Hair Salon Business Guide

By Diane L.

About The Author:

I always wanted to be a hairdresser so when I graduated high school I went to beauty school in New York and got my license. I always worked for a salon when I started first in New York and then in Florida when I moved. One hair salon I worked at was next to a real estate office which worked out to be interesting because one of my clients was a broker in the real estate office next door and each time she came to me she would tell me I should get my real estate license. She said working in a salon is a perfect place to sell real estate because I work with so many people. She told me to get my license and I could use them as my broker. So I took the test and received my real estate license which did prove to be lucrative with being a hair stylist. Then the hair salon was sold and I went to work for another and shortly afterwards they sold out and I decided I had enough of working for someone else and decided to open my own salon.

They had just built a new Key West style strip store on a major street in Clearwater that was really nice. I rented a 800 square foot unit had my husband do the plumbing and electrical you could get away with that then now they watch closer and you would need to get your permits and use a contractor. I put in 4 cutting stations, 8 dryers, 3 sinks and 3 coloring stations in the back. In the front I put a small reception area with a desk and some chairs. I purchased all new equipment had my stations and cabinets made to match each other. I was very fortunate that all my clients followed me to my new salon so I was making a profit from day one.

So the best advice I can give you is to start out working for someone else and build up a clientele and pay attention on how they run things. See what products move how they handle their appointments etc… This is the best way to build the confidence you need when deciding to go it on your own.

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Getting Started in Your Hair Salon Business:

First thing you have to do is get your state license. Every state requires you to have a Cosmetology license. Most states require you to complete a certain amount of hours at an accredited school. Than I would work for a few different salons in the area you would like to open your business. You really need to have a couple of years experience before attempting to go it on your own. If you need to find a beauty school to go to here is a good place to start Beauty Schools Directory . You can purchase your supplies online at Sally Beauty Supply.

Hair Salon License Requirements by State:

Advertising Your Hair Salon:

When I opened my hair salon I had a grand opening day with an open house. I sent flyers out in the mail to the surrounding areas. I ran a grand opening ad and had a little article written about me in the local small newspaper. I served finger food, wine and cookies and had a great turnout. I took out a small ad in the yellow pages (smallest they offered). Every week I ran an ad in the local paper for my area with specials or just my ad to keep my name recognizable. The paper only works if you run it consistently. People have to see your ad over and over again for it to sink into their brain. I had a sign on the marquee in front of the plaza and my husband made me a custom sign out of wood to put in front of my salon that always got a lot of comments. It was carved out so it looked 3 dimensional.

I would run specials in the paper that were fun. I would give two 25lb turkeys away at thanksgiving if people came into my hair salon and filled out a raffle ticket. Even if they were not my customer they had a chance to win. On Easter I would raffle away Easter baskets full of candy. I would do in store promotions each month for my existing customers. One promotion I had was each one of the people working with me brought in their baby pictures. I put each one on the wall and if a customer could guess which hair stylist was the match to the baby picture I would give them a free conditioner. These are the types of advertising that work. You want to keep it on a personal level almost a close friendship so they feel they belong and they have fun. These types of marketing ideas will get the word of mouth advertising going. Word of mouth is the best and most affordable advertising as long as it is positive and not negative which can crush a business.

Hiring Help:

Everyone who worked with me was self employed (sub contractor). I always said when I opened my own hair salon I was going to pay people like I thought I should have been paid. Now with this being said I knew I was not going to become rich owning a salon but I was determined to be fair and I wanted to be responsible for myself and not rely on whether or not the place I was working for was going to sell or close up. I had a girl who came in and her job was to do all of the shampoo and rinses, she would also serve coffee to customers who were waiting on their hair to dry or between different stages of perms and such. She would sweep up the stations and tidy up the place. She was a cosmetology student and was doing extra work to help her through school. I had three other stylists and my mom would come in and help out at the receptionist desk. I was fortunate that about 2 weeks after I had my grand opening a hair stylist stopped in who used to own a hair salon not too far away. She had told me that the person she sold the hair salon to was a jerk and it didn’t work out like she had planned.

She asked if I had a station available for her to work. I knew she would have a good following already being in business so I put her to work. It did not take long for other stylists to find out that I was fair and good to work for and soon I had all my stations filled. I put on a nail technician and this completed my salon. I never said that so in so worked for me. I always said they work with me. Keep the relationship professional but more as a team or big family atmosphere.

