How to Start a Salon Business

Many people aspire to start a business and work for themselves. Far fewer take action on this dream. If you dream of starting a salon business, chances are you already know it is going to take quite a bit of action, effort, and time to succeed. However, if you have the drive and are willing to put the time in, you will do just that. This article is the deep dive that every aspiring salon owner needs to read before they start their business. It provides a step-by-step outline of the preparation, beginning stages, and the practices of successful salon business owners.

Table of Contents

Survey the Market
Plan Your Specialty
Business Plan Write-Up
Legalize Your Salon
Determine Funding
Build Up a Team
Provide Incomparable Value
Market Your Salon

Eight steps do not seem like a lot, but you will put a great deal of time and effort into these eight steps. You may need to brace yourself for an intense few weeks ahead as you put this all into action, but you can also prepare yourself to watch your dreams finally come to life.

Step One: Survey the Market

Before you dive in with your salon business, you need to get a sense of the needs of your community. This act of listening before you move forward in business is often called “market research.”

Market research accomplishes many important things for you, your business, and your future customers.

Is This A Need?

First, completing market research will give you a clear picture of whether or not a salon business is needed in this community. If no one seems interested in a salon, the market may be too saturated or there might not be enough of your ideal client for it to be worth your effort,

An essential aspect of asking this question of your community is that you are prepared for any answer. It will be a fruitless effort if your mind is closed to any answer other than the “yes” you hope for.

In reality, you may hear many other answers:

- - No
  - Yes, but not yet
  - Only if you…

You may not want to hear the answer you are given, but you must walk into each conversation with an open mind ready to receive whatever answer you are offered. This is the only way to be sure that you are building your business in a way that the community will welcome rather than reject.

How Much Will People Pay for this Business?

It may feel awkward to ask people about how much they would pay for your potential business, but this is essential information for you to have. How else will you know whether or not you can support yourself with this new endeavor?

Sometimes people are interested in having new businesses move into their community but do not personally plan to patronize them. Be direct in asking whether or not your interviewee would ever utilize your services. Even if you need to ask it anonymously to make them feel comfortable answering, you need to have this information.

What type of Salon Business is Desired?

When completing market research, you also want to get a clear idea of what type of salon your community wants. Salons often provide many types of services and you won’t know which of these services your community is most interested in until you ask them.

Here are a few salon options to get you started, but be sure to allow space for your interviewees to share any other ideas they may have as well:

- - Haircutting
  - Hairstyling
  - Hair coloring
  - Hair waxing
  - Nail treatment
  - Skin treatment
  - Massages
  - Tanning
  - Natural remedies

The needs of your community could drastically affect your business model. Be sure to have a clear idea of what they are looking for before you decide what services to offer.

What Type of Customer Are You Targeting?

As you talk to various people in your community, pay attention to what demographic emerges as your ideal customer. You will know you have found this type of person when you start to see trends in the age, gender, and life circumstances surrounding those who are most interested in your salon business.

Take quality notes on this ideal customer demographic. Specifically, you can note the following:

- - How old are they?
  - What do they do for work?
  - How do they live their lives?
  - What is their income level?
  - What does their family structure look like?

Once you have determined who your target customer is, you can look for them specifically and question them further than you might any other person. Understanding what this person hopes and dreams of in a salon is crucial to providing a salon business that will succeed in the local market.

Survey the Competition

Your ideal customers are not the only people you want to scope out before diving in with your salon business. You will also want to spend some time asking questions about any other salons in your area.

If you do not feel comfortable speaking with the salon owners directly (which is understandable as they are your future competition!), consider asking some of these questions of those in your community interviews. You might just find someone with some insider knowledge.

- - What other salons are in this community?
  - What do these salons specialize in?
  - How successful are they?
  - What made them this successful or unsuccessful?

Having this insight will help you better understand the established salon scene in your community. It may even give you a helpful insight concerning what you can improve on. For example, if another salon has a particular weakness, you could consider making that weakness one of your focused strengths.

Other Businesses

It may also be beneficial for you to have some initial conversations with other business owners in your area. Making these connections early on might provide you with future partnerships in joint endeavors.

Ask how you can be helpful to them as a salon and see where this relationship leads.

Will You Make Enough?

Finally, at the end of all of your market research you must ask yourself as directly as possible: is this salon business going to make enough money for me to continue?

This concept of “enough” may mean many things to different people.

