As former stylists and salon owners with nearly 100 combined years of experience behind the chair, we’ve learned a thing or two about running a business. We honestly love the beauty industry and are passionate about helping others reach their full potential. That’s why we’ve assembled years-worth of information, added vital industry data, and reached out to specialists in various fields to offer valuable insight into starting and growing your business.
Salon Startup – What to Consider
If your dream is to open a hair salon, you’re in luck; the salon industry is growing. According to the Bureau of Labor Statistics, as of 2021, the employment of barbers, hairstylists, and cosmetologists is projected to increase by 19 percent from 2020 to 2030, faster than the average for all occupations. While the timing is right, you’ll still face a lot of competition, as there are nearly a million salons across the United States. However, don’t let that number quash your dreams. According to the American Association of Cosmetology Schools, those salons are generating over $40 billion a year in sales, and if you play your cards right, you too can realize your share of it.
There are many obstacles for new salon owners to consider, but the most challenging thing is facing the possibility of failure. It’s true of any business and a hard reality with which to come to terms. However, facing hard truths and understanding what could happen if you are not prepared is part of the process. And, by extension, the first step on the road to success.
Every new business owner faces an uphill battle for survival. In fact, financial giant Bloomberg estimates that up to 80 percent of all new small businesses fail within the first 18 months. Since opening a salon takes a lot of time and sweat equity, not to mention capital, it’s wise to educate yourself and prepare as much as possible so that you and your salon don’t become one of these statistics. That’s why we advise you to do your research, crunch the numbers, again and again, make a solid plan for your business, and get the help you need before putting everything you have and have worked for on the line.
If you’re committed to opening a salon, you’ll need more than sheer determination to get started. Here are a few things you’ll want to do first:
Salon Startup – What to Consider
The Right Type of Salon or Spa for You – Rental, Commission, Employee
If you have unearthed your real motivation for becoming a salon or spa owner and have come to terms with the pros and cons of business ownership, the next step is to examine the type of salon that’s right for you. Not so much in the styles of salons and spas or the services offered, but how the business is set up. Your options include commission, salary, or hourly employees, or booth/suite rental.
The Right Type of Salon or Spa for You
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Business Structure
In addition to considering the type of salon or spa you want to open, you also need to decide on a business structure that works for you. According to the Small Business Administration, your business structure affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your liability. Before you get too far down the road, you’ll need to choose a business structure. Here are some things to keep in mind when you are at this stage in your business setup.
Business Structure – What’s Right for Your Salon or Spa
Doing Your Research
When opening a salon or spa, there are many steps that you should take to ensure your success. One of those phases involves researching the industry, as well as your market and any local competitors. This information will help give you a good benchmark to start your business and provide some vital, eye-opening insight moving forward.
Opening A Salon? – Do Your Research!
Funding & Securing Loans
Before opening your doors, you’ll need to accurately figure out how much money your business will require, not only the costs of starting but also the costs of staying in business. Take into consideration that salons and spas can take several years to get going, let alone realize a profit. This means that you will need enough funds to cover all operating costs until sales can eventually take over, in addition to startup expenses.
Once you have everything outlined, look into your options for funding. According to Kabbage, a fully automated online lender for small businesses, there’s a wide variety of funding options from which your salon can choose.
Creating A Business Plan
Suppose you’re looking to open a new salon or spa, change locations, expand or remodel your current facility. In that case, you’ll need working capital to help realize your dream. Naturally, you’ll tap into your own savings and reach out to family and friends for funds, but when that is not enough capital, look to your local bank and the Small Business Administration for a loan. To secure a loan, however, you’ll first need a rock-solid business plan.
How to Write a Killer Business Plan for Your Salon or Spa
Finding the Ultimate Salon or Spa Location
For salons and spas, location makes all of the difference in the world. It’s important to be readily accessible to clients in an area that they like. The trick is to balance what clients need and want with what you like and can afford. Here are some tips on finding the right location for you.
Making the Most of Your Space
A common mistake in laying out a salon floor plan is missing or underestimating some of the required facilities for both clients and staff. Obviously, you’d need to plan out the workstations and shampoo areas, but what about the reception and retail areas, room for waiting, and changing rooms? Read on to find out what else you should consider when designing your space.
Making the Most of Your Salon or Spa Space
Allocating Electrical Power
Whether you are starting from scratch or taking over an existing facility, be sure to inspect and/or amp up the electrical power for your salon. Most standard circuits and outlets will not cut it, at least not for long. Too much of a draw of power at once will trip the circuit breakers, resulting in interrupted service. Here’s what you need to do to keep the outage from happening to you.
