How to Start a Hair Salon

Are you interested in learning how to break into the beauty business? Starting a hair salon can be an amazing way to express your creativity, work closely with clients, and run a lucrative business. But before jumping in, you’ll need some industry experience and general business acumen. In this article, we’ll tell you how to start a hair salon of your own.

How to Start a Hair Salon Business: Key Steps Summary

There are key steps you should take before becoming a salon owner. You may already have a conceptualization of how it will look and operate.

Before you get into the actual operation of your own hair salon business, you need to get the basics out of the way. For instance, you need to develop a business plan, figure out your startup costs, plan marketing strategies and more.

Below, we’ll provide a detailed guide for someone ready to learn how to start a spa business or hair salon.

Plan Your Hair Salon

First, take time to iron out the initial considerations that entrepreneurs must weigh before opening hair salons.

For instance, which hair services will be offered? What is your target market? What is your competition, where are they located and what services do they offer? What hours do you want to operate? Do you want a small operation like a salon cart or booth rental, or do you envision including nail technicians and skin care specialists?

Here are the steps to take before opening a salon:

Develop a Business Plan

Outline your salon’s mission, target market, services offered, financial projections, and marketing strategies to guide your business’s direction and growth. Remember that the salon business plan isn’t etched in stone, it can be adjusted as needed. The business plan is a very important document to provide if you seek financing.

Choose a Salon Model

Decide whether you’ll operate as a sole proprietorship, partnership, or corporation, considering factors like liability, taxation, and management structure that align with your vision and goals. Many hair salon owners use the Limited Liability Corporation, or LLC, as the business structure.

Find the Right Location

This is very important. Research areas with high foot traffic, ample parking, and complementary businesses to attract customers, ensuring your salon’s visibility and accessibility (easy parking) contribute to its success. You must also make sure that local zoning laws permit you to operate a hair salon at a location. This is very important if you plan to start by operating out of your home. In some residential areas, home businesses are not allowed.

Consider Legal Elements

Consult with legal professionals to understand zoning laws, lease agreements, employment regulations, and insurance requirements to protect your salon and comply with legal obligations.

Register Your Business

Get inspired with beauty and hair business names. Then, register your salon’s name, obtain a federal Employer Identification Number (EIN), and fulfill state and local registration requirements to establish your business legally and professionally. Before choosing your business name, check with your state to make sure it hasn’t already been taken.

Obtain Licenses and Permits

Secure cosmetology licenses for yourself and your staff, as well as permits for salon operation, ensuring compliance with health, safety, and professional standards in your area. You’ll need commercial business insurance, even if you’re operating in your own house.

Set Up Your Salon

Next, things will start to get a lot mor fun. Create a functional layout that optimizes space for workstations, reception, and amenities while adhering to safety codes and providing a comfortable environment for clients and staff.

Design Your Space

Reflect your brand’s identity and create a welcoming atmosphere with stylish décor, comfortable furnishings, and effective lighting that enhances the salon experience for clients. Consider your target market as you design your space and consider the type of music (if any) you will provide.

Purchase Equipment and Supplies

Invest in high-quality salon equipment, tools, and premium products to deliver exceptional services and maintain client satisfaction while managing inventory effectively.

Market Your Hair Salon

Develop a marketing plan that utilizes social media, website presence, local advertising, and promotions to attract and retain clients, highlighting your salon’s unique offerings and expertise.

Build a Brand

Establish a distinct brand identity through consistent branding elements, such as logo, color scheme, and messaging, that resonate with your target audience and differentiate your salon from competitors.

Develop a Marketing Strategy

Identify your target market, create compelling salon marketing materials, and implement strategies like referral programs, loyalty rewards, and special events to attract and retain clients and drive business growth.

Launch Your Own Salon

Plan a grand opening event to generate buzz and attract potential clients, leveraging social media, local press, and community outreach to maximize visibility and create a memorable launch experience.

