How to Start a Hair Salon Business

Many people grow up fascinated with hair and interested in styling hair for the rest of their lives. Unfortunately, far fewer people grow up to pursue this field of work as a business. If you have ever thought of running a hair salon, you might have been discouraged over the years by the amount of time and effort such a feat will require. However, if you truly have a passion and call for this line of work, you will make it happen. This article is the perfect step-by-step training for anyone who desires to run a salon of their own. The combination of your drive and determination with this article will help you feel confident throughout the entirety of your business journey, from beginning steps to a successful thriving salon.

Table of Contents

How to Start a Hair Salon Business:

1. Research the Community You’re In
2. Determine a Business Specialty
3. Craft a Business Plan
4. Legalize the Hair Salon
5. Establish Funding
6. Build Your Team
7. Provide Consistent Value
8. Market the Hair Salon

We often hear that eight steps seem like too few, but there is much effort required on your part between each of these steps. Prepare yourself for a busy few weeks and months ahead as you put all of these steps into action. While it will be a long journey ahead, it will also be the journey that allows your long-held dreams to finally become reality.

Step 1 – Research the Community You’re in

This is an important stage of any business venture. You need to completely understand your community and their needs before you jump in with your new business idea and plan. This intentional understanding and listening are called “market research.”

Market research will reveal a great deal of important information that will be necessary for you to know for moving forward. This information will aid you as a business leader, the success of your company overall, as well as your future customers.

Do People Need Your Business?

The first answer that you will get a clear understanding of is whether or not a hair salon is desired in the community you are planning to enter. While you may be very excited about starting a hair salon and even keen on placing one in this location, the market might just not be ready for you.

The market may simply be too saturated or hair salons might not be in demand at all.

A crucial aspect of asking this question of the people in your community is that you are ready to hear any answer come back to you. It will not be helpful if you are closed off to any answer other than the one you want to hear.

You may hear a range of answers come back to you:

- Yes
- No
- Yes, but maybe not right now
- Maybe, but only if you…

You might not want to hear any of the answers that come back to you, but instead, walk into every conversation that you partake in with an open mind. This is the only way you can be positive that you are starting your business in a way that your community will accept rather than reject.

How Much Money Are Your Services Worth?

Once you determine that there is interest in your services, you need to determine how much of a monetary interest there is in your business.

It may feel a little odd to ask the people you are interviewing how much they would pay for your services, but you need to know the answers to this question before you even begin. Without this information, how would you know whether or not your future business will be profitable?

Just because you know that there is some interest in your business does not mean that you will necessarily be profitable in your efforts. Sometimes people express support for a new endeavor but are not necessarily interested in investing money into the services.

You need to be straightforward in asking whether or not the person you are talking to will pay for the type of services you are planning to offer. If so, how much are they willing to pay?

It may help to ask these questions in a way that allows people to respond anonymously so that they do not feel pressured to answer in a certain way for personal reasons.

Check out our article on the highest revenue generating services HERE.

What Hair Salon Services Are They Most Interested In?

Another answer you can focus on securing is what type of hair salon services the community is most interested in. Even salons that specialize in hair will often provide a selection of services.

They may provide multiple types of hair services, additional beauty services, or more.

Here are a few options to offer to the people you interview, but make sure you also allow space for your interviewees to share any additional ideas that come to mind as well:

- Hair cuts
- Coloring
- Styling
- Waxes
- Tanning
- Nail treatments
- Skin treatments
- Massage

The answers to this question should affect the focus of your business. Make sure you understand the data you collect before you decide on your specialty.

Who Are You Targeting?

As you talk to all different types of people in your community, pay extra attention to what recurring details emerge surrounding the people who are most interested in your business.

There may be a trend in demographics such as age, gender, and circumstances surrounding the ones who are most intrigued with and willing to pay for your services.

These are the customers on who you will want to take the most notes. Make sure to keep track of:

- How old is this person?
- What does this person do for work?
- What does this person value?
- What does this person do with their free time?
- What is this person’s income level?

Once you have determined more details about this potential customer’s life, you can use their insights to guide your future salon choices.

Survey Your Competitors

The people who are most interested in your new business are not the only people who you can learn from throughout the market research phase. You can and should also spend time understanding the competitors to your business.

If you are not comfortable reaching out to other hair salon owners directly, consider asking questions about them. There are likely multiple people around your community who have insider knowledge about the competitors in your field.