How to Allocate Electrical Power for Your Salon
Plumbing & Water Heaters
Plumbing is a critical aspect of a salon. You will need the correct line or pipe diameter to supply ample water and enough water pressure to reach several water outlets throughout your facility. You’ll also require access to plenty of hot water, meaning that you’ll need an efficient industrial water heater. Here are our suggestions for plumbing your salon or spa right.
Air Quality & Climate Control for Salons & Spas
An essential part of a salon or spa’s ambiance is a comfortable and enticing climate. Indoor air temperature, quality, and ventilation are a large part of that environment, and it takes the right equipment to make it all come seamlessly together. Here’s what you need to know about your salon or spa’s air quality and climate control system so your clients can enjoy their services in a relaxing atmosphere.
Air Quality & Climate Control for Salons & Spas
Best Lighting for Salons – Specifically for Color
There is no singular “right way” to illuminate when it comes to lighting for your salon. There are, however, a multitude of options to consider for lighting your work environment.
Although it’s tempting to go for drama with little splashes of light to accent your salon or spa interior and give a beautiful ambiance, the reality is that you and your team need to be able to see what you are doing. That’s why it’s advised to go for the best possible illumination for hair color. After all, that’s one of the best profit centers in the salon, so it’s vital to “shine a light” on your handiwork. Before adding any illumination fixtures to your shopping cart, though, let’s review a few lighting basics first.
Best Salon Lighting for Hair Color
Flooring Options
In addition to looking good and tying into your décor, the flooring in your salon or spa will need to withstand a lot of abuse. Each day your salon is open for business, your floor could easily experience a hundred or more clients walking through from the changing room to the shampoo bowl and back to the stylist station before heading out the door. And that number does not include the stylists, assistants, and the drips of color that always manage to splatter along these same pathways. Needless to say, flooring is one of the many investments in your facility that you need to take seriously.
Flooring Options for Your Salon or Spa
Negotiating a Lease
Once you have found an ideal location to rent for your salon or spa, the next step is to negotiate a commercial lease agreement. Before doing so, dive into the types of leases and the terminology you should understand before signing on the dotted line.
Negotiating a Salon or Spa Lease
Interior Themes & Design
Your customers are looking for a warm and inviting salon or spa so that they feel comfortable and can enjoy their pampering services. That’s why you want to provide them with a welcoming environment that is both pleasant to be in and functional.
Dr. Leon Alexander of Eurisko Design explains how design influences our thoughts and behavior and plays a significant role in how we perceive space. Design also impacts our creativity, focus, health, attention, mood, and social ability. This design and environmental psychology specialist says that understanding this relationship between our environment and our mind is essential. Here’s why…
How Salon Design Influences Behavior
Ordering Salon & Spa Furniture
If you’re thinking of opening a salon or spa or are planning to redesign or upgrade your current one, it’s highly advised to consult with a salon or spa design specialist. A seasoned professional will provide valuable advice and help walk you through every design step, from choosing a color and design scheme to ordering and installing fixtures, workspaces, and furniture.
Salon and Spa Furniture – How To Furnish Your Salon
Retail Detail
Most salons and spas sell hair, skin, even lash, brow, and nail care products to their customers. However, there are a handful of beauty businesses that do not stock any products or participate in retail sales at all. If you are one of the minority in the suds-selling business, here are three reasons why selling retail just makes good sense.
Why You Should Be Selling Retail
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Why Your Salon Should Embrace Online Sales
Effectively Selling Retail
When selling retail products to your clients, it really does not matter if you have a sales background or not. What is important is that you don’t put them off by pushing them into buying something that they may or may not need or want. Instead, try some of these highly effective tactics:
Product Merchandising
Displaying your retail products does not have to be extravagant but should be practical and fit well with your salon or spa decor. You want shelving that fits as much product as possible but is easy to get to for clients and realistic for your staff to keep clean. You also want to think through how to display your products and make the most of your merchandising efforts to sell as many products as possible. Here are some suggestions to get you on your way.
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Setting Salon & Spa Pricing
Whether you are a new multi-chair salon or spa owner, a solo artist, or a booth or salon suite renter, the following suggestions should help get you started with pricing. And if you are an established business owner, it never hurts to do a pricing checkup.
Getting Professional Business Help
In business, there is a time to call in a specialist. That’s why it’s essential to consult a Certified Public Accountant (CPA) who understands a service business like yours and maybe even a business analyst to help keep things on track. Come tax time; you’ll be glad that you did! If you have a fair amount of employees, consider a human resources consultant for a yearly or bi-yearly evaluation. Also, hire an attorney to help set up your business, review contracts, or help if a legal matter arises.