How I Paid:

First I had each person sign an agreement with the pay structure spelled out so there would be no confusion. I would pay the hair stylists %55 of the first $500.00 they brought in. For every $100.00 over that I gave them an extra 1% so if they wanted to work hard I rewarded them with a better cut. I paid the nail technician 75% and no incentives. I did not make much at all on the nail tech but it was a nice convenience for my customers. With the stylists I purchased all supplies and major equipment. They were responsible for their personal items like scissors, combs, blow dryers etc… At the end of every year I gave each person a 1099 form and they took care of their own taxes. This kept me from having to pay social security, workman’s compensation and all of the bookwork that comes with payroll. They obviously kept their own tips and it was their responsibility to keep track of them. I always opened the salon and closed the salon either me or my mother always handled the money.

Another thing I always hated when I worked for someone else is that when the salon ran discounts part would come out of my pay. All advertising and specials I ran I always paid for. If I gave away a free hair cut I still paid the stylist her percentage.

What to Charge & Services to Offer:

This is not difficult and when I explain you will see why it is easy to come up with your prices. Let me explain how I determined my prices. Think about it for a moment you are planning on having your clients follow you from your previous hair salons so it only makes sense that you would charge the same amount as they are currently paying. You are asking them to stay loyal you can’t charge them more for doing so.

If you need to after time has passed raise the prices slightly that is understandable but not for the first year at least. On all retail products I sold I charge double whatever the cost to me was. There are many different brands to choose from. I would use the brand you believe in because it will show in your confidence when telling someone this is what they need.

Hair Salon services to offer- You have all the basic services such as cuts, washes, styling, conditioning, coloring, trims, perms, straightening, up-dos, bobs, manicures, sculpted nails, repairs etc… You want to keep a variety of supplies on hand for retail sales such as shampoo, conditioner, gel, hair spray, hair brushes, combs, pins and bands etc…

The best profit is on any chemical service the cuts or shampoo and sets were your bread and butter as far as paying your bills but the chemical treatments were the gravy money. Most of the customers that came on a weekly basis to get shampoo and set also came once a month to have their hair colored. Clients that had perms would get a new perm every three months along with their regular cut.

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Incorporating, Licenses & Insurance:

I incorporated my hair salon business. I always felt that just in case something happen I did not want to mix my personal life with my hair salon business as far as finances were involved. So by incorporating I always kept the two separate giving me a little feeling of security if something were to happen and I did not succeed I would not lose everything I had personally.

Licensing is fairly straight forward. You will need your occupational license, your establishment license from the state, your cosmetology license which each hair stylist must have themselves and health inspection. They do come around and check so make sure everyone’s license is current. You also have to keep up with your continuing education classes.

Insurance cost me around $1800.00 per year for general liability insurance. General liability covers basically anything that can happen inside your hair salon to one of your customers or if the place burns down. I actually had to pay a higher premium because there was a restaurant in the same building as me and made me a higher risk for fire. Try NetQuote to get a free quote on what your insurance will cost will be. It only takes a couple of minutes and you will have an idea of what you will need.

When you are incorporated you have to have a CPA do your end of the year taxes. They will take care of sending out the 1099 forms to your stylists. One thing to remember in order for your stylists to be self employed (sub contractors) you can’t tell them when to work and when to take off. You can set appointments for times they say they will be there but they can come and go as they please.

About the Customer

I would do myself about 15 customers a day in the first part of the week (Monday-Thursday) and about 30 customers a day for Friday, Saturday and Sunday. Most of the stylists did similar numbers. I had the salon open from 9:00 to 5:00 Monday through Saturday. If I had a customer that needed to come earlier or later for some reason I would be there. I was the only one with the key to the salon so if one of the other stylists had an early or late appointment I would be there. Usually the only times customers needed special times were for weddings, funerals or special party at the last minute.

I always sent Christmas cards out every year. I had birthday cards available for my stylists to mail to their customers and I always tried to make sure they did.

How I handled new clients that called or just stopped in I would first accommodate the time the customer wanted. So if the customer wanted to come in at say 11:00 than I looked to see who was available at that time and they would get the appointment. So I did my best to rotate the new clients around to each stylist but always tried to accommodate the customer first. If someone called and requested a appointment say with Cathy at 11:00 and Cathy was full at that time I would say she has an opening at 2:00 but if the customer could only come at 11:00 I would say you should try Sue or Jane she has a time slot open then. You need to make sure you keep the customer coming to your salon it will benefit your stylist and you.

I had a large sign in my hair salon that said please feel free to try any of our hair stylists. This is important and if you have confident stylists and are fair it works for the stylists, customer and the owner. First when someone takes a vacation the customer does not have to wait to get their hair done.

Also if your customers are used to going to different stylists in your hair salon once in a while you may not lose them to a stylist who quits or leaves to open their own business. It is not easy at first to get this started but if you are on vacation and someone takes care of your customer than you will end up taking care of theirs when they are on vacation or out sick.

Because there is so much competition with more hair salons opening every day you have to go out of your way to take care of your customers. If you come in early on a Saturday morning to make sure the customers hair is perfect for that wedding they have to attend they will stay with you.

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