Foster Business Relationships

Cultivate positive relationships with clients, suppliers, and industry professionals through exceptional service, networking opportunities, and collaboration, building a strong support network for your salon’s success.

How Much Does it Cost to Start a Hair Salon

Start-up costs for general equipment in a hair salon may include:

  1. Salon Chairs: Costs can vary based on quality and brand, but expect to budget several hundred to over a thousand dollars per chair.
  2. Styling Stations: Each station includes a mirror, workstation, and storage, with costs ranging from $500 to $2,000 per station.
  3. Hair Dryers and Hooded Dryers: Prices range from $100 to $1,000 depending on type and quality.
  4. Shampoo Bowls and Chairs: Budget around $500 to $1,500 per unit, including installation.
  5. Salon Furniture and Decor: Costs for reception desks, waiting area seating, lighting, and decor can vary widely based on style and quality, ranging from a few hundred to several thousand dollars per item.
  6. Hair Care Products and Supplies: Initial inventory costs for shampoos, conditioners, styling products, and tools can vary widely based on brand and quantity, but expect to allocate a significant portion of your budget for stocking essential products.

Recurring costs of operating a hair salon may include:

  1. Rent or Lease Payments: Monthly rental or lease payments for your salon space.
  2. Utilities: Monthly expenses for electricity, water, heating, and cooling.
  3. Staff Salaries and Benefits: Payroll costs for stylists, receptionists, and other staff, including wages, taxes, and benefits.
  4. Product Inventory: Regular restocking of hair care products, styling tools, and other salon supplies.
  5. Equipment Maintenance and Repairs: Ongoing costs for servicing and repairing salon equipment to ensure proper functioning and safety.
  6. Marketing and Advertising: Budget for ongoing marketing efforts such as social media advertising, local promotions, and print materials to attract and retain clients.
  7. Insurance: Premiums for general liability insurance, property insurance, and workers’ compensation insurance to protect your salon and employees.
  8. Professional Fees: Costs for accounting services, legal advice, and business consulting as needed to support your salon’s operations and growth.
  9. Continuing Education and Training: Investments in staff development and training to keep up with industry trends and maintain high-quality service standards.
  10. Miscellaneous Expenses: Budget for unexpected or incidental costs that may be part of day to day operations such as repairs, upgrades, and additional supplies as needed to keep your salon running smoothly.
Cost CategoryStart-Up CostsRecurring Costs
Salon ChairsSeveral hundred to over $1,000 per chairN/A (periodic replacement or repair)
Styling Stations$500 to $2,000 per stationN/A (periodic replacement or repair)
Hair Dryers and Hooded Dryers$100 to $1,000 depending on type and qualityN/A (maintenance, repairs, or replacement)
Shampoo Bowls and Chairs$500 to $1,500 per unit, including installationN/A (maintenance, repairs, or replacement)
Salon Furniture and DecorA few hundred to several thousand dollars per itemN/A (periodic updates or replacements)
Hair Care Products and SuppliesSignificant portion of the budget for initial inventoryRegular restocking of products
Rent or Lease PaymentsN/AMonthly rental or lease payments
UtilitiesN/AMonthly expenses for electricity, water, heating, cooling
Staff Salaries and BenefitsN/APayroll costs, including wages, taxes, and benefits
Product InventoryN/ARegular restocking of salon supplies
Equipment Maintenance and RepairsN/AOngoing servicing and repairing costs
Marketing and AdvertisingN/ABudget for ongoing marketing efforts
InsuranceN/APremiums for various insurance policies
Professional FeesN/ACosts for accounting, legal, and consulting services
Continuing Education and TrainingN/AInvestments in staff development and training
Miscellaneous ExpensesN/ABudget for unexpected or incidental costs

How to Start a Hair Salon with No Money

Is opening a salon possible if you don’t have the initial funds needed? Yes. You’ve got to be resourceful and innovative, but there are various financing avenues for those with limited capital.

