Opening a nail salon business is an exciting venture that combines creativity with entrepreneurship. An initial investment of between $10,000 and $500,000 is generally required, depending on the location, size, and services offered. Essential skills for success in this industry include customer service, artistic ability, and a comprehensive understanding of health and safety regulations.

With an average owner’s salary ranging from $40,000 to $75,000 and a high demand in many areas, the potential for a profitable business is substantial. However, it’s important to note that breaking even could take a couple of years. Let’s examine the ins and outs of starting your own nail salon business.

Considerations Before Starting a Nail Salon Business

Initial Investment$10,000 to $500,000, depending on the location, size, and services offered.
Skills RequiredCustomer service, time management, artistic skills, and knowledge of health and safety regulations.
DemandHigh demand in most areas, with the potential for increased revenue through additional services.
LocationAreas with high foot traffic, preferably near other beauty or retail establishments.
HoursTypically 10 a.m. to 8 p.m., with weekends being the busiest.
Permits and LicensesRequired permits sometimes include a business license, health department permits, and cosmetology licenses for employees.
Profit MarginAverage ranges from 15% to 20%.
ChallengesCompetition, maintaining quality service, and health and safety compliance.

Benefits of Opening a Nail Salon

With the average nail salon owner income ranging from $40,000 – $75,000, opening a nail salon presents an opportunity for decent income. Plus, that average can increase a whopping 50% depending on where you open the business and how well it’s managed. 

Owning a nail salon also lets you create an environment of professionals uniquely suited to your vision. Imagine going to work every day with a team you hand-picked. Plus, there are almost no barriers to entry here. While all the technicians have to be licensed, the owner does not necessarily have to be if you’re not performing any of the tech work.

How to Start a Nail Salon

1. Create a Business Plan

So many business owners skip this step — to their detriment. While writing everything out may seem daunting or boring, it’s absolutely necessary. As you complete the steps of writing your small business plan, you’ll identify the money, equipment, and people needed to get the business going.

You’ll also cover challenges and opportunities that could crop up, anticipate costs, think through how to position the nail salon for success, and more. The file will help in times of want or plenty, so don’t skip it. A business plan is a must-have.

Here are the areas you need to address in a business plan for a nail salon:

  • Write your mission statement. Think about the brand/feel of your nail salon. Is it a relaxed place or high-concept? Are people laughing and talking, or is it a place of tranquility? 
  • Identify the services you’ll offer. Will you only work with natural nails? Acrylics? Polish? Gels? Manicure? Pedicure? Nail art?
  • Determine the roles and responsibilities that will comprise your business. 
  • Analyze the “Strengths, Weaknesses, Opportunities, and Threats.” This is called the SWOT analysis. Good business management is key to raising the revenue level, so don’t skip this part.
  • Analyze the market. Who is your competition? What’s trending in your area? Who is your target customer? Identify your desired location, remembering it can have a large influence on income. 
  • Determine your service costs. Will you supply your technicians with products or require them to supply them? About 76% of technicians who rent booth space in salons provide all their own products. 
  • Set SMART goals (Specific, Measurable, Attainable, Realistic, and Timely)
  • Consider what could go wrong and how you’ll manage it.
  • Check for tax breaks and local grants.

For an example of a nail salon business plan, consider this one from My Nail Business.

2. Choose a Business Structure

While there aren’t many barriers to opening a nail salon business, you do have to register it with the IRS. To do that, you’ll need to figure out the company structure that is best for your tax situation. Most small companies are either an:

  • LLC (limited-liability company), which offers liability protection and tax flexibility
  • Sole proprietorship, which has less paperwork to set up and is less costly but doesn’t offer the same protection

Providing a service to the public opens your business up to lawsuits brought by discontented or ill-served clients. If you operate as a sole proprietorship, your personal assets may become embroiled in those lawsuits. For this reason, the liability protection of an LLC structure merits consideration as the way to go with your business formation. This structure shields your personal assets from lawsuits, and when it comes to taxes, the LLC structure avoids the double taxation that comes with other corporate business formation structures. 

Don’t worry — there’s no need to go stand in line somewhere and fill out paperwork. You can file for an LLC for your nail salon online. You can even use an LLC formation service to handle the entire process for you. Be sure to also research nail salon license requirements and permits you may need to open your business.

3. Name Your Business

When naming your nail salon, there are a few things to keep in mind. First, be sure the URL and social media handles for your name are available. Customers need to be able to find you online, without getting confused by a similarly-named nail salon.