Consider asking these questions of the community members you interview in your market research:

- What other hair salons are presently operating in this community?
- What services do the other hair salons focus on?
- How successful are these other hair salons?
- What makes them successful or unsuccessful?

These insights will help you determine what is most needed in your community as well as what type of services are already well-loved.

If you notice a weak spot, keep it in mind for later when you consider your salon specialization.

Other Local Businesses

Additionally, it may be helpful to start establishing relationships with other local businesses. You may be able to help one another in the future, so starting these partnerships now is a wise idea.

Ask the other business owners how your potential hair salon might be helpful to them in the future. This information could also offer you some options when it comes to deciding on your specialization.

Will You Make Enough?

Last but not least, you must come to the determination about whether or not your hair salon business is going to make enough money for you to continue pursuing it as a business venture.

This idea of “enough” may mean very different things to different business owners.

Some hair salon owners may need to make a profit right away while others will not find profitability as necessary.

Be aware of where you are financially and what you need from your business to be able to reasonably continue pursuing it. Once you have a handle on where you are and where you need to be, you can move onto step two.

Step 2 – Determine a Business Specialty

Finally, the hard work you put into your market research will pay off now that you have all of the data you need to determine a specialty for your business venture.

Determining a specialty for your hair salon is the same as picking a niche for your work. This is going to help you stand out to your people as well as help others to remember your specific salon.

Specialty Option: Community Needs

A very wise way to specialize your hair salon is to use it to address a need that is present in your community.

You likely uncovered multiple needs as you were completing market research. There should be a few options of what your community is looking for that you can choose from.

Addressing a community need is one of the best ways to land on your niche. It is a way to ensure you will be profitable, but it is also a way for you to show your community that you heard what they asked for and are trying to help.

Specialty Option: Passions

Another important factor to keep in mind when deciding on your niche is the passions that you bring to the table.

Your passions are a huge part of what drives you forward in business and if you can find a way to tie these into how you will specialize your business, you are bound to have an extra spark in all that you do.

For example, if you are especially focused on natural or organic living, this might be a way to niche your business too. You could fill your hair salon with the type of all-natural products you might use at home.

There are many other ways to infuse your business with natural or holistic-oriented material. You could sell these products, diffuse essential oils, or offer more holistic health remedies.

While this may take your business far, it’s important to also keep the needs of your community in mind when deciding on a niche. There needs to be some kind of balance between needs and passions. If there is no expressed need for the specialization that you are passionate about, you may need to consider other options that align better with the community’s interests.

Specialization Ideas:

If you need a few ideas to figure out how to specialize your salon business, below is a list of some options to consider. As expressed, make sure to balance the ideas provided along with the needs you uncovered as well as the passions you possess.

The Relaxing Hair Salon

One option for specializing in your hair salon is to make it a place people can go to relax beyond compare. To do this in the best way possible, you need to implement the features that will make your particular community most feel relaxed.

For some people, this may mean spa treatments. For others, it is all about the music and lighting. Still, others will want complimentary snacks and diffused oils.

Make it an experience for your people. But make it the experience they most want to see.

The Natural Salon

As mentioned earlier, you can make your salon the place to go for health-oriented hair services.

For some people, this might even be a make-or-break factor in whether they will visit a hair salon at all. They may refuse to go anywhere that is not completely natural in their product selection.

While this may be difficult to achieve, you will certainly win loyal customers if you do it the right way.

The Trendy Hair Salon

You could also market your hair salon to a younger generation. Often this is done through the decorations, music, and even the people who are working for you.

If done correctly, this hipper vibe will attract a lot of new and younger business to your hair salon. These people may even be willing to pay a bit more, not necessarily caring much about the cost.

If you are interested in niching your hair salon in this way, consider finding a younger person to guide you. It may be very difficult to understand the style and atmosphere of the younger generation without a younger person’s help.

The High-Class Hair Salon

If you are seeking to style your hair salon in a particular way, another way to do so is to focus on higher-end customers. This can similarly be accomplished through your decorations, music, and staff. You would also likely want to increase your prices to create the full environment your upper-class customers would be expecting.

If you decide to go this route you need to get some insight from someone who would be considered more upscale. They will have all of the insights as far as what brands are most attractive to people like them.

