How to Start a Beauty Salon | The Complete Guide for Beginners

Filed in Business by on February 6, 2020 0 Comments

Venturing into the world of beauty is an amazing idea. It gives me satisfaction when I see people look spectacular when dress.

Don’t start a beauty salon just because you want to make money from it, because if you have such a mindset definitely you won’t achieve your goal.

Plan of satisfying your customers first before you even planned the money aspect. Your customer’s satisfaction should be your main priority because when you know how to satisfy them with what they want, they will also satisfy you with what you want also, which is the money.

How to Start a Beauty Salon

Having this great idea of putting smiles on people’s faces through your work is a better step ahead. There is numerous beauty salon out there which they find it difficult in making money from their salon not because they don’t have the necessary equipment but because their aim was to make money not to make their customers feel the impact of being there.

Always think beyond making money in business and see if money will not be looking for you.

This is an informative word which you need to put into practice and see if things will not work out the way you want it to be.

How to Start a Beauty Salon

1. Make Appropriate Plan For Your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the startup and ongoing costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Luckily we have done a lot of this research for you.

What Are The Costs Involved In Opening A Beauty Salon?

Experts recommend you have at least $60,000 before opening a beauty salon, but this number is highly dependent on the property costs in your area and the number of chairs you plan to have (1,000 square feet will fit about 6 chairs.)

Equipment will typically cost around half the initial capital, or around $30,000. The costs of licensing to operate vary widely (anywhere from $100 to $2,000.)

Advertising costs should also be factored in, with television time costing up to $15,000. If you choose to use a pay-per-click model for digital ads, your costs may be substantial due to the ubiquity of beauty salons.

What Are The Ongoing Expenses For A Beauty Salon?

Owners can expect to pay for the following expenses:

  • Salaries
  • Supplies
  • Advertising
  • Equipment replacement (wear and tear on chairs, dryers, etc.)
  • Building costs (e.g., utilities, permits, upgrades)
Who Is The Target Market?

Beauty salons will profit most from repeat clientele. You’re looking for men and women who are willing to pay more for quality work, and those who need to set services every month.

How Does A Beauty Salon Make Money?

Beauty salons make money by exchanging beautifying services for money. It is important to find the right profit margins for your services. Some salons use a base rate for coloring or haircuts.

A good rule of thumb is to look at the pricing structure of other salons in the area and aim for a middle-of-the-road approach.

Customers do have their budget limits, but they may become instantly suspicious about the quality of work if the rates are too low.

How Much Can You Charge Customers?

The exact amount to charge customers will be dependent on where you are, who your clientele is, and the experience of the stylists. Celebrities may pay up to $800 for hair service and $200 for their nails.

Typically though, you’ll want to set your stylists up on a tiered set, with junior stylists charging around $30 for a cut, intermediates charging around $40, and masters charging $50 to $60.

Manicures and pedicures can be anywhere from $15 for a basic treatment to $30 for a spa manicure.

How Much Profit Can A Beauty Salon Make?

On average, profits can be up to 15% of the total amount your salon brings in. You can also make additional money selling retail products, such as special shampoos and conditioners.

Should you want to make additional money, you’ll need to adjust your service prices, but increasing prices may scare off customers.

How Can You Make Your Business More Profitable?

Look for the ways you can make your customers look better based on their needs. For example, if you have a lot of middle-aged women coming in, offer more services to lift and refresh aging skin.

Look into bringing in cosmetic specialists from time to time for special events (e.g., offer Brazilian hair straightening for a month.)

There are a variety of new trends that hit the market, like vampire facelifts and sunset coloring that can drive interest and set your salon apart.

You can also franchise if your business grows large enough, but 99% of beauty salons have a single location.

What Will You Name Your Business?

Choosing the right name for your business is very important. That alone needs thorough planning because you need to relax your mind before you can get the right name for your business.

2. Form A Legal Entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your beauty salon is sued. There are many business structures to choose from including Corporations, LLCs, and DBAs.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

3. Register For Taxes

You will need to register for a variety of state and federal taxes before you can open for business. In order to register for taxes, you will need to apply for an EIN. It’s really easy and free!

4. Open A Business Bank Account & Credit Card

Using dedicated business banking and credit accounts is essential for personal asset protection. When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open A Business Bank Account
  • This separates your personal assets from your company’s assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
Get A Business Credit Card
  • This helps you separate personal and business expenses by putting your business’ expenses all in one place.
  • It also builds your company’s credit history, which can be useful to raise money and investment later on.

RECOMMENDED: New York LLC Guide | A Comprehensive Write-up for Beginners

5. Set Up Business Accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

6. Obtain Necessary Permits And Licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a beauty salon. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Certificate of Occupancy

A beauty salon is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws, and government regulations have been met.

1. If You Plan To Lease A Location:
  • It is generally the landlord’s responsibility to obtain a CO.
  • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a beauty salon.
  • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
2. If You Plan To Purchase Or Build A Location:
  • You will be responsible for obtaining a valid CO from a local government authority.
  • Review all building codes and zoning requirements for your business’ location to ensure your beauty salon will be in compliance and able to obtain a CO.

7. Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, worker’s compensation insurance may be a legal requirement in your state.

8. Define Your Brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How To Promote & Market A Beauty Salon

Find out what a customer wants and then start filling in the gaps. For example, there may not be many salons open late on weeknights or you may have better quality color treatments that last longer than other salons.

You may want to set up a referral or loyalty program to encourage customers to promote your business. These discounts will ensure that the customers promote your business and return for your services themselves.

Your customers are likely to be on social media, which is the perfect place to market. Take pictures of all your successes and constantly update your feed even if interest is low at first.

If you have a specific trend that’s happening in the area (e.g., sunset color), then this should be heavily visible on Instagram and Facebook company pages

How To Keep Customers Coming Back

Focus on making each customer interaction a success. This will help customers to associate success with your services, and it will also lead to them telling others they know about your business.

Think about the customer experience from every angle: finding the salon, getting to the salon, parking, exiting, etc. Be proactive on sites like Yelp, and never leave a complaint unanswered.

Be generous if you want to get people’s attention. Ten percent off may seem like a lot to you, but it’s not likely to impress someone who already has a relationship with another salon.

9. Establish Your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

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