For some salon owners, turning a profit right away will not be an urgent need. They have money in the bank and time to allow their business to grow. Other owners will need to see profit as soon as possible or they will not be able to support their family.

As long as you are honest with yourself about your need and your business’s likelihood of survival, you will be able to make an informed decision of whether or not to move forward. Once you have made the conscious decision to move forward, it’s time to move on to step 2.

Step Two: Plan Your Specialty

This is where all of your hard work conducting market research finally pays off.

Planning a specialty for your salon business means that you will decide what niche your salon will be based in. Specializing in your salon business will help you stand out to your ideal customers and help all others remember your salon in particular.

Look for the Need

One way you can niche your salon business is by addressing a need in your community.

Now that you have completed all of that market research, it should be clear to you what the community is looking for. This is one of the best ways to decide on your specialty. It not only ensures you are selecting a niche that will be profitable, but it also shows the community that you are paying attention and there to help.

Don’t Forget Your Passions

When considering how to specialize your salon, remember the passions you come to this business with. If you can find a way to tie in some of what makes you you, your business will certainly have an extra spark of life with every move you make.

For example, if you are a health-conscious person, you might consider filling your salon with as many all-natural products as possible. You can provide samples of these products or even sell them in your waiting area. You can also consider diffusing essential oils in your salon or offering more holistic health remedies as you are comfortable.

While you won’t win every customer with a niche like this and may even turn some away, it is highly likely that if your specialty matters to you, it will be important to someone else too. These people may even be willing to pay a higher price to go to a salon like this.

A reminder on passions: do not be fooled into thinking that nothing else besides your passion matters. Yes, passions are important, but the desires of your community also need to be considered. If your passion niche does not come up at all in any of the market research you conduct, you may need to change your trajectory to align better with the local need.

Specialization Ideas:

If you need a little assistance determining how to niche your salon business, we have compiled a list of some possibilities. As stated, make sure to balance these ideas with the needs you discovered in your market research as well as the passions you bring to the table.

The Pampering Salon

One way to specialize your salon is by making it the most relaxing place people can go to. There are many ways to do this, but the best way is always by implementing the features your particular customers most want to see.

For some, this will mean spa treatments and massages. For others, it could all be in the music and atmosphere. Still, others might hope for freebies such as complimentary food and drinks. The idea is that a trip to your salon becomes more than just an exchange of money and services performed. Instead, it becomes an experience.

The Natural Salon

We mentioned this one earlier. Making your salon the place to go for a natural beauty service could be just what you need to do to capture the attention of potential customers.

While some people might just see this specialty as a nice touch, there are many others out there who will only use natural products and treatments. Staying away from chemicals may be difficult to achieve as a salon, but you are sure to earn some hearts from this effort.

The Hip Salon

Some salons specialize themselves by appealing to a younger generation. This can be accomplished through décor, music, and even the people you hire to work for you. Portraying a hipper vibe may turn some people away from you, but if you niched right, it will have many others running towards your salon business.

To do this well, make sure you include younger folks in the design of your salon business. You won’t get very far by guessing what they are interested in, so find some younger folks you trust and ask them to be part of your team.

The Upscale Salon

In a similar vein, you can use your décor, music, and employees to portray a more upscale image to your community. This may even allow you to increase your prices like the ones who would be more attracted to this business specialty would be willing to pay more for it.

Again, make sure to seek outside support if you are not sure what types of décor, music, or people to fill your salon business with. People in this particular niche will likely be able to tell if you don’t have much experience in more upscale businesses, so rather than fake it, ask for help along the way!

The Parent-Friendly Salon

You can make your salon business especially parent-friendly by providing care for any children who might come along to appointments.

Providing this kind of service will allow your busy Moms and Dads to truly rest and rejuvenate during their visit with you. Yes, it will take some extra funding to properly compensate whoever is entertaining the children, but you will likely make up for this additional expense when you win the hearts of every parent in your community.

The Community Salon

Every business needs to decide how they will interact with their local community.

Some businesses choose to remain isolated, not interacting with any other businesses or inviting the community into their establishment for anything other than the service they already provide.

Others, however, intentionally decide to be an active presence in their area. Should you choose to go this route, this decision will likely earn you some points with new potential customers.

Many people take pride in the town or city that they live in and when a business makes a conscious effort to be part of this community, they are taking pride in that area as well.

One way to demonstrate this pride is by participating in community events. This could mean sponsoring local races, offering coupons in other local stores, or offering free services as a part of local fundraisers.

