How to Start a Hair Salon
The hair salon industry is favorable to small businesses. Less than 10% of the market is controlled by major companies. This means that entering this growing industry does not require a large investment. We've created a detailed guide to help you enter this growing market.
Decide what type of hair salon you want to open.
Research the different types of hair salons.
There are five main types of hair salons: basic value-priced salon, boutique, salon and spa, specialty, and barbershop. Each type of hair salon offers a different range of services and attracts different customers.
Basic value-based hair salon: Basic value-based hair salons offer few services, focusing mostly on haircuts. These types of hair salons are usually franchises or chains, and they accept walk-in appointments. Their haircuts are reasonably priced and the stylists work quickly.
Boutique hair salon: Boutique hair salons are a mix between a hair salon and a retail store. They offer the usual hair salon services, but also sell items such as books, jewelry, clothing, candles, etc. Boutique salons generally cater to women.
Salon and spa: A salon and spa offer hair services along with full pampering experiences. They are often high-end and expensive, and some even have liquor licenses.
Specialty hair salon: Specialty hair salons rely on specialist stylists to offer clients services that require advanced techniques. Often, these salons employ only a few stylists, each a master in one particular area.
Barbershop: A barbershop mainly caters to men, offering simple cuts and styles, and various grooming services. The decor is mostly simple and most barbers are men.
Consider your expertise and qualifications.
The type of hair salon you choose to open should complement the skills and qualifications you have to offer. For instance, a barber will have different techniques and cutting methods than a boutique hairstylist.
Create a business plan.
Conduct research on the hair salon industry.
Market research is a great way to highlight your growth potential, identify your target market and competitors, compare pricing, and measure brand awareness. The process involves distributing surveys, gathering statistics, and creating reports.
Use your research to compile a detailed business plan.
A business plan should describe your hair salon business and brand, show how your business will grow, define what it will need to succeed, and outline possible challenges your business is likely to face. This business plan is a sort of road map for you in the early stages, and it can be used to get financing and attract partners.
Essentials for a hair salon business plan:
Sales and Marketing Plan.
Ownership and Management Plan.
Check out our generic business plan template for a hair salon. Download link listed above.
Form your hair salon.
Choose a legal structure.
Forming a business entity protects you from liability and can save you money on taxes. You have four possible legal structures to choose from for your hair salon: sole proprietorship, partnership, limited liability company, and corporation.
Most salon owners choose LLC. This structure protects you from personal liability if there is an unfortunate slip of the scissors. LLC's are more flexible when it comes to taxes, but can be difficult to set up.
Once you've chosen your legal structure, file a DBA (Doing business as), or file LLC paperwork with the State.
Choose a business name.
You want the name of your hair salon to be catchy and unique, while cleverly hinting to the services you provide. However, naming your business can be a time-consuming process as there are many steps to follow. Check out our detailed guide on how to name your hair salon.
Open a business bank account.
Opening a business bank account that is separate from your personal accounts protects you from liability and gains you access to business banking services. Visit your local financial institutions and ask them about their business accounts.
To help you better manage your finances, you may also want to establish an accounting system.
Get business insurance.
To protect your business from losses caused by lawsuits, fire, flood, theft etc., you need business insurance. These may include liability insurance, commercial property insurance, and more.
Invest in hair salon software.
Salon management software will help you to schedule and manage appointments, process sales and payments, and manage client information. Popular options include Salonist, Shedul, and Versum.
Choose a location.
This is one of the most important decisions you'll make when starting your salon. Depending on your budget, you may decide to set up your salon in the city center, or on the outskirts of town, near tourist attractions, or in a new mall. It is all up to you, but there are many things to consider before leasing commercial property.
Think about the following factors when making your choice:
- Is the location close to your target market?
- Is there public transport nearby?
- Does the space offer ample room for at least three stylists and an admin clerk?
- Is the location safe?
- Are there amenities available?
The location should be easy to find.
The place needs to fit your expansion plans.
Your target demographic should live or work in the area.
Look for a place with lots of foot traffic.
Ask family and friends.
If you're planning on starting small, asking friends and family could be a great solution. Prepare a good presentation and explain how you plan on expanding your business. Depending on your future plans, your family and friends may also suggest starting a partnership.
Apply for a small business loan.
Applying for a business loan can be a daunting process, especially when one considers the stringent requirements banks and lenders have in place. However, this remains one of the best options for entrepreneurs looking to start a new business.
You can apply for a small business loan at your local bank, with the Small Business Administration (SBA), or through an SBA-approved lender, such as Lendio and Lendr.
Get a business credit card.
