How To Start A Salon In Your Home

You have years of working for others in the beauty salon industry and now you’re thinking of starting your own business. Can you accomplish your dream of a satisfying career and make a good income doing this if you don’t have any business experience?

Yes! Anyone who has the drive and the willingness to work hard can open their own home-based salon business and be successful!!

If you’ve worked in salons and already have a good skill set, then going into business for yourself is a great next step. Starting a new salon doesn’t have to be expensive, especially if you base it out of your home. A home-based business offers numerous advantages when it comes to taxes and expenses.

It can be scary to switch from the role of employee to owner. However, there is no better way to ensure future success and income. With enough hard work and perseverance, you can absolutely run your own home salon.

Research

If you’re going to choose your own home to operate your business out of, then you need to do research on your local area. Are there any other salons, whether commercial or private, home-based ones? What services do they offer? What are their prices?

You also want to look at the state of your local community. Is it a growing community that may help enhance the growth of your business over time? Do you live in a centralized location where more potential clients can easily get to you?

Do you have a Home Owners Association (HOA) in your neighborhood? Will you be able to even have a home salon, or will you have to pay extra fees in order to do so? If your HOA does allow it, then make sure you get this in writing. When HOA boards turn over, sometimes you can get new officers in that may disagree with the actions of prior boards.

Business Plan

Creating a business plan should be one of the first tasks you take on when starting up a new salon. A business plan is a way to put down on paper (or computer screen) your thoughts and ideas. It can serve as a road map for establishing and growing your business.

A good business plan is composed of several factors.

  • Location – Where in your house will you locate your salon? You may want to place it in a location where there’s a private access so clients won’t be walking in to your house via the front door. Will you need to remodel the area?
  • Name – What will your business be named? It needs to be unique and reflect your business style or even just your location.
  • Employment – Will you work all by yourself or will you hire someone else to work alongside you? If you do choose to work by yourself, at what point would you look to hire someone else?
  • Services Offered – While your services may just start with hair cuts and styling, would you also want to provide manicure/pedicure services? What about hair coloring?
  • Equipment – If your budget is tight, then how can you maximize any equipment purchases? Can you fit everything you want into the spot you’ve chosen in your house?
  • Marketing – Every business needs to advertise yourself. Being a home-based business, you may start advertising with Facebook ads and posting on the NextDoor app.
  • Pricing/Revenue – You need to figure out what your services need to cost in order to bring in a livable profit for yourself. See what other local businesses charge for similar services and be competitive. Keeping expenses low will help maximize the profits.
  • Expenses – You’ll have fixed (cost of equipment at startup, for one example) and variable (hair and nail products) expenses that you need to estimate. Will you pay “rent” to the owner of the house (you)?

Once you’ve ironed out the details of what you want your new home-based salon to be, then it’s time to get serious about starting.

Business Licenses

If you’re not sure about which licenses you may need when starting a new home-based business, then you should consult a local Certified Public Accountant (CPA) or attorney (CPA’s are generally cheaper and you will likely want to have one to do your taxes anyway) for some good advice. You can also consult your state’s Small Business Association (SBA) for more information.

An LLC is a great choice for most businesses and especially for a home-based business. You want to separate the business from your home legally to protect both your business and your home.

Not sure if your desired business name is available as an LLC? Checking with the SBA is a great way to see if it’s available. When naming your business you are going to want something unique and that describes your business style. That may make it easier to find a unique name that won’t infringe on someone’s trademark. This post from the SBA has some great information on this topic.

Make sure to check with your local government as well when it comes to knowing what types of licenses that they will require. If you are going to sell any products out of your business, you will also need a sales tax license.

Let’s not forget about permits, either. If your salon is going to be in your home then you need to make sure that the location is up to the local code. Will you need to add additional electrical capabilities? Will it need its own restroom?

Professional licenses also need to be up to date. If you have a cosmetology license, you will need to display it. If you’re going to be offering services like hair coloring or manicures, then you need to also be certified and have all the proper documentation.

Don’t forget insurance! You need to check with the insurance company that you have your homeowners insurance with to see what sort of options you have when it comes to insuring your home-based business. You need to have a separate insurance policy as a business owner, as this will cover things like commercial property and general liability.

Financing The Startup

With your business plan, you should have constructed a list of equipment and supplies you will need to start the salon. You may also know what sort of construction upgrades that also need to happen.

Will you have the money in the form of savings or will you need to borrow the money? If you need to borrow the money then you will need to know what sort of options there are available to first-time small business owners.

Don’t forget to consider looking into grants that may be offered by your state or other local organizations. There are grants that offer money to veterans, women, and other groups of people. If you’re a first-time business owner with a startup, there are even more options.

While you may be able to borrow all the money you need from family and friends, is that a good idea? Money always complicates relationships, and owing someone money that are you close to may alter that relationship in a way that you don’t foresee. Even if you do borrow the money from someone you know, you should have a formal contract signed by both parties so your agreement is formalized.

If you need to borrow from a financial institution such as a bank, lending company, or even the Small Business Association, you will need to submit an array of financial documents first. They will check your credit score, your debts, your current or recent income of you and your spouse, as well as other factors.

Having a well-designed business plan at this point is essential. Anyone who lends you money will want to evaluate your business plan. You need to know what your expenses will be.

If you’re having trouble with obtaining a loan, look into getting a SBA-insured loan. If you qualify for it, having the Small Business Association backing will ensure that the loan is ultimately paid either by you or the SBA. That gives some assurance to lenders who may be more willing to loan money to a business that they think is a bit risky.

Setting Up Your Space

So now you’re ready to actually put your salon together! This is the fun part! Let’s break down the parts of a good salon design.