CPA Advice – The Numbers Game
According to Kopsa Otte CPA, a nationally known firm specializing in financial analysis, consulting, and tax planning, a salon or spa must be run as a business by being a business person first. Although most salon owners are good at what they do, they are not business people. They got into business because friends and clients kept whispering in their ear that they should start their own salon but most did not realize the talent of a hairdresser is much different than the skill of a business person. Those owners knowing both the art of hair and of business have the advantage.
The Business of the Salon Business
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Navigating Insurance Needs
Not only are most businesses required by law to have some form of coverage, but the idea of preparing for the worst-case scenario also makes good business sense. Fire, theft, and employee and client accidents or lawsuits can destroy a business and even tap personal assets, like your home or savings. Here’s what you need to know when it comes to insurance for your business.
Navigating Salon & Spa Insurance Needs
Payment Processing
One of the best decisions you can make as a salon or spa owner is taking credit card payments for your business. It’s a convenient way for your clients to pay for products and services rendered. However, the convenience of salon credit card processing comes at a cost.
The process of payment processing is a bit complicated and can be overwhelming to most small business owners. And navigating the credit card processing options and their costs can be confusing. Almost like you need a Ph.D. in credit card processing!
Before diving head-first into options for salon credit card processing, you’ll first need to understand the fees involved in the process.
- Understanding Credit Card Processing for Your Salon
- Best Practices for Taking Deposits in Your Salon
- How to Create a Cancellation Policy for Your Salon or Spa
Salon & Spa Software
In addition to a talented staff and business-related consultants, be sure to employ robust salon and spa scheduling and management software. Essential for running a successful business, management software can help with scheduling, inventory, email marketing, and so much more. However, with so many offerings on the market, it can be overwhelming when choosing the right one for your business.
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- 5 Ways to Automate Salon & Spa Management
- 5 Reasons to Offer Online Booking
- 7 Ways to Optimize Your Salon Scheduling
Marketing Your Salon or Spa
Are you looking for practical ways in which to market your salon or spa? Do you find yourself at a loss for new and exciting ideas for promoting your products and services? Here are some tips to help get your marketing going and keep it on track, plus some simple ideas for promotions.
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- Mission Statement, Tagline, or Slogan – What Does Your Salon Need?
- Dos and Don’ts of a Great Salon Website
- Tips for Optimizing Your Salon’s Web Presence
- How to Create Effective Salon Newsletters
- Strategizing Your Salon Social Media
- 5 Tips for Handling Bad Salon Reviews
- 10 Reasons You Need Text Message Marketing
- Text Message Marketing Best Practices for Salons
- 25 Salon Marketing Ideas to Grow Your Customer Base
Building, Maintaining & Incentivizing Customers
There are many ways to build, maintain, and incentivize customers, keeping them returning for more pampering at your salon or spa. In addition to strong marketing and promotions efforts, it’s important to keep happy clients wanting more and to get them to refer others so your business can continue to grow and prosper.
- 7 Salon Business Ideas To Get More Clients
- How to Build a Salon Clientele for Any Stage of Your Career
Client Retention
Have you ever wondered what it is that keeps clients coming back for more? Why do some customers leave while others stay as if they were nearly family? Whether it’s their hair, makeup, facials, lashes, massage, waxing, or nails, clients naturally expect the service that you provide to be stellar. That’s a given. The truth is that what keeps them coming back for more has little to do with the salon or spa services that you offer. It’s more than that. Their decision to stay a client is all about how they feel after walking out of your door.
So, the question is, how do you keep customers coming back time and again? Here are some suggestions to help keep your clients happy and clamoring for more.
Loyalty & Rewards Program
For a great way to reward your loyal salon or spa customers, consider offering a client loyalty program. It’s an ideal way to thank longtime customers and incentivize new ones. Your bottom line will love you for it!
Client Referrals
Whether you are the owner of a multi-station salon or spa, an independent contractor in a booth rental facility, or flying solo in a salon or spa suite, coming up with successful ways to grow your business can be costly and time-consuming. Two things for which you likely don’t have an abundance.
How to Solicit Client Referrals
Staffing, Training & Management
Running a salon or spa is a lot of work and typically requires the help of others to make it happen. Although you don’t want to incur unnecessary costs by overstaffing, you do want to be sure that you have enough help to manage the workload.
- Staffing, Training & Management for Your Salon or Spa
- How to Recruit, Coach & Keep the Best Talent in Your Salon
- Inclusion in the Salon
Motivation Factor
It’s a simple fact that your staff will not be as motivated or dedicated to your business as you are. You want your passion and enthusiasm for the business to be contagious, but your team may perceive things differently. The reality is that by not having a stake in the company, there’s just not as much in it for them as there is for you. It is, however, possible to motivate your employees without giving up shares in the company.