Some businesses will even work with other businesses that are local to them to share one another’s merchandise and promote each other’s services. When you are considering what businesses to partner with, spend some time contemplating who your ideal client is.

You might not want to partner with every single business in your area, but there might be a select few that would appeal to your target customers. By providing an opportunity for your customers to patronize both your salon and another business they frequent, you are making their lives easier and providing additional community value along the way.

Step Three: Business Plan Write Up

An important part of establishing any type of business is writing up a business plan – your salon business is no exception!

Your business plan is a written document that showcases all of the hard work you put in during your market research. It breaks down the highlights from these important conversations and shares them in a way that is easy to review.

The crafting of this document as well as the final product itself can be helpful for many different people.

First, the actual writing of the business plan will likely help you. At first, it may only help you by giving you an extra boost of confidence – the kind that comes when you see all of your hard work and numbers crunched finally on paper together.

Once you get started in your salon business, this business plan may also help you by keeping you on track with where you initially intended to go. As businesses start-up and start to grow, it can be very easy for owners to get distracted with the many tasks that need to be completed as well as their ideas for the future. Having a business plan will help you stay the course when you are pulled in multiple directions.

Next, if crafted well, this business plan might just help you secure some funding. If you decide you need or want to apply for a loan to assist your salon business financially, you will likely need to provide a business plan to any potential lenders.

Seeing a plan laid out with all of the research and data included helps lenders feel more confident about lending out their hard-earned money. Typically, people like to see some proof that they will make their money back. Your business plan may be as much proof as you can offer them.

Finally, your business plan may be helpful to others in your life who need some convincing that your new endeavor is a worthy one. Even if you have the most supportive family in the world, it will encourage them to see the way you have carefully planned the path of your business. It demonstrates just how serious and prepared you are for the long road ahead.

This will ultimately be beneficial for you as well – when your family can be more encouraging, you will be able to experience more encouragement along the way!

Salon Business Plan

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

We will dive into many of these topics later on. For now, here are some basics that you should know:

Basic Business Information

This is the initial section of your business plan where you can list all of the essential information a reader might need to know about your company. Include your name, contact information, business structure, and any essential legal information.

It is better to include more information than too little in this section. You do not want your readers to be confused about who you are or how you operate. Especially not if they are a potential lender!

Mission Statement

This is where you get to tell about what makes your salon business special. Be sure to craft a mission statement that you truly believe in and that you can bring everyone involved in your business on board.

Many businesses have mission statements that they cannot even remember, but some of the best companies have strong mission statements that they believe in and focus on daily.

Initial Research

This is where you can showcase your market research. You will have much more information than you need to put in your business plan, so try to piece out the relevant data to show readers exactly how you have determined there is a need for a salon business in your area.

Financial Analysis

Again, remember that you are trying to persuade readers that your business endeavor is a worthy one. This is particularly true if those leaders are going to be lending you money and reading your business plan closely to determine whether or not they will be able to make it back!

Company Procedures

It might be a little overwhelming to consider what procedures you want to put in place in your business before it even begins, but this is a great way to set your salon business up for success.

You can always make changes to these policies over time. For now, make your best guess and make a note to check back a few months down the line to see if anything needs to be changed.

Marketing Plan

Finally, once you have finished all of the hard work of starting your own business, you need to make sure people know about it. We will have an entire section dedicated to marketing towards the end of this article. At this point, recognize that it is an essential aspect of any successful business.

Who Can I Share this Document With?

Be careful with showing your business plan to just anyone. After all, this is the plan for your business, so you would not want it falling into the hands of a competitor.

Feel free to share this document with those who “need-to-know” what’s inside. We would consider family on this level as well as any potential financial partners. Finally, you may decide that some of your employees would benefit from having access to this plan.

It is your plan and it is ultimately up to you to make wise decisions when sharing it. As long as you are not posting it online for everyone to see, you will probably not run into any trouble.

Step Four: Legalize Your Salon

Don’t walk away just yet! We know that talking about legal requirements can be one of the most nerve-wracking aspects of starting a business for many entrepreneurs, but we hope you will stick with us.

Just because you do not have all of the answers at this moment does not mean you never will! Take your time and seek out guidance from trusted mentors and professionals along the way. It may seem impossible now, but if you take it one step at a time, you will get there.

Salon Business Structures

There are many options to choose from when determining a business structure for your new endeavor. This decision will affect both your financials as well as how your company operates.

