- A hair salon can be a steady, profitable business, but before you open one, you need a strong business plan and preparation.
- Finding a niche for your salon helps you attract a loyal client base.
- The most important things a salon needs to succeed are a good culture, knowledgeable employees and an understanding of what its services are worth.
When it comes to owning a business, a hair salon is a pretty safe bet – the beauty industry generates over $60 billion each year, with hair care bringing in up to 24% of the revenue. Beauty is also a steady business, often remaining unaffected during economic recessions.
But even if you have the styling skills, launching your own business can be a challenging process that requires patience and know-how. The cost of opening your own salon is around $62,000 for a basic setup, but it can go up to $500,000 or even more. No matter how much you invest in your new business, you'll want to do everything you can to ensure your salon's success.
Check out these 10 expert tips to help you start your salon on the right foot.
1. Create a salon business plan.
Writing a business plan should be your first step when starting any business. It provides you with a clear objective, outlines how you will achieve that objective, and gives you a good idea of what you need to do to be successful. [Read related article: How to Write a Business Plan]
"A business plan is key to starting a salon," said Ali Ryan, owner of The Dry House. "The plan offers a road map 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."
Make sure you have a good understanding of the existing salon market in your area, including how large it is, if it is growing and common trends. This will help you to understand exactly how you will compete against other salons.
You should also have an idea of who your target audience is, said Michelle Lee, co-owner and master designer of Salon Eva Michelle. "Think about what kind of salon you want to open [and] what culture you want."
2. Research your local laws and regulations.
Laws and regulations will vary depending on where you live and what type of salon you are opening. For example, a salon that strictly provides hair services will require different licenses from a salon that also offers facials or massages.
"Do your research," said 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."
These are some of the common licenses, regulations and permits required for salons:
- Salon license
- Cosmetology license(s)
- Employee Identification Number (EIN)
- Building permit
- OSHA requirements
3. Find a way to make your salon stand out.
"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," said Pamela Jeschonek, owner of Everyday Esthetics Eyebrow Studio.
Think about what makes your salon unique. Is it the services you offer? Your attentive staff? Your customized experiences? Whatever it may be, try to make it a focal point of your identity and grow your business from there. In other words, find your niche. Growing your business in a niche market is much easier than trying to succeed in a larger, general market.
A niche market provides you with more security against failure and a chance to find out 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 will help you attract not only a very loyal client base, but will [also] instantly lend credibility to your salon as the experts in your niche space," said Jeschonek.
4. Talk to distributors.
To obtain products for your salon – such as chairs, mirrors, washing and drying stations, shampoo, conditioner, pins, and brushes – you will need to contact a distributor. You can find local, wholesale or national distributors with local agents.
For larger items, like chairs and dryers, you will need to work with a larger wholesale distributor like Belvedere or Takara Belmont. You can purchase smaller items from a local distributor or directly from a manufacturer, like Paul Mitchell or Estée Lauder.
Once you begin the distributor search, remember to shop carefully and consider every prospect. Look at price points and the kind of support the different distributors offer (like advice or consulting), and ask if they offer any deals or perks.
5. Develop a solid client base.
As a salon owner, you should place your clients and their experience at the top of your priority list. This 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," said speaker and entrepreneur Sandra LaMorgese. "With a solid client base of your own, you'll be in a better position to call the shots."
6. Choose the right location to open your salon.
Whether you buy a building or rent a retail space, your location is one of the biggest expenses of opening a salon, and there are many factors to consider when making this decision. As the saying goes, the most important thing is location, location, location. It should be in a well-populated area and easily accessible by car or public transportation. You should also make sure you are far enough away from competitors that offer the same services as your salon.
"Secure a solid location with plenty of parking," said 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."
7. Hire a designer.
If you have the financial means, hiring a designer to help you create your salon can go a long way to reduce stress and ensure an appealing, functional workspace. A designer can help you determine an overall look and feel that is 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," said Miriam Deckert, 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 things like double-sided stations or couches for waiting guests. You should also know the dimensions of each area before you shop for equipment or furniture.
8. Focus on your staff.
Your salon is only as good as the people you employ to help run it. Because beauty is such a personal industry, it is vital that you retain a skilled, knowledgeable and friendly staff.
"I would advise any new salons to invest time in the training and motivation of the staff," said Jennifer Quinn, digital marketing 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."
Taking the time to properly and thoroughly train your employees will help your business run more smoothly and maintain a professional reputation.
"Being passionate about your staff's growth is important," said Lee. "Be a leader, not a boss."
9. Think about your clients.
"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," said Samira Far, founder of Bellacures. "This will help in developing a look, feel and atmosphere."
As you start out, try to gather feedback from your clients about what they like and don't like about your salon. Outline in your business plan how you intend to meet clients' needs and wants as much as possible and show your customers that you value and act on their input.
10. Charge what you're worth.
It can be difficult to decide how much to charge for your services, particularly when you are just starting out with your own business. After you do some research and get a ballpark idea of what someone with your personal level of training could charge, you should carefully consider your own skills and training and determine a price based on that – not what others in your area are charging.
"You don't know anything about them or their skill set," said 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."
Additional reporting by Brittney Morgan. Some interviews were conducted for a previous version of this article.