Starting a salon or beauty business is exciting — but it requires careful planning. In the U.S., personal care spending is booming: Americans spend hundreds to thousands per year on beauty services, and Statista values the U.S. beauty industry at $69 billion in 2023.
Starting a salon or beauty business is exciting — but it requires careful planning. In the U.S., personal care spending is booming: Americans spend hundreds to thousands per year on beauty services, and Statista values the U.S. beauty industry at $69 billion in 2023.
Women alone spend about $1,800/year on hair, nails, and styling and even men average ~$600/year. This translates to a large and growing market.
Euromonitor data estimates roughly 84,000 U.S. hair and beauty shops (80,000 salons + 5,000 barbershops) pulling in ~$25 billion annually. (IBISWorld even counts ~1.5 million hair & nail salons in 2023 reflecting many small or booth-based businesses.)
Even with strong demand, salon ownership is challenging. Industry reports show only ~50% of new hair and beauty businesses survive 3 years, often due to inexperience or poor marketing.
First-time salon owners (and independent stylists branching out) must therefore be methodical. These steps – backed by real industry data – will help you systematically plan, launch, and grow your salon business with confidence.
1. Craft a Solid Business Plan
A comprehensive salon business plan is your roadmap.
Experts note salons fail “because of bad planning,” not bad haircuts. Your plan should include:
- Executive summary (vision, location, concept), a market analysis (competition and target clients),
- Clear services menu (your “happy meal” of basic and premium treatments),
- Marketing strategy (social media, loyalty programs, local outreach), an operations plan (staffing levels, hours, scheduling and payment systems)
- Detailed financial projections
an executive summary (vision, location, concept), a market analysis (competition and target clients),
a clear services menu (your “happy meal” of basic and premium treatments),
a marketing strategy (social media, loyalty programs, local outreach), an operations plan (staffing levels, hours, scheduling and payment systems) and
. Break-even analysis, start-up costs, pricing and revenue forecasts are critical so you know when the salon becomes profitable.
Pro Tip: Nail your salon’s brand. Choose a unique name, logo, and aesthetic. A strong brand and online presence (website, Instagram, Facebook) builds trust before you even open.
2. Register Your Business & Obtain Licenses
Make your salon legal. In the U.S., virtually all salons need a business license to operate – apply through your state or local government. Most states also require cosmetology/barber licenses for stylists (earned via accredited school and a state exam).
If you or your staff will perform nail, skin or massage services, check those licensing requirements too. You’ll likely need a sales tax permit (if you sell products) and a certificate of occupancy (inspection of your space). Also, every salon should carry general liability insurance (often $50–$250 per month) to protect against accidents.
All these licenses and permits cost money and time. Budget roughly $100–$400 for a basic business/salon license, about $250+ for a building inspection/occupancy permit, plus fees for cosmetology permits. (In some states mini-salon licenses are cheaper.) Plan a few weeks for applications and inspections. Remember, some cities/counties have extra rules (e.g. signage, health codes), so check local requirements carefully.
3. Secure Financing and Plan Your Budget
Startup and operating costs are substantial. Typical salon startup costs range widely: a basic setup is around $60,000–$130,000, while an upscale salon build-out can easily exceed $500,000. Buying an existing salon often costs $40,000–$250,000, whereas building new from scratch runs about $50,000–$500,000.
These figures cover real estate, build-out, equipment and initial inventory. In addition, plan for ongoing monthly expenses of about $30,000–$40,000 covering rent/mortgage, utilities, payroll, supplies and marketing.
Create a budget listing startup costs (lease deposit, equipment like styling chairs, wash stations, mirrors, POS software, initial products) and recurring costs (rent, salaries, inventory resupplies, marketing, insurance). Factor in an emergency buffer of 10–20% of total costs. If you need funding, options include small business loans, investors, or using personal savings.
Many salon owners use a mix of sources. The key is to not undercapitalize – salons often spend the first years paying down startup debts, so ensure you have enough runway to survive slow months.
Tip: Consider trade-offs to cut costs initially. For example, negotiate lease terms, buy some used equipment in good condition, and start with a smaller staff. You can expand services and upgrades as revenue grows.
4. Choose Location and Outfit Your Salon
Location and layout set your salon up for success. Look for a space in a visible, high-traffic area (shopping plazas, downtown, etc.) where your target clients can easily find you. Negotiate your lease carefully: initially you may want a shorter lease or options to renew, since it’s tough to predict exactly how fast your business will grow. If you buy, factor in renovation costs.
A well-designed salon interior can make a strong first impression on new clients. Lighting, layout, and decor all contribute to a welcoming atmosphere.
Plan your space: ensure enough room for styling chairs, wash basins, retail shelves and a reception area. Good lighting and mirrors are a must. Consider hiring a professional designer if budget allows.
Renovation and decor costs can be significant – nicer materials and fixtures increase startup costs (basic salon interiors often start around $60K+, high-end salons much more). You’ll also need salon software and payment systems set up.
