Top 6 Salon Business Startup Secrets

When you are setting out to create a hair salon business, you typically need all the help you can get. Starting any business is challenging and demanding; thankfully, you don’t have to go at it alone. There are resources available, and people who have already created successful salons can give you hints and tips.

We have condensed all this information into our top 6 salon startup secrets:

1. 1. 1. Make sure you are passionate about your salon.

      2. Identify a need

      3. Build a roadmap

      4. Have a lean marketing plan

      5. Hire, train, and retain the right employees

      6. Be flexible and open to new ideas.

Make sure you are passionate about your salon.

Before you do anything else for your salon business, you need to take a long hard look at your motivation for starting a salon and a good fit for you. 

Owning your hair salon gives you autonomy and freedom that most jobs can’t provide. There’s a price to pay for those benefits, though. Long hours, financial risk, employee conflict, and cumulative stress are a couple of the downsides of owning a hair salon.

To help you decide if a salon is a good fit for you, here’s a handful of pros and cons for owning a hair salon:

PROS

You’re the boss

Starting your hair salon gives you the power to make decisions and operate your business how you want. You can set the tone for your salon and create an environment that fits you and your customer’s needs.

Potential for financial independence

When you take on the risk and work that goes into owning your salon, you are also opening up the potential for more significant income than you could ever obtain as a stylist. 

A high income and financial independence are not guaranteed, but if you build your business the right way and put the hours in, you will likely have more financial flexibility than before.

Recession-proof business

The beauty industry is valued at over $500 billion a year and has shown to be relatively safe during economic recessions. Even when money is tight, people still have to get their hair cut and styled. 

Social environment

If you are someone who loves to interact with people and have exciting conversations for most of your day, a hair salon could be a good option for you. Not only do you get to interact with customers throughout the day, but if you hire the right employees and build a friendly environment, you could have a very tight-knit team and customer base. 

Cons

High startup costs

Hair salons are not a lean startup. You need to rent or buy a location, purchase supplies, and hire employees. You should expect to spend $50,000 at the very least to start a basic salon, but this number can go all the way up to $500,000 depending on what kind of salon you are trying to build.

There is funding available, so don’t let these numbers scare you too much.

High competition

As you know, in pretty much every area, multiple salons are offering the same products and services. This creates a lot of competition, but, as mentioned, a lot are doing the same thing. If you offer something different, you will stand out and create a thriving salon. 

Wear multiple hats

When you are starting, your salon will likely be the:

• • Stylist
  • Employee manager
  • Bookkeeper
  • Marketer
  • Inventory manager
  • Accountant
  • Legal assistant 

To name a few. 

This can be stressful for a lot of people to take on this many tasks all at once. Many people start a hair salon for the simple fact that they are a great stylist and love their career. 

Don’t make this mistake; learn about running a business beforehand or be prepared to hire these tasks out.

With technology these days, you can find cost-effective help via online sites such as:

• • Bookkeeping/Accounting
  • Quickbooks
  • Zipbooks
  • Bench
  • Marketing
  • UpWork
  • Fiverr
  • Freelancer
  • Legal
  • LegalZoom
  • IncFile
  • Rocket Lawyer

Do your research to find what combination is most useful for your business. It is much more efficient to pay someone $15/hr to do your accounting rather than spending hours on it every night. 

Long hours

When you open up a business, the work doesn’t stop when it’s closing time. Being a business owner, especially as a startup, you will be working long hours because you will have many responsibilities that you can’t yet afford to hire out.

This doesn’t mean that once you get things up and running, you will still be grinding out these long days, but in the beginning, be prepared to sacrifice some of your free time for business responsibilities. 

Identify a need

If you’re opening a hair salon and plan on mimicking the competition in your area, you will be struggling for clients. Customers usually stick to what and who they know; if they’ve been going to a salon for five years and are happy with the results, why should they give your salon a shot?

A unique advantage in the market is why you need to identify a need in the marketplace. What are customers not currently getting from the hair salon that you could provide? This is also called finding a niche. 