  • Lighting – Will you have some natural light from windows or will you want to simply have overhead lighting? It needs to be soft, warm, and inviting. One of the benefits of having a salon in your home is that it can feel like a home to your customers.
  • Color Choices – Pick soothing colors in shades of blue, yellow, and green. You’ll want an overall theme to match the floors, walls, and possibly even your equipment.
  • Decorations – Plants are great if you have natural light from a window. A few pictures on the walls or even a painting or two is a nice touch.
  • Music – A little background music is soothing and helps to pass the time for both you and your client. While a radio is easy and cheap, I recommend not using one because of ads and potential interruptions for traffic and news. A wifi radio an Echo Dot from Amazon is a great cheap choice for constant radio on a station that you select and control.
  • Smell – You don’t want your salon to smell like chemicals all the time whether it’s from coloring hair to cleaning supplies. An essential oil diffuser if a nice touch that clients will appreciate. My favorite one I use in my own home is this one. The lemongrass is my favorite scent.

Purchasing Equipment And Supplies

If you don’t already have a checking account for your business, then now is the time for that. You should consult your CPA on whether or not you need a business checking account or just a separate personal checking account for your business.

You fund your initial account with either your own money or any loan funds that you may have received. That doesn’t mean that you need to simply write a check or pay everything with a debit card.

There are many distinct advantages to getting a business credit card to make purchases. Amazon makes it very easy to get a free business account with them, and making purchases with their credit card will earn you rewards that you can use to get cheaper products in the future.

You’ve undoubtedly already researched all the various pieces of equipment that you’re going to want to get for your salon. However, this is a great time to make sure you have a plan for how each piece is going to be used. Don’t buy a separate manicure station if you can’t afford it at first, for example.

Getting a good salon chair is one of the first purchases that you will make. Check out our post on the Best Salon Chairs in 2019 for a variety of styles and prices. Make sure that the chair is comfortable for your client and not just attractive.

You will need some sort of wash bowl to wash and rinse your clients’ hair. This can be a cheaper mounted unit like this one for around $100. You can also purchase a bowl/chair combo that looks nicer but is more expensive and takes up more room.

Having somewhere to store your smaller equipment such as scissors, shavers, and brushes is essential. You can choose something like a rolling open cart like this one, or you can choose one with a larger capacity that can also be locked for safety. Having the cart be mobile is great for versatility as well as being easier to clean around.

If you do plan on offering manicures, then there are some great smaller options that fit into smaller spaces. Check out the article on 7 Best Manicure Stations for 2019 that I wrote recently.

When purchasing products, you will need to look at many different items like shampoo, conditioner, mousse, gel, and nail polish. Spending too much on inventory is a great way to run your business into the ground. Be sure that you know you will use what you purchase and keep on top of your inventory to make sure you never run out of things you need.

Marketing

Every small business needs to become familiar with all the different ways that you can market what you do to potential clients. You also need to know how much you can budget towards marketing, especially when you are first opening your business.

Social media is usually the first place business owners go to when marketing, but consider what kind of clientele you are looking to attract. While Facebook is probably the best overall platform for your business, Instagram can be great for attracting a younger clientele.

Twitter, Pinterest, and LinkedIn are likely to be very small sources of traffic for your salon business but you may still want to post on them as well. In any case, you need to post often and regularly.

Having a website is a must in this day and age, even for a smaller home-based business. It doesn’t have to be fancy. A one-page site detailing your services, location, and how to contact you is all you need. A new domain will usually cost less than $12 annually, and hosting can be found for as little as $5/month on some sites.

Don’t know how to do all this yourself? Consider hiring someone more experienced to do it for you on sites like UpWork or Fiverr. You should be able to get a basic website made for under $100.

Be creative with your social media advertising! Show off before-and-after photos of your clients (with their permission) or other fun photos to attract people to you.

If you want to up the ante on your advertising, consider taking out some Google ads or Facebook ads. These can be tailored to your location and can be fairly cheap or expensive depending on how many people you want to reach.

Scheduling

Don’t even consider buying scheduling software when you are first starting up your home-based salon. That’s an expense that you just don’t need when there are many great scheduling phone apps these days.

We are going to talk about Square for payments down below, but they also have a great free scheduling app if you’re the only one working in your business.

If you want other options, there are several that are available for either IOS or Android phones. Check out this great article for more information.

If you have a laptop already and want to use it for scheduling and even accounting software like Quikbooks, then go ahead and do it. However, you don’t need an expensive computer to run your small business. Save money where you can.

Payments

Small businesses are incredibly fortunate these days that modern technology has made taking credit card payments easier than ever.

You can get a small credit card reader that plugs directly into your phone so you can swipe credit cards quickly. Square has a great payment processing application and reader for this.

Square also has a separate bluetooth-connected reader that can take chip cards or other payments such as Apple pay or Android pay. This is likely the better option with more security.

With Square you can also utilize scheduling in conjunction with payments in the same app. That increases your efficiency and makes you look like a real business professional to your clients.

Additional Resources

Now that we’ve gone over the basics of starting a home-based salon, all you need to do is get started. However, for many people, that is the hardest part.

Starting your own business from scratch is scary, and most people don’t grow up knowing how to do this. They usually don’t receive this kind of education in school as well. If you’re needing more information, there are many ways to get more knowledge.

Conclusion

Starting up a home-based salon is a great way to maximize your potential in the beauty industry and your personal career at the same time. Taking care to fully research and plan your new business will prevent headaches down the road.

Make sure to get help when you need it, whether it’s from a CPA or your local SBA. Understand the principles of marketing to launch your business and continue to grow. You can learn what you don’t know from so many different resources.

You may be only a short time away from maximizing your potential and living the life you want to lead with a home-based business. All you have to do is gather your courage and take that first step.