Your dream of opening a successful salon is about to come true! You’ve studied hard, trained, saved, and now, the time has come. There is a price tag though, uncover the upfront and hidden costs involved in starting your salon.
Opening the doors to a salon requires a solid business structure and smart investments. Know what to expect, and you can avoid both financial and legal surprises.
In this SalonCA article, you will discover the real costs of opening a salon, what should be included in your budget, and the legal requirements involved in its successful beginning.
Hair Salon Opening Expenses List
Part of opening a successful hair salon or barbershop is the understanding of the expenses involved. The following are standard expenses that new salons will need to consider and plan for in their budget:
Cosmetology Licensing — To open a salon, you must be a licensed cosmetologist. The cost of getting a cosmetology license from a reputable school can range between $10,000 and $20,000.
Rent — Location and square footage will determine the rent for a salon. Expect to see a range from $1,800 to $5,000 per month or more.
Renovations — It is highly unlikely to walk into the perfect setup for your salon. Improvements, installations, or renovations may cost from $5,000 to $15,000.
Stations, Chairs, and Mirrors — For a 5 station setup, new salon furniture and wall units will run anywhere from $5,500 to $7,500 or more depending on brand and quality.
Equipment — A single shampoo and dryer station can range from $1,000 to $2,000. Go here for barber equipment salonca.com/barber.html and here for salon equipment salonca.com/salon.html
Product Inventory — A three month supply of products for use and retail can range from $5,000 to $10,000.
Website and Social Media — Invest in a professional website which includes a listing of your services, profiles of your stylists, your business information, and a system for scheduling appointments. Your website should also be linked to the social media platforms you use to promote specials, events, and advertising new styles or skill sets. Custom website design ranges from $3,000 to $10,000.
Marketing — Flyers, banners, and promotional products for a grand opening can run from $500 to $1,500 or more depending on quantity, quality, and size.
Cash-On-Hand — When your salon opens its doors, your POS will need a cash reserve. Typically, $500 to $1,000 cash is kept on-hand to make change or used for impromptu or emergency purchases.
From $32,300 to $72,000 is what you may spend by the time you are licensed, have a great location, furnish, equip, stock your salon, and market its opening.
Legal Requirements for a Beauty Salon
As with all businesses, federal, state, and sometimes municipal registration or licensing is required to operate legally. The following are examples of the permits and legal requirements you should fulfill before opening your salon.
• Federal EIN (Employer Identification Number)
• Business Operation License
• Certificate of Occupancy
• State Cosmetology License
• License to Sell Retail
• Building Permit
• Fire Department Permit
• *Insurance (theft, damage, and liability)
As each state and municipality may have different requirements, you can visit their websites for specific instructions, or visit https://library.municode.com and search “salon” for your applicable state and municipal codes.
Each license or permit will typically require a fee, and that fee will vary depending on the state and municipality you choose to open your salon in.
*The cost for insurance will depend on the types of coverage you wish to purchase, and the amount of the deductible you choose.
You must form an Incorporation, Partnership, Sole Proprietorship, or a Limited Liability Company, etc. Depending on your business structure, there will be tax and legal requirements for your business. Consult and decide with your attorney and/or accountant which structure will be best suited for your salon.
Open the Doors to a Successful Salon
After so much preparation and hard work, the time will arrive to open your salon. Know what to expect and avoid financial surprises by preparing for the process.
Having read this article, you are now able to understand better the cost of opening a salon, know what should be included in your opening budget, and which legal requirements must be met.
Knowing what to expect during the opening phases of a salon eliminates the majority of financial and legal surprises. This benefit allows you to focus on bringing in talented licensed stylists, attracting new clients, and making your dream a reality.
Sources:
https://www.sba.gov/business-guide/launch-your-business/apply-licenses-and-permits
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
http://www.business.lacity.org/starter-kits/beauty-salon
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