Guide on starting a Salon Business Idea with Checklist

A complete step-by-step guide is broadly discussed here for starting a successful salon business with a checklist. To start a successful salon or parlor business, you need to know every pro and con. Here, we cover the practical knowledge of how to start a salon business and continue it successfully over time. We hope you will find the business idea helpful in making the right decision and turning your dream into reality by following the correct steps. Let’s get started!

Salon Business Guide:

Summary of 12 phases, a step-by-step practical guideline for starting a salon or beauty salon. This article will cover the details of the salon business startup.

 

Step-01: Planning Stage

Step-02: Legal Formation Stage

Step-03: Select the Location

Step-04: Decoration of the Salon

Step-05: Purchase Salon Equipment

Step-06: Getting Ready to Serve

Step-07: Hiring Staff

Step-08: Promoting Stage

Step-09:Operations and  Management stage

Step-10: Financial Management

Step-11: Grand Opening and Launch

Step-12: Ongoing Evaluation and Growth

 

 

Step 01: Business Planning Stage:

There is a saying, “A good plan is half the work done.” In today’s competitive world, business planning plays a vital role. Otherwise, you might incur a capital loss from messing up the business. The planning of a salon business includes the following activities:

01. Select the Name:

Choose a catchy name that matches your service. Take suggestions from Google and check the availability of the name in the domain.

02. Create Your Business Logo and Slogan:

A logo can be created for free using Canva, or you can seek help from a professional. Choose a slogan that aligns with your specialty in the salon business.

03. Branding Color:

Select your brand colors. Choose a maximum of three to four colors for your branding, which will be used across all promotional media and your outlet. Match the colors to better reflect your brand identity.

04. Write Down the Complete Business Plan:

Take a diary and manually write down your business plan. A business plan comprises the following aspects:

A. Set the vision and mission of the business.

B. Outline where you want to set your business, at least for a 5-year plan.

C. Provide a description of the salon or beauty salon business, including the types of salon services you want to offer.

D. Identify the market and target customers.

E. Identify and list competitors’ information, including their strengths and weaknesses.

F. Gather industry insights for your country and area.

G. Develop a financial plan and forecast.

H. Outline your marketing strategy.

I. Conduct a SWOT analysis of your salon business.

J. Identify risk factors and ways to mitigate them.

K. Plan your daily operations and monthly development goals.

L. Develop a plan to retain and increase customers.

M. Identify areas for improvement in customer service.

 

05. Budget for Your Business:

After setting the plan, consider the budget you want to invest and keep ready for operations. It requires two types of funds—one for fixed costs and another for operational costs. Fixed costs include leasing premises, primary legal costs, and equipment costs. The total budget varies depending on the type of salon you want to establish. However, keep in mind that the salon business can be costly. Statistics show that the average starting cost of a salon business in America ranges from $25,000 to $500,000.

06. Sources of Funding:

If you can, it’s better to use your own funds. Otherwise, consider borrowing from relatives or taking a loan from financial institutions. Consider the cost of borrowing against your business’s cash inflow and margin.

07. Pricing of Services:

Set a competitive price menu for your offered services, including color, cuts, hair extensions, texture, nails, treatment, and waxing. Gather pricing ideas from your competitors and collect data to help you set your service pricing.

 

 

Step 02: Legal Formation Stage:

This stage will formally establish your business identity by completing the necessary legal formalities.

01. Collect the Cosmetology or Beautician’s License:

The State Board of Cosmetology will issue the license upon application and inspection. It is a valuable license. To obtain it, you are required to complete courses totaling between 1,000 to 2,300 hours and pass the exam, with an estimated cost of $12,000. If you already have a cosmetology license, you’ll need less than $500 to acquire the required business license.

02. Determine the Legal Formation:

Choose whether your business will be a sole proprietorship, partnership, or Limited Liability Company (LLC) based on your capacity and future expansion plans. If you plan to operate limited services in a single outlet, sole ownership is better for easier management in the future.

03. EIN No.:

Obtain a Federal Employer Identification Number (EIN) before starting any business.

04. State Tax ID:

Obtain the respective State Tax Identification as per the law.

05. Insurance:

To mitigate risk, obtain suitable insurance for your business. A salon and spa business typically requires three types of insurance coverage: General liability insurance, Professional liability insurance, and Product liability insurance.

06. Open a Bank Account:

Conduct related transactions through a business bank account. Bank accounts can often be opened with $0. Some business checking accounts require an opening deposit, typically ranging from $25 to $100.

07. Business Operation License:

Obtain a business operation license from the respective state or area. Organize the necessary documents with your business plan and apply to the appropriate center. Costs may vary, typically ranging from $50 to $100.

08. Obtain Other Specific Licenses:

Obtain any additional specific licenses required to operate your business including health department permit and fire department clearance.

09. Retail Seller License:

To sell retail items related to the beauty salon, obtain a license to comply with all state rules and regulations.

