How to Open a Beauty Salon
10 September 2021
How to Open a Beauty Salon
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How to Open a Beauty Salon Редакция «Innovator Cosmetics»
Редакция «Innovator Cosmetics»

As long as the road to the beauty world is full of high-flying entrepreneurs and starving clients, it will be open. Beauty industry is currently booming — the number of spots where you can have your nails, eyebrows or hair done is rising. Everything can be modified and upgraded from head to toe. The very idea of opening a beauty salon is very tempting. But where to start? How to evolve from ground zero? Is it difficult to run a beauty business? Actually, there are certain rules that you should follow to stay the course. We did our best to collect them all for you in this article.

Define the concept

Idea

Should one start a hair salon with budget prices or an expensive luxurious place with an eye-catching logo? Or will it be all about nail design? Is it a good idea to open a beauty salon in a high-end outdoor mall? Don't rush into anything. First, you need to decide WHAT exactly you want to offer and WHO is the target customer. Mobile salons compete successfully with traditional ones: a quick touch-up at your own home or a hotel is a nice option instead of trying to make an appointment when the line is busy. This trend is motivated by the modern market, and you should keep an eye on it once you've decided to start a salon. And it's not necessarily to stick to the only one service: you can combine hair styling and makeup, brow design and eyelash extensions treatment, body massage and waxing.

If you have neither hit the jackpot, nor inherited an enormous fortune, we do not recommend starting an upscale salon with big windows and high-end furnishings. Let your project evolve gradually.

Let's assume that you've chosen the services you want to provide. Now it's time to take a look at the target audience. It means, simply put, that you need to get what people are supposed to come to your salon. However, before you start Googling to find an analytical agency that would give you the information about people's capacity to pay, try to make it on your own. Explore the nearest salons, assess the level of service and price range. That will help you define the type of a future salon.

Analyze the rivals

Who are they? What's so special about their activity and ways of positioning? What can you do to stand out? It's not necessarily to dress up like a neon arrow pointing at the salon's front door. Find a unique feature that would be decisive. It can be a specific interior layout, a number of electronic devices showing promos about the services, corporate identity and style of clothes, bonuses and so on. Turn your creativity, energy and ideas into business opportunities. You've already joined the game, so why not compete for the prize — client's attention? Being afraid of rivals is pointless. All you need to do is determine their strengths and weaknesses in order to find a strategy that will provide a distinct advantage.

Make a business plan

Make a business plan

In order to make the idea real, you need to roll up your sleeves and get a plan and figures down on paper. The cost of rental of premises, the purchase of equipment and consumables, staff salaries, plans to reach the financial break-even point — all these points are crucial when assessing the investments and building up a business strategy. Normally, a business plan is created on a multi-year basis, but due to the economic changes, you can make the necessary calculations for one year.

Let's break down the key points of a business plan:

  • Executive summary. Describe the key information about your business, the goals you want to achieve and what your mission statement is all about. It would be great to include a brief summary of the current experience that you have. Keep it short and businesslike, half a page is quite enough.
  • Business overview. Explain precisely, what products and services you intend to market, what solutions you offer, who the target customers are and which segment you're going to capture.
  • Market analysis. Reveal that you have a clear vision of the industry as well as the niche you're entering. Support it with data and statistics regarding the prospects of growth, sales potential and latest trends.
  • Competitor analysis. Here you should tell more about the rivals, how they are succeeding or failing and why your business can do things better.

  • Organizational structure of the company. Show how your business is set up. Introduce the top managers and their duties. Don't forget to mention the type of business entity that you've chosen.
  • Sales and marketing strategy. Try to break down the steps that you're to take in order to promote your products and services, as well as the required budget.

  • Financial plan. This section is literally the most important point of a plan. It explains what the anticipated revenue is, what level of projected sales lets the business cover the costs, what the operating costs are and so on. In case you need funding, show investors that you need a certain amount of money to set up the business and explain in detail what you're going to spend their money on.

All companies are different, so there's no two alike business plans. But there are certain key points that are to be included in every good plan, and it's also necessary to put a clear and accurate summary of the business goals in the bottom line of the business plan.

You can trust the business plan making process to a specialized agency, if you're not sure that you can cope with it. However, if the budget does not allow delegating the task, you can search the web for more information or apps that would make calculations for you.

How much does it cost to launch a beauty salon from the ground up? Depending on the country, the size and condition of the property and equipment the cost starts $50,000. It can be significantly higher (up to $500,000), but there are also ways to launch a salon on a much smaller budget. It is worth noting that a beauty salon requires time to generate profit. So the costs for the start-up period should also be put in the plan.

