Figure out how much money you need. Starting a business can cost a lot of money, and most entrepreneurs don't turn a profit for the first year or two. Here's what to consider:
Can you still support yourself while your business gets up and running? Calculate how much money you need for monthly expenses, how much of a cushion you have in savings, and how much you absolutely must make each month to stay afloat.
Come up with an operating budget. Calculate how much money you'll need to run your business every month. Include rent, licensing, training, payroll, supplies and an emergency fund.
Figure out how much you'll charge for services. Once you have an operating budget, you'll know how much money you need to break even each month. To make a profit, though, you'll need to do more than break even. Estimate how many services (such as hair cuts, colors, manicures, etc.) you might perform in a week and figure out how much they need to cost in order for you to make money.
Keep in mind that though you need to charge enough to be profitable, you can't charge too much — or you'll drive away customers. Try to set a price point that is both fair for your clients and prosperous for you.
Get an idea of what other salons charge. Browse comparable salons in your area, and take note of what they charge. Your prices should probably be in a similar range.
Do you need a small business loan? Make an appointment with a loan officer at a local bank, and ask him or her to talk you through the process of getting a small business plan. Before you go, write up a quick summary of how you expect your salon to be profitable — whether it's because you offer a unique service or because there aren't enough salons in your area.
Figure out how you'll pay taxes. Paying taxes as a small business is different than doing so as an individual, so be sure to figure out what you need in advance. To save yourself time and trouble, consider enlisting the help of a CPA while you set up your business.
Take care of any licensing. Unfortunately, running a business means having to deal with red tape and paperwork. Here's what you need to take care of:
Get a business license. All businesses in the U.S. must be licensed. Check out the Small Business Administration website for more help.
In the United States, all personal appearance workers must be licensed. That includes cutting or coloring hair, painting nails, hair removal, and makeup application. Rules vary by state, so contact your local Division of Occupational and Professional Licensing.
Make sure your salon can pass a health inspection. To avoid fines or (even worse) being shut down by the health department, make sure your salon is sanitary and following the guidelines laid out by your state. For an example of what to expect, check out New York state's salon requirements.
Choose the right location. Location is critical to the success of your business. Consider these factors:
Get into a high-traffic area. Busy streets, malls or spaces next to locations people visit often (such as grocery stores) are ideal.
Try to have easy access. If parking is a hassle and traffic is thick on the way to your salon, people might not consider it worth the effort.
Stay away from the competition. Don't situate yourself directly next to another salon — you'll cancel each other out. Instead, try to stake out a place where you'll be the only salon for a few blocks.
Hire qualified and trained personnel. The cosmetic procedures performed by untrained personnel may cause health problems to the clients. It is important that you hire only qualified and well-trained beauticians, stylists, and other personnel.
Remember, it is your responsibility as the salon owner to ensure that your personnel are adequately trained and understand each procedure offered.
Experience may give a beautician the expertise to render treatment, but, without proper training, she would be unaware of the merits and demerits of procedures.
Have a short but clear salon procedures manual in place as soon as you can, and give each employee a contract when they start. These documents are usually easy to find on the internet and you can then customize them to your business. It will save you a lot of headaches in the long run if you are set up properly at the beginning.