 

 

Step 03: Select the Location and Setup

 

01. Select the Right Place:

Focus on visibility and easy access to your salon. It’s better to be located beside a busy road, near other relevant businesses in the area, with ample parking and a local clientele base.

02. Know the Local Regulations:

Before starting, familiarize yourself with the local regulations and consider any potential issues for future mitigation.

03. Select an Area with Availability of Items:

Choose an area where you can purchase the required daily items and where people have access for other purposes as well.

04. Buy or Lease the Space:

Collect the required paperwork properly for your occupancy of the space.

04. Certificate of Occupancy:

After buying or leasing the salon premises, obtain a Certificate of Occupancy, which describes how you will use the structure and ensures compliance with local building regulations. Keep a budget of at least $250 for the occupancy certificate.

05.Apply for a Building Permit:

Finally, apply for a salon business permit for the building you chose. After applying, the electrical department, building inspector, and/or fire inspector will inspect the premises before signing off on the salon business permit. The building permit cost might vary from $50 to $400.

 

 

Step 04: Decoration of the Salon

01. Plan the Right Layout:

Consult a professional to design the layout accordingly. Consider spacing the chairs apart from one another. The overall environment of the salon depends on its layout.

02. Color Strategically:

Choose the best color combination for different parts of the salon. For a luxury brand, you may choose golden, silver, and black. For a playful look, focus on bright and bold colors like purple, yellow, or pink.

03. Design:

Design the waiting room, interior, and exterior of the salon. Consider space for each item, such as dispensaries, trolleys, hair electricals, and processors.

04. Installation of Utilities:

To make the salon functional and create an ideal look, install and set up plumbing and electrical lines accordingly.

05. Hire an Expert Handyman:

To install and repair, connect with expert and professional individuals for the respective services.

06. Prioritize Comfort in the Waiting Area:

Ensure customers feel comfortable and relaxed while waiting, with access to newspapers, magazines, a pleasant environment, and comfortable seating arrangements.

07. Interior Decoration:

Create an appealing and comfortable atmosphere with appropriate lighting, furniture, decor, and color scheme that reflects your brand image.

 

 

Step 05: Purchase Salon Equipment

After completing the required layout and design, you need to purchase the equipment and set it up according to your planned layout. Ensure you buy the right, high-quality equipment within your budget, as this will distinguish your service quality from others and provide customers with a unique service experience.

The best places to purchase equipment are online stores, which offer multiple options. Don’t rush; take your time to explore the options for better quality at reasonable prices for your salon business. You may also buy used salon equipment from the market. Some recommended places to buy salon equipment include AB Salon Equipment, Salon Equipment USA, Minerva Salon Equipment, Belvedere Salon Equipment, Cosmoprof Salon and Spa Equipment, Keller International Salon Equipment, Amazon, eBay, Craigslist, Wholesale Salon Equipment, and Sally Beauty.

Here is a detailed equipment list to purchase for a salon or beauty salon business:

A. Set up the Station:

Choose the best one depending on your layout and business structure. Prices vary depending on quality and style.

• Main Station
• Portable Styling Station
• Double-Sided Styling Station

B. Select Styling Chairs:

Prices and variations in quality are available in the market. Set them up in the correct places.

• Main Seated Chair
• Reclining Chair
• Booster Seats
• Stools
• Chair Covers

C. Shampoo Area:

Consider different sizes depending on your layout; if required, set up a demo first.

• Shampoo Sinks
• Backwash Units
• Storage Units
• Tilting Chairs
• Color Bars
• Shampoo Bowls
• Tools and Accessories

D. Barber Area:

Ensure the required equipment is ready and kept alongside the station.

• Barber Chair & Stools
• Station
• Grooming Items (including clay wax, gel, shampoo)
• Scissors
• Razor
• Shave Brush
• Clipper
• Comb
• Cape
• Neck Duster
• Hand Mirror

E. Dryer Area:

Consider the space and size of the equipment before purchasing.

• Hair Dryer Chairs
• Wall-Mount and Hooded Hair Dryer Units
• Wheel Kit for Hair Dryer
• Hair Steamers, Blow Dryers, Hair Curlers, and Flat Irons

F. Manicure and Pedicure Place:

Set up a relaxing and comfortable area. The basic items include:

• Manicure Table
• Technician’s Chairs
• Customer Chair
• Pedicure Chair
• Technician’s Tools
• Technician’s Carts (including clay wax, gel, shampoo, and more)

G. Reception Area:

You might include the following items:

• Reception Desk
• Reception Sofa or Furniture
• Cash Register
• POS Machine
• Water Cooler
• Coffee Machine
• Retail Product Display
• Wi-Fi Connection
• Magazines (updated regularly)
• Required CCTV Camera

H. Spa Area:

• Facial and Massage Beds
• Facial Steamers
• Skincare Equipment
• Spray Tan Machine
• Wax Warmers
• Electric Massage Chairs
• Esthetician Stools

