Salons can be excellent entrepreneurial ventures for those interested in the beauty space. From hair salons to spas to nail salons – or a combination of these services – various salon models can be successful businesses for the right entrepreneurs. However, opening a salon comes with unique challenges and considerations. Before launching your beauty venture, you must familiarize yourself with applicable laws and regulations and consider financing and other crucial factors.
The following 10 expert tips can help you start a business on the right foot and set up your salon for success.
When starting any business, writing a business plan should be your first step. A business plan helps you set a clear objective, outlines how you’ll achieve that objective and gives you a good idea of what you must do to succeed.
“A business plan is key to starting a salon,” explained Ali Ryan, founder of The Dry House. “The plan offers a roadmap for salon owners to follow and helps entrepreneurs consider all areas of the business. A business plan makes sure you set up a metric for success and consider the financials before you invest huge amounts of time and money in a new salon.”
When writing your salon business plan, you must have a thorough understanding of your area’s existing salon market, including its size, growth capacity and trends. This information will help you determine how you’ll set yourself apart from the competition.
According to Michelle Lee, co-founder and master designer of Salon Eva Michelle, salon owners must also understand their target audiences. “Think about what kind of salon you want to open [and] what culture you want,” Lee advised.
Laws and regulations vary by where you live and what type of salon you open. For example, a salon that provides hair services only will require different business licenses from one that also offers facials or massages.
“Do your research,” advised Shanell Jett, owner and stylist at Jettset Mobile Studio. “Ensure that you are complying with the state laws and regulations. If you have to make some adjustments to your plan because of regulations and laws, do so early so that you can avoid potentially having to stop your operation later or [having to pay] a fine.”
Some typical licenses, regulations and permits that pertain to salons include the following:
“With salons on every corner, even in small towns, entering into the market with a specialty or service niche can dramatically increase buzz and press about your opening,” noted Pamela Jeschonek, former owner of Everyday Esthetics Eyebrow Studio.
Consider what makes your salon unique. Is it your services? Your attentive staff? Your customized experiences? Whatever it may be, make your defining element a focal point of your identity, and grow your business from there.
A niche market gives you more security against failure. It also offers an opportunity to help you discover what works well (and what doesn’t) for your business by allowing you to interact more closely with your customers.
“Even if you do offer many services, promoting a niche or specialty service not only will help you attract a very loyal client base, but will instantly lend credibility to your salon as the experts in your niche space,” Jeschonek explained.
To obtain products for your salon – such as chairs, mirrors, washing and drying stations, shampoo, conditioner, pins, and brushes – you must contact distributors. You can find local, wholesale or national distributors with local agents.
For larger items, like chairs and dryers, you’ll likely work with a large wholesale distributor like Belvedere Maletti or Takara Belmont. You can purchase smaller items from local distributors or directly from manufacturers like Paul Mitchell or Estée Lauder.
When you begin your distributor search, remember to shop carefully and consider every prospect. Look at various distributors’ price points and customer support (like advice or consulting), and ask if they offer any deals or perks.
As a salon owner, you must place your clients and their experience at the top of your priority list. A client-centered focus will create return customers who, over time, will form a reliable customer base.
“My No. 1 tip for aspiring entrepreneurs before they open up a salon is to have a number of professional clients of your own that will cover your overhead,” recommended author, speaker and entrepreneur Sandra LaMorgese. “With a solid client base of your own, you’ll be in a better position to call the shots.”
Choosing the right business location for your salon is crucial. Whether you buy a building or sign a commercial lease on a retail space, your location is one of the biggest expenses of opening a salon. There’s much to consider. For example, it should be in a well-populated area readily accessible by car or public transportation. Also, you should ensure you’re far enough away from competitors that offer similar services.
“Secure a solid location with plenty of parking,” suggested Jim Salmon, vice president of business services at Navy Federal Credit Union. “If you make it convenient for clients to visit your salon, you’ll have more customers, which in turn means more revenue to pay off your initial loan and to put toward growth expenses.”
If you have the financial means, hiring a designer to help create your salon can reduce stress and ensure an appealing, functional workspace. A designer can help you determine an overall look and feel consistent with the image you want to project.