During build-out, don’t overlook details: storage for towels and products, a clean backroom or supply area, and compliance with accessibility and health codes. Purchase quality equipment (styling chairs, dryers, sinks, tools) and initial inventory (shampoos, colors, nail polish, retail products). It’s better to invest in reliable gear than to constantly replace cheap items.
5. Hire Staff & Define Services
Your stylists and team are your business’s backbone. Decide what services your salon will offer (haircutting, coloring, styling, nails, skincare, etc.) and hire accordingly. Many salons start small (e.g. 2–3 stylists or even owner-operated) and grow as demand rises.
When recruiting, require that stylists hold valid state licenses. Provide onboarding and training on your salon’s service standards and software. (Remember, a great team culture encourages employee retention.)
Skilled stylists providing exceptional haircuts encourage repeat visits. Clients who receive outstanding service and feel heard are much more likely to return. In fact, industry data show only about 45% of first-time clients rebook a second appointment on average, dropping to 39% by the third visit. To boost those numbers, focus on customer experience: personalized attention, loyalty programs, and easy rebooking.
For example, enabling online appointment booking can significantly improve retention — clients who book online are roughly 80% more likely to return for another visit.
Set your pricing to be competitive yet profitable. A handy benchmark: the typical U.S. salon brings in about $245K in revenue per year, with profit margins around 8–10%. Keep close track of costs (rent, salaries, supplies) so you can adjust pricing or services as needed.
Pay staff fairly (hairdressers often earn $10–$30/hour plus tips or commission) to attract talent. Implement a reliable scheduling system and salon POS software to manage appointments, payments, and staff calendars efficiently.
6. Market Your Salon and Grow Clients
With preparations underway, start marketing before opening. Use social media (Instagram, Facebook) to share your salon’s story, style, and special offers. Local advertising (flyers, Google My Business, collaborations with nearby businesses) can also drive awareness. Encourage word-of-mouth by offering opening promotions or referral discounts.
Once open, focus on client retention. As noted, repeat business is crucial: a 5% increase in retention can significantly boost profits. Keep clients engaged with a mix of strategies: email/text reminders for appointments, loyalty rewards for frequent visits, and personal touches (like asking for feedback or sending birthday specials). Prompt clients to review your salon online to build credibility.
Track which marketing efforts bring new clients (like coupons or ads) and double down on the most effective channels.
By the numbers, a modern trend is clear: clients expect digital convenience. Online booking and digital payments make a salon stand out. A Boulevard Labs study found that clients who use online scheduling are nearly twice as likely to book a follow-up visit. So, invest in a user-friendly website and booking app.
7. Salon Startup Checklist (Summary)
Use this checklist to ensure you cover every step. Download our free printable Salon Startup Checklist for a convenient step-by-step guide.
- Market Research & Niche: Define your target clients and local competition. Identify services in demand (e.g. family haircuts vs. high-end styling).
- Business Plan: Write a detailed plan with vision, market analysis, service offerings, marketing plan, and financial forecasts. Include start-up costs, pricing, and break-even projections.
- Legal & Licensing: Register your business and obtain an EIN. Secure all required licenses and permits: salon/business license, cosmetology licenses for stylists, sales tax permit, certificate of occupancy, and insurance.
- Financing: Secure funding. Open a dedicated business bank account. Budget capital for build-out, equipment, and at least 6–12 months of operating expenses. Plan for recurring costs (rent, utilities, salaries, inventory).
- Location & Build-Out: Choose a strategic location. Negotiate lease terms. Plan salon layout and design for client flow. Obtain necessary building permits. Install equipment (chairs, sinks, POS hardware) and stock initial inventory.
- Team & Training: Hire qualified, licensed stylists and support staff. Provide training on services, software/systems, and customer service protocols. Set clear compensation (e.g. salary, commission, or booth rental).
- Service Menu & Pricing: Finalize your service offerings and price list. Ensure pricing covers costs plus desired profit margin (~8–10%). Display the menu clearly in-salon and online.
- Systems & Software: Implement salon management software (scheduling, CRM, payments). Enable online booking and point-of-sale systems. Set up accounting or bookkeeping software.
- Marketing Launch: Create a marketing plan for your opening. Use social media, local advertising, and promotions (grand opening discounts, referral bonuses). Build a simple website and Google Business profile.
- Client Experience: Focus on customer care. Encourage rebooking (e.g. “Book your next visit now!”) and loyalty rewards. Collect contact info for reminders. Solicit reviews and feedback to improve service.
- Review & Adapt: Track key metrics (revenue, new vs. returning clients, popular services). Adjust your plan as needed. Meet regularly with any staff to discuss goals and improvements.
By following these steps, first-time salon owners and independent stylists can launch methodically and confidently. With solid planning, careful budgeting, and ongoing customer focus, you’ll be set up to turn that passion for beauty into a thriving salon business.
Good luck on your salon journey – and don’t forget to download our salon startup checklist to tick off each task along the way!
Next: Strategies To Grow Your Salon
