A Step-by-Step Guide to Opening a Hair Salon

How about opening a hair salon?

There’s a lot of compelling reasons you should. In 2021, the US hair and nail salon industry was estimated to reach a market worth $63 billion with 77,000 barbershops and nearly 130,000 beauty salons. Of course, building a hair salon business can prove to be an excellent entrepreneurial venture.

However, like any other brick-and-mortar business, it requires more than just a knack and passion. Don’t worry if you are still deciding whether it will be a hair salon, nail salon, barbershop, or an end-to-end beauty salon or spa business.

This guide will provide you with a complete salon opening checklist and information on how to operate a salon business.

Tips for Opening a Hair Salon

Your reason for opening a hair salon could be any. Let’s say you have been working as a hairstylist under the mentorship of other salon business owners. Now, you wish to establish your brand and advance your career. It could also be your passion for styling, coloring, and makeovers that brings about a different look or personality in your clients.

You could also have an entrepreneurial soul and see potential in building a hair salon business, for example, by targeting a specific segment, such as brides, children, or seniors. Knowing it all and doing it all is different. However, the basic principles of an entrepreneurial journey remain the same.

Your salon opening checklist includes a business plan, zoning, gathering licenses and permits, registering a business, insurance, hiring staff, marketing your salon, securing equipment and inventory supplies, and more.

Here’s your step-by-step guide on how to open and operate a salon business.

1. Create a Salon Business Plan

Here are the essential elements of a business plan:

• Executive Summary: This must state your salon’s purpose and objective, how you plan to achieve it, and the UVP (unique value proposition.
• Market Analysis: Include details about other salon businesses in your area, the cost of operation, your competitive advantage over peers, and the cost of acquiring new customers.
• Organization & Management: Provide a brief idea about how you plan to manage your salon. Give details about hiring resources and a manager, insurance, and software requirements, such as a POS system for the salon and spa.
• Financials: Include a detailed list of expenditures and funds needed to open your salon. State any existing arrangements you may have secured from friends, family, or a small business loan.
• Services & Products: Highlight the various services and products you will offer in your salon.
• Marketing Strategy: Describe how you plan to market and advertise your salon, such as through word-of-mouth, social media campaigns, referral programs, etc.

2. Local Laws & Regulations

Depending on your local, state, and federal regulations, here is a list of certifications, licenses, and permits you may require:

• Barber or cosmetology license
• Worker’s compensation insurance coverage
• Federal employer identification number (EIN)
• Business license to legally operate your salon & spa business
• Sales tax permit if you plan to sell retail items
• Certificate of occupancy meeting all the fire and building codes
• Building permit
• Health permit meeting compliance with sanitation code

3. Choosing The Location

Finalizing the location is the most crucial element in the success of your salon business. Regardless of whether your salon will be in the hustle-bustle of the city center or an area with your target demographic, it would help if you ideally kept following in mind.

Proximity to other salons
Foot traffic and visibility
Building cost or rent
Parking availability
Public transport access

4. Engaging a Talented Designer

Appointing a talented designer can help you optimize your salon floor space. Moreover, space planning can enhance the look and feel by creating an appealing, functional, and immersive workspace.

5. Focus On Your Staff

Your employees are the face value of your salon and spa business. Irrespective of whether they are salaried, on hourly pay, or even independent contractors, cultivating a solid relationship is vital for building a hair salon business. Hiring and retaining talented, skilled, and professional staff in the salon and spa industry is complex.

You should consider:

• Training
• Motivation
• Drawing a career path
• Encourage team bonding activities
• Offer competitive compensation
• Promote from within
• Offer perks like flexible hours, transport allowance, etc.

6. Prioritizing Client Satisfaction

Any salon entrepreneur would want their customers to keep coming back. That is only possible when they are pleased and satisfied with your services. A little hiccup in a scheduled appointment can even prevent them from opting for your salon next time.

A positive experience will enhance your brand image, build a loyal customer base, and help you with referrals and word-of-mouth appreciation.

7. Order Salon Equipment

Opening a hair salon requires procuring a lot of equipment and supplies, which may amount to a big chunk of your startup costs. To limit the same, you can create an essential checklist of the things you need to get started. It may include the following.

• Salon stations with chairs, mirrors, and storage space
• Washing stations with chairs, shampoo, conditioner, and other hair care products
• Drying stations with dryers, towels, etc.
• Styling products
• Cleaning products
• Laundry machines
• Spa & Salon POS System
• Display and decor cases

The list may still go on. However, the actual requirement will be based on your salon area and theme.

8. Grand Opening and Beyond

You may want to spread the buzz about your newly opened hair salon and spa business. You can offer a first-time discount, bundle-up packages, run promotions, offer birthday and anniversary discounts, and much more. Furthermore, you can market services on your website, through email and social media marketing, and register on Google My Business to appear in local search results.

How Much Does It Cost to Open a Salon?

The most critical factor in opening a hair salon is cost. Here’s an estimated cost breakdown; however, we recommend checking the cost according to your local and state territory.

• Setting Business Name: $150 – $200
• Licenses and Permit: $100 – $300
• Salon Rent: $1,500 – $10,000
• Salon Equipment: $30,000 – $50,000
• Space Preparation: $0 – $20,000
• Inventory: $10,000 – $30,000
• Insurance: $300 – $500
• Website: $1000 – $3000
• Employee Uniform: $200 – $300

The above cost classification may vary based on the size, locality, and several variable factors. You can also factor in the daily operational cost, salary based on the number of employees, and other such costs.

Wrapping Up:

Building a hair salon is not easy, but it is also not impossible. If you have a passion for styling hair, beauty, and spa, then you can create a space in the salon industry, which is worth $63 billion. Ensure your salon business is focused on becoming digital-first to increase visibility and profitability. Also, aim to scale technologically with a POS system for salons and spas to sort inventory and appointments, run promotions, and offer discounts at checkout points.