Established In 1994
Opening a salon can be the start of a long-term, profitable business. However, without careful planning, it’s easy to overspend or make critical errors that could make your salon unprofitable. We have created this guide to help you with all the information you need to successfully open a salon while sticking to a budget.
If you are considering opening a home beauty salon, please look at this information specific to home beauty salons.
How to Open a Salon
Twelve things to consider before opening a salon in a financially cognisant way include the following:
1. Renting a Commercial Property
When you rent a commercial property, you must pay a deposit. This will consist of your first month’s rent. You may be required to pay an additional deposit if the salon is already fitted out. Commercial properties are normally rented for at least six months, and you will be required to pay the full six months.
Engaging a solicitor to check contracts before opening a salon is highly advisable. You can expect to pay between £100 and £200 per hour, and a solicitor will typically incur a minimum fee of two hours.
2. Fitting Out a Salon
Depending on your preferences, your financial situation, and the actual dimensions of the salon, the cost of fitting out the interior of a salon will vary greatly. If you need to have plumbing and electrical work done, this will increase costs significantly. Plus, don’t forget to account for the costs of any signage you might need to have made.
3. Salon Furniture
Unless you rent a fully fitted, furnished salon, you will need to invest in salon furniture. Take time to plan out where to perform treatments after you know where the sinks will go. Buying furniture such as a salon couch will work for multiple treatments. Looking for reduced-priced furniture outlets is a great way to keep costs low.
4. Salon Equipment
Before opening a salon, working out what beauty salon equipment you will need can be difficult, and it is also one of the most expensive parts of fitting out a salon. And let’s be honest, you will likely want to purchase more salon equipment than you have the budget for.
To make this process easier and ensure you stick to your budget, write down a list of the treatments you would like to offer. Once you know this, you can look for equipment that will allow you to provide those treatments. Consider which types of treatments will bring in the most profit and the ones that are the most popular, and try to have a balance between the two.
5. Salon Stock
To run your salon efficiently, you must have a good stock of the products for the treatments you offer. Running out of something mid-treatment can cause stress and lead to unhappy clients.
Subsequently, it could result in bad reviews and lose you new customers and referrals. On the other hand, you must be strategic about the stock you buy unless you have an unlimited budget.
To keep your initial costs down when opening a salon, start off by offering a smaller choice of treatments. This will enable you to purchase more stock for the treatments you wish to provide in your salon.
6. Licencing and Health and Safety Regulations
Depending on your services, registration with your local authority’s environmental health department may be necessary before opening a salon. Treatments such as electrolysis and semi-permanent makeup are prohibited until the official authorisation of your registration is complete, and you have a certificate. You must also obtain a music licence from PPL PRS Ltd. to play music or even if you want to have the radio on in your salon.
Additionally, you must adhere to all the health and safety regulations that apply to running a business where you provide services to the general public. A useful business guide on health and safety requirements for your salon is available from The Health and Safety Executive. Spending adequate time reading everything and ensuring you are following the law is crucial.
7. Insurance
Business insurance: This is necessary to protect your stock, equipment, and property. Read through every one of the terms and conditions because there are several kinds of business insurance. It’s crucial to be entirely truthful about the supplies, furniture, and equipment you will have in your salon. If you don’t give the correct details, your claim can be denied, and criminal charges could be brought against you.
Personal liability insurance: This is required to protect you if a client suffers injury due to a treatment or while in your salon. If you don’t have liability insurance and the client filed a small claims lawsuit against you, the client would hold you accountable. If the client won, you would be liable to make the payment.
8. General Data Protection Regulation (GDPR)
You must abide by GDPR rules and requirements if you keep any records of personal information about your clients. The Information Commissioner’s Office (ICO) may forbid you from retaining clients’ data and fine you if you don’t adhere to GDPR.
9. Financial and Tax Obligations
If you intend to work alone or in a partnership, you can register with HM Revenue and Customs (HMRC) as a sole trader without incurring fees.
Your alternative choice is to apply to become a limited (LTD) company. Limited liability is this key benefit. If your company experiences financial difficulties and you go into debt, your assets will be safe. Companies House has information on how to set up a limited company.
10. Business Bank Account and Processing Payments
You will need a separate business account for paying vendors. This also makes it easy to document transactions and pay for salon essentials. A business bank account also allows you to accept credit and debit card payments and gain quicker access to credit.
Portable card machines are a valuable addition to your salon and will enable you to take contactless payments. Clients may also feel more comfortable paying with a card machine and, therefore, more likely to use credit cards. This could result in them spending more on treatments than they would otherwise.
11. Branding
The beauty industry is competitive, and branding could be key to your success. Good branding will make your salon easily recognisable on social media and can even get people talking about your treatments.
Your brand is how clients will relate to your salon and could even be why they choose to book a treatment. This is why it’s worth thinking about your brand and what you want your salon to be known for. For example, do you want to offer vegan products, have an eco-friendly salon, or be known for creating an atmosphere and playing a specific type of music?
12. Marketing and Publicity
Opening a profitable salon requires consumers to find you and be aware of the treatments you provide. While word-of-mouth marketing may assist in bringing clients to your salon, it is unlikely to provide a consistent flow of new bookings for treatments. However, there are several inexpensive options to market and publicise your salon, such as:
Local Newspapers: Contact local newspapers before opening to find out if they want to run a story. Think about what things might make the opening of your salon newsworthy, such as:
- Are you a single mother?
- Do you have a chronic illness?
- Have you opened in an area known for high crime or unemployment?
- Are you offering any apprenticeships?
- Have you converted a commercial property that has been empty for a long time?
- Has a friend or family member helped you financially?
- Are you using all of your savings to open your salon?
- Are you female, and have you taken a business loan?
- Are you part of the LGBTQ+ community?
- Will you allow people to bring dogs into the salon?
- Will you offer a child-friendly area for parents?
- Will you have an event when you open?
Basically, anything that will add an interesting angle to your story and give the newspaper something to write about!
Google Business Profile: Often overlooked, one of the most effective strategies to promote your home beauty business is to create a Google business profile, which is free. You may also gather client testimonials and a star rating through your Google business profile, which could offer you an edge over other nearby beauty salons.
Website: With website builders, you can build a website free in less than a couple of hours. There will be some costs associated with hosting a business website and acquiring a domain name, but these are minimal compared to the advantages of having a website for your salon. A website makes you appear more professional and trustworthy, and you can use it to promote your services on social media.
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