Computers, Laptops, and Servers
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Sewing Machines, Equipment, and Tools
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name ideas for Hair Extensions Business

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a hair extension business are;

Creative Hair Extensions Business Name ideas
  • One Beauty© Hair Extensions, Inc.
  • MT Connect® Hair Extensions Company, LLC
  • Lilly Brownie © Hair Extensions Company, Inc.
  • Hair Solutions® Hair Extensions Company, Inc.
  • Serena Outlook™ Hair Extensions Company, Inc.
  • Judi Couture™ Hair Extensions Company, LLC.
  • Sonia Kent© Hair Extensions Company, LLC
  • Shane Given® Hair Extensions Company, Inc.
  • Hair Pros© Hair Extensions Company, Inc.
  • Rachael Morgan© Hair Extensions Company, Inc.
  • Mili Cent® Hair Extensions Company, Inc.
  • Clarine® Hair Extensions Company, LLC
  • Stretch Prop® Hair Extensions Company, Inc.
  • The Hair Group Corporation, Inc.
  • Stacy Marion® Hair Extensions Company, LLC.
  • Sol Shannon® Hair Extensions Company, Inc.
  • Denver Porto® Hair Extensions Company, LLC
  • Rohila Braithwaite® Hair Extensions Company, LLC
  • Starlings® Hair Extensions Company, LLC
  • Noeline Justine® Hair Extensions Company, LLC.
  1. Register Your Business

a. What Type of Business Structure is Best for Hair Extensions Business

Even though there are several options when it comes to the business structure for a hair extensions business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Hair Extensions Business?
  • General Business License
  • Fire, Health, and Safety Permit
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
  • Operational State Facility Inspections
d. What Type of Certification is Needed to Open a Hair Extensions Business?

You don’t need any special certification to go into the production of hair extensions.

e. What Documents are Needed to Open a Hair Extensions Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a hair extensions business, you may need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for someone to infringe on your work or copy your designs.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Hair Extensions Business?

When it comes to starting a hair extensions business, the startup costs could range from $50,000 to over $250,000 depending on how much equipment the business owner decides to purchase and the production facility and space leased. Please note that this amount includes the salaries of all the staff for the first month of operation.

b. What are the Cost Involved in Starting a Hair Extensions Business?
  • The total fee for registering a business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
  • Marketing expenses for $3,500, as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant – $2,500.
  • Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $105,600.
  • The cost for facility remodeling and equipping – is $50,000.
  • Other start-up expenses like phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory – $120,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $3,000
  • The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): is $4,000.
  • The cost of launching a website: $600
  • The cost for our opening party: $3,000
  • Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Hair Extensions Business?
  • The size of hair extensions business
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The cost of hiring and paying a business consultant and attorney
  • The cost of branding, promotion, and marketing of the hair extension brand
  • The cost of furnishing and equipping the production facility
  • The cost of insurance
  • The cost of registering the business
  • Source of your supplies and ongoing expenses
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost of the grand opening of the facility.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your hair extension business, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Hair Extensions Production Business?
  • Rent and lease
  • Supplies and inventory
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Maintenance of machines
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (President) – $40,000 Per Year
  • Factory Manager – $30,000 Per Year
  • Merchandise Manager – $29,630,000 Per Year
  • Hair Extension Designers – $29,000 Per Year
  • Accountant (Cashier) – $28,500 Per Year
  • Marketing and Sales Executives – $28,000 Per Year
  • Factory Workers – $26,100 Per Year
  • Customer Service Executive – $26,000 Per Year
  • Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Hair Extensions Production Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Rohila Braithwaite® Hair Extensions Company, LLC is a registered and standard hair extensions production business that will be located in an industrial area in Fort Wayne, Indiana. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of renewal on terms and conditions that are favorable to us.

The facility has government approval for the kind of business we want to run and it is easily accessible. We are deliberate about that to facilitate easy movement of raw materials and finished products.

b. Products and Service
  • Hairpieces and hair extensions for both aesthetic and medical purposes.
c. Mission Statement

Our mission is to build a highly successful hair extension production business whose brand will be known all around key cities in the United States of America and around the globe.

