How to Start a Salon Business: The Essential Checklist

Starting a salon business can be a great opportunity for financial freedom and professional growth. However, starting your own business is no small undertaking and requires careful planning to ensure success. This article provides important tips and advice to help ensure you get off to a successful start when launching your own salon business.

Key Points:
Before starting a salon, make sure to research local market conditions to assess the viability of starting a salon business.
Develop a detailed business plan with financial projections and a marketing strategy long before opening your doors.
With a salon business, you’ll need to secure the necessary capital, permits, and licenses in order to open.

Checklist for Starting a Salon

Starting a salon business takes some gumption, time, and money. We’ve got 19 steps below to get you through the entire process.

1. Do Your Research on the Industry, Local Laws, and Competition

When starting a salon business, you’ll need to do thorough research in order to ensure success. The industry, local laws, and competition all need to be taken into account.

When researching the industry, potential salon owners should look into:

Industry trends.
The cost of services.
The products needed to provide services.
The ideal customer base.
The salon’s target market.
Local salon regulations and licensing requirements.

Researching local competition is important and can help potential salon owners identify opportunities and potential pitfalls. Looking at competitors’ prices, services, and marketing strategies can help potential salon owners build a better business plan and understand the best ways to attract customers.

2. Determine How Much It Costs to Open a Salon

Generally, the cost of starting a salon ranges widely from $10,000 to $200,000.

When thinking about how to start a salon business, it's important to have a realistic understanding of the costs involved. To get a better understanding of the potential costs of opening a salon, you'll need to consider:

Location. This is an important factor to consider when opening a salon, as rent and other associated costs can vary significantly from location to location. Additionally, salon location can have a direct impact on your customer base.
Equipment and supplies. You'll need to invest in equipment and supplies such as furniture, styling tools, and other products. Make sure to create a comprehensive list and budget accordingly. This will likely be the really expensive part of starting a salon, so consider where you’ll get salon equipment financing as well.
Staff. You'll need to calculate the cost of hiring and paying staff, such as hairstylists, assistants, and receptionists.
Additional costs. Make sure to factor in other costs associated with starting a salon, such as permits, licenses, insurance, and marketing.

3. Define What Your Salon Concept Will Be

When starting a salon business, you’ll decide on a concept that will set your business apart from your competitors. Salons come in many shapes and sizes, and determining what type of salon you want to start will guide your decisions and define the success of your business.

First, consider the different types of salons. A typical salon might focus on haircuts and styling, while a day spa might offer services such as massages and facials. There are also specialty salons, such as nail salons that offer only manicures and pedicures. When choosing your concept, try to find a niche in your local market that will separate your salon from the competition.

4. Select the Right Type of Business Entity for Your Salon

It’s important to create a brand identity in order to connect with your target audience. This includes choosing a business entity, your liability, and the way income is taxed.

The most common types of entities are:

Sole proprietorship. A sole proprietorship is the most basic and simplest type of business structure. It brings with it the least amount of paperwork, with no formal registration required. However, as a sole proprietor, you are personally liable for the financial obligations and legal liabilities of the business, leaving you exposed to risks.
Partnership. This entity involves two or more people, who share the ownership of the business and the profits and losses associated with it. A written agreement is necessary to outline the details of ownership and responsibilities, and a partnership must file an informational tax return each year.
Limited liability company (LLC). An LLC is a hybrid entity that combines the legal and tax advantages of a corporation with the simplicity of a sole proprietorship or partnership. You can protect your personal assets from legal action or debts of your business with this type of entity, and you will likely receive tax benefits.
Corporation. A corporation is a legal entity in its own right, separate from its owners. It must comply with different regulations than other entities and requires more paperwork. Owners have no personal liability for the obligations of the business, and this type of entity is often more attractive to investors.

Before deciding on the right entity for your salon business, consider consulting with a lawyer or accountant to understand the implications of each type.

5. Register with Your Local Secretary of State

Registering your salon business with your local Secretary of State is an essential step in getting your business up and running. This process can vary slightly from state to state, so it is important to research the rules and regulations for your particular area.

