Deciding to open your own beauty salon can be a terrific way to start your own business while still pursuing your passion. There are many steps you must take before opening your salon, as well as considerations you should make in order to set yourself up for success.
How to opening a Beauty Salon or Spa
1. Create your business plan.
The best, first step you can take is to create your business plan. There are many different templates available online, but the key aspects of a business plan are:
- Target Markets
- Business Goals
- Analysis of the Industry
- Financial Outlook and Forecasting
Having a strong, complete business plan will allow you to better complete all of the other steps outlined below and is one of the most necessary pieces of paperwork you can provide when seeking to fund.
2. Determine what type of services you will offer.
Your beauty salon can specialize in hair styling services or you can choose to increase your service offerings to include things like facials, skin care, makeup, manicures, and pedicures. By determining what services you want to offer you’ll be able to figure out a few things:
- How much space you’ll need
- How many people you’ll need to hire
- What types of supplies you’ll need
- What equipment you’ll need
All of these elements will be extremely important when you move forward with the other steps outlined below, especially in regards to securing financing.
3. Determine what type of equipment you will need.
Once you have a complete list of the services you will offer, generate a list of all the equipment you’ll need, as well as the associated costs. When accounting for cost, make sure to include service contracts for any machines that may need ongoing maintenance.
4. Determine how many employees you’ll want to hire.
Most salons need to hire a staff. From an appointment setter to aestheticians to hair colorists and hair stylists, you’ll want to be sure you have a staff large enough to meet demand while also keeping everyone gainfully employed. Another thing to consider is your salon hours; if you plan to be open more than eight hours a day, you’ll probably need to consider multiple shifts which might require more employees.
In addition to determining the number of employees, you’ll want to forecast salary and benefit costs. Make sure that you have a good idea of the current rates being offered in your area so that you’ll be competitive and attract top talent.
5. Determine how much money you need.
Based on the services you’ll offer, the equipment you’ll need and the number of people you’ll hire, as well as the type of space you’ll need, you should be able to accurately forecast how much money you’ll need to start your business.
This might also be a good time to determine what type of business you’ll have: LLC, partnership or corporation. Each offers its own benefits and drawbacks, but for legal reasons and tax purposes, it is important to make sure your business is set up correctly.
6. Investigate the required licenses and associated fees.
First, you’ll need a business license issued by your state’s Secretary of State Office.
Secondly, all of your aestheticians and hair stylists will need cosmetology licenses to actually ply their trade. Licensing requirements vary by state, but many require that you graduate from cosmetology school, work as an apprentice with an experienced stylist and take a state exam.
7. Set up your accounting for success.
All businesses need a Tax ID number in order to file annual taxes with the federal government. There are different types of Tax ID numbers, including an Employer ID Number (EIN) for businesses with employees.
Additionally, you’ll want to have business insurance. Insurance will protect you from different forms of liability, including being sued by clients, as well as help to reimburse you if any equipment is lost or stolen. Choosing the right type of business insurance might seem daunting; consult with other beauty salon or spa owners for an idea of what similar businesses find necessary. It’s important to note that in most states, business insurance is required for any establishment where there is contact between employees and clients.
You might also consider consulting with an accountant at regular intervals during the first year of your business. By checking in with a professional and having him or her review your books will make filing taxes at the end of the year a much simpler process. An accountant can also ensure that you have covered your bases in regards to taxes and fees, which hopefully allow you to avoid any penalties.
In general, the process of opening your own beauty salon or spa will be a time-consuming task, but the reward will be the ability to be your own boss and successfully manage your business for potentially years to come.