How to Set up a Hair Salon

A well-run hair salon can be a profitable business no matter what state the economy’s in. People are always willing to pay for services that can’t be replicated well at home, and hair styling is at the top of the list. Running a hair salon is quite different from working at one as a stylist. You’ll need to have your business incorporated, hire employees, attract customers and make sure they stay happy. Keep reading to learn the ins and outs of setting up your own salon.

Steps

Setting up the Business

Decide whether to start a new business or run an established one. Setting up a hair salon from scratch is a great option if you want a challenge, but you an also buy an established salon if you prefer an option with a little less risk involved. Here's a rundown of the options:
- Set up a brand new business: You'll need to track down a location, come up with a name, attract customers, and run the business without an established customer base or brand.
- Open a franchise salon: Choose a salon chain with an established brand and open a new location. You'll have to adhere to their company's policies, so you'll have less freedom to make your own business decisions, but you'll benefit from working under a name that people recognize.
- Buy an established salon: If you know of a salon whose owners are ready to sell the business, you can buy it and take over. You won't have to find a new location or buy equipment. However, it's important to investigate the owner's reasons for selling to make sure you're getting a good deal.
- Run a booth rental salon: A popular option these days is to open a salon facility and rent out the different booths to stylists, who are responsible for bringing in their own equipment and clients.^[1]
Check out the competition. Choose a group of salons that are already successful and who have a similar target group of customers as you do, and then see what makes them successful or where they are lacking. Visit as a customer, and get a feel for what your customer will expect, and how you will be able to provide the services. You can then skillfully adapt these solutions to your business. Leave what doesn't work, and adapt what may work for you.
Take care of official business. Every jurisdiction has slightly different requirements when it comes to starting a small business. Visit your local courthouse or the Small Business Administration website to find out everything you'll need to do in order to legally run your hair salon. Here are a few actions you can expect to make things official:
- Get a business license. To legally start a business, you'll need to get a license from the city where you live. Go to a local courthouse or visit the Small Business Administration website to figure out how and where to get a license. You'll fill out necessary paperwork and submit it with a fee in return for a license.
Get a Federal Tax ID. This is a mandatory step when you're starting a small business. Your Federal Tax ID will be the number you use when it's time to pay taxes on your business. Go to irs.gov for information on getting your tax identification number.
- Make a business plan. This is a plan that details all aspects of how you plan to run your business, what your expenses will be, and what your competition will look like. You may need to use it to get a loan or license.
- Find a way to finance the business, either by taking out loans or paying for it yourself. Conduct research to figure out how much money you'll need to get your business started and keep it running. Factor in rent, salaries, equipment costs and product expenses.
Rent a space. A hair salon should be in a convenient, busy location with other stores nearby that match the tone of your business (like a boutiques, lunch spots and other places that draw similar clientele). Look for a place with easy parking and a nice-looking storefront.^[2]
- Make sure it has all necessary hookups for your sinks and other equipment. You may have to put more money into renovations.
- Talk with other local business owners about the challenges they face in the area, and weigh the pros and cons before renting.
Buy equipment. You can buy all new equipment or track down equipment that was used by another salon. Make sure everything is in good working order and matches the look you're going for. Make a checklist of everything you need and plan your budget accordingly.
- Figure out how many stations you want to have. How many sinks will you need? How many chairs and vanities?
- The tools you use should be topnotch. If you buy them used, make sure they work well and will enable you to create all the latest styles.
- Decide what products to use. Going with a name brand could be attractive to your customers, however top-of-the-line products can get very expensive.