Vision Statement

Our vision is to be among the top 3 hair extension production companies in the world.

d. Goals and Objectives

The goals and objectives of a hair extensions production business are to produce hairpieces and hair extensions for both aesthetic and medical purposes.

e. Organizational Structure
  • Chief Executive Officer (President)
  • Factory Manager
  • Merchandise Manager
  • Hair Extension Designers
  • Accountant (Cashier)
  • Marketing and Sales Executives
  • Factor Workers
  • Customer Services Executives
  • Security Guard

Marketing Plan

a. SWOT Analysis
Strength
  • Ideal location for a hair extensions production business
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Excellent customer testimonials.
  • Unique design and styles
Weakness
  • Financial constraints
  • A new business that will be competing with well-established hair extensions brands.
  • Inability to retain our highly experienced and qualified employees longer than we want
Opportunities
  • A rise in the demand for hairpieces and hair extensions for both aesthetic and medical purposes
  • Online market, new services, new technology, and of course the opening of new markets
  • Increase the number of hair salons within our target market area.
Threats
  • The arrival of new hair extensions production business within our market space
  • Unfavorable government policy and regulations.
  • Economic uncertainty
  • Liability problems
b. How Do Hair Extensions Production Businesses Make Money?

Hair extension production businesses make money by selling a wide range of hairpieces and hair extensions for both aesthetic and medical purposes.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
  • Payment via bank draft
d. Sales & Advertising Strategies
  • Place adverts on both print (newspapers and lifestyle magazines) and electronic media platforms
  • Sponsor relevant community-based events/programs
  • Leverage the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
  • Install your Bill Boards in strategic locations all around your city or state
  • Engage in roadshow from time to time in targeted neighborhoods to create awareness of your hair extensions production business
  • Distribute your fliers and handbills in target areas
  • List your hair extensions production business in local directories/yellow pages
  • Advertise your hair extensions production business on your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the location where your hair extensions production business is located.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.

Financial Projection

a. How Much Should You Charge for your Product/Service?

The average cost of good non-permanent hair extensions is between $200 and $500. Such as halos or clip-ins. Professional permanent extensions usually range between $600 and $3000.

b. How Much Profit Do Hair Extensions Production Businesses Make a Year?

It depends, but available reports show that hair extension production business owners earn approximately $59,000 per year. Business profits can average between $54,750 to $109,500 in gross, depending on your location, line specifics, expenses, marketing efforts, and company size.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the hair extensions production business
  • The location of the hair extensions production business
  • The management style of the hair extensions production business
  • The business approach of the hair extensions production business
  • The advertising and marketing strategies adopted by the business
  • The number of years the hair extensions production business is in business
d. What is the Profit Margin of a Hair Extensions Production Business?

Typically, hair extension production businesses gain a handful of profit on all their products. Margins usually range from 20% to around 40-50%. So, the revenue you would be making will be based on sales made by you monthly and the expenses that you incur while running the business.

e. What is the Sales Forecast?
  • First Fiscal Year (FY1): $340,000
  • Second Fiscal Year (FY2): $550,000
  • Third Fiscal Year (FY3): $880,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for Hair Extension Production Business?
  • The demography of the location
  • The demand for hair extensions in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of hair extensions production businesses in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Hair Extensions Production Business?
  • Rowland Heights, California
  • Portland, Oregon
  • New York City, New York
  • Las Vegas, Nevada
  • Wintergreen, Virginia
  • Chicago, Illinois
  • Boston, Massachusetts
  • Silver Spring, Maryland
  • Atlanta, Georgia
  • Houston, Texas
c. What Equipment is Needed to Operate a Hair Extension Production Business?

These are some of the machines, equipment, and tools we would need to start our hair extension production business;

  • Industrial sewing machines
  • Scissors
  • Measuring tapes
  • Pins
  • Sewing machine needles
  • Hand sewing needles.
  • Threads
  • Draping tools.
  • Hair extension-making Stickpins
  • Muslin
  • Style tapes
  • Computer
  • Mannequins
  • Hangers
  • Labels and Tags.
  • Packaging materials
  1. Hire Employees

When it comes to hiring employees for a standard hair extensions production business, you should make plans to hire a competent chief executive officer (president), factory manager, merchandise manager, accountant (cashier), marketing and sales executives, factory workers, customer care executives and security guard.

  1. Launch the Business Proper

In recent times, no hair extensions production business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the hair extensions production business, you will officially inform people in your city that your hair extensions production business is open for business.

a. What Makes a Hair Extensions Production Business Successful?
  • Choose a good location and showroom facility to launch the business
  • Make sure your hair extensions are unique, durable and the finishing is topnotch
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your hair extensions production business
  • Leverage all available online and offline platforms to promote your hair extensions production business
b. What Happens During a Typical Day at a Hair Extensions Production Business?
  • The production factory is open for the day’s work
  • The facility is cleaned and well-arranged
  • Factory swings into action (production of hair extensions)
  • Deliveries of orders are made
  • Stocks are taken and reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Hair Extensions Production Business?
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining and bidding skills
  • Work experience in a hair extensions production business
  • Experience in managing people
  • Experience in business administration.