Below are a few business structures that you can consider:

Sole Proprietorship

This business structure is the default of any business, making it one of the easiest business structures to hold. This comes with downsides though, as sole proprietorships are one of the least protective business structures. This means it may make sense at the beginning of your business journey, but it might not be the best fit for the long haul.

Limited Partnership

If you have multiple owners and would prefer to maintain a simple structure, a limited partnership might be for you. One of the partners has unlimited liability and everyone else has limited liability and limited control of the business.

Limited Liability Partnership

Limited Liability Partnerships are slightly more complex than Limited Partnerships. In this structure, liability is offered to all owners.

Limited Liability Company

Limited Liability Companies are more protective business structures, pending all requirements are followed. They do not force their members to pay a corporate tax, but they do require members to pay self-employment taxes.

Corporation

There are a few different types of corporate structures (C Corp, S Corp, B Corp, Close Corporation, Nonprofit Corporation). If you think a corporation might be for you or want to learn more about the differences between your options, be sure to contact a trusted accountant or lawyer.

Cooperative

Money generated through cooperatives is given to user owners. These businesses also typically have a board of directors, officers, and members who can vote on how the business will move forward.Register Your Business

Next, you need to be sure to register your salon business in as many ways as is required of you. This might be a bit overwhelming, but rest assured that you have already completed all of the difficult work through your market research and business plan. Now you just need to fill your answers into some required forms.

State Registration

Start with your state registration. This should be a simple process, though different states have differing requirements for registering businesses. There will likely be a fee attached to this registration, but it should not break the bank. Your state may require you to develop and submit an Operating Agreement. If they do, be sure to give this document much time and focus so that you do not have to redo it too soon.

County Registration

Many cities and townships require some type of local permit for business owners to officially operate. Often this will look like a zoning permit, to make sure you are not illegally using your land.

Federal Tax Number

You will also likely need to apply for an Employer Identification Number. Unless you choose to operate as a sole proprietor, this number will assist you with your finances and taxes. This is a simple registration that can be completed right on the IRS’s website.

Set Up a Business Bank Account

This is the point in your business journey where you will need to start separating your money. From here on out, you must keep your finances in a different bank account than your business income and saving. This helps to prevent you from becoming personally liable for any legal issues that your business may fall into.

To sign up for a business bank account you will need the EIN you acquired in the previous section. If you did not need an Operating Agreement for any of the other registrations you completed, you will likely need to take the time to craft one now.

Step Five: Determine Funding

If you know that you will need extra funds to make your salon business dreams a reality, then this section is for you! While not every business owner will need to find a way to acquire funding outside of what they give to their business themselves, the reality is that most businesses will start with some sort of financial need.

Thankfully, there are many avenues to choose from to make sure your business is well funded.

Borrow Money

Some business owners will borrow money. You can do so by applying for a loan. If you choose this route, keep in mind that you will need to pay this money back eventually. It would be wise to pay close attention to any rules and stipulations surrounding the money you are borrowing.

Find Investors

Finding investors to help fund your business is another excellent way to make sure you have the start-up money you need to make an impact. Investors can be people you know or someone outside of your immediate circle.

Whether you know them well or not, make sure you understand any strings attached to this investment. Different investors will require different agreements – make sure you are clear on what your investors are asking before signing any legal documents.

Apply for a Grant

Some businesses can apply and receive free money for their business. These can vary widely based on your area and what grants are available at the time. You can check out grants.gov to see if you immediately qualify for any national grants. If you do apply, be certain that you meet all of the criteria so that you do not find yourself in the messy situation of needing to pay back grant money.

Work for Your Money

Some business owners will hold a part-time or full-time job while they are getting their new endeavor off the ground. This may not be ideal, but if you need the money and cannot get it any other way, you may need to sacrifice in this way to get started.

What Are the Funds For?

As a business owner, you should have this answer before you ever seek out outside money. As a salon owner, there are many expenses that you could use this money for:

- - Rent/Mortgage Payments
  - Salon Supplies
  - Cleaning Products
  - Hiring Staff
  - Training Staff
  - Marketing
  - Decorating

Again, you should have a clear idea of what your budget is before ever seeking out funding. This will help you be especially clear about what you can afford, what you need, and where the money will go when you receive it.

Need more information about applying for a loan? Check out this article here!

Step Six: Build Up a Team

Every successful business has a high-quality team.

