Hey there

Here is one approach:

**# Hair Salons** = (# hours required* *for men's haircuts per year* * + # hours required for women's haircuts per year) / average service capacity of 1 hair salon (which would be: opening hours x average # hair dressers x utilization rate).

**Reasoning**

I usually like to estimate these from the demand side - the logic being that a sizing of demand is actually an estimate of the *maximum efficient *supply of hair salons that can be supported in the market. Estimating it from the supply side is also a great approach, but you leave yourself open to the risk that there is undersupply in the market.

**High level illustration (you can add more segments to this)**

**Total service hours required for haircuts p.a.:**

- Assume 8m people in NY; 4m men and 4m women
- Service hours for men:
- Assume men go to hair salon average once every month, 30min each time
- Service hours p.a. = 4m x 12 x 0.5 = 24m hours

- Service hours for women:
- Assume women go to hair salon average once every 3 months, 1 hours each time
- Service hours p.a. = 4m x 4 x 1 = 16m hours

- Total time spent in hair salons is 40m hours p.a. in NY

**Total service capacity per hair salon**

- Assume 8 hours operating time, average 3 hair dressers, 50% utilization rate, open 6 days per week for 50 weeks.
*Note:*the key assumption here is that a hair dresser cannot work- Hence service hours per hair salon p.a. = 8 x 3 x 0.5 x 6 x 50 = 3600 hours p.a.

Therefore, total number of hair salons = 40m hours / 3600 hours = 11,000 hair salons

**Sense check: **11,000 salons implies 1 salon every ~700 people in NYC (350 men, 350 women). Given men cut their hair 12 times p.a. and women cut their hair 4 times p.a., that implies 5600 visits per year, or around 15-20 clients per day, which feels reasonable.

*Note again that demand side estimation assumes there is a maximum efficient supply in the market, which may not be case.*

Hope that is helpful!