HAIR SALON BUSINESS

The idea of owning a salon has been in the back of your mind for a while, but now you want to make this a reality. How can you start a salon business that is a cut above the rest?  The truth is that starting a salon is a lot like starting any other type of small business: there’s research, licensing, hiring, and plenty of decision making involved before you can open your new salon’s door to clients.  Below, we’ll answer all of your questions about opening a salon, from an initial opening checklist to a full guide of common questions.

How much does it cost to start a salon?

According to The Salon Business’s breakdown of costs, starting a salon can cost anywhere from $2,000 for a more basic physical salon location to up to $2,000 for a more complex salon. Startup costs for any salon business can vary significantly, but largely depend on:

Size of the salon
Location
Licenses and permits
Business structure (i.e., chair rental versus hiring employees)
Equipment
Operational costs
Marketing effectiveness
Optimizing your scheduling

Since your goal is for your salon to be profitable as quickly as possible, the best way to do that is with a little bit of planning: establish your salon startup costs, forecast your revenue potential, and find your break-even point.

First, determine the fixed costs that you incur on a monthly basis. Fixed costs are your salon’s expenses that don’t change with sales volume, and are typically non-negotiable (we call them fixed for a reason). Some of these include:

Insurance
Rent and lease agreement
Utilities
Equipment

Variable costs, on the other hand, are easier to manipulate, which can help you cut costs and save money. These are the costs of labor and materials that change with sales volume. Variable costs associated with opening a salon include:

Labor costs
Products and tools used by hair stylists
Shipping and delivery costs to replenish hair product
Advertising and marketing

After you determine your salon’s expenses on a monthly basis, you should create a revenue forecast for your first year and then determine your break-even point, which is where your revenue and expenses zero each other out.

Use this information — your expenses and projected revenue — to create a budget that keeps you on track and helps you avoid overspending.

 

What kind of salon equipment do I need to purchase?

You’ve just signed the papers and picked up the keys to your new salon space. One of the first things you need to do is fill your empty space. While it’s easy to get wrapped up in buying equipment, furniture, and decor, you have to remember that these things come at a price (and it’s often a high one).

Salon equipment makes up a large portion of your startup costs, and many owners tend to overspend. To keep costs reasonable for salon equipment, create a basic checklist of the materials needed for your salon. Every salon needs the following:

Salon stations that include a chair, mirror, and storage space for hair and styling products
Shampooing stations with a chair, shampoo bowl, and storage space for products
Drying stations for use during coloring services

The amount of equipment you need depends on the size of your salon and the number of employees you decide to hire. Most salons have one salon station per employee, but hair stylists with opposite working schedules may be able to share a station.

A small reception area is also necessary for most salons. You’ll want a seating area for clients waiting to see your stylists, as well as a front desk. Most importantly, you’ll want a sleek point of sale for managing bookings and payments.

How do I hire the right hair stylists?

Hiring the right staff for your salon is essential; the quality of your staff’s work makes or breaks your salon. So before you start the interview process, create a list of what you are looking for in an ideal candidate. Here are some things to consider:

  • Skill set: The candidate’s skill set and capacity to learn are both important to think about when interviewing. Think about the years of experience you want your stylists to have. Do you want each stylist to have proficiency in coloring? Or are you going to hire dedicated colorists?
  • Attitude: A candidate’s attitude and work ethic determine their dependability, ability to work with others, and overall customer service.
  • Personality: A candidate’s personality should match the company culture you infuse in the salon. Whether you are aiming to be an upscale boutique or a family-focused shop, you want your company culture to be naturally instilled in your employees. Think about how you want to define your company culture and the traits that each employee should have.

Opening a salon checklist

Before we dive into the details, here’s a checklist of what you’ll need to accomplish as you prepare to open your salon:

Define your salon concept.

Your salon concept should be woven into every aspect of your business, from the services offered to your style of customer service. Your concept should also be reflected in the name of your salon, your design, your decor, and your price range.

Create a business plan for your salon.

Your salon business plan should lay the foundation of your operations. Be sure to include an executive summary, company description, industry analysis, geographic analysis, target market analysis, sample services, marketing plan, management strategy, and financial plan.

Register your business.

You need to register your business with the IRS to receive your Employer Identification Number, which you need to file taxes. (You can sign up for one here.) You might think about trademarking your salon’s name, too.

Select the right location.

A salon’s location can make or break its success. Think about visibility and foot traffic, and evaluate the size and interior shape to decide if it’s the best fit for your business goals.

  1. Order salon equipment. Equipment can get pricey, so you want to be strategic when selecting what to buy or lease. List out everything that you absolutely need versus what you want. Make decisions based on your budget and your financial analysis.
  2. Outline your offerings and services. Your services are the centerpiece of your salon and should reflect your concept and brand. Service descriptions are a marketing tool that can help convince new customers to try your salon, so your descriptions should be concise but appeal to your audience.
  3. Hire the right staff. Make a list of how much staff you need to run your business efficiently. Then get to hiring. This is also a good time to decide if you want to process payroll yourself or use payroll software.
  4. Create a marketing plan. Before you open a salon, it’s important to develop a marketing plan that drives awareness, brings in new customers, and creates a loyal following. Marketing tactics you might use include everything from social media to hosting a soft opening that drives hype.