On This Page:
- How to Start a Salon
- How Big is the Salon Industry?
- What are the Key Segments of the Salon Industry?
- What External Factors Affect the Salon Market?
- Who are the Key Competitors in the Salon Industry?
- What are the Key Customer Segments in the Salon Market?
- What are the Typical Startup Costs for a New Salon Business?
- What are the Key Costs to Launching a Salon Business?
- How Much Do Salon Owners Make?
- What are the Keys to Launching a New Salon Business?
- What Marketing Strategies Work Well for a Salon?
- How to Start a Salon FAQs
- Helpful Videos
- Additional Resources
Starting your own salon business is a great way to make money and control your destiny. However, as I’m sure you know, you can’t build a salon overnight. Rather, there are many factors involved and it will take time to get everything up and running.
This article covers how to start a salon step by step, including what you need to do before opening your doors for business so that when the day comes, you’ll be able to jump right into making money.
Importantly, a critical step in starting a salon is to complete your business plan. To help you out, you should download Growthink’s Ultimate Salon Business Plan Template here.
How to Start a Salon
One of the first things you need to do when starting a salon is to write a business plan. Your salon business plan should have all your revenue projections, salon expenses, and assets in it. Next, when you are ready to start the salon, you will need to take down measurements for furniture placement. You also need to purchase equipment that can handle hair care treatments and shampoos. Once this is set up, use your salon business plan as a guide to making sure there are no missing steps in your startup process.
If you don’t want to start from scratch, you can find an existing salon that may be looking for someone with management experience or another specialty like pedicures or manicures. If they are open to the idea of training you for certain aspects or even letting you manage the salon on your own, this is a great way to learn how to run one.
Next, you’ll need to find employees who specialize in hair cutting and coloring. Depending on your location, some people might be willing to work part-time while they are still working at another hair salon.
Finally, you need to make sure your salon is equipped with all of the tools needed for hair care services. This includes shampoo bowls and sets, hairdryers, color products, foils, and others depending on your specialty. You can purchase these items at a beauty supply store or online. If you work in an existing salon, you can request to borrow the equipment until you are able to purchase your own.
Once this is all set up and running smoothly, it’s time to open your doors. You will need to market your salon so that people know it exists. This includes putting signs outside of the building, listing your business in local directories, and encouraging word-of-mouth advertising. Once you have a steady stream of clients coming in, continue to watch your salon business plan so that you know how much money is being made and where it is going.
Starting a salon isn’t an easy feat. Fortunately, there are many steps you can take to minimize the risk and maximize your potential for success. By writing a salon business plan, finding employees who specialize in the specific services offered, setting up all the necessary equipment, and starting marketing efforts immediately before opening your doors, you have a much better chance of being successful.
How Big is the Salon Industry?
The business of beauty and wellness is a fast-growing and dynamic sector in the United States, with over 1.2 million total salon businesses and sales of more than $62 billion annually.
What are the Key Segments of the Salon Industry?
Salons are businesses that specialize in the application of cosmetics to both women and men. Hair salons, nail salons, skincare treatments, and other sub-segments are all part of the market. Many salons promote themselves as full-service establishments that provide a wide range of services including haircuts, manicures, waxing, skincare, and tanning.
Hair and Nail Salons
Salons that specialize in hair and nail treatments are perhaps the most common type of salon. Many salons now offer a range of different beauty treatments such as waxing, skincare, manicures, pedicures, tanning, facials, and haircuts to name a few.
There has been a growing interest in skin treatments such as Yon-Ka Oxygene and Oxygen facials, chemical peels, and microdermabrasion. These types of salon treatments can revitalize and rejuvenate your skin, leaving it looking fresh and young.
Facials provide an opportunity to relax while receiving pampering treatments.
Salon tanning beds are popular with clients who want to lose or maintain their summer tans. The Tan Co’s Salon Tanning Bed is becoming increasingly common throughout salons today.
Waxing and Skincare Treatments
These services are perfect for women who don’t have the time to do their own waxing and skin care treatments.
Salons provide a wide range of beauty treatments that vary from one salon to another. In addition, services can change rapidly due to new products, changing styles, and increasing demand for certain treatments.
Other Sub-Segments of the Beauty Industry
Aside from hair and nail salons, other sub-segments of the beauty industry include spa services such as skin care, waxing, and facials; mobile services such as mobile hairdressers and mobile make-up artists, and home-based 1:1 beauty services such as one-on-one skincare treatments for everything from anti-aging to teenage skincare.
What External Factors Affect the Salon Market?