Explore Financing Options

Consider traditional financing options such as bank loans, Small Business Administration (SBA) small business loans, or lines of credit to secure capital for your salon. Research alternative financing options like peer-to-peer lending platforms, crowdfunding campaigns, or grants specifically for small businesses in the beauty industry. Compare interest rates, terms, and eligibility requirements to find the most suitable financing option for your salon’s needs.

Utilize Free Resources

Take advantage of free resources available to entrepreneurs, such as business development centers, Small Business Development Centers (SBDCs), and SCORE mentoring services, which offer guidance, workshops, and resources to help you develop your business plan, navigate legal requirements, and access funding opportunities without incurring additional costs. Explore online resources and educational materials provided by industry associations, government agencies, and financial institutions to gain insights and knowledge about starting and managing a successful salon.

Build a Network

As a business owner, leverage your personal and professional networks to seek advice, support, and potential funding opportunities from family, friends, mentors, and industry contacts.

Start Small

Consider starting your salon as a smaller-scale operation initially, such as operating from a home-based studio or renting a chair in an existing salon, to minimize upfront costs and test the market demand before scaling up. Focus on providing exceptional service and building a loyal clientele to generate revenue and reinvest profits into expanding your salon over time. Explore Financing Options

FAQs: How to Start a Hair Salon

What are the biggest challenges for new salon owners?

The biggest challenges when learning how to start a business in the salon industry are competition, financial management and staffing/training:

  1. Competition: Standing out in a crowded market and attracting clients in an industry with numerous salons can be challenging. Differentiating your salon through unique services, exceptional customer experience, and effective marketing strategies is essential for success.
  2. Financial Management: Managing cash flow, controlling expenses, and pricing services competitively while maintaining profitability can pose significant challenges for salon owners. Implementing sound financial practices, tracking expenses closely, and regularly reviewing pricing strategies can help mitigate financial risks.
  3. Staffing and Training: Recruiting and retaining skilled and reliable staff, including stylists who have a cosmetology license, receptionists, and assistants, can be a challenge in the salon industry. Providing ongoing training and development opportunities, fostering a positive work environment, and offering competitive compensation and benefits are essential for attracting and retaining talented employees.

How can salon owners stay competitive?

There are several options for staying competitive when running a hair salon franchise or independent business. Here are some top tips:

  • Keep Up with Trends: Stay updated on the latest hair trends, techniques, and technologies to offer innovative services and stay ahead of the competition.
  • Offer Exceptional Customer Service: Focus on providing personalized experiences, building relationships with clients, and exceeding their expectations to foster loyalty and word-of-mouth referrals.
  • Embrace Technology: Utilize salon software, online booking systems, and social media platforms to streamline operations, enhance customer engagement, and reach a broader audience effectively.

What are the best practices for hiring and retaining top talent in a salon?

Clearly outline job responsibilities, expectations, and performance metrics to ensure alignment between employees’ skills and salon needs.

Take the time to conduct comprehensive interviews and assess candidates’ technical skills, personality fit, and passion for the industry to make informed hiring decisions. Invest in ongoing training and professional development opportunities to help employees improve their skills, stay motivated, and grow within the salon. Cultivate a supportive and inclusive workplace culture that values teamwork, communication, and mutual respect to enhance employee morale and retention.

Provide competitive wages, commission structures, and benefits packages, such as health insurance, retirement plans, and employee discounts, to attract and retain top talent in the industry. Acknowledge and reward employees’ contributions, achievements, and milestones through incentives, bonuses, and recognition programs to foster a culture of appreciation and loyalty.

Image: Envato Elements

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Lisa Price Lisa Price is a staff writer for Small Business Trends and has been a member of the team for 4 years. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She is also a freelance writer and previously worked as a newspaper circulation district manager and radio station commercial writer. In 2019, Lisa received the (Pennsylvania) Keystone Award.