Do you want to start a hair making factory? If YES, here is a 21-step guide on how to start a hair extension production business with no money or experience. If you have ever gone shopping especially as a lady, you will have come across hair extension shops and perhaps if you take your time to go window shopping, you will definitely find several brands and other similar products from different countries.

This goes to show that there is indeed a thriving market for hair extensions. It is a known fact that hair extensions and similar products are used in all parts of the world and of course those that are in the business of producing these products are known to generate sales year in year out if the business is properly managed.

As a matter of fact, economic downturn hardly affects the usage of hair extensions because it plays a major role in the beauty world. This is no wonder that the production of hair extensions have continued to soar high. If you are however thinking of starting your own hair extension making factory business, then you must be ready to really learn the ropes of the business.

You can start your hair extension making factory from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes a nationally and internationally recognized.

20 Steps on How to Start a Hair Extension Making Business

1. Understand the Industry

Hair extensions making factory is part of the Wig & Hairpiece Production industry and players include establishments that specialize in manufacturing wigs, hairpiece and hair extensions for both aesthetic and medical purposes.

The Wig & Hairpiece Production industry depends on strong consumer spending to spur the demand for industry products. Over the last half a decade, the economy has begun recovering from recessionary declines with both the Consumer Confidence Index and disposable income increasing.

Interesting Statistics About the Hair Extension Industry

Going forward, as the economy of the United States continues to recover and consumers are expected to loosen their discretionary budgets, the industry is anticipated to thrive.

The Wig & Hairpiece Production industry is indeed a major sector of the economy of the United States of America and they generate over $224 million annually from more than 696 wigs and hair extension manufacturers outlets scattered all around the United States of America.

The industry is responsible for the employment of over 1,997 people. Experts project that the industry will grow at a 4.0 percent annual rate. No player can boast of having a lion share of the available market in this industry. A close study of the Wig and Hairpiece Production industry shows that the industry has low and steady barriers to entry.

For instance, the capital requirements to open a hair extension making factory is moderate and primarily consist of leasing a commercial property and purchasing machines and initial inventory. Increased vacancies and lower leasing rates as a result of the recession have improved new entrants’ ability to find low-cost property in attractive locations over the past five years.

One of the major factors that encourage aspiring entrepreneurs to venture into the hair extension making business is the fact that there are readily available markets for hair extensions and similar products. Despite the fact that there are competitions amongst hair extension manufacturing companies, if you are able to carve a niche for yourself, it won’t be too difficult for people to accept your products.

You can choose to start on a small scale selling your products within your city or state or you can choose to start on a large scale with your products spread across your country and even in other countries of the world.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition for those who make use of hair extensions is all encompassing. It is not restricted to the female gender as males also make use of hair extensions. The truth is that when it comes to selling hair extensions and other similar products, there is indeed a wide range of available customers, so your target market can’t be restricted to just a group of people.

So, if you are thinking of opening your own hair extension making factory, then you should make target demographics all encompassing.

3. Decide What Niche to Concentrate On

There is no niche in the hair extension making factory business. Branding and packaging is a major factor that can help you increase your sales and gain market prominence in the hair extension making factory line of business.

The Level of Competition in the Industry

The competition that exists in the hair extension making factory line of business goes beyond competitions in your city or country as it is both national and international. This is because, major hair extensions brands in China, India, Peru, France, Italy, United Kingdom and in any part of the world can be found in hair extension shops all across the United States of America. So, it will be right to say the competition in the hair extension making business is stiff.

The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to churn out quality products and you know how to reach out to your target market.

If you choose to start your own hair extension making business in the United States, you will definitely meet competitions amongst hair extension brands within the United States of America and other countries of the world. Besides, there are larger hair extension making brands that determine the trends in the industry and you should be ready to compete with them for customers.

4. Know the Major Competitors in the Industry

When it comes to hair extension making factories cum brands, you can be rest assured that there are world class hair extension brands whose products are scattered all across the world; brands that have successfully become household names.

Here are some of the well-known hair extension brands in the United States of America and in other parts of the world;

  • 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

Economic Analysis

If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.

So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey of what it costs to get raw materials and other equipment needed to run the business.

The bottom line is that if you are considering starting a hair extension making factory, then your concern should not be limited to the cost of setting up the business and churning out quality hair extensions but also on how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are sure going to become a household name and indeed maximize profits in the business.

5. Decide Whether to Buy a Franchise or Start from Scratch

Unfortunately, you can hardly find a franchise of a hair extension making company to purchase meaning that if you want to own a hair extension making factory, then you must be ready to start from the scratch. This is because the business is still pretty much thriving and there are loads of opportunities available to aspiring entrepreneurs that are interested in the industry as long as you can carve a niche for your brand.

