A hair salon is a widely known business model that can generate a huge stream on income. In most cases the prime factor that directly influences the income of a hair salon is the geographical location. It is important to place the shop in a central area, or in a place where there is a high amount of population. Another important factor is the skill and reputation of your staff. Considering other expenses, the average income that a hair salon generates per year in the US is around $50,000.