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Set up your own beauty salon.
Research by Statista has revealed that the US market size for beauty salons (hair, skin, nails) is $42.8 billion. The beauty industry is evolving and constantly seeking new talent. Considering how to leave your unique mark in the beauty industry? This article is for you 🙌
Starting a beauty business can seem like navigating a maze, but having the right map makes all the difference. Read our detailed guide to help you set up your own beauty salon. Let’s get styling!
Types of salons.
Beauty business opportunities don’t begin and end with traditional hair salons. Here are five popular business options for you to explore:
- Hair salon – A hair salon offers services such as haircuts, dyeing, extensions and styling. There are also some salons that provide exclusive treatments for problems such as hair loss or thinning.
- Beauty salon – A beauty salon offers a broad range of services such as manicures, pedicures, facials, waxing, hair threading and body polishing. Occasionally, beauty salons also offer hair care, simple massages and aromatherapy.
- Nail salon – Nail salons specialize in services such as manicures, pedicures, nail art and nail extensions.
- Tanning salon – Tanning salons typically offer indoor tanning via spray, sunbed or solarium. Many clients use their services to maintain a tan throughout the winter months.
- Bridal salon – Bridal salons provide specialist hair and makeup services for brides and wedding parties, creating a harmonious look for ceremonies and other events.
Some salon businesses or beauty bars offer a mix of the above services. You can also offer mobile services or set up a salon in your home. Keep reading to decide what could be the best option for you.
How to start a beauty bar business.
1. Find your USP.
This three-letter word can be an absolute force of change in setting up your salon and leading it to success. We’ve already taken a brief look at the various services you could offer. But why should you open a particular type of salon in a particular location? Many refer to this reasoning as a business’ unique selling point or USP.
You don’t want to be one among many in the market. It would be terrific to be everyone’s go-to salon for any and all services. But, this is rarely the case. Consider what would make your business unique. What can you offer that no other salon does?
For example, if you want to open a hair salon, you could specialize in curl care or braiding. Assess the type of audience you want to attract and how your business could meet their needs and fill a niche. This helps you to make your mark and stand apart from your competition.
2. Write a salon business plan.
An effective business plan should be strong, detailed and concise. It puts across the financial success range of your business and sets out a clear roadmap for future growth. A typical business plan usually spans three to five years. If you endeavor to request the bank or other investors for financing, this would give them a clear idea as to how you’ll pay back a loan.
Your beauty salon business plan should contain the following sections: An executive summary, about your company, business goals, the legal structure of your business, products and services offered, a marketing strategy and your financial projections. We detail many of these aspects later in this article.
3. Choose a business model.
Not everyone opens a traditional salon where they’re the sole owner of a property. Although this gives you considerable freedom over your business, it also comes with a huge capital requirement.
An ideal model for someone who wants to start with very little investment is that of a mobile salon. If you’re wondering how to start a mobile beauty salon business, here’s some food for thought. Clients can typically book your services through an app or booking website like that provided by Setmore. You’d visit their home rather than having the client come to your premises.
This saves a lot on rent and equipment hire. However, it also limits the services you can offer as your equipment needs to travel with you. The target audience ranges from clients who are unable to travel to coordinators for location-based photoshoots.
Starting a home-based salon is a desirable option if you don’t want to spend a lot of money on rent. You can pick your own work hours to account for any other responsibilities you may have. A tip from us: There needs to be a clear difference between your salon area and your living space. A home-based establishment has an expectation of equal professionalism and your space is a clear indicator of that.
If you’re not into the home salon idea but still want to save on rental costs, opt for a chair rental or salon booth rental. You can pay a salon owner to rent a chair, styling station or booth on their premises. You get a dedicated space to style your own clients, within a salon and use your own pricing. However, you cannot influence the interior or business hours. It might also be a challenge to create a clear split between your branding and the salon’s from which you operate.
If you want something similar to a traditional salon, but with fewer startup costs, you can opt for renting a salon studio. Find a fully-furnished space or one that you can customize to suit your needs.
You get full control over your location’s look, without a big-ticket purchase. Many salon owners have started with a small studio space and expanded to avoid large financial risks.
That brings us to the final business model up for discussion: a franchised salon. You can run a salon that is part of a well-known, existing brand in the market. This reduces the amount of time required for marketing and creating a client base.
The franchise will often provide you with training and supply products that you’ll need to meet their quality standards. But, this model also requires you to pay royalty fees, and you might have limited flexibility in the services you can offer.
4. Legal structure of your salon
The legal structure of your beauty business depends on your willingness to risk your personal assets, the amount of control you want over your business, the tax system you want to adopt, and the long-term goals of your business. Five legal business structure options are sole proprietorship, partnership, limited liability company (LLC), S corporation, and C corporation.
A sole proprietorship or individual entrepreneurship is a business that is owned and run by one person. There is no legal distinction between the owner and the enterprise. This is the most simple legal structure that might work if you opt to run a home salon, mobile salon or just rent a chair.
A partnership is a business that is owned by multiple people or multiple businesses. The profits are divided among the owners in agreed percentages and are reported as part of their taxable income.