It may take you some extra time and money to bring your hair salon up to the standards of higher-class customers, but this will come back to you ten-fold when these types of people start purchasing your products and services.

As always, make sure there is at least somewhat of a need for this type of niche before you dive in. You would not want to spend all of the money it takes to prepare your salon in this way only to find that no one is interested in it.

The Community-Oriented Hair Salon

If you aren’t interested in styling your hair salon to reach a specific demographic, there are still other ways to specialize your hair salon brand in the community.

One way might be to focus on how you can be an asset to the community purely with the space you possess. That could mean making your hair salon available for various groups to meet in as needed.

Another way to accomplish this branding is to be active and involved in your community in as many ways as possible. Volunteering, events, and building intentional relationships will all help niche yourself down as the hair salon that is community-oriented.

Check out our tips for making your business stand out HERE.

Step 3 – Craft a Business Plan

Now that you have completed your market research and carefully considered how you will specialize your business, it’s time to organize your data into a plan.

This plan of business is called a business plan.

Crafting a business plan for your hair salon will be helpful for many different people involved in your business.

First, it is going to be a helpful process for you to complete. It’s easy to procrastinate figuring out all of the details of your business until later, but writing a business plan will help force you to determine those answers now.

Once it’s complete, this plan will also help offer you a boost of confidence when you need it most. You will be able to look to it for guidance, realizing that you have already put a great deal of time and effort into the planning of your business. Now, you just need to live it out.

A business plan is also helpful if you determine you need additional financial assistance in your endeavor. Many lenders and banks will require some sort of business plan so that they are certain you have put detailed thought into your business.

We will talk more about securing funding later, but for now, recognize that this step could help make that funding a reality.

Finally, your business plan may be an encouragement to friends and family who need to see some proof that you have a plan for your efforts. Sometimes it is hard for family members to support their loved one’s dream, especially if it is an expensive one that does not produce fruit right away.

Use your business plan to show the people you love that you have a plan guiding you on your way. This will help them see how you are being intentional about your efforts.

Hair Salon Business Plan sections

The sections included in business plans can vary, but these are some helpful ones to get you started:

- Basic Business Information
- Company Mission Statement
- Market Research
- Financial Analysis
- Company Procedures
- Marketing Plan

We will dive into many of these topics deeper later on in the article. For now, here is some basic information you should know:

Basic Business Information

This is where you will list the essential information a planned reader would need to know about your company. Include the business name, your name, contact information, business structure, as well as any necessary legal information.

Company Mission Statement:

Share the niche you decided upon. Make sure that you craft a mission statement that you can believe in and live into each day.

Market Research

This is where you finally get to showcase all of your hard work from section one. Be sure to organize this information carefully. You should not include every detail and interview that you completed. Instead, organize the highlights for a compiled section of need-to-know information.

Financial Analysis

Spend as much time as you need outlining your finances in this section. Keep in mind that future lenders will be reading this information. They will need convincing that you will be able to pay them back for any money they may lend you.

Company Procedures

You can always adjust this section over time, but consider what policies and procedures you would like to start with when you open the doors of your hair salon. These can be policies for your business, your employees, and even your customers.

Marketing Plan

We will dive into marketing more in the final section of this article. For now, you need to know that your marketing plan should be included in your official business plan.

What Happens With My Business Plan?

As we mentioned, having a well-crafted business plan can be helpful not only for your encouragement, but for friends, family, and lenders as well.

While you can certainly share your plan of business with each of these people, you should be careful about who you consider sharing it with beyond the people you know and trust.

You would not want your business plan to fall into the wrong hands. This could give someone else to start your business in your community before you even get a chance to!

Play it safe with your business plan and keep it to those who need to know.

Check out our guide for creating a business plan HERE.

Step 4 – Legalize the Hair Salon

Do not run away just yet.

Yes, talking about lawyers and legal requirements can be especially anxiety-producing for new business owners, but stick with us. It won’t be that bad.

Just because you do not have all of the information you will need to start your business right now does not mean you will never get there. A quality attorney can help you a lot on your way.

Hair Salon Business Structures

There are many options you can consider when you are thinking about how to structure your new hair salon business. This decision will affect your financials as well as how your hair salon operates legally.

Here are a few ideas for you to consider:

Sole Proprietorship

This is the default business structure, making it an easier business structure to decide on. There are some negatives. Specifically, sole proprietorships are one of the least protected business structures around.