Designing the Space and Hiring Stylists

Create a relaxing space. The ambiance of a hair salon is extremely important to customers. Getting a haircut is a treat that people look forward to, so the entire experience should be mood-lifting and rejuvenating. If your space looks drab or uninviting, customers will search for a different salon.^[3]
- Decide on a color scheme and decorations. Paint the walls in fresh, bright colors and decorate with tasteful paintings or other cheerful items.
- Invest in high-quality mirrors and lighting that will make the space feel bright and clean.
Find experienced stylists. Decide how many stylists you need and either ask around or place an advertisement for the job opening. Be sure the people you hire graduated from beauty school and have experience cutting hair. Review their references and have them do a trial run before offering the job.
- Decide if you want your stylists to bring clients with them. If so, ask questions about their customer base.
- Hire people who have special skills you're looking for, like the ability to do great highlights or cut children's hair.
Create your list of services. Every salon has a slightly different menu of services to offer their customers. Tailor yours to the current trends as well as the skills your stylists have to offer. In addition to basic cuts for women, men and children, you may want to consider offering the following:
- Coloring
- Perming and straightening
- Special services (weddings, cutting-edge treatments, etc.)
- Consider adding spa services, like nail services, facial and skin services, or massage
Figure out pricing. Decide how much you want to charge, and whether you want to have a tiered pricing system according to the experience of the stylist. For example, you might want to charge more for a cut done by an expert stylist than a junior stylist. When you're setting your prices, take the following into account:
- The cost of labor and supplies. If you're offering top-notch services and expensive products, you'll need to charge more than if you hired junior stylists and lower end products.
- Competitors' pricing. See how much other salons charge for their services, and try to stay within a range that's affordable but will still ensure you make a profit.
Decide how to handle scheduling. There are helpful computer applications to manage the salon operations, such as Neohair.com, Shortcuts, Rosy, Envision and Hair Max. Most of them have similar functions: management of customer visits, personnel, finance, inventory and procurement. A few of them, such as Salongenious, give further opportunity to remind clients of their appointments using SMS messaging or saving the photos of your clients' hairstyles.

Running the Salon

Decide on your operating hours and customer service policies. The hairdressing industry is less and less frequently located in the rigid framework of the typical 9-5 workday. Salons are becoming increasingly more flexible. Some operate into the evening, and some even the whole weekend. You must keep in mind that the fight for clients often necessitates more flexible working time - and makes your salon more accessible to their needs.
- Many people require salons to be open after regular work-day timings, because that is when they have events to attend and need to look their best. Think about offering this service only with advance booking and adding an extra charge, or you can rotate your staff so that your salon is open during times it usually would not be.
- The most vital part of any business is people. Many hairdressers offer similar quality products and services, but the few exceptional salons that stand out not only meet customer requirements, but actually exceed them. Therefore, training your employees in customer service can help you leave the competition behind, and if you can make the customer feel very, very special and well taken care of, they will probably become a regular, loyal client. In many cases, it makes good business sense to hire an experienced manager who can manage your personnel and the salon on a day-to-day basis.
Advertise your salon. When the salon is set up and ready to go, it's time to start attracting customers. Spread the word to your friends and family, put up signs around town, and consider taking out advertisements in local newspapers, magazines and blogs. In addition, consider these effective ways to advertise a hair salon:
- Promote it on Facebook and Twitter. Start a Facebook page with information about your business, and update it regularly with news and deals.
- Offer to provide service to a local celebrity and ask him or her to spread the word.
- Encourage customers to write reviews on Yelp, since many new customers will check reviews before committing to an appointment.
Have a modern website. If you have a sleek, modern website for your business, you'll build better trust with customers before they even enter the salon. Hire a web designer to create a nice-looking website that's easy to navigate, and put the url on your Facebook page and in your advertisements.
- Include a menu of services with descriptions of each.
- Have high-quality photos in color.
Keep the equipment clean and up to date. Make sure your facility meets sanitation requirements and is up to code at all times. In addition to sanitizing the tools you use, keep the floors swept and wash the mirrors and sinks regularly. Paint and update fixtures now and then so that your salon retains its chic, upscale feel.
Keep customers coming back. Offering the latest products is a great way to get customers in the door, but to keep them coming back you'll need to provide stellar hair styling every single time. There's nothing worse for business than giving a customer a bad cut or dye job, since she'll probably write a bad review and tell her friends.
- Respond promptly to complaints when they come up. Even if you executed your job perfectly, the customers won't be happy every time. It's better for your business to offer them a free service or a refund instead of showing them the door.
- Adjust your business practices to stay profitable. As you gain experience, increase prices and hire better stylists.