Second, think about where your salon will appear in listings. Quick tip: Consider starting the business with “A” such as “A Stellar Nail Salon” so that your business appears toward the top of the list in phone books or other listings. Finally, check to make sure a salon with your name doesn’t already exist in the area. 

Your business doesn’t have to have the same name as your nail salon. You can have two different names, with a “doing business as” (DBA) setup.

4. Register Your Business and Open Financial Accounts

Time to make this official. Register the business structure you selected (i.e. LLC) and get a sales tax license with your state. Obtain an employer identification number (EIN) from the IRS. Then, open a business bank account, as it’s best practice to not mix personal banking with business banking.

5. List Anticipated Business Costs

The costs to start your nail salon business aren’t complicated. Basically, write these down: people, place, product, and promotion.  

  • Employees: What arrangement will you have with the people you employ? Will the technicians rent booth space from you? Will you pay them a base salary plus tips? Keep in mind that, since the 2015 exposé of nail salon wages by The New York Times, the public is more aware than ever of their nail techs’ wages. Also, factor in costs for an accountant/bookkeeper and attorney. If you don’t intend to provide day-to-day management of the business, budget for a business manager, too. 
  • Place: Location of your salon is a big deal, as it directly impacts income. Check out rental rates in your desired location(s) and determine what costs make sense. Also, think about your salon’s best fit. Will it be within a hair salon or spa? Outside a grocery store? In a high-end shopping center?
  • Product: Will you work exclusively with a handful of product suppliers? Go organic? Sustainably-made? Or will you require that your technicians supply their own products? This can be a significant cost if it falls to your business, but it also presents an opportunity to maintain consistency, quality, and branding.  
  • Promotion: While location and excellent service are important, also consider promoting your nail salon through yellow page ads, handing out flyers, establishing customer loyalty programs, and networking within the community.

Also, check with a local insurance agent to get insurance costs and determine the exact coverage you’re required to have based on your needs.

How do you fund your startup costs? 

There are various ways to fund your new nail salon, and they include the following:

  • Government assistance: Check out these government resources created specifically for entrepreneurs. 
  • Business credit cards: This is an option, but it’s one to approach with great caution. Be sure you have a solid plan to quickly pay back any credit card charges. 
  • Loans: These can come formally through programs established between the Small Business Administration (SBA) and banks, or via a personal loan you take out with your bank, friends, or family. 
  • Collaboration: Are there existing salons that would benefit from having a nail salon on the premises? Maybe a hair salon or spa? Think about who you could partner with to offset the costs of establishing your nail salon business.
  • Investment: Are there friends, family members, or investment groups that may want some ownership in your new venture?

6. Purchase Salon Equipment and Products

The equipment and products you’ll need are determined by the type of salon you’re opening. The more expensive items most salons have are chairs, tables, drying stations, and sanitation equipment. Towels, a way to wash and dry them (either on-site or via an off-site vendor), and nail polish are also needed.

If you are supplying all the service products (rather than requiring your techs to provide them), you’ll also need clippers, files, polish remover, cotton balls, massaging lotion/oil, and more depending on your salon’s services.

7. Market Your Nail Salon

Remember, a good location and excellent service will go a long way toward promoting your salon. Consider reaching out to local Instagram and community influencers with an offer of a complimentary service. If they enjoy the experience, they’ll tell their audiences. 

Don’t forget to use the inexpensive advertising opportunities of social media platforms like Twitter, Facebook, Instagram, Pinterest, Snapchat, and YouTube to get the word out as well. Finally, register your nail salon with Google My Business as well as any local business and tourist directories.

Examples of Nail Salon Businesses

The best nail salons seem to be those that pay their technicians fairly, are managed well on the business side, and physically position themselves strategically in their markets. Miniluxe is a good example of how paying techs well can ultimately influence a business’s growth.

Here are a few examples of different kinds of nail salon businesses:

  • Door-to-door nail care
  • Traditional nail salon
  • Kiosk-style nail salon
  • Nail salon services paired with a hair salon
  • One-tech nail salon

Bottom Line

Opening a nail salon has very little barrier to entry, low startup costs, and solid potential for income. By paying attention to the clearly identified income influencers of location and business management practices, you can be on your way to running a successful nail salon.

If you want to keep your startup costs low, we can form your nail salon LLC for free (+ state fee).

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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