First, you will need to decide on a business name and make sure that it is available for use in your state. Once you have selected your business name, you can then register it with the Secretary of State. You will typically need to fill out a registration form and submit it along with the necessary fees. Additionally, you may need to provide proof of other required documents such as a business license.

Completing this step is necessary for a number of reasons, including:

It serves as an official record of your business and will make it easier for customers to find you.
It ensures that you are in line with local laws and regulations regarding your business.
It provides some level of protection for your business in case of any potential legal disputes.

6. Sign Up for an Employer Identification Number (EIN)

If you plan to start a salon business, you’ll want an Employer Identification Number (EIN) from the IRS. An EIN is a unique nine-digit number that identifies your business for tax purposes. It’s also sometimes referred to as a Federal Tax Identification Number.

To obtain an EIN, you must first fill out IRS Form SS-4. This form can be completed online or by mail. You will need to provide some basic information about your business, including the type of business structure, the location of the business, and the name and Social Security numbers of the business owners.

Once you have completed the application and it’s processed by the IRS, you will receive an EIN in the mail. You should use this number when filing taxes and any other business-related paperwork.

7. Open a Business Bank Account and Credit Card

Starting a salon business requires a certain amount of capital and financial organization. Opening a business bank account and a business credit card is essential for managing the cash flow of the business.

Business bank accounts provide a way to separate your personal finances from the salon’s finances, and protect the business’s financial interests. In addition, many business bank accounts provide services specifically for business owners, such as payroll and automatic deposit.

In addition to a business bank account, getting a business credit card can also be beneficial. The main advantage of getting a business credit card is that it can help you establish a credit profile for the business. Business credit cards also typically offer higher credit limits and cash back rewards.

8. Create a Business Plan for Your Salon

Creating a business plan for a salon is essential for the success of your business. In addition to outlining general information about the company, such as your mission, business history, and desired goals, a comprehensive business plan should also include information on setting prices and a comprehensive marketing section.

When setting prices for services, consider:

The expected profit margins.
The cost of materials.
Any services being offered as a promotion.
The cost of labor for the services provided.

Knowing these key components will help you determine what prices to set for your services, and whether those prices are competitive in the salon industry.

The marketing section of the business plan should include:

A detailed description of the strategies you will use to increase brand awareness and reach new customers.
A description of budgeted marketing tactics you will use, such as advertising on social media, direct mail campaigns, or any other medium you are using to reach potential clients.
Projections for the number of customers you expect to reach, as well as the expected return on investment for your marketing efforts.

9. Secure the Necessary Salon Financing

Securing the necessary salon financing is the foundation of any successful salon business. The key to finding the right fit is understanding the various financing options available. Here are a few to consider:

Personal savings or loans for beauty salons. Investing your own money or taking a loan from family or friends is a popular choice among small business owners. It’s a great way to lower the risk involved and also provides a way to keep more of the profits.
Angel investors or venture capitalists. These are private investors who are willing to put money into small businesses in exchange for a significant stake in the company.
Bank financing. Banks can offer both short-term and long-term beauty salon loans for those who qualify and can be a good option for businesses that need a larger start-up loan.
Small business credit cards. These can provide short-term financing options for those with a good credit score, and the cards often come with additional benefits such as rewards points and other business-related perks.
Crowdfunding. Crowdfunding has become increasingly popular in recent years and can be an easy and effective way to raise money for your startup. Sites like GoFundMe and Kickstarter offer a way for you to reach your peers and get funding for your business venture.

10. Choose a Good Location for Your Salon

When starting a salon business, the most important thing to consider is the location of the salon. The location of your salon should be easily accessible and visible to potential customers. It should also have enough room for your salon services, staff members, and other amenities.

Start by researching potential communities and neighborhoods that might be a good fit for your salon. Look for areas that have a high population density and are close to your target customer demographic. Consider the local competition and the pricing of similar services in the surrounding area.

Once you have narrowed it down to a few locations, take a look at the physical area. Find out if the buildings are up to code and if any zoning laws must be adhered to. Look into the average foot traffic in the area, what kind of parking and public transportation is available, and any other amenities that might be beneficial to your salon.

11. Make Any Necessary Modifications to Your Building

If you plan to open a salon business, you need to make sure that the building you choose is suitable for your needs. Before you begin any renovations, check with your local zoning board to discuss any restrictions you may encounter. They may have certain regulations imposed by the municipality which you’ll need to abide by.

