How to start a beauty salon business

If you’ve been daydreaming about opening your own beauty salon, maybe it's time to snip those thoughts into reality. But how do you start a salon business that’s truly a cut above the rest?

Launching a salon is a lot like perfecting a new hairstyle. There’s a bit of prep work, some serious styling (and by that, we mean planning!), and a dash of creativity to make it all shine. Between researching the latest trends, nailing down licenses, hiring your glam squad, and making tons of decisions, you’ll be on your way to opening those fabulous doors to clients in no time!

In this blog, we’re spilling the tea on everything you need to know about starting your salon. From a handy dandy opening checklist to a glam-packed guide answering all those burning questions, we’ve got your back! Let’s get started.

Opening a salon checklist

Did you know that according to 2024 data from the US Bureau of Labor Statistics, 20.4% of businesses fail in their first year? But don’t let that scare you away from your dream of opening a beauty salon. With the right prep and know-how, you can thrive in the salon industry. Use this checklist to guide you through the essential steps of starting your own successful salon business.

A solid beauty salon business plan

A killer business plan is like your salon's roadmap. It outlines your goals, strategies, and the details of how you plan to succeed. A good business plan will give you a personal confidence boost, proving to yourself that you’ve thought of everything, and giving structure to the way you run your business. But if you’re planning to borrow money to start your salon, your business plan, with detailed financial projections, will be vital to your success, because iit gives a lender confidence that you’ve thought seriously about every aspect of your business.

What’s inside your business plan?

• Executive summary: This is your salon's elevator pitch – a quick snapshot of what you’re all about. You want it to be enticing enough to make anyone want to read more. Include your salon’s name, location, and the services you’ll offer.
• Market analysis: A detailed look at your local competition that helps you to identify your target market. Are you catering to busy moms, trendy teens, or the luxury crowd? Knowing your audience will help you tailor your salon services and marketing strategy.
• Services Offered: Be clear about what beauty and hair services you’ll provide. Will you focus on haircuts, color treatments, or skincare? Don’t forget to mention any unique offerings that set you apart from the many salons out there!
• Marketing strategy: How will you get the word out about your fabulous new salon? Consider using social media marketing to showcase your skills, run promotions, and engage with potential clients. You want your salon to be the talk of the town!
• Operational plan: This section covers the day-to-day operations of your salon space. Think about staffing, salon hours, and the software you’ll use for scheduling appointments and managing finances efficiently!
• Financial projections: Time to get real about those numbers. Include your startup costs, fixed expenses, and revenue forecast. This helps you understand when you’ll break even and start turning a profit. Just as importantly, your projections will allow you to keep testing whether the assumptions you made at the start were realistic, or whether you need to adjust your expectations upwards or downwards.

TIP: Check out some of the other salon owner responsibilities you’ll have once you open your doors!

Register your business trademark

This is where the magic happens, and it all starts with the IRS. To get your Employer Identification Number (EIN), you’ll need to fill out a quick application. This little number is super important because it’s what you’ll use when filing taxes and handling payroll. 

While you’re at it, think about trademarking your salon’s name. This is a smart move to protect your fabulous brand! By trademarking, you ensure that no one else can snatch up your name or use it in a way that confuses your loyal customers. Plus, it adds a level of professionalism that shows you mean business.

Find the ideal location for your customers

Ready to find the “it” spot for your own salon that’ll have clients flocking faster than a fresh blowout on a Saturday morning? Let’s talk about how to secure the perfect location!

First up as a new salon owner you've got to think about your target market. Are you all about snazzy cuts for busy professionals who need to look fab on their coffee runs, or is your vibe more about indulgent pampering for the self-care warriors? Pinpointing who you want to attract will help narrow down the areas that match your brand. For trendy urbanites, a spot near chic boutiques and bustling cafes is golden. If you’re catering to families, look for locations close to schools or playgrounds – parents love convenient beauty options!

