The beauty industry is worth more than $60 billion yearly and the hair service business is the largest sector, with 86,000 outlets throughout America. Despite the economic downturn there is usually very few shortages in hair changing services, especially in recession, and there can be many waiting for someone interested in opening a new salon. Although salon industry life may appear glamorous for clientele, a new salon is the same as every other small business. Getting a job is a lot of work.
So, you want to know how to start a salon business? Lets address some of the initial steps new salon owners must make to get your first salon. This will look exactly like what you would do with similar local business; however there are certain procedures you've got to take.
Developing a salon concept for a hair salon involves creating a cohesive vision that sets your beauty business apart while catering to the needs of your target audience. Start by determining the range of services you will offer, such as haircuts, coloring, styling, treatments, or even additional options like nails or skincare.
Consider the type of clientele you aim to attract and the demographic they belong to—families, professionals, teens, or luxury-focused individuals. Align your pricing strategy accordingly to reflect both the quality of your services and the financial expectations of your demographic. Choose a memorable salon name that resonates with your brand identity and can stand out in the market.
Additionally, develop an interior design that complements your concept, creating a comfortable and inviting space that matches the style and sophistication you want to convey. Every element, from services to decor, should work together seamlessly to create an experience that leaves a lasting impression on your clients. Lastly, make your salon unique to stand apart from other salons.
Developing a solid business plan is the essential first step for any entrepreneur. A solid business plan provides a clear framework for defining achievable objectives and details the strategies needed to reach them. A well-crafted business plan not only sets the foundation for your venture but also allows you to evaluate every aspect of your business effectively. It’s a critical tool to guide your journey and ensure a strong start.
Here are some key components to include in your salon business plan: Executive Summary, Market Analysis, Services Offered, Marketing Strategy, Financial Plan, Financial Projections, Operational Plan, and SWOT Analysis. Including these components in your salon business plan will help ensure that you have a thorough understanding of your business and a roadmap for success.
Re-registering your salon can help you establish legal businesses and protect your reputation. Start selecting the best business structure based around the needs and objectives of the individual.
Using a suitable name for a salon ensures it does not already exist through your state's business entity search look up on your state's business or commerce website. Register the names to be used in order for the brand to be secured. Secondly, a general business license that must be obtained for legally-operated business activities through your local municipality.
You will need to obtain a Federal Employer Identification Number (FEIN) from the IRS.gov as you will need it for banking, building lease, financing and employee payroll and tax reporting. You also might want to think about trademarking your brand name. We recommend you at least perform a Trademark search at the US Patent and Trademark Office (USPTO) to ensure another competitor doesn't already own the rights to the name. This will help you avoid any legal liability.
I mean, salon space? The right salon location will determine its effectiveness. It's crucial to have high visibility and easy access to areas that attract a large population as well as high foot traffic.
Researching local competition as well as considering local complementing businesses can also be influential in your decisions. If you're looking for a place to live then you will have to negotiate a lease.
We recommend leaving your wallet and buying behaviors in the car when you research locations. It has nothing to do with you personally and many times you can get in the way. Put yourself in your potential customer's shoes. Where are they in relation to your location? Will they frequent your location or be turned off by one of it's traits. Build a list of pros and cons to ensure the pros outnumber the cons.
Determining your services and offerings is a critical step when starting a new hair salon business, as it directly impacts your ability to attract clients and retain them. By clearly defining the range of salon services—such as haircuts, styling, coloring, treatments, and specialized options—you create a focused identity for your salon that distinguishes it from competitors.
This clarity also helps in targeting the right audience, setting competitive pricing, and ensuring that your staff possesses the necessary skills and expertise to deliver high-quality services. A well-thought-out service menu can also foster customer loyalty by meeting their specific needs and preferences, ultimately contributing to your salon's business growth and reputation.
When ordering hair salon equipment for a new business, it is crucial to consider both your budget and the type of salon you aim to establish—low-end or high-end. The equipment and overall build-out should align with the target new customers and market you are pursuing, as creating the right atmosphere is key to attracting new clients and retaining existing clients.
Since buying equipment can be a significant expense, explore a few options such as purchasing outright, leasing equipment, or seeking financing to save money and ease the initial financial burden.
Start by analyzing what is truly essential for your salon’s launch, focusing on quality over quantity to ensure a professional setup within your budget. Remember, you can always invest in additional equipment or upgrades as your salon experiences growth, or your financial position strengthens.
By carefully planning and prioritizing, you can create a functional and appealing space that fits both your vision and your means.
The Salon Business estimates starting a salon will cost from $62,000 for a less complex physical salon to around $500,000 for a complex salon with significant interior build out. Start-up costs for any salon business vary depending on the following factors: salon location, salon size, salon insurance, salon software & POS, salon website, salon licenses, salon branding & design, marketing expenses, legal & consulting, salon equipment, supplies & inventory, and salon loans & financing.
Since you aim for your salon to grow quickly, the most effective method is to plan the best way for this: establish your salon startup costs, forecast your revenue potential, and determine your budget including overhead costs. Determine what your monthly fixed cost will be.
Despite the lack of savings for opening a salon, some options still have to be considered. Before you commit to additional investment opportunities and financing, you must first talk with an experienced investor.
There are several different business loan options to make the transition to the salon you want to be. Online lender sites, lending sites and lending institutions are only one example.