The truth is that it will pay you to start your hair extension making factory from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.

Please note that most of the successful hair extension making factories around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

6. Know the Possible Threats and Challenges You Will Face

Despite the fact that there are threats and challenges when it comes to starting a hair extension making factory, an manufacturer who has carefully studied the industry before launching his or her business won’t struggle to breakeven.

But that does not rule out the fact that if you decide to start your own hair extension making business today, one of the major challenges you are likely going to face is the presence of well – established hair extension brands whose products can be found all across the United States and the global market.

Other threats that you are also going to face are economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When it comes to starting a hair extension making factory, the legal entity you choose will go a long way to determine how big the business can grow. In actual sense, you have the option of either choosing a general partnership, or a limited liability company which is commonly called an LLC for your hair extension making company.

Even though, sole proprietorship should have been the ideal business structure for a small – scale hair extension making factory especially if you are just starting out with a moderate capital in a small neighborhood and with the intention to market your products online in your community.

But if your intention is to grow the business and have your products all across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your hair extension making factory; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to study the  various legal entities to use for your hair extension making company with the ability to open showrooms and have your products retailed all across the United States of America and other parts of the world, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

If you change the status of your hair extension making factory to a ‘C’ corporation or ‘S’ corporation, it will definitely give you the opportunity to grow your hair extension making factory so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.

8. Choose a Catchy Business Name from the ideas Below

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own hair extension making factory, here are some appealing names that you can choose from;

  • Gen X™ Hair Extension Company, LLC
  • Shinny Yeadon® Hair Extension, Inc.
  • Beulah Dan® Hair Extension Production Line Company
  • Laura Bae® Hair Extension Production Line Company, LLC
  • Yvonne Stallone® Hair Extension Line, LLC
  • Slim Tee®Hair Extensions, Inc.
  • Stacey Lorenzo® Hair Extension Production Line Company, LLC
  • Jane Fresh® Hair Extension, Inc.
  • Maureen Blues® Hair Extension Production Line Company, Inc.
  • Rena Prisca® Hair Extension, LLC
  • Tracie Lopez® Hair Extension, LLC

9. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and of course in most countries of the world, you can’t operate a business without having some of the basic insurance covers that are required by the industry you want to operate from. Besides, the nature of hair extension making factory requires that you have the proper insurance cover in place or else you will be forced out of business if you are sued for any business-related issue.

So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best insurance policies for your hair extension making factory business. Here are some of the basic insurance covers that you should consider purchasing if you want to start your own a hair extension making factory in the United States of America;

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own hair extension making factory, usually you are not required to file for intellectual property protection. This is because the nature of the business makes it possible for you not to challenge organizations and individuals in court for illegally making use of your company’s intellectual properties.

But if you want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.

11. Get the Necessary Professional Certification

Even though you do not need any special professional certification before you can successfully start your own hair extension making company, but you will do yourself a whole lot of favor, if you study related course before starting this this type of business. It will afford you the opportunity to truly maximize the business; you will be able to have full grasp of the business from start to finish.

So, if you come across any form of certification that can aid you to maximize profits with your hair extension making company, then by all mean try and pursue such certification.

12. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own hair extension making factory in the United States of America;

13. Raise the Needed Startup Capital

Starting a hair extension making factory can be relatively expensive even if you choose to start on a small scale. Securing a standard and reliable production facility and purchasing equipment and machines are part of what will consume a large chunk of your capital.

If you choose to start the business on a large scale, you would need to source for fund to finance the business because it is expensive to start a standard large scale hair extension making factory. When it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan.

If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your hair extension making factory.

14. Choose a Suitable Location for your Business

Starting a hair extension making factory comes with its own challenges; it is a business that can be started in any location as long as there are people and businesses ready to buy or retail your products. As a matter of fact, you can start your car hair extension making business in the outskirts of town and still grow the business to profitability.

But it cannot be overemphasized that the location you chose to start your business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people who make use of your products and who have the required purchasing power, and lifestyle.

It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for a business such as hair extension making factory, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your hair extension making factory.

Most importantly, before choosing a location for your hair extension making factory, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to start yours can’t be ruled out.

15. Hire Employees for your Technical and Manpower Needs

If you are considering setting up a hair extension making factory, it means that you should be prepared to purchase the needed raw materials such as polyester, nylon, acrylic or other synthetic materials. You are also going need equipment like the appropriate welding, gluing and stitching equipment in order to go into production. If you don’t have enough cash, you can start with fairly used equipment but if you are financially buoyant, then you should go for brand new ones since they usually have a long – life span.

As regard leasing or outright purchase of a production facility or warehouse facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.

