Are you a talented hairstylist, cosmetologist, nail technician, or any other hair and beauty professional? Do you run your own salon or work for someone else? If you are employed, how badly do you want to start your own practice? Well, this article is for you if you are a talented employee in the hair and beauty industry who has had enough of helping other people fulfill their business dreams. It is for you if you just graduated from beauty school but have no intention of seeking employment right away.
The greatest hindrance to talented people like you venturing into business is insufficient capital. The overhead costs of running a beauty salon are insane, to say the least! But what if we told you there is a way of going around this problem and starting your practice in no time at all? Well, you can if you start a home-based beauty salon. The demand for beauty services has been and will always be higher than the supply. And then with the growing phobia of crowded places, thanks to the pandemic, you wouldn’t believe the staggering numbers of people who wish for an expert like you to start a home-based salon. The market is ready for you!
Running a home-based salon business has many unbeatable perks. Notably, your overhead costs will be a lot less compared to mainstream salon businesses, and that allows for competitive pricing. Secondly, the comfort and coziness of a home allow for more socialization between you and your clients. Creating and growing a loyal clientele is simply a breeze. Now add the convenience of working from home to that list of benefits and you have all the reasons you need to make the leap.
We want to help you open your first successful home-based salon. That is why we have listed for you the 7 essential tips for starting a successful home salon.
1. Before anything else, sort out all legal issues
To avoid getting your salon shut down before it even takes off, you need to start on the right side of the local laws and industry standards. Here is a simple checklist of the legal questions you should answer before buying salon equipment and supplies:
- If you live in a rented apartment, is your landlord okay with you starting a home business?
- If you live in the suburbs, your neighborhood is probably governed by an association of homeowners. Is the association okay with you starting a home business? Do you need their permission? If the association dismisses your request, are there loopholes in the local laws that you can leverage to go over their heads?
- Which local zoning laws would affect your business now or in the future? For example, is it legal to put up signage in your front yard for marketing purposes?
- Which permits (e.g. a business permit), licenses (e.g. cosmetology license), and insurance (e.g. health insurance) do you need for a home-based salon? You can get answers to this question by visiting your local government website or consulting a local attorney.
- What is the process of applying for an EIN (Federal Tax Identification Number), and which business and/or personal details are required for that?
- When choosing a business name, which patent laws do you need to comply with? How do you patent your business name to protect it from plagiarism?
- What business structure do you want to adopt for your home salon? The common choices are two: Sole proprietorship and Limited Liability Company (LLC). An LLC structure protects your salon from your personal lawsuits or bankruptcy, but the process of registering one is pretty tedious. Sole proprietorships are easier to register, but then you can’t hire employees under this structure. This structure also makes you personally liable to any lawsuits and/or debts that your salon may fall into.
- If you plan on creating a retail section in your home salon, will you need a resale permit?
- In order to get your salon approved by the local Board of Cosmetology, which codes must you comply with? What should you expect from the inspector that the board sends to inspect your salon?
2. And the finances
Financial management is perhaps the trickiest of all responsibilities that you now have as a business owner. It is understandable if you aren’t good with numbers because, after all, you aren’t a financial expert. But there is no room for errors or guesswork when it comes to business management. Your only option is to get out of your comfort zone and start making deliberate efforts to understand financial management. Among other things, ensure that you understand:
- Your starting capital. How much do you need for the initial inventory, equipment, furniture, and business registration?
- Do you need a business loan, say from a bank or a credit union? If yes, ensure that you understand the available financing options, especially their repayment options and interest rates.
- Understand your financing alternatives, e.g. bringing a partner on board or crowdfunding from your folks.
Once you have your business up and running, financial management challenges now shift to ensuring that your business runs profitably. For optimal profitability:
- Separate your business bank account from your personal finances. Again, be sure to shop around for the bank or credit union that offers the best banking options for your business.
- Track your expenses and keep an accurate record of your daily revenue against the average daily overhead costs.
- Invest in salon management software that tracks your day-to-day transactions, cash flow, and inventory.
- Set up a payment system. Get a software system with a POS that enables clients to make payments from all major digital payment options, including credit cards, Square, and PayPal.
- Figure out your tax obligations.