Once you have the proper permits in place, you should consider any necessary modifications to the building. If you plan to offer manicures, pedicures, hair styling, or any other salon services, you will need to ensure that the layout of the building is suitable for these services. Depending on the size of the building, you may need to make modifications to the walls and flooring, such as installing stationary dryers, chairs, and plumbing or electrical fixtures. You may also need to install new lighting or replace outdated fixtures.

12. Obtain the Required Licenses, Permits, and Insurance

It often takes multiple permits in order to operate legally and protect your business. The most common type of license you may need to open a salon is a general business license, which grants you the authority to open a business in your area.

In addition, you may also need specific licenses and permits related to salon operations, such as a cosmetology license. Depending on your city or state, you may also need a license for estheticians, nail technicians, barbers, and other specialized services. In some cases, you may need to obtain additional permits related to health and safety to operate your salon.

Once you have obtained the necessary licenses and permits, your next step is to properly insure your business in case of any unfortunate incidents. There are a few different types of salon insurance policies you may need to obtain, such as general liability insurance and workers’ compensation insurance.

13. Talk to Distributors

Distributors are the vendors who provide the business with supplies such as hair care products, salon tools, and furniture. In other words, they’re pretty darn important for a salon to run effectively. Choosing a distributor requires research and lots of it. Here are some things to consider when talking to distributors:

Assess the quality of the products. It is important to research the quality of the products that the distributor is offering. Ask questions about the safety and efficacy of their products, and thoroughly read customer reviews to get a better feel for their products.
Research delivery time and cost. Research how quickly the distributor can deliver the products to the salon. This can help determine turnaround time and keep clients happy. Additionally, ask about delivery costs and inquire about any discounts they may offer.
Consider payment options. Discuss payment options with the distributor. Enquire about payment terms, whether they offer discounts for bulk orders, and what types of payment methods they accept.

14. Order Salon Equipment, Supplies, and Inventory

Before you start ordering, create a comprehensive list of the salon equipment and supplies you’ll need. This list should include:

Furniture.
Storage.
Towels.
Capes.
Dryers.
Brushes.
Styling tools.

Research various suppliers and compare their prices and quality to ensure you get the best deal. Consider any warranties available and shop around for the best one. If possible, try to purchase from one supplier since this allows you to save money on shipping.

Next, order the necessary inventory. Purchasing inventory is a bit tricky since it’s important to stock enough products without overstocking. Consider your salon’s specialty services and the type of clients you intend to attract to determine the types and brands of products you will need. Once you have decided on the products and brands, you can determine how much you will need to ensure you always have enough supplies on hand.

15. Create a Salon Service Menu

Creating a salon service menu allows customers to know what services you offer, what the cost is, and provides an opportunity to showcase any special offers or promotions. When creating a salon service menu, consider the nature of your business, the size of your salon, and the type of customers you wish to serve.

Focus on the services that make your salon unique. These could include special treatments, hair-cutting techniques, and unique styling options. You can also add accessories such as hair extensions or wigs to your menu.

When creating your menu, it’s also important to include any additional information that customers might need to know about your services. This could include appointment times and costs of services, as well as methods of payment accepted by your salon.

16. Set Up a Point of Sale System

A POS system allows salon owners and staff to keep track of inventory, process payments, and manage customer information. When selecting a POS system, research different options and find the one that best suits the needs of your particular salon. Consider features such as inventory tracking, customer loyalty, and appointment scheduling. Also look for a system that accepts various payment methods such as credit cards, debit cards, and cash.

17. Hire and Train Staff Members

Hiring and training staff members is one of the most important aspects of running a successful salon business. Choose personnel who are highly skilled, experienced, and have the right qualifications and credentials.

When hiring staff, take the time to review resumes carefully, check references thoroughly, and interview candidates in person. During the interview process, make sure to explore their work history and skills to ensure they are a good fit for the role.

After making the hiring decisions, you’ll need to devote time and effort to training your staff. Provide them with a comprehensive orientation on the salon and its policies, as well as the specific skills they’ll need to excel in their job. This could include day-to-day procedures, customer service techniques, and techniques for giving haircuts, manicures, and other services.

