How to Start a Beauty Salon | Business Ideas

A beauty salon or beauty parlor (beauty parlor) (or sometimes beauty shop) is an establishment dealing with cosmetic treatments for men and women. Other variations of this type of business include hair salons and spas. There is a distinction between a beauty salon and a hair salon and although many small businesses do offer both sets of treatments; beauty salons provide more generalized services related to skin health, facial aesthetic, foot care, nail manicures, aromatherapy, — even meditation, oxygen therapy, mud baths, and many other services. 

Have you always dreamed of being successful in the beauty business? 

Here's how to launch and establish your very own beauty salon.

Business Plan for a Beauty Salon

A business plan is a comprehensive outline for starting a new business. Business plans describe a company's mission, operations, financial plan, marketing strategy and management qualifications. Writing a business plan for a salon walks you walk through the steps necessary to open a business in the hair and nail care industry.

• Write a summary of your company, it's mission and operational philosophies. Include your company name, address and other contact information, as well as your business structure; sole proprietorship, LLC., etc. Briefly state the purpose of your organization and describe your customer service philosophy.

• Write descriptions of your products and services. Describe how the customer experience in your store will differ from your competitors' services. Discuss line-queuing systems and goals for minimizing customer wait-times. Discuss whether you will cater to the upscale end of the market by taking reservations for personalized services, or the budget end of the market that serves walk-ins at the lowest price possible, or even the segment in between. Discuss whether you will include hairstyle consultation services, nail grooming services or hair-care products in your salon.

• Create a financial summary section, and include projected financial statements spanning at least three years. Include all expected startup expenses and list potential sources of initial funding. Use your experience and your best judgement when creating forward-looking financial statements. Use your marketing goals to gain a perspective on how many customers you will serve and how quickly your customer base will grow, then base your revenue and direct cost estimates on these figures.

• Create a marketing plan and an initial marketing budget. Describe how you will publicize the new salon using advertising and promotions. Discuss any incentive programs you plan to offer to frequent customers. Family-oriented salons may do well to use local mass-market media, such as newspapers, local radio stations and community magazines, to advertise their services. Upscale or niche salons' ads will be more effective in specialty publications. Keep in mind that word-of-mouth advertising can make or break salons serving this segment.

• Include a succinct, professional biography highlighting your experience and qualifications. Incorporate professional bios of any co-founders or investors with a management stake in the company as well.

• Write an executive summary and use it as the first section of your business plan. Use this one- to two-page summary to provide an overview of your business plan, quickly highlighting important features of each succeeding section.

Setting Up Shop

Figure out how much money you need

Starting a business can cost a lot of money, and most entrepreneurs don't turn a profit for the first year or two. Here's what to consider

Can you still support yourself while your business gets up and running? Calculate how much money you need for monthly expenses, how much of a cushion you have in savings, and how much you absolutely must make each month to stay afloat.

Come up with an operating budget. Calculate how much money you'll need to run your business every month. Include rent, licensing, training, payroll, supplies and an emergency fund.

Figure out how much you'll charge for services. Once you have an operating budget, you'll know how much money you need to break even each month. To make a profit, though, you'll need to do more than break even. Estimate how many services (such as hair cuts, colors, manicures, etc.) you might perform in a week and figure out how much they need to cost in order for you to make money. 

• Keep in mind that though you need to charge enough to be profitable, you can't charge too much — or you'll drive away customers. Try to set a price point that is both fair for your clients and prosperous for you.

• Get an idea of what other salons charge. Browse comparable salons in your area, and take note of what they charge. Your prices should probably be in a similar range.

Do you need a small business loan? Make an appointment with a loan officer at a local bank, and ask him or her to talk you through the process of getting a small business plan. Before you go, write up a quick summary of how you expect your salon to be profitable — whether it's because you offer a unique service or because there aren't enough salons in your area.

Figure out how you'll pay taxes. Paying taxes as a small business is different than doing so as an individual, so be sure to figure out what you need in advance. To save yourself time and trouble, consider enlisting the help of a CPA while you set up your business.