When it comes to hiring employees for your company, you should make plans to hire a competent Chief Executive Officer (Owner), Admin and Human Resources Manager, Sales and Marketing Manager, Quality Control Officer, Machine Operators, Accountant, Distribution / Delivery Van Drivers and Client Service Executive. On the average, you will need a minimum of 7 key staff members to run a small – scale hair extension making business.

The Production Process Involved in the Production of Hair Extensions

Firstly, most hair extensions are synthetic and they are made from polyester, acrylic and other poly – filament fibers. One good thing about the production of hair extensions is that hair extension making factories can either choose to make use a single type of fiber or a combination of different fibers.

The production of hair extensions starts with the purchase of the needed raw materials such as polyester, nylon, acrylic or other synthetic materials. You are also going need the appropriate welding, gluing and stitching equipment in order to go into production. When the hair extensions are produced they are made in such a way that they come out rugged, heat and wear resistant.

The manufacturers of hair extensions usually adopt processes that usually involve ultrasonic waves, precise diameter cutting, heating, welding, sewing and coating. Synthetic hair fibers are fine threads manufactured to resemble human hair.

A hair extension making factory may use single type monofilament fibers, or a combination of two or three poly – filament fibers. Acrylic or polyester is used to make some fibers. Wigs and hair extensions, which are constructed of synthetic hair, are more affordable than similar items made from human hair.

When the hair extensions are produced, they are passed though the quality control department and once the products are approved, they are packaged and loaded into distribution trucks and distributed for sale.

It is important to state that a hair extension making factory may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated hair extension production business process is not cast on stone.

16. Write a Marketing Plan Packed With ideas & Strategies

Marketing your hair extensions requires creativity and aggressiveness. No doubt there are competitions in the hair extension line market, but if your product stands out, you will be able to corner a portion of the available market. One of the key strategies in marketing hair extensions is to create hype around your product.

Creating hype involves attending related business expos, and leveraging on both online and offline media platforms to promote your hair extension brands. Instagram and YouTube are some of the potent social media tools in promoting your hair extension brand.

Another major leverage in marketing your hair extension is to get well known celebrities to endorse your brand. The truth is that if a celebrity makes use of your hair extensions, she will definitely help you generate traffic to your hair extension. It is one of the easiest ways to get people to accept your hair extension in the market place.

It might be expensive but it will sure be worth it. These are other marketing ideas and strategies that you can adopt for your hair extension making business;

  • Introduce your hair extensions making factory and products by sending introductory letters alongside your brochure to females, retailers and other key stake holders in and around the locations you intend retailing your products
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your products.
  • Provide discount days for your customers
  • Advertise your business in community based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you produce your hair extensions at rock bottom prices is to purchase your raw materials directly from manufacturers in pretty large quantities. The truth is that the higher the quantity of raw materials you purchase directly from the manufacturers, the cheaper you tend to get them.

Another strategy that will help you produce your hair extensions at the right price is to ensure that you cut operational cost to the barest minimum, channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.

You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives and also purchase.

18. Develop an Iron-clad Competitive Strategies to Help You Win

The quality of your hair extensions, your business process and of course your pricing model are part of what you need to stay competitive in the industry. If wholesale distributors are making profits from selling your products, they will be more than willing to go the extra mile to help you push your products.

Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution cum business network. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your products can favorably compete with the some of the best in the industry.

19. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers or products.

Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.

If you can continue to make available a wide range of trendy hair extensions at affordable prices and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting you brand awareness then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

If your intention of starting a hair extension making factory is to grow the business beyond the city where you are going to be operating from to by opening chains of show rooms across major cities, then you must be ready to spend money on promotion and advertisement of your brand.

Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your hair extension making factory;

  • Place adverts on both print (newspapers and events and lifestyle magazines magazines) and electronic media platforms
  • Sponsor relevant community based events
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your wedding gowns brand – business
  • Install your Billboards 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 extension – brand
  • Distribute your fliers and handbills in target areas
  • List your hair extension making factory – company in local directories
  • Advertise your hair extension making factory in your official website and employ strategies that will help you pull traffic to the site.
  • Position our Flexi Banners at strategic positions in the location where your showrooms are 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.

21. Create a Suppliers/Distribution Network

Running a hair extension making business requires that you enter into business relationship with suppliers of hair extension materials (such as polyester, nylon, acrylic, other poly – filament fibers or other synthetic materials) and suppliers of packaging materials. One of the places where you can get to network with business partners is in chambers of commerce and industry, and fashion expos et al.

Another major business relationship that is required is the relationship with wholesale distributors and even retailers. The amount of cash in – flow in your business is determined by the number of wholesale distributors that you have.

It is important to create a win – win business relationship with merchants and wholesalers if indeed you want your hair extension brands to penetrate the market. You might want to sell below the average price in the industry especially if you are new so as to attract customers.

Ajaero Tony Martins