This may be the best choice at the start of your hair salon endeavor, but it likely will not benefit you long term.

Limited Partnership

If you have multiple owners and want to keep your structure simple, consider a limited partnership. One partner possesses unlimited liability and everyone else has limited liability. This also means they have limited control of the business.

Limited Liability Partnership

Limited Liability Partnerships are a bit more complex than Limited Partnerships. All owners receive liability.

Limited Liability Company

As long as you follow the rules properly, Limited Liability Companies are more protective business structures. Members are not responsible for corporate taxes, but members do pay self-employment tax.

Corporation

The different corporation structures include C Corps, S Corps, B Corps, Close Corporations, and Nonprofit Corporations. A tax advisor or attorney could give you more information about the specifics of each of these.

Cooperative

User owners receive the money earned through cooperatives. There is also often a board of directors with a cooperative. These members can vote on business proceedings.

Register Your Business

There are many ways that you need to register your business before you will legally be allowed to service hair for money. Thankfully, you figured out most of the necessary details throughout your business plan writing. That means all that is left is to fill in the appropriate answers on the proper forms.

Register with your State

There are bound to be state-specific registration processes, so be sure to check with your local authorities about all of the details.

County Registration

You may also need to register with your county or township. This may require some sort of zoning permit to make sure you are not inappropriately utilizing your home.

Employer Identification Number

You should also register for a Federal Tax Number, also called an EIN.

This number will be helpful for any financial documents you may need to fill out. It is a simple registration that is completed right on the IRS’s website.

Business Bank Account

You will also want to set up a bank account exclusively for your hair salon finances. Keeping your business and personal money separate will help prevent you from being liable for any legal issues that your hair salon may encounter.

To sign up for a business bank account, you will need an EIN, so be sure to register for this number first.

Learn more about the cost of opening your salon HERE.

Step 5 – Establish Funding

Not every business owner will need to secure outside funding to make their dream a reality, but many wills. If you need additional monies to make your hair salon a possibility, then this section is for you.

There are multiple options for how you can make sure your business has the money it needs to move forward and grow.

Borrow Money

You can borrow money by applying for a business loan. There will be a few hoops for you to jump through before you can have this money and you will likely need to pay interest on the money you borrow.

For this reason, we recommend you pay special attention to all of the financial details written into your loan agreement. You do not want to be surprised later when you find out just how much money you owe in interest.

Secure Investors

Investors act in a similar way to loans. They will offer you money if they believe in your endeavor, but more often than not there is a cost involved.

Again, be sure you understand all of the details before you sign any legal documents. You do not want to find yourself surprised, especially when it comes to the future of your business.

Apply for Grant Money

Your hair salon may be eligible for a local or national grant as well. Grants are typically a gift of free money, without any catches written in.

Your best bet will be to ask around if there are any hair salon-specific grants available. If not, there may be local grants that anyone can apply to.

Work for It

Finally, you may simply need to continue working in another fashion to earn the money it takes to live out your dream of starting a hair salon.

This may be discouraging to hear as someone who is starting a new business, but as you work to make this new business a reality, you are earning the right to do what you love.

Put in the time, energy, and effort now and you will reap the benefits tomorrow!

How Will You Use the Funds?

You must have a clear vision for how any of the funds you receive will be spent. Of course, you have many options to choose from as a hair salon owner.

- Building Expenses
- Hair Products
- Cleaning Material
- Staff Paychecks
- Training of Staff or Volunteers
- Marketing Material or Subscriptions
- Decorations

When you have a clear idea of how you will spend the money you receive, you will be much better prepared to justify why you need the money in the first place.

Looking for grants? Check out our article HERE.

Step 6 – Build Your Team

Behind every thriving business is an effective team.

As the owner of your hair salon, you need to be careful about who you allow onto your team. These people will often be the face of your company. There is no possible way you can be everywhere all the time. Hire people that you would be honored to have in your place.

Lawyer

You will need a proper attorney to guide you along your way. Even if you do not think you have a use for an attorney right now, it is better that you start building the relationship with someone you like now rather than wait until there is an emergency.

Tax Professional

You will want to find a qualified professional to help you with your finances. You have far more things to worry about as a business owner than trying to figure out how to properly do your taxes each quarter.