“Work[ing] with a designer or space planner [can] ensure you are maximizing your revenue potential for the space,” advised Miriam Deckert, former marketing director at SalonSmart. “If construction work is needed, try to negotiate those costs in your lease agreement.”
Deckert recommends taking advantage of space in the center of the salon with double-sided stations or couches for waiting guests. You should know the dimensions of each area before shopping for equipment or furniture.
Your salon is only as good as the people you employ to help run it. Because beauty is such a personal industry, retaining a skilled, knowledgeable and friendly staff is vital.
“I would advise any new salons to invest time in the training and motivation of the staff,” advised Jennifer Quinn, online content executive at Phorest Salon Software. “Your salon will be built around your stylists and technicians, [so] ensuring they are comfortable with upselling products and other treatments across the brand is the difference between success and failure.”
“Being passionate about your staff’s growth is important,” said Lee. “Be a leader, not a boss.”
Your clients’ experience is crucial for your salon’s success, and you must know your customers to create an optimal experience for them.
“Create a vision for how you want clients to feel, what you want them to experience and what adjectives clients will use when describing their experience,” advised Samira Far, founder of Bellacures. “This will help in developing a look, feel and atmosphere.”
In your business plan, outline how you intend to meet your clients’ needs and wants as much as possible. While operating, gather client feedback and show them you value their input and will act on it.
Deciding how much to charge for your services can be challenging, particularly when you’re just starting out. You should conduct research and get a ballpark idea of what someone with your level of training could charge. However, you must carefully consider your unique skills and training and determine a price based on those factors – not what others in your area charge.
“You don’t know anything about them or their skill set,” noted Sheryl Miller, owner of Fringe Hair Art. “I charged $60 a haircut when I first opened in a town where the most expensive haircut was $38. I had 25 years of training and education to get here. Some people thought I was crazy and wouldn’t get it. Not only did I get it, [but] I have since raised [prices] to $70 and keep billing. If you are great at what you do, people will pay for it.”
When it comes to owning a business, a hair salon is a pretty safe bet. According to Statista, the beauty and personal care industry was valued at $625.7 billion in 2023 and is expected to grow annually by 3.32 percent. Beauty is also a steady business, often remaining unaffected during economic recessions.
But even if you have the necessary skills, launching a business can be challenging and requires patience and know-how. Starting costs can range from $10,000 to $200,000 and vary widely depending on multiple factors.
Typical salon startup costs can include the following:
These are just some of the many costs of opening a salon. Keep a checklist of possible salon expenses so you know what to account for when acquiring funding.
Salons are often considered high-risk businesses, so some banks may be reluctant to invest. However, there are many alternatives to traditional loans. Here are some popular financing options for salons.
With low rates and fast payback periods, SBA loans are perfect for small startups. However, these loans are relatively competitive, so you’ll need a strong credit score to qualify. Also, if you need immediate funding, you’ll want to look elsewhere.
Microloans are much easier to attain than traditional SBA loans because you don’t need an expansive credit history or time in business. SBA microloans can be up to $50,000. Ensure you have a solid business plan in place before trying to secure your loan.
Alternative lenders tend to be much more accessible (and immediate) than other sources of capital. If you need quick money, you might consider a term loan, asset-based loan, business credit card or business line of credit.
You need a decent amount of equipment to run a salon, including chairs, sinks and hair dryers. When you’re starting out, it can be difficult to afford all these purchases.
With equipment financing, you’ll receive a loan to front these payments so you can start off on the right foot without breaking the bank. Equipment financing uses the equipment as collateral; you’ll make regular payments until the value of the equipment is repaid with interest.
Marketing is an essential process for every business. However, some tactics work better for specific business types. When opening a local salon, focus on becoming part of your community. Since you’re a brick-and-mortar business (i.e., you operate out of a physical location), building your local following is crucial for attracting and retaining loyal clients.
Salon marketing requires technique and consistency. Here are some tips for marketing your salon:
Careful planning and preparation can ease the process of opening a new salon and set your business up for success. Analyze your overhead costs, ensure you comply with various laws and regulations, and build your clientele with care. Take time to find the ideal location, secure the right financing and provide the desired services that will take your salon to the next level.
Kiely Kuligowski and Brittney Morgan contributed to this article. Source interviews were conducted for a previous version of this article.