There are a number of factors that affect the salon market. Some of these include:
- New Beauty Technology and Products – Beauty salons need to keep up with new technologies such as the Beauty Light Pro-face and body machine which uses lasers to reduce acne scars, wrinkles, and stretch marks.
- Changing Styles – New hairstyles are constantly being created, and skin care trends change frequently.
- Competitive Pressures – Salon owners need to know how much competition they’re up against when setting salon prices, choosing suppliers, and marketing their salon services.
- Changing Demographics – demographics play an important role in who will use your salon’s beauty treatments. Consider the effect of an aging population on demand for skincare treatments, for example.
- Economics – The state of the economy has a major effect on the industry. When the economy is struggling, people tend to cut back on discretionary spending which includes beauty treatments such as haircuts and manicures; however, when the economy is thriving, business tends to thrive as well.
Who are the Key Competitors in the Salon Industry?
Direct competitors in the salon industry are other beauty salons and spas within your geographical area.
In order to attract clients, you’ll need to offer competitive pricing and a range of services that will help differentiate you from the competition. Some ways that you can do this include being open earlier, staying open later, have longer operating hours, having faster service times, providing gift certificates or coupons for future services, being more flexible on price, and providing a more luxurious experience with better seating arrangements and customer bathrooms.
Key competitors of the industry also include manufacturers who produce chemicals, equipment, and other supplies required to run a salon business. In addition, home-based 1:1 beauty service providers such as skincare experts, make-up artists, and waxers should also be considered as competitors to your salon.
There are also a number of indirect competitors that you need to be aware of as well including:
Traditional hair salon services such as those offered by Sports Clips, barbershops, ethnic hair salons, Supercuts, and more. Barber Shops tend to offer more traditional men’s haircuts, but they also offer services that women are looking for such as straight razor shaves.
Traditional beauty salon services such as those offered by nail spas, meditation salons, karate dojos, and more. Meditation or wellness salons provide a wide range of treatments including skincare treatments, reflexology massage, reiki sessions, and more.
These establishments can be a challenge because they are often not considered a “serious” competitor by the typical owner who focuses only on competing against other salons. However, it is important to recognize the threat that these competitors can pose because they may attract customers who would typically come to your salon.
What are the Key Customer Segments in the Salon Market?
Your salon’s key customer segments are women who want to improve their appearance. However, it’s important not to forget men as well. In fact, some salons target men with specific haircuts and grooming treatments.
Beauty salons typically attract four main customer segments:
- Customers who regularly visit salons (e.g., weekly or monthly) for beauty treatments such as haircuts, manicures, pedicures, facials, and skincare treatments.
- Customers who only visit the salon occasionally – usually for specific events such as weddings or proms.
- Customers who regularly purchase products to maintain their beauty treatments at home e.g., hair care, skincare, and manicure/pedicure products.
- Customers who only purchase a few beauty products a year to maintain their salon-purchased treatments such as those who buy shampoo from the grocery store but regularly go to the salon for haircuts.
Having a clear understanding of your salon’s key customer segments will help you create an ideal customer persona that can be used in the following sections when developing your marketing strategy.
What are the Typical Startup Costs for a New Salon Business?
The typical salon startup costs include the following:
- Physical location – You will need to initiate a lease agreement or purchase your salon’s physical location. The cost for monthly rent may vary greatly depending on the type of salon, its size, and location. For example, if you are planning to open your own hair salon in Los Angeles, California, expect the monthly rent to be $4,000 or more while the average monthly rent for a hair salon in Salt Lake City, Utah is around $700.
- Physical buildout – Most salons require renovation work to make the space look appealing and functional. You will need to update the lighting, floors, paint, wall coverings (e.g., wallpaper or large prints), counters, furniture (e.g., hair salon chairs, manicure tables), and salon equipment (e.g., hairdryers, shampoo sinks).
- Salon Equipment – These include the physical tools you will need to perform beauty treatments such as hairdryers, curling irons, straighteners, combs, brushes, rollers, styling products (e.g., hair spray), makeup, skincare products (e.g., facial creams or oils). You may also need to purchase beauty supplies such as cotton balls, napkins, tissues, disposable cups for beverages.
- Salon Operating Supplies – These are the items you will use on a daily basis in your beauty business while others are used less frequently such as cleaning supplies (e.g., disinfectants, bleach), paper towels, and plastic bags for rubbish.
- Salon Furniture – You will need salon furniture to seat your customers while they receive their beauty treatments. Consider purchasing salon-specific furniture rather than using generic furniture you already own such as dining or office tables and chairs.
- Cash Register – You will need a cash register to keep track of your salon’s revenue.