Board/Mentors

Consider collecting a group of people around you who can provide insight and feedback into your business. A board of directors may be required of you depending on your business structure. However, even if they are not required, there is still a lot of benefits to having some intentional mentors.

As you collect these folks around you and your business, make sure at least some of them have expertise in areas you may be lacking in. This will help you have a more effective collective strength than you alone would have had.

Staff

Again, be sure the staff you hire are completely on board with your mission as a company. You need to be prepared to work as a team moving forward.

Especially in the beginning, take care in hiring only the best employees. Filling your business with quality people early on will help you establish yourself as a business people want to patronize.

Customers

Consider customers to be part of your team as well!

You want to keep a few of your most loyal customers close to you so that you can constantly consult them for guidance. They will be the best source for you to understand the desires of your community at a deeper level.

Check out our tips for attracting new clients HERE.

Step 7 – Provide Consistent Value

Now that you are outfitted with a proper team, it is time to get to work on making your business the best in town.

In the beginning, you will likely have quite a few customers coming to check out the community’s new hair salon.

You will need to focus hard on turning these curious patrons into loyal customers so that their visits to your hair salon are not just once and done.

Providing exceptional service is one of the best ways you can keep people returning to your business. There are many ways you can do this and it starts as soon as your patron walks through your doors.

First, make sure your hair salon is a place people can feel good about themselves. They may be nervous or uncomfortable about walking in. Do whatever you can to make them feel relaxed and safe so that they can let down their guard and truly experience all that you have for them

Never rush your customers. Try to give them as much of your time as possible so that they can feel as comfortable about their visit.

As you learn information about new customers, it may be helpful to write it down to reference later. Remembering these details about your customers will likely be very impactful for them.

Here are a few particular details you can take note of:

- Name
- Service Preferences
- History
- Why they came in that day
- Family member names

If you can provide your customers with a positive experience, you are doing the best kind of marketing for your hair salon business possible. You will want to strive for this every single day you arrive at work.

The reason this is so important is that word-of-mouth is the most effective way to get the word out about your business. Yes, you will want to experiment with additional types of marketing (and we’ll get to that next!), but your future customers will be more likely to trust the word of their friends and family than your word specifically.

Step 8 – Market the Hair Salon

Finally, you need to learn how to market your hair salon with every day that you are open for business.

Now, it is likely that you have a specific mindset of what exactly marketing is. You must recognize that marketing can have multiple definitions. For now, we should focus on the online marketing of your business and offline marketing of your business.

Offline Traditional Marketing

Many of us grew up before the internet was as frequently used as it is now. You may be more intimately aware of offline marketing tactics than online tactics.

Offline tactics include:

- Posting flyers
- Hosting tables at community fairs
- Door knocking
- Sending postcards in the mail
- Calling people on the phone

These may seem fairly simple, but they will effectively get the message out about your business. Even though online marketing tactics are important in this day and age, offline marketing should continue to be part of your strategy.

Check out our tips for marketing on instagram HERE.

Don’t Focus on Sales

Whether you are marketing online or offline, you don’t need to constantly focus on selling to the person on the other side of your message.

Instead, try to help the person reading your marketing material in some way.

Can you teach them something? Can you provide them with a friendly tip?

Perhaps you can even focus on announcing a free opportunity rather than advertising your hair salon. You need to slowly draw them into your hair salon business rather than hard-sell them with every chance you get.

Online Digital Marketing

Just as you provided value offline, you can provide value to people online. The best places for you to focus on when providing value online include:

- Your website
- Your social media platforms
- Advertisements run on search engines like Google
- Email messages

When you focus on online marketing as well as offline marketing, you are more likely to reach the most people possible. Another bonus of including online marketing in your plan is that you can reach people that are not located in your community.

Online marketing and, eventually, online sales can expand the impact of your hair salon across the state, country, or world!

Now, Get to Work!

It can be quite overwhelming to take in all of this information all at once.

From legal decisions to community outreach to marketing your hair salon with every day your doors are open, you certainly have a lot on your to-do list.

While it is easy to get bogged down in all that is ahead of you, the most important thing is that you focus on moving forward. Continuously focus on taking the next step in front of you and you will be on your way to opening your hair salon.

Unfortunately, many business owners lose focus and give up before they even get started.

Do not let that be your fate. Create your to-do list and get started today! Each step brings you one step closer to having the hair salon of your dreams.