For many stylists, cosmetologists, makeup artists, masseuses, and other professionals in the personal care industry, running your own business is the ultimate dream. At your own salon or studio, you can call the shots and reap the reward of entrepreneurship, all while developing your craft.
However, businesses in the personal care industry face unique challenges, and launching a business in such a competitive market is no easy feat. To start, you’ll need to secure funding, find the perfect location, hire experienced staff members, and more.
Financing and Business Planning
As with all other business ventures, opening a personal care business requires startup capital. According to Business News Daily, basic salon setup typically costs around $62,000, but it can cost $500,000 or more for more involved salons.
If you don’t have the means to finance your business venture yourself, you’ll need to secure the capital through other means like loans, grants, pitching private investors, and crowdsourcing.
But before you can get to that, you need to write a robust business insurance plan. A business plan should include:
- A description of the business
- Analysis of the target market
- The structure and management of the business
- Services offered and any products
- A marketing plan
- Financial projections
Proper Licenses and Permits
Depending on the services you offer and where your business operates, you may need several licenses, so be sure to research your state and local requirements.
State laws generally require licenses for cosmetologists and aestheticians, but you’ll need additional licenses for operating a salon. According to The Salon Business, required licenses and permits can include a salon retail seller permit and salon business operation license on top of a standard federal employer identification number (EIN) and a certificate of occupancy.
Unique Insurance Needs
Every business owner needs to account for small business insurance policy costs and understand their state’s legal requirements for insurance.
Across all U.S. states (except Texas) and industries, most businesses legally have to carry workers’ compensation insurance. Businesses in the personal care service industry are no exception, and salon or studio owners should also consider other common small business insurance policies such as general liability insurance and property damage insurance.
In addition to these standard policies, business owners in the personal care service industry should consider coverage for the unique liabilities associated with their work. For example, you can purchase a professional liability insurance plan designed specifically for salon owners.
Salon Aesthetics and Experience
With practical considerations out of the way, spend some time on the fun aspects of running a salon. Choosing the location and designing the space requires a little creativity. Consider the tone you want to set for your business. Most personal care businesses aim for a luxurious and relaxing spa-like experience.
You should select materials, colors, and products that contribute to the experience you want customers to have. For example, a cozy waiting area with comfortable seating is a great way to welcome visitors. Lighting needs to be bright enough to provide services but not so harsh it takes away from the sense of relaxation.
Hiring Employees vs. Contractors
It’s impossible to run a thriving salon on your own, so you will need to consider how and who to hire at some point. In the personal care industry, you have two main options in hiring:
- Employees– Business owners have more control over employees, dictating when and how they work. They must also withhold income taxes.
- Independent Contractors– A contractor is someone you hire to do the same work, but you have less control. The assumption is that the contractor knows how to do the work, and you do not direct them. You also do not income withhold taxes.
Salon owners uniquely have the option to rent space to independent workers. For instance, you can rent a chair to a hairstylist or a massage table to an independent massage therapist.
Social Media and Marketing
Once you’re up and running, it’s time to think about marketing. An online presence is essential for modern entrepreneurs, so spend some time building up social media pages. As a small business, you may not have the budget for traditional advertising. Use social media sites to reach your target audience and to spread the word about your services.
Plan for Success
Starting and running a successful personal care business is certainly challenging but also rewarding. At your own salon, you can take creative control and build long-lasting relationships with your clients. It’s daunting, but with a solid business plan and strategy for growth, your services can fuel your success.