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Posted on by Scott

Starting a Hair Salon in Victoria (Australia) – The Risks You Need to Know

Opening a hair salon in Victoria, Australia can be an exciting and profitable business venture. The hair and beauty industry remains strong across Melbourne and regional Victoria, with consistent demand for cutting, colouring and styling services.

However, if you are not a qualified hairdresser yourself, there are specific business risks you must understand before investing your time and capital.

Many salon start-ups fail not because of lack of passion — but because of poor risk management.

If you’re considering starting a hair salon in Australia, here’s what you need to know.

1. Staff Dependency Risk in Hair Salons

When you are not a hairdresser, your salon business in Victoria becomes entirely dependent on your team.

You cannot step in to:

  • Cover staff absences

  • Fix technical colour mistakes

  • Train apprentices directly

  • Accurately assess advanced cutting or chemical skills

In the Australian hair industry, clients are often loyal to their stylist — not the salon brand. If a senior stylist leaves your Melbourne salon, they may take a large portion of clients with them.

This creates operational and revenue risk.

Clear expectations, structured performance standards and strong workplace culture are critical controls when you cannot personally deliver the service.

2. Legal and Compliance Risks (Victoria, Australia)

Hair salons in Victoria must comply with multiple regulatory requirements.

Key compliance areas include:

  • Workplace Health and Safety (WHS) obligations

  • Safe chemical storage and handling

  • Public liability insurance

  • Professional indemnity insurance

  • Fair Work compliance

  • Superannuation and payroll obligations

Hairdressing involves chemicals, sharp instruments, electrical tools and slip hazards. Under Victorian WHS legislation, business owners carry legal responsibility for providing a safe workplace — even if they do not personally perform the services.

Failure to manage salon compliance in Australia can lead to:

  • Regulatory investigations

  • Fines or improvement notices

  • Workers compensation claims

  • Civil liability claims from injured clients

If you are starting a hair salon in Victoria, understanding your WHS obligations is not optional — it is a core business requirement.

3. Financial Risk and Cash Flow Challenges

One of the biggest risks in opening a salon in Australia is underestimating financial pressure.

Hair salons typically have high fixed costs:

  • Retail lease costs (particularly in Melbourne shopping precincts)

  • Fit-out and plumbing installation

  • Salon chairs and basins

  • Professional product stock

  • Wages, superannuation and leave entitlements

  • Electricity and high water usage

If chairs are empty, you are still paying overheads.

Because you are not generating income personally as a stylist, your entire revenue stream depends on staff performance and booking rates.

Many new salon owners in Victoria underestimate:

  • How long it takes to build a loyal client base

  • Seasonal downturns

  • Staff turnover impact on revenue

  • The true cost of payroll obligations

Without detailed financial forecasting, cash flow can quickly become strained.

4. Reputation Risk in the Australian Beauty Industry

In Australia’s competitive hair industry, reputation is everything.

Online reviews and social media presence significantly impact your salon’s success.

If a stylist makes a mistake — such as:

  • Incorrect chemical processing

  • Severe colour damage

  • Scalp irritation

  • Poor hygiene standards

The reputational damage can spread quickly.

As a non-hairdresser owner, you may not immediately recognise technical errors until a complaint arises.

Strong operating procedures, documented service standards, and clear client communication processes are essential risk controls.

5. Staffing and Retention Risk

The Australian hairdressing industry experiences high staff mobility.

Stylists may:

  • Move to competitor salons

  • Rent chairs independently

  • Start their own home-based businesses

  • Be recruited by larger salon chains

If your business model relies heavily on one or two key stylists, your exposure increases.

Retention strategies in Victorian salons should include:

  • Clear career progression pathways

  • Ongoing training investment

  • Fair and compliant pay structures

  • Positive workplace culture

As a salon owner who is not a hairdresser, your leadership and management capability becomes your greatest asset.

6. Knowledge Gap Risk

Without technical hairdressing experience, you may find it challenging to:

  • Select reputable suppliers

  • Negotiate wholesale pricing

  • Identify skill gaps in staff

  • Stay current with colour trends

  • Invest in appropriate training

This does not mean you cannot succeed — but it does mean you must deliberately educate yourself in salon operations and industry standards.

Is Starting a Hair Salon in Victoria Worth the Risk?

Yes — but only with structured planning.

Many successful hair salon owners in Australia are business-focused individuals who excel at:

  • Risk management

  • Financial control

  • Marketing strategy

  • Staff leadership

  • Compliance systems

If you are considering opening a hair salon in Melbourne or regional Victoria, take the time to:

  • Conduct detailed financial modelling

  • Seek professional advice on employment and compliance obligations

  • Understand Victorian WHS requirements

  • Develop documented operating procedures

  • Build a staff retention strategy

A hair salon is not just a creative venture — it is a compliance-driven, people-dependent, reputation-sensitive business.

Success comes from managing risk before problems appear.

If you approach the opportunity strategically and with strong risk awareness, a salon business in Australia can be both profitable and sustainable.

Scott

I have been a owner or managed a range of business including Security, Bookkeeping, Hair Salon, prior to becoming a Business Mentor, to help small businesses prepare their business for long term operations. I have also been involved with a couple of NFP and training organizations to help in the general community in the range of areas, including Event Management, Event Health, General Sports.