Having a business credit card is a good way to track business expenses, earn rewards, and improve your credit rating. In addition, this is a great option for those who require access to quick capital.
With the right business plan, research, and a stellar pitch, you may be able to sell your vision to the right investor. Be sure to focus on showcasing your business's growth potential in a comprehensive business plan. Potential investors can include a third party investor or a trusted peer.
Set up shop.
Purchase your equipment and supplies.
Now that you've got the funding and the location space prepared, you'll need to start equipping your store with the right tools, decor, and equipment. These may include outdoor signage, workstations, mirror cabinets, display cases, and washers and dryers.
Design the layout of your hair salon.
When designing your hair salon layout, think about the impact it will have on your clients and your stylists. More workstations might mean you have a greater turnaround, but they could clutter the space and make it uncomfortable for your stylists to do their work.
Make use of natural daylight.
Opt for darker upholstery to hide stains.
Have lighting above workstations, then additional lighting for ambiance.
Use a wall mirror to create the illusion of space.
Separate different areas using plinths, pot plants, or different floor levels.
Build the ideal candidate persona.
Because a good team will drive success in your business, it's important that you hire quality candidates. Ideally, you should be looking for experience, a cosmetology license, a range of skills and knowledge, a willingness to learn, and a positive attitude.
Create a detailed job description.
Your job description should include a detailed description of the type of candidate you're looking for, which qualifications and skills are required, and a list of daily job responsibilities. Once you've found potential candidates, follow up with an interview, practical assessment, and background checks.
All new and re-hired employees must be reported to the new hire department in your state. This must be done within 20 days of employment.
Market your hair salon.
Create a website.
A must-have for every modern business is a website. Your website should be user-friendly, informative, and perfectly aligned with your brand. To save on costs, there are many website builders that have free versions and are packed with templates to help you get started.
Pay-per-click advertising and optimizing your website for search can also have huge payoffs, but you'll either need to research these topics or hire a local agency to help you.
Leverage social media.
Never overlook the power of social media. Facebook and Instagram lend themselves nicely to salons. Just remember that the point of social media is to actively participate in it. This means you'll need to be accessible to your customers, share relevant pictures, videos, and memes regularly and freely.
Register your business with Google.
These days people most often find businesses by asking their phones about it. If you want to appear when someone asks "where is the nearest hair salon?" Be sure to register for Google My Business. Also, consider setting up a Yelp! page and asking happy customers to rate your business there.
What license do I need to open a hair salon?
- Business Operating License.
- Certificate of Occupancy.
- Building Permit.
- Fire Department Permit.
- State Cosmetology License.
Is owning a hair salon profitable?
In 2017, hair services had total revenue of $55.9 billion, of which $4.9 billion was made up of profits. This revenue is estimated to grow by 2.1% annually, which equates to $62 billion by 2022.
How much does it cost to start a hair salon?
Considering the lease of the property, design, and initial equipment, the minimum start-up capital ranges between $60,000.00 and $70,000.00. That includes registering your business and having some cash on hand.
Do you need a cosmetology license to do hair?
Yes, you need a cosmetology license to do hair.
Can you own a hair salon without being a hairdresser?
Yes. However, basic knowledge about hair practices is beneficial.
How much money does a hair salon owner make?
Hair salon owners make an average of $41,000.00 a year. The average revenue for a salon is $245,000.00. Naturally, these numbers will vary greatly depending on location.
How do I fund my hair salon?
- Ask family and friends.
- Apply for a small business loan.
- Get a business credit card.
- Approach investors.
What are typical hair salon dimensions?
The first workstation should be placed about 3 feet from a window or wall. Every station to follow should be placed about 4 feet from the center of the previous station. Each hairdresser should have at least 3 feet behind them.
What should I pay my hairstylists?
Depending on their experience level, hairstylists make between $20,000.00 and $51,000.00 a year. Median pay is $24,900.00 per year or $11.97 per hour. Apprentices make about $10.00 an hour.
Can you tell me how to start a hair salon business with no money?
There are many sites that could teach you how to start a hair salon with no money, but at some point, you will need to find funding. It is best to start with the activities that cost nothing. For instance, you can start by putting together your business plan, scouting possible locations, and getting quotes for equipment.
What should I know about starting a hair salon from home?
When considering how to start a small hair salon from home, it is important to note that most of the same steps apply to open any business, only the initial costs will be less.
How do I start a mobile hair salon?
Get the correct licensing from county or state bureaus and make sure that your vehicle is properly licensed and insured. You'll need a portable wash station, fold-up chairs, a table, products, and tools. An SUV or minivan are your best options to get around. Consider branding your car.