18. Market Your Salon and Its Services

Starting a salon business can be an exciting endeavor, but it’s important to market your business properly in order to actually gain the customers you need to keep the doors open. Here are some tips to get your salon noticed and attract clients:

Develop a unique brand identity. Establish a unique brand identity that reflects the personality of your salon. Use this identity to create a memorable logo and other visuals to support your business.
Make your presence known on social media. Create accounts on all the major social media platforms and use them to showcase your salon, its services, and special promotions. Respond to customer inquiries and reviews in a timely, professional manner.
Advertise your services. Consider both traditional and digital advertising to reach potential customers. Direct mail, radio, and television are all common forms of traditional advertising, while social media, email marketing, and Google Ads can be used for digital marketing.
Offer promotions and loyalty programs. Loyalty and referral programs can provide your salon with repeat customers and positive word of mouth.
Network with beauty professionals. Network with other beauty professionals, such as makeup artists and hairstylists, to get your salon’s name out there. This can be done through social media and industry events.

19. Open for Business

After all your time and dedication, it’s finally time to open for business! Advertise your salon through flyers, online posts, and word-of-mouth. You may even want to run a promotion for the first few days you’re open, just to get people in the door.

Tips for Opening a Successful Salon

No matter your experience level in the salon business, there are a few essential tips to keep in mind when launching your own salon. Taking some time to prepare and educate yourself on what it takes to successfully open a salon will help ensure your business’s longevity.

Get Plenty of Salon Business Experience Before You Open

Having experience in the salon business is key to running a successful salon. Spend time apprenticing or working in other salons to understand the daily operations of the business. You should also explore the different services that salons offer and observe the unique approaches each salon takes to run the business. This will help you create a successful business plan for your own salon.

Find an Experienced Salon Owner to Mentor You

When starting a business, it’s important to find a mentor who can provide insight and advice. Reach out to other salon owners and entrepreneurs to help you better understand the industry. If you don’t know anyone, consider joining salon business groups on social media or associations to build connections and learn best practices.

Know Who Your Ideal Salon Client Is

Before opening your salon, do your research to see what your clients are looking for. Understand the needs and wants of your target audience and how you can best serve them. This will help you plan and create services and packages that meet their needs.

Invest in Branding to Set Your Salon Apart

Creating a unique brand identity is key to standing out from the competition. Invest in creating a memorable logo and website design to help your salon stand out and attract new customers.

Build a Salon Website Your Clients Will Love

A website is an essential part of any business. It’s the first and best way for potential clients to learn about your salon and its offerings. Make sure you have a website that is easy to navigate and packed with helpful information about you and your services. Invest in quality content and photos so potential clients can get a good feel for your salon and its offerings.

Useful Resources for New Salon Owners

Need help learning how to start a salon business? Well, there are a variety of resources available to help new salon owners get their business off the ground, including:

Small Business Administration (SBA). The SBA is a government-run organization that offers a variety of resources to help small business owners. On their website, you can access information about business funding, small business loans, business plan creation and more.
SCORE. SCORE is a nonprofit organization that provides mentorship and resources to those looking to open a business. They offer free business advice and free resources to help guide potential business owners through the process of opening a salon business.
Commerce Department. The Commerce Department of each state provides resources such as financing, offices and work spaces, marketing advice, and more to help potential new business owners.
Professional Beauty Association (PBA). The PBA is an organization that provides resources to salon owners. They offer advice on business operations, tips on how to keep up with current trends, and resources for finding and verifying salon licenses and certifications.
Local organizations. Your local government or chamber of commerce may offer resources that can help guide potential new salon owners in the process of opening their businesses.

Final Word

Starting your own salon business is a challenging and potentially rewarding endeavor. There are a variety of aspects you’ll need to consider, from marketing to financial management. It’s important to remember, however, that your business is what you make of it. With hard work and dedication, you can create a successful and profitable business.

Additionally, it’s a good idea to take time to plan your business and research the industry to ensure you’re making the right choices at each step. As you move forward, you should also make sure to stay up-to-date on trends and regulations related to your industry. Successful business owners never stop learning and stay ahead of the curve.