Take care of any licensing

Unfortunately, running a a business means having to deal with red tape and paperwork. Here's what you need to take care of: 

• Get a business license. All businesses in the U.S. must be licensed. Check out the Small Business Administration website for more help.

• In the United States, all personal appearance workers must be licensed. That includes cutting or coloring hair, painting nails, hair removal, and makeup application. Rules vary by state, so contact your local Division of Occupational and Professional Licensing (DOPL).

• Make sure your salon can pass a health inspection. To avoid fines or (even worse) being shut down by the health department, make sure your salon is sanitary and following the guidelines laid out by your state. For an example of what to expect, check out New York state's salon requirements.

Choose the right location

Location is critical to the success of your business. Consider these factors:

• Get into a high-traffic area. Busy streets, malls or spaces next to locations people visit often (such as grocery stores) are ideal.

• Try to have easy access. If parking is a hassle and traffic is thick on the way to your salon, people might not consider it worth the effort.

• Stay away from the competition. Don't situate yourself directly next to another salon — you'll cancel each other out. Instead, try to stake out a place where you'll be the only salon for a few blocks.

Hire qualified and trained personnel

The cosmetic procedures performed by untrained personnel may cause health problems to the clients. It is important that you hire only qualified and well-trained beauticians, stylists, and other personnel.

• Remember, it is your responsibility as the salon owner to ensure that your personnel are adequately trained and understand each procedure offered.

• Experience may give a beautician the expertise to render treatment, but, without proper training, she would be unaware of the merits and demerits of procedures.

• Have a short but clear salon procedures manual in place as soon as you can, and give each employee a contract when they start. These documents are usually easy to find on the internet and you can then customize them to your business. It will save you a lot of headaches in the long run if you are set up properly at the beginning.

Welcoming Clients

Create a clean and safe atmosphere 

Salons thrive on an environment that is clean, safe and relaxing, where customers can receive prompt and professional service.

• Cleanliness is a particularly important element that can draw clients in again and again. Be sure your towels, foot baths, and other equipment's are washed, clean and odor-free.

• Keep your tools sharp and current. Your clients must be able to trust that the products and tools that you use on them are of top-notch quality and safe. You cannot afford to put your clients at risk from infections, as it could damage your reputation.

• Make the atmosphere relaxing. Play soft music, use gentle lighting and keep loud chatter between your employees at a minimum.

Offer a wide range of services (optional)

This could give you a distinct advantage over those who offer only one or two types of services. Many clients prefer to have their hair, nails and face done in one place, instead of going to three different places.

• While you can specialize in one main area (e.g. hair), giving your clients the convenience of a one-stop beauty shop can set your business apart from your competitors.

Keep your clients satisfied

It is important that your business create and maintain the desirable reputation as a quality hair and salon operation, so that your clients keep returning for maintenance. Try to give them the best possible experience each time, and go out of your way to make them feel valued.

• A salon’s best marketing tool is word-of-mouth. If a client is happy with the results, he or she will come back to the your salon; after all, it's a question of trust. Satisfied clients can then help advertise your business to their friends, family, and colleagues. Word can easily spread about the great look and outstanding personal service that your salon provides.

• Collect contact information from your clients e.g. an email address or cell phone number, and if you have a computerized system you than then easily text or mail them with updates on new products/services, and any special offers you have.

Tips

• This is a beauty business; you're expected to look your best! Have in your procedures manual what you expect as a minimum in grooming for all staff and set a good example yourself.

• Consider providing training classes on a regular basis to your personnel to improve their product knowledge and skills as well as awareness to trends.

• At the beginning you may not be able to pay big salaries to staff, but there are many other things you can do to create a "feel good" factor. Be reasonable about time off and take time to devise a time in lieu give and take system — for example, staff can take time off and then pay it back during busy periods. Have a staff night out every two to three months — a pizza and wine night won't cost much but creates a real team feeling. Introduce a commission-based system so staff are motivated to grow your clientele. Set up your salary system and holiday system so that staff get paid on time and up to date, and can check their time off entitlements. These are all small things but they make a big difference to staff.

Reference

• Business Plan for a Salon
• How to Start a Beauty Salon