How to Start a Hair Salon Business: An 8-Step Guide

Choosing a name is the first step in creating the salon’s brand identity; it’s the first public signal of the brand the stylist is building. A good hair salon business name should reflect the salon’s style, target clientele, and the feeling the salon owner wants to evoke. It needs to be memorable, easy to pronounce, and distinct from competitors in the area.

Before finalizing a name, a salon owner should check if their favorite is available for use in their area. Usually, it’s possible to do this by running a business name search on the Secretary of State’s website (or a website for a comparable government office). After that, it’s wise to see if there’s a matching domain name; that makes it easier for prospective customers to find the salon online.

Once the name’s verified as available, many states allow a salon owner to reserve their business name for a brief period (often between 30 and 120 days, but it varies by state). Reserving a name early gives a salon owner some extra time to manage other startup details without the risk of losing their perfect business name. This is important because a strong name translates well to exterior signage for the salon and its social media profiles.

Here are a few sample salon name ideas:

• The Gilded Strand
• Urban Edge Salon
• Bloom & Brush Hair Co.

A business plan is the tool that turns the vague idea of starting a salon into a concrete decision to act. Writing a hair salon business plan helps separate the people who think about starting from those who keep saying they’ll start one day.

A hair salon’s business plan covers a lot of topics, including the business’s vision and goals and its financial projections. Those financial projections are especially important. These should estimate how much it will cost to set up the salon, its projected overhead expenses, the pricing strategy, and more. Ideally, it’ll outline the projected revenue for the first three years, too. Lenders and investors will want to see this information before they’ll back the project.

Here are a few more details about the key components of a business plan for a hair salon:

Startup costs for a hair salon are high, and securing adequate financing is a foundational step. For many hair salon owners, the startup costs are one of the most intimidating aspects of starting their business. Thankfully, understanding what to expect can help an entrepreneur tackle those expenses with a plan.

But how much startup capital does the salon need, exactly? Ultimately, it varies depending on the salon’s size, location, and whether its space will need extensive renovations. A salon owner will need to build a detailed budget that accounts for those initial renovation costs and the recurring monthly expenses.

When it comes to financing, most salon owners find it necessary to get enough working capital to cover their first several months of rent and payroll. It usually takes a few months to turn a profit as a new salon, so cash reserves are a priority.

Here are a few of the most common funding sources salon owners pursue:

A hair salon’s physical location has a big impact on its potential for success. A good salon location provides visibility, foot traffic, and convenient access for the salon’s customers.

So how’s a salon owner supposed to choose a space? It’s wise to consider a lot of factors, including neighborhood demographics, how close the space is to complementary businesses, and how much parking is available.

There are two primary routes that business owners can pursue for their space. For one, they can lease a traditional commercial storefront and build it out to their specifications; this route gives the salon owner more control over their branding. Meanwhile, renting a private, fully-equipped studio within a larger salon suite is usually significantly cheaper. The drawback is that the salon owner will have less control over the business’s management and appearance.

It’s also essential for a salon owner to verify that their desired space meets local zoning requirements for a salon business.

Many salon owners have an attorney review their lease before signing. That way, they can have confidence that they won’t encounter any unexpected liabilities down the line, and they might even be able to negotiate for more favorable terms.

Choosing a legal structure for the hair salon is ultimately a decision that affects the business’s liability, taxes, and administrative requirements. There are a variety of options, including sole proprietorships and partnerships, but most new salon owners form a Limited Liability Company (LLC). An LLC for a hair salon is often a practical choice because it helps with protecting personal assets.

The primary benefit of an LLC is that it creates a legal separation between the owner’s personal property and the business’s debts. If the salon faces a lawsuit from a client or financial trouble, the owner’s personal assets remain protected.

Another perk is that LLCs offer tax flexibility: the owner gets to choose whether they want to be taxed as a pass-through entity or as a corporation.

After the LLC is formed, it needs an Employer Identification Number (EIN) from the IRS. This nine-digit number acts like a Social Security number for the business; it’s required to open a business bank account.

Legal compliance is the unglamorous part of starting a business, but it is entirely non-negotiable. Operating without the proper licenses can lead to fines or forced closure. The specific licensing requirements for a hair salon vary by state, county, and city. Owners must research the regulations in their specific area to ensure full compliance before opening day.

Many states require hair stylists to have a license from the state cosmetology board. It’s also common for salons to need to pass inspections with the local health department to verify that they’re meeting sanitation regulations.

Here’s a quick glance at some of the most common licenses required for a hair salon:

Once a salon owner has secured their financing and their location, it’s time to build out and equip the salon. This step transforms the space from a commercial “blank slate” into a functional and inviting environment for clients. There’s a lot of creative freedom with the design, but ideally, it’ll align with the salon’s brand identity.

There are lots of moving parts with this step: managing contractors, ordering equipment, ensuring plumbing meets codes, double-checking that there’s adequate ventilation, getting proper lighting to help with hair coloring, and more.

Here’s a quick look at some of the key steps involved in setting up the salon space:

A professional online presence serves as the salon’s digital storefront. A website provides necessary information and makes it easy for new and existing clients to book appointments. Ideally, the website will feature high-quality photos of the space, a clear list of services offered at the salon, and stylist biographies.

Many salon owners also decide to integrate an online booking system to make the client experience smoother (and to reduce the number of times staff members have to answer the phone). Modern booking systems also help clients remember their appointments with automated reminders via text or email. Salons can even link their booking system to their social media profiles to help drive bookings, too.