Some niches that you can target with your hair salon:

• • • Coloring
    • Teenagers
    • Male hair styling
    • Seniors
    • Bridal hair and makeup
    • Eco-friendly products

It is essential to identify niches you can serve when you start because you likely don’t have the resources that other salons in the area have. When you go after specific niches, you can become the “expert” in these fields.

Looking for a stand out salon name? Check out our article here to learn more!

Once you have started to dominate specific niches, you can expand to others from there.

Build a roadmap 

If you have decided that you want to own a salon and have identified one or more niches, it’s time to plan to achieve success.

Your business roadmap is typically called your business plan. Your business plan typically includes sections such as:

• Executive Summary
  • Brief business description
  • Problem & solution
  • Opportunity & competitive advantage
  • Business model
• Company Description
  • Name 
  • Services
  • Position in the market 
• Market Analysis
  • Market area
  • Competition
  • Niches
• Organization & Management
  • Business structure
  • Owners
  • Key employees
• Service or Product Line
  • Overall service
  • Niche products and services 
  • Unique selling points
• Marketing & Sales
  • Marketing plan
  • Brand
• Funding Request
  • What type of funding you are requesting (if any)
  • How much
• Financial Projections
  • Startup costs
  • Break-even analysis
  • Projections (1-year, 3-year, 5-year)
  • Funding repayment
• Appendix
  • Any relevant documents and resources

For startup companies, sometimes it can be not easy coming up with sales and financial projections. Some optional categories you can include in your business plan are:

• • • Key partnerships
    • Key activities
    • Key resources
    • Value proposition
    • Customer relationships
    • Customer segments
    • Channels

Have a lean marketing plan

You don’t have to spend a fortune on marketing to be a successful salon; in fact, we suggest you don’t spend a lot on marketing when you are first starting. 

This is because marketing is a tricky thing to master; it takes time, patience, and experience to get it just right. When you are a startup business, you don’t typically have those luxuries. 

So how can you have a lean marketing plan and still attract customers?

Here’s our recommendation:

1. Have introductory deals/offers to attract clients
   1. Make sure these deals are good enough to persuade customers to give your salon a try but make sure you have an “exit plan” to get them on your normal payscale shortly after the introductory offer.
2. Provide unmatched customer service
   1. By far, the most critical factor in making your marketing plan and your salon successful is the customer service they receive. Once you have attracted some customers, you need to make sure their salon experience is the best they have ever experienced. 
3. Develop a referral program
   1. After you’ve converted some potential customers into enthusiastic, loyal customers, it’s time to have them help you out. Developing a referral program will build loyalty with your current customers while also bringing pre-qualified customers to your salon.

Hire, train, and retain the right employees

Your employees are going to be the ones executing most of the customer service tasks at your salon. If you skimp on the hiring and training process, you will be missing the critical component that makes your salon successful.

The hiring process isn’t as tricky as marketing, but it still takes time and effort to get it right. The most important part is to take the time to get to know the applicants and look at their character, not just their work history.

The training process is another area that takes time. It would help if you spent time with your new hires to get to know them and prepare them for the daily challenges they will face. 

After you put in all the effort to hire and train quality employees, you need to retain your best employees to ensure long-term success at your salon. You can do this in several ways:

• Financial incentives
• Flexible scheduling
• Treating them with respect & kindness
• Giving them a voice for how the salon is run

Be flexible and open to new ideas

It’s important to understand that starting a salon business is sometimes going to be a turbulent process. There will be ups and downs and times when you are overwhelmed and not sure why you started a salon.

To help with this, be flexible and open to new opportunities that will arise. Even though you have your business plan that seems relatively rigid, there is always room to capitalize on unexpected events. If you are unwilling to change and adapt to the marketplace, you will have a much more difficult time succeeding with your salon.

Related questions

Do I need a loan to start a salon?

Most likely. A salon usually costs $75,000+ to start from scratch. If you have that kind of cash available, you can choose not to take out a loan, but you will need a loan for at least a portion of the expenses for most people. 

How much should I spend on marketing for my salon?

Every salon will be different based on your size, goals, and type of salon. A ballpark number for most salons is 5% of revenue gets reinvested for marketing.

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.