I. Other Equipment:

• Mirrors
• Carts
• Trays
• Trolleys
• Tool Holders
• Foils
• Long Foils
• Processing Caps
• Small Gloves
• Medium Gloves
• Large Gloves
• Express Drops
• Color Brushes
• Foil Combs
• Clips
• Capes
• Cotton
• Blending Brush
• Color Remover
• Stain Remover for Skin
• Hair Clips
• Hot Towel Warmers
• Sanitizers
• Towels
• Brooms and Cleaning Items
• Mixing Bowls with Applicator Brushes
• Brushes and Combs
• Aprons
• Trash Bins
• Salon Lighting

 

 

Step-06: Getting Ready to Serve

In this stage, before setting up, verify your layout and set up fixed items first, then arrange the movable items.

i. Organize the purchased equipment
ii. Schedule the handyman for furniture setup
iii. Schedule electricians and plumbers
iv. Set up utilities and Wi-Fi
v. Pick suppliers
vi. Decide on a payment processing company
vii. Purchase POS equipment
viii. Purchase booking software
ix. Purchase accounting software
x. Design and print business cards
xi. Schedule the inspection and get approval

 

 

Step-07: Hiring Staff

Following employment rules, start hiring skilled and experienced hairstylists, beauticians, nail technicians, and support staff for your salon business. Just follow the basic rules to hire the required staff. First, hire the basic service staff, then hire others step by step.

i. Write down all the positions required in the salon
ii. Decide on responsibilities and skills needed for each position
iii. Advertise job openings
iv. Develop a training plan for your staff
v. Ensure continuous proof of education
vi. Interview applicants and hire the best ones
vii. Start with the training

viii. Draft employment contracts, job descriptions, and employee handbooks.

ix. Establish salon policies on dress code, working hours, commission structures, and employee benefits.

 

 

Step-08: Marketing and Promoting Stage

Promoting is a crucial part of success in the beauty salon business. Make strategic decisions and Develop a strong brand identity, including a logo, color scheme, and tagline. Ensure consistency across all marketing materials. Here are some examples of promoting a salon business for your reference.

i. Offer initial promotions like 20% discounts, BOGO offers, gift cards, etc.
ii. Develop a long-term marketing plan
iii. Register a domain name and launch your website
iv. Set up an online booking form
v. Set up social media accounts
vi. Start networking
vii. Boost online reviews
viii. Offer express services
ix. Advertise both online and offline
x. Hand out flyers and business cards
xi. Contact local publications to announce your opening
xii. Plan special events for the first few weeks to attract clients
xiii. Run salon contests
xiv. Offer referral discounts
xv. Publish your own salon blog regularly
xvi. Tag your clients on social media
xvii. Set up a selfie station with your salon’s hashtag

 

 

Step-09: Operations and Management Stage

Effective management is crucial for providing quality service and maintaining a high brand image. From opening time to branding your salon business, efficient management will ensure solid success. Here main points to focus are scheduling, Inventory management, customer services and pricing strategies.

i. Ensure inventory management
ii. Proper scheduling
iii. Prepare and send invitations for the opening
iv. Test every plug and outlet
v. Test plumbing
vi. Set your working hours
vii. Set up your cash register
viii. Purchase first aid kits
ix. Prepare bathroom, cleaning, and laundry supplies
x. Purchase stationery materials
xi. Stock up on magazines and coffee
xii. Arrange your product display
xiii. Set up your music system
xiv. Decorate the salon
xv. Ensure everything is spotless
xvi. Automate financial statement checks

 

 

Step-10: Financial Management

01. Accounting:

Set up an accounting system to track income, expenses, and profitability. Consider hiring a professional accountant for financial management and tax compliance.

02. Banking:

Open a business bank account and obtain a business credit card. Keep personal and business finances separate.

03. Funding:

Secure financing if needed through personal savings, bank loans, investors, or small business grants.

04. Financial Monitoring:

Regularly review financial statements, cash flow, and profitability. Adjust strategies to improve revenue and control costs.

 

 

Step-11: Grand Opening and Launch

01. Pre-Opening Marketing:

Generate buzz before the grand opening with teasers on social media, email campaigns, and partnerships with local businesses.

02. Grand Opening Event:

Plan a grand opening event with special promotions, giveaways, and demonstrations. Invite local influencers, bloggers, and media to increase exposure.

03. Collect Feedback:

Gather feedback from clients after the opening to identify areas for improvement and enhance customer satisfaction.

 

 

Step-12 : Ongoing Evaluation and Growth

01. Customer Feedback:

Regularly collect feedback from clients through surveys, reviews, and social media. Use the feedback to improve services and customer experience.

02. Continuous Improvement:

Stay updated with industry trends, new products, and techniques. Offer new services and treatments to keep clients engaged.

03. Expansion Opportunities:

Explore opportunities for growth, such as adding more services, expanding to new locations, or developing a line of branded products

 

Starting a salon business requires careful planning, dedication, and attention to detail. By following this checklist, you can lay a solid foundation for a successful and thriving salon. Remember, the key to success is providing excellent service, building strong relationships with clients, and continuously adapting to the ever-evolving beauty industry.