3. Pick your workspace
Being a home-based salon doesn’t mean working from anywhere around the home. Setting up a designated workspace will help you get more organised and separate your work life from the rest of the home. To create a good home salon workspace:
- Choose a room or a corner in your house that has adequate space for your styling chair, a “waiting lounge” couch, and a computer desk.
- Ensure that the space has enough water supply and electricity sockets.
- Ensure that air conditioning in the space is pitch-perfect and that there is a sufficient supply of fresh air.
- Remove all clutter that could be blocking access to the workspace.
- In order to claim your home salon workspace on income taxes, ensure that it has a separate entrance from the rest of the home.
- Set restricted working hours for a more effective work-life balance.
- Ensure that everyone in the home understands that the space is out of bounds.
- Make the necessary renovations to meet local codes.
- Decorate and furnish the space. Ensure that the colors you choose match the vibe you intend to create in your home salon. Bring in houseplants for both their air cleaning and decorative properties.
4. Bring in the supplies, equipment, and tech
You need at least one styling chair, a hooded hair dryer, a couch for your waiting area, and at least one workbench. Consider comfort, flexibility, and portability when choosing your furniture.
For the equipment, you need an instant shampoo station, preferably a removable spray attachment that you can use in your bathroom or kitchen sink. You also need a wheeled cart for storing tools such as scissors, rollers, shampoos, curlers, and pins. And for the purposes of hair shampooing and conditioning, you will need a ceramic sink that’s big enough to serve as a wet station. Make a list of all the supplies and equipment that you need to ensure that you have everything ready when you open.
We already mentioned the need for a salon management system. At the risk of repeating the obvious, it is important to have stellar salon software for all your salon automation needs. Your software will help you automate scheduling, client appointment management, inventory management, bookkeeping, and cash management, among other tedious management roles.
5. Set your prices
To get your pricing right:
- Factor in your tax obligations, rent, utilities, loan obligations, overhead costs, monthly salary, and target profits when deciding on prices.
- Remember the unique qualities that would make clients choose your home salon over the available alternatives. Charge for those qualities.
- Be flexible with your pricing at first in order to win over clients, but don’t allow clients to dictate your terms. The clients aren’t doing you a favor. What you have is a mutually beneficial relationship. Also, remember to revise the charges as soon as you have a solid customer base.
- Ensure that the prices capture the entire customer experience. If your music collection, decorations, air-conditioning, and services are at the level of a high-end salon, don’t feel bad for charging high-end prices.
- Consider what your competitors charge.
- Ensure that your charges are reasonable as per your location’s median income level.
- Once you have a reasonable figure, hike it a little to accommodate client discounts.
6. Which services will you offer
Your expertise should determine the services you offer at your home salon. However, your location should determine the quality of your services. Don’t offer high-end services in a target market that can only afford to pay for basic services. Also, you need to broaden your skills if your expertise doesn’t satisfy the available market.
To diversify your income streams and optimize the quality of your services:
- Offer additional services, e.g. free scalp massage.
- Sell retail products.
- Ensure that your salon is relaxing, peaceful, tranquil, and ambient. Have soothing scents too. How clients feel when in your salon is part of the customer experience.
- Offer beverages if that won’t hurt your profits.
- Take your time before scaling your home salon. Hiring stylists will necessitate room expansion, more equipment and furniture, and more financial obligations. These changes can easily crash your business. Only expand when your revenue and schedule calls for an extra set of hands.
- Stay up to date with the latest hair and beauty trends by reading magazines, following fashion models on social media, and attending beauty events.
7. Market!
Your home salon is now ready for customers. It is time to market it. Among other marketing efforts:
- Set up a website and social media profiles.
- Ensure that all your online platforms are updated with all relevant business details, including location, business hours, and booking details.
- Print and share your business cards, flyers, pamphlets, and brochures.
- List your home salon in online directories.
- Advertise on local podcasts and magazines.
- Incentivize your first clients to refer to their friends and families. The incentives can be anything from discounts to free add-on services.
Final word
Starting a home salon is easier than starting a mainstream salon business, but it involves more attention to detail. It requires you to be at the top of your game at all times because clients associate you as a person with your brand identity. Also, because you are going to be your own boss, you must be ready to broaden your styling and business management skills. The success of your salon business relies entirely on your competence.