The Next Generation Workforce
As Millennials age into their thirties, Generation Z, a new and vibrant wave of would-be professionals, is emerging. Gen Z’s, or those born after 1995, have an advantage over their Gen Y predecessors. As the first digital natives, this energetic bunch has grown accustomed to personalizing their path for knowledge, devouring information at a rapid pace. Thanks to the internet, Gen Z is far more resourceful and informed than generations past. Is your salon ready to market to this new crowd, let alone hire them?
Harnessing the Force of Generation Z
Handling Payroll
No matter what type of business you have, when you take on staff, you also assume responsibility to pay them. However, how often and what method you use to pay your team is up to you. You can pay weekly, bi-weekly (every two weeks), or once a month. Some workers want a physical check, but many prefer direct deposit into their bank accounts. Regardless, you’ll need to set up a payment schedule for your workers and decide how that payment will be distributed.
Handling Payroll for Your Salon or Spa
Employee Perks and Bonuses
When it comes to attracting the ideal talent to work in your salon or spa, employee perks may sweeten the pot. In addition to a base salary plus any commission, consider these added perks.
Continuing Education
One significant aspect of salon or spa operation is continuing education. To stay relevant and keep yourself and your staff up on current trends, techniques, and processes it’s vital to implement a policy supporting advanced learning. Education needs to be available to everyone from reception and management to every service provider and assistant.
Continuing Education for Your Salon or Spa
Running an Efficient Front Desk
The impression clients have of a salon or spa starts at the reception desk. This vital frontline position is the command center for the business and should be managed by highly attentive and detail-oriented people. You want them to be friendly and sincere, with an innate talent for customer service, all while watching out for the welfare of the salon or spa and its staff.
Whether you are running the front desk or hiring someone who will, these tips will keep your salon or spa humming along while offering the best possible experience for your clientele.
Running an Efficient Front Desk for Your Salon or Spa
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Cleaning & Maintenance
Covid aside, salons and spas require a fair amount of cleaning, maintenance, and general upkeep. The key to maintaining a clean and well-running facility is to plan for its care on several levels. Here are some suggestions to help keep your salon or spa in top shape.
Cleaning & Maintenance for Salons & Spas
Planning for Success
There is nothing worse than having more business than your salon or spa can handle. Whether it’s increased client spending around the holidays, an at-capacity salon or spa in terms of operators or available appointments, or not enough room to seat awaiting patrons regularly, the last thing you want to have to do, is to turn away business. Or worse, lose clients because they become frustrated. At the same time, you don’t want to expand too quickly, as it could all come crashing down on you in the lean times. The only way to avoid this problem is to plan for growth so you and your team will be prepared for it when it does come.
Planning for the Success of Your Salon
Ready for Rainy Days
As a business owner, you will face lean times – it’s just part of doing business. These business hurdles can be an unusual lull in bookings, a staff walkout, a higher-than-expected price hike in your overhead or cost of goods, an owner illness or accident, or some sort of catastrophes such as a fire, earthquake, flood, or any other natural or another type of disaster. The question is, are you ready for the proverbial rainy days ahead?
Is Your Salon or Spa Ready for a Rainy Day?
Balancing It All
Working long days is nothing new to hairdressers or spa professionals. In some cases, the workweeks can even seem endless. Because of the industry’s competitive nature, salon and spa owners find themselves offering more value to the customer to stay in business. However, more value for the customer usually results in more extended hours and more responsibilities for everybody during peak seasons. These extended workdays and weeks can add stress to the work environment and strain workers at all levels.
Getting Motivated
We’ve all fallen victim to “I’ll get to that later,” and for a salon or spa owner, the consequences of putting things off can be substantial. Repairs are not tended to, supplies go unordered, and bills pile up. The pains of this neglect eventually trickle down to your staff, affecting productivity and morale. This situation naturally hurts where it counts with customer service and, ultimately, your bottom line. While tools like a reward system for every completed task can help in the short term, shaking off the procrastination bug requires that you dig deep to the root of the cause.
Improving Business Practices
These days, it’s just not enough to put in double-digit hours each day or to endlessly promote your salon or spa. Only time will tell if a business is successful, but in the meantime, there are a few simple ways to determine whether yours is on the right track.
Controlling Your Overhead
An essential factor in successfully managing a salon or spa is keeping tight control of your overhead expenses. It’s so easy for those small day-to-day expenditures to get out of hand, especially during the busy season, but everything can be kept in check with a bit of planning and persistence.
Thank you for downloading The Ultimate Guide to Starting a Salon. We do hope that you found the information useful. For more information about our comprehensive suite of salon and spa scheduling and management tools, please visit Rosy Salon Software.
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