An In-Depth Manual for Launching Your Own Hair Salon

If you’re contemplating the exhilarating journey of launching a salon, you’re diving into a vibrant industry: the beauty sector booms with a staggering annual valuation of over $56 billion. Hair care alone claims the largest slice of this pie, boasting around 86,000 establishments nationwide. The demand for hairstyling continues to surge, even during economic downturns, which paves the way for countless aspiring salon owners. You’re not alone in this endeavor!

Salon life may appear glamorous, especially from a client’s perspective, but let’s be real: running a salon is akin to managing any small business. It demands dedication, extensive hours, adeptness, thorough research, and sometimes, a sprinkle of good fortune. To increase your chances of thriving rather than merely surviving, a solid grasp of the salon’s economic landscape, from initial investment to pricing strategies, is crucial.

Most successful salon entrepreneurs have honed their skills as hairstylists or within the salon realm, often nurturing a genuine passion for their craft. Take the stories of Shana Dyer, co-owner of Harlow Salon in Nashville, and Tiffanie Barackman, owner of Aria Salon in Michigan. Both women spent years immersing themselves in the beauty industry before taking the plunge to open their own salons. They offer valuable insights drawn from their journeys.

While many steps in launching a salon mirror those needed for any small business, there are unique nuances specific to the beauty industry. For newcomers, beginning with a keen focus on your plan and budget is paramount. Dyer emphasizes this by stating, “You want to have a business plan and a budget. If you don’t know what that is, you shouldn’t own a business. Consider taking a class or consulting a financial adviser or attorney.”

Your business plan should encompass various elements, including your target clientele, approaches for attracting customers (like social media strategies), supplier agreements, necessary partnerships, revenue models, cost structures, and essential resources. This strategy requires significantly more than simply envisioning an aesthetically pleasing salon and hoping for clients to flock to you. Conducting thorough market research is essential to assess the demand for an additional salon in your community.

In your business plan, create a comprehensive checklist to guide you through the salon launch process. This list should encompass both minor and major tasks, ensuring you don’t overlook critical items as you work towards your goal. A few items to kick off your checklist include:

Draft a business plan.

Select a legal structure.

Register your business and its name.

Identify an ideal location.

Obtain licenses to operate.

Purchase insurance.

Choose suppliers.

Acquire essential equipment.

Buy salon furniture (think sinks and chairs).

Stock up on supplies.

Recruit your stylists.

Provide training for new hires.

Initiate marketing and booking efforts.

A foundational aspect of your business plan involves understanding the financial needs to keep your salon running. Keep in mind that it may take several months, or even over a year, to start seeing profit after factoring in the costs of setup and operations. This entails engaging with a local bank or credit union for small business loans and consulting with an accountant to navigate tax implications.

The key to a successful salon lies in managing your operating costs—rent, staff training, insurance, inventory, and service prices. According to Dyer, “Product pricing is a universal standard — there’s typically a 50% markup based on wholesale rates.” Clients will often encounter similar pricing at different salons within the same neighborhood, which inevitably shapes service offerings as well. Dyer shares that they routinely survey other businesses every six months to adjust their pricing accordingly, ensuring they remain competitive.

Insurance isn’t just a bureaucratic necessity; it’s a safety net that can protect your business from unforeseen mishaps. It’s an often-overlooked expense that Shana Dyer attests can be invaluable after her own experience with employee fraud. “We thought we’d lose everything,” she recalls, “Luckily, we had a portion of our insurance that covered employee dishonesty.”

Embarking on the salon ownership path involves navigating a web of regulations, including securing a business license, obtaining personal appearance licenses, preparing for health and safety inspections, and paying additional fees to landlords (Common Area Maintenance charges). New business owners are encouraged to connect with local business owners or government representatives to clarify what’s required in their area.

Many salons emerge from previous establishments, as seasoned hairstylists venture out on their own while retaining their client base. Selecting a prime location is integral; positioning yourself in a high-traffic area or near former clients is crucial. Of course, Dyer emphasizes that remaining within a close radius of their previous location was beneficial, as many clients will likely follow their favorite stylists.

Hiring the right team can significantly influence your salon’s future. As Barackman notes, “The people you bring on will affect the atmosphere and reputation of your salon.” Utilize your network and community to find qualified hairstylists who align with your vision. In the initial days, balancing the need to fill positions with the desire to find the perfect fit may be challenging, but long-term success relies on making careful hiring decisions.

Once your planning and logistics are complete, the next step is to attract customers. Start by reconnecting with former clients and encouraging them to follow you to your new salon. Additionally, establish an online presence through social media and your salon’s website to draw in fresh clientele. Barackman highlights the substantial impact of social media, citing how platforms like Facebook and Instagram have been instrumental in driving new business.

As you embark on this venture, bear in mind that your dream salon might come with a hefty price tag. Initial startup expenses include rent, equipment, and furnishings. Dyer advises starting small: “You don’t need state-of-the-art equipment right away. We sourced much of ours from closing salons at half price.” Growing your business gradually and upgrading as needed can help manage financial strain.

You can establish a warm, welcoming environment without breaking the bank. Maintain cleanliness, offer complimentary refreshments, and consider adding soothing music for ambiance. Creating a cozy feeling can enhance the customer's experience significantly, with minimal expense.

Even when you operate within budget, it’s easy to overlook minor expenses that accumulate. As Barackman states, “Many small necessities, like service menus and business cards for new hires, can add up quickly.” However, as you build rapport with distributors, they often extend offers to support your inventory needs, easing the financial burden.

Clients value the sense of community a salon provides as much as the haircuts themselves. To maintain this balance, adhere to your business plan, ensure compliance with licensing and insurance, create an inviting atmosphere, and prioritize stellar service. Ultimately, the success of your salon lies in your hands, driven by the quality of services offered and the relationships you build with your clients.