What about foot traffic? You want a hotspot where people can’t help but notice your salon. Think shopping districts, farmer’s markets, or community events, places where the crowd gathers and could be tempted by your glowing salon sign.

Keep an eye on the competition! A little friendly rivalry can be good, but you don’t want to be drowning in a sea of similar beauty salons. Scope out the area and look for gaps that you can fill with your unique offerings.

Finally, the neighborhood vibe is key! Your salon should reflect its surroundings while also standing out. Whether you’re going for a glam and modern feel or a cozy, welcoming space, the right location will set the perfect tone for your beauty oasis.

Equip your salon with the essentials

The furniture should reflect your style, whether it’s modern glam or cozy charm. You want clients to sink into those plush styling chairs and feel like they’re in for a treat. But it’s not just about looks; comfort is key! A fabulous chair can make all the difference during that three-hour balayage.

And let’s not forget the all-important salon equipment. Investing in high-quality hair dryers and styling tools isn’t just a luxury; it’s essential for delivering those stunning looks. Picture yourself wielding a sleek flat iron that glides through hair like butter, leaving your clients feeling fabulous and ready to hit the town. Plus, if your wash stations aren’t as comfy as a cloud, you might find clients squirming instead of enjoying their shampoo.

Now, what about those must-have beauty products? Stocking your shelves with the latest and greatest will not only elevate your services but also entice clients to buy their favorites to take home. When they see that shiny new hair serum that promises to transform their locks, trust me, they’ll be reaching for their wallets faster than you can say “add to cart!”

Describe clearly your services and products

Whether you’re all about those stunning haircuts, creative color transformations, makeup transformations, or trendy styling techniques, you want each service your beauty business offers to sparkle with personality.

For instance, instead of just saying “women’s haircut,” try something like, “Snip, snip! Our expert stylists will help you find the cut that flatters your face shape and brings out your inner goddess. Say goodbye to bad hair days!”

Next up is your treatment menu. Maybe you offer rejuvenating deep conditioning treatments or smoothing keratin treatments that make hair feel like silk. Use enticing language that lets clients envision their hair looking and feeling fabulous, like “Transform your look with our deep conditioning treatment that hydrates and revives tired hair, leaving you with a radiant shine that’ll turn heads!”

Hire the right amount of team members 

Ready to assemble your dream team? Your wage roll will be one of the biggest costs, so your business plan should set out who you’ll be recruiting, when, how much they’ll cost and what value they’ll bring to your salon. Because the right staff can make or break your salon, and you want a crew that’s as fabulous as your services!

Here’s a quick breakdown of what you might need:

• Stylists
• Beauticians
• Receptionist
• Assistants
• Nail technicians & estheticians
• A marketing and branding guru who specializes in the hair and beauty industry

For payroll, you’ve got three options: do you want to tackle payroll yourself, use payroll software to make life easier or pay to outsource to another company? If you love crunching numbers and keeping everything organized, handling it in-house might work for you. But if you’d rather focus on your salon’s day-to-day operations, consider investing in payroll software. It can save you time and headaches by automating everything from tax calculations to direct deposits.

Create a marketing plan 

A solid marketing strategy holds everything together and makes your salon shine. Here's what you need to do:

• Define your brand identity: Are you all about luxury and pampering, or do you embrace a trendy, edgy vibe? Your brand identity will guide everything from your salon's decor to your marketing materials. So, slap on some color and let your personality shine!
• Build your online presence: In 2024, just having a brick and mortar location isn't enough to make your salon the latest hot spot. Create a sleek site that showcases your services, team, and pricing. Don’t forget to sprinkle in some stunning before-and-after photos! And while you’re at it, set up profiles on popular social media platforms like Instagram, TikTok, and Facebook.
• Content is queen: Start a blog or create eye-catching posts sharing beauty tips, trends, and salon news. Whether it’s a “How to Choose the Right Hair Color” guide or “Must-Have Products for Gorgeous Locks,” valuable content positions you as a beauty authority.
• Use email marketing: Regular newsletters are a fantastic way to keep clients informed about promotions, new services, or salon events. Throw in some exclusive offers just for your subscribers to keep them excited!
• Foster local partnerships: Collaborate with local businesses, such as boutiques, gyms, or spas, for cross-promotions. Think about hosting joint events or offering referral discounts. It's all about building a beauty-loving community around your salon!
• Run promotions and contests: Everyone loves a good deal! Create special promotions, seasonal offers, or contests to engage your clients. A “Refer a Friend” discount or a giveaway for a free service can generate buzz and attract new clients.

