All new salon owners should know what will be required of them before officially launching their salon. If you miss any of the requirements for your salon, you can put your business in jeopardy. To help you start your new salon with a solid foundation, we have listed the eight requirements to start a salon, along with the details you need to know.
The requirements to start a salon include:
- State Cosmetology License
- Business License
- Building Permits
- Salon Retail Seller Permit
- Federal Employer Identification Number (EIN)
- Business Plan
- Business Insurance
- Business Accountant
State Cosmetology License
The very first requirement you need to obtain before opening your own salon is getting your cosmetology license in the state where your salon will be located. Even if you don’t plan on providing services yourself, most states will require the salon owner to have a cosmetology license before they can open their salon.
The length of time it takes to get your cosmetology license will depend on the school that you attend. You can get your license in as little as eight months, and it can take up to 2 years. It will also depend on how much time you have available to put towards your school.
The requirements to get your cosmetology license will depend on your state and what your state requires. When you start looking at cosmetology schools, the schools can let you know what will be required to get your license (like how many hours you will need).
If you have your cosmetology license already, we recommend making sure you keep a copy of your license hung up in your salon where your clients can see. By seeing your license and knowing that you’re properly trained, your new clients will have more trust in your salon and in your services.
You do need to keep in mind that all of the stylists that are working in your salon will also need to have a valid cosmetology license. If any stylists in the salon don’t have their license yet, you can put your new salon at risk!
The second requirement you need to get before you can open your salon is your business license. The qualifications to apply for your business license will depend on the specific state that you live in. The requirements will vary per state. Therefore, we recommend researching your own requirements first.
By researching your requirements for a business license first, you will be less likely to miss anything during the application process. Some states won’t let you make any changes to your business license application after you’ve submitted it, so it’s essential to do your research and complete it correctly the first time.
To find out the requirements for your state, you will need to visit the Small Business department on your state’s official website. Most states will have a page where you can see specifically what you will be required to have before you can get your business license. If you have any questions or are confused by any requirement, we always recommend calling to get clarification.
After you’ve done your research and you know the requirements for your area, you can begin applying for your license. Most states will give you the option to apply online. If your state doesn’t give you the option to apply on their website, you will likely need to visit your local courthouse to get your business license.
Once you’ve filled out your application, we recommend going over all the information again and proofreading it. This will help you catch any errors or mistakes before you submit your application. As we mentioned, you want to ensure everything is correct in order to get your application for your business license approved by your state.
If your state allows you to apply for your license online, you will likely also be able to track the status of your application on their website as well. If you can’t track your application online, you can call your local government to get an update. For most states, you will know if your application was approved within 1-2 weeks.
Most states will require salons to obtain specific building permits before you can open for business. While doing your research on your state requirements for your business license, you will likely also find the requirements for building permits. The specific building permits needed will vary per state.
For most states, it is likely that your building will need to meet certain requirements in order to qualify for your needed permits. The reason behind this is to ensure that your building is safe and working properly for your clients that will be entering your building.
Another factor to keep in mind when it comes to building permits is that your building will have to regularly meet compliance regulations to stay open. Many building permits will need to be annually renewed and may be inspected regularly.
Salon Retail Seller Permit
If you plan on selling any retail items in your salon, you will need to obtain a salon retail seller permit before you can sell items. Selling retail items is highly common in salons because it is a great way to bring in additional income. It also ensures that your clients will be using high-quality products that you recommend.
Selling retail items without obtaining a retail seller permit can cause your business to get fined by your state or getting shut down. Investing in a retail seller permit ensures that your salon is operating legally.
The process of getting a salon retail seller permit will vary depending on the state. However, for most states, you can apply for your permit through your local city or state’s government website. If you are not able to find it online, we recommend visiting your local city’s courthouse.
Federal Employer Identification Number (EIN)
Every business needs to have a Federal Employer Identification Number (EIN). You may also hear it referred to as the Federal Tax Identification Number. This number is given to new businesses by the Internal Revenue Service (IRS) as a form of identification.
