How to Open a Beauty Salon

Beauty salons are booming. The beauty salon industry accounted for more than 46 billion dollars of revenue in 2019.

There are 77,000 salons in the country. Walk down any commercial street in America, and you’ll likely find at least one.

How can you succeed? You need to know how to open a beauty salon. That requires a few different steps.

Familiarize yourself with those steps and your beauty salon business will prosper. Here is your quick guide.

Table of Contents

Get an Education

You need an education in two separate departments, beauty care, and business management. Some community colleges offer programs for beauticians. The programs last up to two years and cover different practices.

You can specialize in one practice. You can focus on cosmetology, hairstyling, or nail treatments. You can receive an all-around education as well, but specialization can distinguish you from your competition.

Most community colleges offer business management courses. You should be able to take beautician and business classes at the same time.

If you can afford it, try to get a Bachelor’s degree in business management. You can run a business with a diploma from a community college. But investors prefer highly educated applicants.

Take a couple of classes within your business program in marketing. You will need those skills later on when your salon is up and running.

Build a Beauty Salon Business Plan

Do some research into your marketplace. See how many beauty salons there are in your area. If there are many, consider placing your salon somewhere else.

Figure out a way to make your salon distinct. If there are a few different cosmetology salons, you can focus on hairstyling.

You have many costs you need to cover. Paperwork with your municipality and insurance costs money. These are smaller costs, but you must take them into account.

Real estate is one of your biggest costs. You can either rent a property or buy it. If you are renting, remember that you will need to pay an upfront security deposit in addition to monthly fees.

You will need to pay salaries and benefits for your employees. You will need multiple beauticians, a receptionist, and a cleaning crew.

You will need many pieces of equipment, including chairs and desks. If you are selling beauty products, you will need to buy a large inventory of them.

Write out a thorough and itemized budget. Then decide what legal structure you want.

A sole proprietorship gives you maximum power, but it leaves you vulnerable to bankruptcies. Incorporating your business makes your salon a distinct legal entity, though it requires fees and extensive tax forms.

Get Funding

You can get funding from several different sources. You can supply some funding from your personal accounts. Try not to put too much of your own money into your business.

The Small Business Administration (SBA) works alongside lenders to give loans to small businesses. SBA loans are lucrative, but they are highly competitive. You will need a strong application to receive one.

Microloans are usually easier to receive than SBA loans. But they are capped at low amounts, around 50,000 dollars. They are good for covering smaller costs like inventory.

To cover equipment, you can get an equipment financing loan. You receive a loan to provide payments for your equipment, and you can pay the loan back at some point. To keep expenses down, lease your equipment instead of buying it.

Learn more about the tools at your disposal. You may need cash while your business is in operation, so stay in touch with your investors.

Recruit Staffers

Make as many connections as you can from an early stage. Talk to people in your classes. Attend events that bring beauticians together.

Try to bring people on board as soon as possible. This will increase your legitimacy to investors and regulators.

If you don’t have too many connections, wait until you get funding to recruit staffers. Many people won’t sign up for a job if it doesn’t seem like they will get paid.

Place advertisements in newspapers and on job boards like LinkedIn. Be as specific as possible in your job description and requirements. Ask for resumes and examine the experience of each applicant closely.

Narrow the pool down to several possible candidates for any one position. Then conduct phone interviews. Ask them about their experience and style of beauty care.

If you can, bring them into your salon and have them demonstrate their skills. Talk with them as they are working. They should be a skilled professional, but they should have a good rapport with you and clients.

Run a background check on everyone you plan on hiring. If you get any bad vibes from an applicant, do not hire them, even if their check does not uncover anything.

You can hire an employee who has a criminal background. Misdemeanors and offenses from many years ago do not mean that person is untrustworthy. Talk with them about their past and assess whether you can work alongside them.