When you use Square you can apply for customized loans that you can easily repay by selling. Square Loan is my absolute Favorite. They offer loan approvals and clearly outline the amount and the repayment terms and one-time fees. I have no idea how much money I can make. The credit is repaid.
You can rent salon equipment without borrowing and paying the whole costs upfront. This is so that there are not too many purchases of expensive things for profit. See if a company offers a variety of leasing choices. Generally, one is cheaper for a better value budget and may offer better equipment for a better value.
Hiring the right stylists for your salon is crucial to building a successful business. Start by defining the qualities and skill set you value most in a stylist—technical expertise, creativity, excellent communication, or a strong work ethic.
Look for candidates who not only have the necessary certifications and experience but also align with the culture and vision of your salon. Consider conducting a technical assessment during the interview process, such as a practical hair styling demonstration, to gauge their skills and professionalism.
Additionally, assess their attitude, as a positive, team-oriented mindset is essential for creating a welcoming environment for clients. A well-thought-out hiring process that balances leadership with the right staff ensures your customers receive exceptional service and sets the foundation for lasting salon success.
When determining the right compensation model for your hair salon, there are several options to consider, each with its own advantages and disadvantages.
Commission-based pay is a common choice, where stylists earn a percentage of their generated revenue. This model incentivizes performance but can sometimes create competition among staff.
Booth rental allows stylists to operate as independent contractors, offering them flexibility and autonomy, though it may lack the team cohesion seen in traditional salons. Salary-based compensation provides stability and predictability for employees, fostering loyalty, but it may not drive high performance as effectively as other systems.
Lastly, hybrid models combine elements of these approaches to tailor compensation to specific small business needs, though these can be complex to manage. Evaluating your salon's values, goals, and budget will help determine which model aligns best with your vision for success.
Once you've successfully hired top talent, retaining and managing them effectively is crucial to ensuring long-term success. Providing competitive compensation is a key starting point, but additional perks such as flexible schedules, health benefits, and professional development opportunities can significantly boost employee satisfaction. Investing in ongoing training helps employees refine their skills and feel valued, while outlining clear career paths fosters a sense of purpose and growth within the salon.
Regular feedback and open communication are essential in building trust and ensuring that your team feels heard. A happy and motivated staff not only improves workplace morale but also enhances the overall client experience.
Once your salon is stocked with equipment you will soon open its doors. Before you do this, you need your salon management software to make your payment processing easier, manage your client database with a CRM, as well as a scheduling tool including online booking.
A good Salon POS (Point of Sale) system is the backbone of efficient day to day operations, offering streamlined transactions, enhanced customer management, and detailed reporting. With the right system in place, you can process payments quickly and securely while keeping track of inventory and staff schedules in one centralized platform. Key features to look out for include multi-payment options, automated reporting, and integration with other tools like CRM and online booking systems. Additionally, user-friendliness is essential to ensure your team can utilize the system effectively without extensive training.
FAQs
Q: How does a Salon POS system improve customer experience?
A: By enabling seamless checkouts, digital receipts, and personalized promotions based on client history, a POS system ensures a smoother and more satisfying client experience.
Q: Can a Salon POS system help manage inventory?
A: Yes, most systems come with inventory tracking features, allowing you to monitor stock levels, set reorder alerts, and keep your shelves supplied with essential products.
Q: Is a cloud-based POS system better than a traditional one?
A: A cloud-based system offers greater flexibility as it allows you to access data remotely, provides regular updates, and often includes built-in integrations with other useful tools.
When choosing the right scheduling software, it’s crucial to ensure it integrates seamlessly with your POS system. This integration allows customers to access stylist calendars and book appointments anytime, 24/7, offering unmatched convenience. The best scheduling tools also work with platforms like Google Reserve, enabling potential clients to book directly from your Google Business Profile, eliminating the need to visit your website and streamlining the entire booking process.
We also recommend the MYA stylist matching survey which will ensure your clients are paired up with the right stylist and personality. This a great marketing tool to book more appointments as well as retain more existing salon clients. When a client doesn't click with a stylist up front, they usually don't return.
First, you need to go back to your business plan and tell me the target customer of your salon? What is the plan? How do you distinguish your salon from other salon owners? Do you or the competition offer coffee bars and retail locations to sell product? Do you have similar services? This is very important when developing a business plan and promoting your salon brand.
Second, think of where a customer will look for new products through research and determine where they will be targeting your marketing efforts, which can be done through email, social media, SEO or paid advertising.
The grass always looks greener on the ownership side, however 85% of the time the grass turns brown within 5 years of opening. Only 15% of the salon industry makes it as opening a salon is hard.
Careful planning, keeping up with business plans, utilizing salon management software and strong marketing can make your salon profitable. Some salon businesses will unfortunately close, so you should take into consideration this scenario when you're planning and operating.
Opening a salon requires a significant amount of initial investment. Many new small business owners underestimate the upfront costs involved and end up not having enough funds to cover expenses such as rent, equipment, and supplies.
The unexpected costs tend to be marketing expenses which are critical to land new clients as its not free. There is a reason that highly successful salons have higher prices. This can lead to financial struggles and potentially even bankruptcy for a growing business.
Learn how to open a thriving hair salon with our step-by-step guide, covering marketing, industry trends, and growth strategies.