How much does it cost to open a salon?

According to The Salon Business, launching your beauty haven can set you back anywhere from $62,000 for a basic setup to a whopping $500,000 for something a bit more glam. Your costs can vary widely depending on a few fab factors, including:

• Salon size
• Location
• Business license and permits
• Business structure
• Equipment
• Operational costs
• Marketing strategy

Since you want your salon to be profitable as soon as possible, a little planning goes a long way. 

Start by figuring out your fixed costs, which are the expenses that don’t change, no matter how many clients you have strutting through your doors. Then there are variable costs, which are a bit more flexible and can help you save some cash. These change based on how busy your salon is and include labor costs, products and tools and shipping and delivery costs.

Once you’ve got your expenses all figured out, create a revenue forecast for your first year and identify your break-even point. This is where your earnings will finally match your expenses.

A carefully thought-out cashflow forecast will help you to understand if there may be times when you need access to small business finance, and there are lots of alternative options to consider that may suit your salon.  

Essential salon equipment 

Here’s a quick rundown of the must-have equipment that’ll help you serve up fabulous looks to your clients:

• Styling chairs
• Hair dryers
• Hair styling tools
• Beauty products
• Shampoo bowls
• Mirrors
• Trolleys
• Retail POS system
• Salon payment processing tech
• Sanitizing equipment
• Retail display

Check out our full salon equipment list for more!

What is the best POS software for beauty operations?

Enter Epos Now, the ultimate beauty salon POS system that’s here to revolutionize your business operations! From appointment scheduling to inventory management, it’s your all-in-one solution that keeps everything running smoothly, so you can focus on what you do best—making your clients feel fabulous.

• Easier management: Say goodbye to stress and hello to efficiency! Save up to 10 hours a month on business management and staff admin. More time for coffee breaks? Yes, please!
• Save time: With Epos Now Payments integration, you’ll save over 4 hours each month during sales. That's like a spa day you didn’t know you needed!
• Boost your bottom line: With the Epos Now Loyalty integration, you can enjoy an average 13% increase in revenue. Hello, loyal customers!

Our user-friendly system helps you manage every aspect of your salon business. With cloud-based POS software, you can set up promotions, manage your website, and even launch loyalty programs to keep those clients coming back for more.

In the beauty biz, it’s all about your clients, right? Epos Now makes customer management a breeze. Accept online bookings seamlessly, edit prices, and apply discounts on the fly. Plus, with Caller ID, you can provide a quicker, more personalized service.

So, if you're looking to elevate your salon game, look no further than Epos Now. It’s time to shine brighter and work smarter! 🌟

FAQ about salon business 

How can I manage my salon finances better?

Keep track of every dollar—income and expenses—using budgeting tools or salon software (Epos Now, anyone?). Keep a constant eye on your cash position – do you have enough in the bank to meet your immediate liabilities? – and stash away some cash for emergencies. Review your finances regularly to catch trends and make adjustments. With a little planning, you’ll keep your salon’s finances in tip-top shape!

What licenses do I need to open a beauty salon?

You’ll need a cosmetology license and any other occupational and professional licensing for you and your staff to offer services legally. A business license is also a must to operate in your area. Depending on where you are, health and safety permits might be required, too.

What are the best services to offer at a beauty salon?

Start with haircuts, coloring, and styling—classic crowd-pleasers. Nail services like mani-pedis are always a hit. Don’t forget waxing, facials, and makeup for special events. To really stand out, consider trendy options like balayage or keratin treatments.