A limited liability company or LLC limits personal liability. You only risk the money you’ve invested in the business, rather than your personal assets. This is often a preferred option as it also comes with tax flexibilities.
S corporation and C corporation models are applicable only when your company has stocks. These types are not often found in the salon industry.
5. Create a budget
Once you have a business model and legal structure in mind, it’s time to get a handle on those finances. It’s advisable to have at least six months’ worth of capital in your bank account before starting a beauty salon business. Your budget should include the amount that will be spent on equipment, products, rent, utility bills, marketing, insurance and permit costs, if applicable. If your business involves other staff members, you should also include salaries, health insurance and potential training costs, if any.
Aside from these expenses, you may invest in online salon scheduling, payroll and inventory management software, your website and branding. Heads up – you can find tons of free software options. Consider the features you’ll need before committing.
With Setmore, salon businesses are able to customize an online Booking Page, which can act as a standalone website. You can also create your own logo and branding with tools like Canva. Experiment and apply this to your online and offline communications. Many startups also request support from a graphic designer for the basics, like editable templates for emails.
Once you have your budget summarized, you can approach a bank for a loan. Many offer special loan types for small businesses. Check your eligibility with a local bank.
Some starting their salon journey opt to set up crowdfunding campaigns or reach out to family and friends for investments. You can open a business account at your bank and use a credit card for small monthly payments. It might take anywhere from six months to one year for you to make a considerable profit from your salon business. This varies depending on your business model.
6. Establish your salon business
The next step in setting up your salon business is to find a suitable location, register your business, and acquire all the necessary permits and licenses.
A business location is determined by your target audience, the amount you can spend on rent, and the market saturation. If an area already has four salons, this might not be the best place to start your business. Be sure to measure general foot traffic and explore local businesses that would complement your salon.
For example, having your nail salon in a mall might be a good way to attract shoppers and convert them into customers. Having your bridal salon as an extension of a wedding boutique (or next to a boutique) could help you get discovered faster.
The next step is to register your business. The process can be different based on region-based regulations. Some common considerations are to acquire a set of permits and licenses to operate your business. These often include a cosmetology license or a beautician’s license, a renter’s agreement or certificate of occupancy, a health and hygiene certificate, and occasionally a safety certificate from the fire marshal. Once all of these licenses and permits are acquired, you can register your business.
Following this, look into relevant insurance to protect your business, your employees and yourself. We encourage you to research thoroughly before deciding on a policy.
7. Salon design, equipment and services
Your salon’s appearance can leave a lasting impression on your clients and lead to repeat business. If you opt to have a home salon, find a design that is suitable for the available space. For example, having a dedicated reception area or product display case for your retail items might not be possible. Use the space judiciously to cover all the necessary aspects of your setup without making it look cluttered. Social media platforms such as Instagram and Pinterest can be a great source of inspiration for your designs. Create aesthetic boards to narrow down your ideas and bring cohesion to your setup.
If you’ve rented a studio to redesign, make the space look large and chic. Everything from the lights you use to the paint colors can impact how your salon is received. How do you want clients to feel when they enter, right to when they leave?
Find subtle ways to incorporate your brand colors into the decor. Having a designated waiting area is advisable, and ensure that one section of your salon is reserved for services such as hair washes or waxing. In the case of a franchised salon, be sure to follow brand guidelines provided by the franchise. For a tanning salon, you might have to set up individual booths.
It can be very tempting to add all possible services to your salon’s menu. But we suggest that you start with a carefully-curated list that falls under your expertise and USP.
If you have a mentor in the cosmetologist or beautician community, their experience can be of great help here. Imagine your ideal customer and create an essential set of services that they require. Then, create a set of add-on options to enhance your primary services. Based on this menu, you can shop for the necessary equipment. We recommend making a checklist to stay on track.
8. Marketing your salon
Now that you’ve nailed the setup, it’s time to get the word out about your salon! There are traditional ways of marketing your salon using flyers and posters. But these might be expensive at the beginning stages. We’re living in the social media era. Instagram has reported more than 1 billion monthly users and 500 million daily users. There are mobile businesses that use this to their advantage and solely rely on social media to find customers.
Set up a social media account for your salon and publish relatable, branded content regularly. Research the algorithm of your preferred social media platforms and use it to increase your engagement rates. You can also opt for paid promotions on these platforms or pay-per-click ads. Remember, think about the platforms your audience uses to get messaging to them.
Instead of branding your services as an option, aim to market them as a way of life.
Utilize your USP to make your clients feel special and have loyalty programs and special discounts in place. This helps foster a sense of community and positive word-of-mouth that’s vital to beauty businesses. By refreshing your marketing plans as your client base develops, you could scale your business within a few years.
For more ideas, check out our guides to increasing website traffic and utilizing QR codes in marketing.
Can’t wait to hear your story
Starting a beauty salon business requires meticulous planning, hard work and determination. But we know you can do it 🚀
And to help you on your journey, Setmore provides a FREE solution for automating appointment booking, staff scheduling, payment processing and more. Create your account today.
Looking for more resources to grow your salon? Visit our beauty business resources for the latest articles and how-to videos.
by Kavvya Ravi