- Salon Supplies & Inventory – This category includes items that are paid for when they are purchased e.g., beauty supplies, inventory-items you pay only after selling them-and stored in the salon. Examples include shampoo, hair color, ties, headbands, cotton balls, facial washcloths.
- Business Insurance – You will need to purchase at least two types of insurance: salon insurance and general liability insurance (also called business owner’s policy). Ensure you contact an experienced independent insurance agent who can guide you through the process.
- Salon Accounting Software – There are many good salon accounting software options available on the market, but many salon owners use less expensive software such as QuickBooks instead of purchasing salon-specific accounting software.
- Marketing and Promotional Campaigns – Besides advertising, there are many ways you can promote your business including flyers, postcards, social media campaigns (e.g., Facebook ads or Twitter promotions), business cards, coupons, direct mailings.
- Legal and Licenses – You will need to purchase legal documents (e.g., business contracts) and licenses (e.g., tax registration certificate).
What are the Key Costs to Launching a Salon Business?
When you are trying to figure out how much money you want to start a salon, your main costs will be related to the physical buildout of your salon.
Your rent is one of the biggest expenses for new salons, especially if you are located in an expensive city such as New York City or Las Vegas.
Location is everything in the industry so it’s important to choose your salon location wisely. You don’t want to be in a bad location that scares people away or makes it difficult for them to get to your salon.
Getting salon fixtures is a must if you are building the space from scratch. You will need to get shampoo stations, stylist workstations, reception areas, waiting spaces, etc.
Music and entertainment systems are also necessary parts of your buildout.
Things like nail bars can be added later but it’s easier to get those installed on day one.
You will need to get a general business license and apply for your salon license as well as any other state or city-level licenses that you think you might need.
Salon insurance is also essential to protecting yourself and your assets from business liability.
Your budget will look very different depending on the scale of your salon type and design. It’s important that you do not underestimate the costs when planning for your salon space, but also don’t kill your budget either.
How Much Do Salon Owners Make?
Salon owners can make anywhere from $60,000 to $300,000 US dollars annually depending on the size, location, and services and/or products offered by the salon. The average income for a salon owner is a salary of $69,245 plus profits if applicable.
What are the Keys to Launching a New Salon Business?
If you’ve made it to the decision of opening a salon business, chances are that you have been planning for a long time already. It’s essential to be as prepared as possible before opening your doors.
Below is a list of essentials that every salon owner should look into:
- Salon management software – You need to keep track and organize all data related to the salon.
- Concierge services – These can help you with getting clients in the door. If you have an excellent service that people want, then they will be willing to pay for it.
- Salon website – Your salon website is one of your biggest marketing tools. It should look professional and convey a sense of your own salon brand.
- Business banking – Get a business account and debit card as soon as possible. While you’re at it, set up an automatic payment option like direct deposit and online bill pay to make your life easier.
- Salon insurance – From the salon’s property to employee compensation, you need good coverage for everything.
- Marketing plan – Create a salon marketing plan that will work best for you.
- Quality hair and beauty products – Invest in the best salon products. If your products are top quality, then all you have to do is get them out there and let results speak for themselves.
Be efficient with your time and resources so that you can focus on growing your business.
If you start building strong business relationships with your clients and getting their word of mouth, then new clientele will come to your salon without even needing a marketing plan. Everything comes full circle so make sure to spend effort on each part of the process.
What Marketing Strategies Work Well for a Salon?
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How to Start a Salon FAQs
It's time to take your dream of opening your own salon and make it become a reality. Follow these simple guidelines to turn your startup into a thriving salon business:
Before people will trust any service or product being sold by you, they need to know who it is that they are trusting. This means that before starting any kind of advertisement campaign about the launch of your new salon you should work on building relationships with potential customers first.
You might do this by hosting demonstrations for how hairstyling works at an event near them which could also act as an advertisement for how qualified staff members are. If people are happy to buy your services then they are more likely to spread word of mouth about how great your salon is.
Promote What You are Selling
Once you have people's attention with the product or service that you are offering, it is time to use this opportunity to sell yourself.
Try promoting yourself through targeted online adverts which will let people who would most often visit a salon know that there is something new in town with your advertisement appearing on websites including social media accounts and others where people who might be interested in visiting a beauty salon might spend their free time.
This kind of press can go a long way especially if your stylists already have experience working at other successful salons which could potentially give an incentive for more customers to come to try out your salon.
Take on Contract Work
Some local businesses in your industry might only be interested in working with the most successful salons, but there is no reason why you can't prove that you are just as reputable. Try taking on contract work for major hair care brands at the launch of your new business, offering them a deal where they give you their business and in return, you promote their products to your customers. This could be extremely beneficial when trying to recruit new stylists especially if they have experience working under the same brands already. People trust familiar names so having these kinds of big-name companies involved with the wonders of your own work for credibility.