As a new business owner, it will be your responsibility to seek out and build this team for your salon. Having an effective and trustworthy team will not only give you a more enjoyable experience in running your business, but it will make everyone appreciate your efficiency – including your customers!

Lawyer

Every business needs a good lawyer and your salon is no exception. You might wonder why you would need a lawyer if you are just serving community members with their beauty needs. The truth is that many people do not believe they will need a lawyer until they do. It would be better for you to develop a relationship with someone you trust before it becomes an emergency.

Tax Professional

It’s often best to hire a professional accountant to help with your business taxes. Some business owners will try to do their taxes, but there are much better uses for your time at this stage and they must be done correctly.

Board of Directors

Some business structures will require the business develops and maintains a board of directors to function. Even if you are not required to have this group of people, it may be helpful to gather a group of people who can give you feedback about your business as it develops.

Mentors

Similarly, it can be helpful to have some mentors that you can trust to guide you in the right direction as you start your new salon business. These people should have a range of experiences that they do not possess. Having varied perspectives and experience at your side will make you a more effective leader with a more successful business.

Staff

Make sure to hire staff that fits with your mission and vision for your company. Depending on the size of your business, your customers may end up working with your staff much more than they ever work with you.

For this reason, it is crucial to take your time in hiring only the most qualified employees that truly fit with your mission and goals. Filling your business with qualified staff can only help you in the long run.

Customers

In some ways, your customers are part of your team as well!

Just as you did with your market research, you should always have the needs of your ideal client in mind. As a salon, this might mean checking in with key customers from time to time to see how they believe you could improve in your service to them overall.

Step Seven: Provide Incomparable Value

Now that you have a team of people at your side, it’s time to get to work!

You will likely have many people coming into your salon who are curious about the services you offer, even at the very beginning of your business journey. To increase the number of customers who choose to walk in your door, you will have to read the next section on marketing very closely. For now, we are going to focus on quality.

Providing quality service of incomparable value is one of the surest ways to ensure your customers keep coming back. You will need to start this work as soon as they walk in your doors.

Make sure your salon is a place where people feel welcome and safe. They need to be comfortable enough to let their guard down so that they can experience the pampering that you have to offer them.

Be quick to give anyone who enters your salon as much time as you possibly can. They may have questions about your services, so be sure to answer them in full. As you are speaking with potential customers, make note of as much information as you can:

- - Their name
  - Their service preferences
  - Why they came in that day

It may even be helpful to write some of this information down in a notebook so that you can reference it later. Remembering even the most minute details about a customer and their wishes will make a huge impact on them. This is the kind of value you want to provide every day.

In a way, your customer having a positive experience with you is the best kind of marketing you can offer. If a customer feels accepted, valued, and seen just by walking into your establishment, they will surely spread the word to all their friends.

When people share with friends and family members about a positive experience with a business, their friends and family members are likely to take this to heart. It means so much more to hear of a business’s quality from someone you are close to than it does when you hear it from the business itself.

Step Eight: Market Your Salon

Last but not least, you need to market your salon every day from the day you open your doors onward.

Marketing can have multiple definitions. For now, we are going to focus on two important examples of marketing: offline traditional marketing and online digital marketing.

Offline Traditional Marketing

Many of us grew up before the age of the internet and so we are intimately familiar with offline marketing tactics:

- - - - Flyers
      - Tables at events
      - Knocking on doors
      - Mailings
      - Phone calls

These may seem like simple marketing tactics, but their simplicity does not make them any less powerful. For some people, offline marketing is the only marketing they encounter, as they do not use the internet.

Online Digital Marketing

These days it is rare to find a successful business that does not take part in some sort of online marketing. This can also take many forms depending on your business:

- - - - Website
      - Social Media
      - Ads
      - Email Marketing

One of the best steps you can take in ensuring you have the best mix of quality marketing tactics for your target customer is to check in with a few ideal clients and see what their thoughts are. If a few ideal clients agree with how they are best reached by other businesses, this is likely a good sign that other ideal client would feel the same.

Less Talk, More Action!

While we are thrilled you made it this far in reading this article, we want to stress that the most important step is the one that happens next. It is the step where you decide to take action.

Too many potential business owners spend hours reading about how to start the perfect business without ever taking steps to try it for themselves.

We hope you will not be like these potential business owners. Instead, we hope you will wipe the word “potential” write off of that phrase and get started today building the very best salon business you can.

It may be hard work at times, but we know that if you simply focus on the next step that you need to take, you can make your salon business dreams come true!