A Federal Employer Identification Number is essential for you to be able to pay any employees you may have and to file your business tax returns. Your EIN is how the IRS will keep track of your salon and all of your records. Therefore, it is essential for you to keep copies of your EIN in a place that it will be safe and protected.
You can see if you are eligible for an EIN and also apply for your own EIN for free by visiting the Internal Revenue Service website at irs.gov. This step should be one of the first steps you take while getting your business license and starting your salon.
In order to start your salon with a solid foundation, it is essential to create a business plan during the early stages of your business. Your business plan will act as the road map throughout your new business journey.
In your business plan, you should include a thorough description of your business, your short-term goals, an analysis of your competition, a description of your long-term vision for your business, and an explanation of your marketing strategy.
As you get busy with operating your new business, it is easy to get caught up in your day to day activities and lose track of your long-term vision. By reviewing your business plan, you can regularly remind yourself of where your salon is going in the future.
Another reason why a business plan is a requirement for a new salon is for financing. If you plan on applying for business loans or grants to help you finance your new business, you will likely need to have a business plan. Financial institutions will want to see that you have done your research and have a plan in place for your business.
Some states will require you to obtain business insurance before you can legally open for business. Therefore, we have included business insurance as a requirement for opening your salon. Even if your state doesn’t require it, insurance is an essential tool that will help your salon start with the right foundation.
Business insurance acts as a form of protection for both you and your salon. We recommend getting at least general liability business insurance. This form of insurance will cover you if a client gets hurt while they are in your salon.
Without insurance, you would be personally financially responsible for covering any of the medical costs that your client has. You may also face the risk of being sued. However, when you invest in business insurance, your insurance company would then cover the medical costs for your client.
When you are searching for business insurance, we recommend calling around to get various quotes first. By getting quotes from 3-5 insurance companies, you will ensure that you are getting the best price and the best policy for your salon.
When you call insurance companies to get quotes, you want to ask what coverage the policy includes, the premium of the policy, if you have to pay upfront or can pay monthly, what your deductible will be and if there are any other benefits that come along with the policy.
Finances are the backbone of every business, which is why it is essential to invest in a business account when you are starting your own salon. By ignoring your business finances or not getting an accountant, you can take the risk of putting your salon in danger.
A business accountant can help you ensure that your business finances are set up for success. If your business needs to make any changes financially, your accountant can let you know in advance and can give you recommendations while working together.
One key factor in hiring a business accountant is business taxes. Filing your own taxes is a large responsibility when you own a business. Your taxes will no longer be automatically taken out of a paycheck. Therefore, it is essential to have an accountant who can help you ensure that you are putting enough money away for taxes.
A business accountant can also ensure that you are filing taxes enough times throughout the year and can help you through the filing process. Business taxes are not an area that you want to take chances with for your business. Investing in a business accountant for your salon is absolutely a requirement as you get started and throughout the life of your business.
How big of a location do I need for my new salon?
The size of your location for your new salon will depend on your budget and your ultimate goals for your business. You need to keep in mind that larger commercial buildings will often result in a higher cost as well.
If you plan on growing your salon quickly, then we recommend investing in a larger space. If your space is smaller, you will be limited when it comes to your business growth. Either way, you need to ensure you have enough space to fit your stylists and clients comfortably.
What experience do I need to start my own hair salon?
Before opening your own hair salon, we recommend having thorough experience as a hairstylist first. If you have experience working as a hairstylist in other salons, you will have more knowledge and be better prepared to operate your own salon.
Although new business owners start salons with various experiences, we do recommend having up to 2 years as a hairstylist in another salon before starting your own.
What are the startup expenses of starting a new salon?
When you start your new salon, the expenses you will have at first include your business license, supplies, equipment, your building, and insurance. Other expenses you could also invest in our marketing and employees.
You can keep your expenses down by shopping around for your supplies and equipment. We also recommend shopping for items in bulk when possible.
Looking to start your own Salon? Get the documents you need to get organized and funded here.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.