Keep Up Quality
Keeping high-quality standards across all aspects of running a salon is important to keep your loyal customers happy and could also potentially attract larger salons to work with you. After all, the more successful you are at running a high-quality salon the more people will want to come to you for their hair care needs. Make sure that everything from the salon equipment used to how well trained every member of staff is working is like clockwork if you want even bigger companies interested in having contracts with you.
Your salon brand should be recognized before long as one which always keeps up its promises; this kind of reputation can help generate word-of-mouth advertising rapidly. The name 'Salon X' might not mean much now, but after three years of offering high-quality services, it might be known throughout your city as being a salon that consistently delivers the highest quality services. This kind of brand awareness can be a great help when trying to get more contracts from big-name brands.
It is subjective how much money you need to open a salon but most salons will spend around $300,000 for their buildout. If you want to make sure that your salon is successful, you should be prepared to invest at least 6 months’ worth of your salary as well as the cost of your buildout.
The financial requirements for opening a salon will depend on how much you can personally invest in your business. Salons generally start with developers that want to get into the salon industry, but then there are also models where salons are franchised or managed by existing salon owners.
Small Business Administration loans - These are available for small business owners that meet certain requirements, but it does require a decent credit score and a history of on-time payments. Read more about how to get an SBA loan here.
Equity financing - This generally requires setting up some sort of contractual arrangement between yourself and investors. The more capital you can provide yourself with, the better.
Business loans - There are a handful of bank options available for small business owners that meet certain requirements to get a loan from a bank. Read more about how to get a business loan here.
Partnerships and collaborations - Depending on your experience in the salon industry it might be possible to find a partner that will invest in your salon/salon business.
The more capital you can bring yourself, the better off you'll be long-term. Make sure to budget accordingly before opening your doors.
It's one thing to have a new salon and a solid business plan, but you need to make sure that people actually come in and try out your services.
You'll want to think about:
- How will you get the word out there? Social media campaigns, flyers on community boards, direct mailers, etc. Try not to use too much advertising or you'll burn through your budget quickly.
- What's in it for the client? Obviously, you want to have happy, satisfied clients who want to come back. This will be easier if you offer excellent customer service and quality products.
- How much are you charging? If your services are affordable, then people won't think twice to book an appointment. If you offer higher-end services, then make sure to have a clientele base that is willing and able to pay for them.
- Will you offer specials? Offering a special for a limited time is a great way to attract new clients and let them feel how much they can save by booking an appointment with you.
- What will your salon environment be like? Make sure that it's clean, peaceful, and relaxing to help clients feel at home.
There is no magic wand or quick fix for getting new clients in the door of your salon business. It takes hard work and patience but if you can provide quality products and services, then your clients will come running.
You want to make sure that every part of your salon's operations runs smoothly from massive production to everyday tasks. Things should run as seamlessly as possible between making appointments, scheduling employees, tracking inventory, and receiving payments. That way life is simple for the owner and managers so they can focus on improving important things such as revenue or cost-efficiency. In order to keep your business up and running, you should also follow these steps.
Make sure that everyone is on the same page when it comes to salon documentation. For example, what information goes into the client record? How are appointments scheduled? What are different appointment types? Make sure that all employees know this information so that there aren't discrepancies in how tasks are carried out or who is responsible for them.
Be flexible with scheduling time off for employees. It makes sense to have set times off, but make sure to be accommodating if they need to reschedule their appointments due to an emergency or personal reasons.
What will your salon's payroll look like? Will you hire freelancers or permanent employees? Keep track of each person's hours worked and time off.
Lastly, you should always be trying to improve your salon business operations so that your salon can run as efficiently as possible. This will leave the owner more time for important tasks such as growing their clientele or expanding services offered.
Growing a salon business is hard work but there are some things you can do to help boost your success rate. If you want to grow a salon business, make sure to:
- Focus on branding. Make sure that people recognize your name and what it stands for. This way they will know exactly what they're paying for every single time they walk through the doors of your salon.
- Promote your salon business through social media platforms. This is a great way to promote new products or services and let people know what's going on at your salon.
- Attend industry events. Make sure that you attend as many beauty conventions, expos, and salon expos as possible. These events are a great place for networking with other professionals in the industry which can be very beneficial to promote your brand name.
- Make as many connections as you can. The more people that know your name, the more likely they are to return for future services.
- Be consistent with your pricing and products. If clients feel like they can rely on you then there is a higher chance that they will return to your salon business time and time again.
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