Choose a legal structure

Documents

Usually, when starting a new business in the beauty industry, the entrepreneurs have a choice of the most common legal structures, such as limited liability company (LLC), sole proprietorship, partnership, corporation, etc. The type of a business entity determines both the structure of a company and the way it's taxed. For many small businesses an LLC turns out the best option, as it offers the most flexible tax treatment. An LLC protects the owner from personal liability (only the amount of money invested in the business is at risk), so you can be safe for your property. Another advantage is that you can carve up profits any way you choose, unlike shareholders that share the gains in proportion to each one's percentage ownership in the corporation. LLCs are much simpler, as they have less paperwork and corporate formalities, don't require a board of directors, shareholder meetings, etc.

A business established as a sole proprietorship is owned and operated by a single owner (or a married couple). Depending on the chosen industry and the place you're going to start the salon, you might need some local business licenses or permits. Service professionals such as consultants and freelancers prefer this type of legal entity, though a more established business like a retail store with one person at the helm can also choose this option. An obvious downside when operating as a sole proprietor is that you're personally responsible for all of the debts and liabilities of the business.

Partnerships have much in common with sole proprietorships, but the key difference is that there are two or more owners. There are two types of partnerships: general partnerships (GPs) and limited partnerships (LPs). All partners of a GP operate the business, share gains and losses, and each partner is fully responsible for the actions of the others. In an LP there are general partners (those who own, manage and assume liability) and limited partners (who invest only without control over the business and pay fewer taxes).

In order to determine which type of legal entity works best for your beauty salon, you can turn to a business lawyer or a tax professional.

Pick the team

Beauty salons team

What people would you like to see in your beauty salon? Do you want them to be ambitious and have extensive professional experience? The description of a perfect team member enables you to announce the vacancy through all possible means. The number of applicants depended on how many sources you use to advertise the position. Once you get the responses, don't rush to fill the calendar up with interviews. Study the resumes carefully to send a test task or invite a prospective staff member for a beauty treatment demonstration.

There's another way of picking the team: take a look at graduates of specialized courses and trainings. For example, Innovator Beauty Academy trains future beauty experts, such as lashmakers, brow technicians, hair colorists, wax therapists, makeup and nail artists. The Academy also provides all the required materials for work, so you literally get a qualified specialist in the fast-growing industry.

The team is ready. What's next? Can you just say ‘Go!» and enjoy the fine work? Unfortunately, it doesn't work like that. You should convey the company's values, purpose and mission statement to the team members, set the rules of communication with colleagues and clients, and work through behavioural patterns in case of possible negative reactions and other emergencies. Blind faith in people's understanding of important things that are obvious to you will bring problems.

Find suppliers

Suppliers research

Furniture, mirrors, skin and hair care products don't come from nowhere. Normally, to buy professional stuff and beauty products you have to find a supplier. In case you need products for beauty treatments and accessories, you can either contact a brand manufacturer for straight supplies or find a local distributor (the middleman between manufacturers and salon owners) on the Internet. Cooperating with local distributors is very beneficial, because they often woo salons by offering free products, various gifts, equipment items or even free courses for salon beauty experts. Above all distributors may give you advice in terms of pricing and placing orders.

Don't forget that clients want to maintain the effect of a treatment when back at home, so you'll need to boost retail trade.

When searching for the furniture or equipment suppliers, pay attention to the agents that have trustworthy reputation and a great selection. Distributors stock the latest equipment at very favorable prices and can offer you flexible payment terms, but what's more important you receive warranties and can be sure of the high quality of the items. Usually, suppliers provide consultative services and replace any of the broken items when needed, so you'll be able to choose the most suitable stuff for your beauty salon. If a supplier has no return or exchange policy for faulty equipment, don't hesitate to look for the one who offers such policies. As you don't have to sign a binding long-term contract, it'll be easy to switch.

Promote the salon

Beauty salons adverting

How should people know that you're going to cut the ribbon at the front door of a new beauty salon? Tell them about it via different sources. For starters, create a stunning salon website with help of applications or website builders. Ideally, the salon website should have much in common with a trained receptionist. It should let clients feel welcome and provide all the information they need. Describe the services you offer, attach the portfolio of your team and prices. Moreover, there should be an opportunity to book an appointment online.

Facebook ads can turn out to be a game changer for your business, so you can either learn how to deal with it on your own or find an agency to help you. It's more expensive to use Google ads, but that's because it works better and is also easier to get going with than Facebook Ads. Let's say somebody has an intent to find a salon in your area. When they do a search on Google, the first thing they see is a list of advertising links and the map. The point is to get on that list so that a potential client doesn't have to scroll the page down. You need to get noticed.

There's no better promoter of your salon than a loyal client. The word of mouth is a very powerful tool, so get the best out of it: offer your clients bonuses for bringing new clients to your salon and don't be shy to ask them to share feedback online and leave ratings after their visit.

Clearly, launching a beauty salon from the ground up is an excellent experience of conducting business. Beauty treatments have always found demand on the market, while the industry is developing at a frantic pace. Nobody gets it right all the time, but being both proactive and reactive and giving new strategies, services and treatment offers a try is the key.

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