Special discount

Get 30 days free plus 40% off Lili Smart fee for 3 months

Get 40% off Lili Smart fee for 3 months

How to Open a Salon: A Comprehensive Guide

Starting any type of business is challenging, and a salon is no exception. This detailed guide walks you through every part of getting your salon business off the ground.

By Lili • Nov 12, 2023

So you’ve made the exciting decision to open a salon… What’s next? We’ve developed a guide to help answer that question, taking you from your initial idea to opening day and beyond, covering everything from market research to business management essentials. Whether you’re an experienced stylist ready to launch your own place or a newcomer eager to dive into the beauty industry, we’ll help you with every step on your journey towards opening a successful salon. 

Before Starting Your Salon Business

Before you mix your first color or style a single strand of hair in your salon, there’s significant groundwork to be done. This preparatory phase is where your vision starts to take shape and where you lay the foundation for future success.

Perform a Market Analysis

First, dive into market analysis. This means figuring out who your target audience is, what they want in a salon experience, and what the competitive landscape looks like. Look into local trends, pricing, and service providers. Are there enough potential clients in the area? What are they looking for in a salon that they’re not currently getting? This analysis helps to ensure that there’s a demand for your salon and that you can position it to fill a niche that’s currently underserved.

Choose a Concept

Deciding on the concept of your salon is a crucial step that impacts every subsequent decision, from decor to services offered, and shapes the entire customer experience. Drawing inspiration from your market analysis, your salon’s concept should resonate with your target audience and aim to fill a niche in your local market. Whether you opt for a luxurious spa-like retreat, a budget-friendly family salon, or a specialized studio focusing on particular treatments, ensure that your concept is coherent, compelling, and consistently executed in all aspects of the business. This will guide your branding, marketing, and even the layout of your space, creating a distinct identity that clients will recognize and appreciate.

Establish a Brand

Your salon’s brand is its heartbeat. It’s what will resonate with your customers and set you apart from your competitors. Building your brand starts with determining your salon’s name, logo, and colors, but extends to the design of your space, and even the way you communicate with customers. Your brand should tell a story, evoke emotions, and create a lasting impression. It’s crucial to choose a name and create a visual identity that’s not only attractive but also reflective of the values and atmosphere you want to establish.

Understand the Costs

Like any business, opening a salon comes with its fair share of costs, and it’s essential to have a clear financial plan. There are the initial expenses such as leasing a space, renovating it to fit your brand’s aesthetic, purchasing or leasing salon chairs, wash stations, and styling tools. You’ll also need to consider ongoing costs like utilities, insurance, payroll, marketing, and restocking of supplies. Drafting a detailed budget and financial forecast will be critical to ensure you have the necessary capital to keep your business afloat until it becomes profitable.

Know the Rules (and Regulations)

Navigating the regulatory environment is an unavoidable part of opening your salon business. You’ll need to obtain the proper business licenses and permits in order to operate legally. Depending on your location, this might include a cosmetology license, a salon license, health and safety permits, and a general business license. It’s also important to understand the Occupational Safety and Health Administration (OSHA) regulations to ensure the safety and well-being of both employees and clients.

Real Estate Research

The right location can make or break your salon. It should be easily accessible to your target clientele, visible, and in an area that complements your brand’s image. Consider foot traffic, parking availability, and the proximity to complementary businesses such as spas or fashion boutiques. Performing some preliminary research about where to locate your salon business will make it easier to secure the perfect location once you’ve set up your business and obtained financing.

Taking the time to thoroughly understand and prepare for each of these aspects will lay a solid foundation for your salon. It will ensure you’re not just ready for your grand opening but also poised for growth and success in the competitive beauty industry.

Opening a Salon: A Step-by-Step Guide

Embarking on the journey of opening a salon is akin to sculpting a masterpiece; it requires vision, precision, and a step-by-step process to bring it to life. Here’s your guide to navigating these waters, ensuring your salon is set to dazzle from day one.

  1. Craft a Business Plan
  2. Register Your Business
  3. Develop Your Brand
  4. Get the Required Permits and Licenses
  5. Open a Business Bank Account
  6. Secure Financing
  7. Select the Right Location
  8. Order Equipment and Supplies
  9. Get Insurance
  10. Hire Your Dream Team
  11. Stay Organized

1. Craft a Business Plan

Begin with the blueprint of your venture. A business plan isn’t just a document you prepare as a formality; it’s your roadmap to success, something that should guide you as you establish your business. Outline your mission, the services you’ll offer, your target market, and financial projections. This plan will become the go-to reference when setting up your salon, and is also essential for securing funding.

2. Register Your Business

Registering your business as a legal entity, such as forming an LLC, is necessary to formally establish your business. This is also a crucial step in separating your personal and business finances, and it serves to protect personal assets.

3. Develop Your Brand

Your brand is the soul of your salon. It’s more than a logo or a color scheme; it’s the experience you promise to each client who walks through your door. This step should translate your vision into a tangible brand identity that resonates with your target audience.

4. Get the Required Permits and Licenses

Formally setting up a salon means obtaining the necessary permits and licenses. This may include a salon license, individual cosmetology licenses, and health department permits. An Employer Identification Number (EIN) from the IRS is also essential for tax purposes and hiring employees.

5. Open a Business Bank Account

Establishing a solid financial foundation is essential for any new salon. Opening a business bank account is a fundamental step that brings structure and professionalism to your financial operations. Look for an account tailored to the needs of small businesses, offering perks such as minimal fees, robust customer support, and additional financial management services. A dedicated business account streamlines your financial management, making it easier to manage cash flow, handle bookkeeping, and ensure accuracy in tax filings. This clear financial separation also reinforces the credibility of your salon as a serious and established business, providing confidence to both your clients and potential investors.

Lili provides a business bank account that includes all of the essential banking features you need to run your business smoothly, as well as a suite of accounting, invoicing, and tax prep tools that fully centralize your business financial operations. Forget jumping between different platforms to run your business–with Lili you get one platform to manage your business finances, so you can focus on what matters: growing your business! 

6. Secure Financing

Capital is the lifeblood of your business. Assess your savings, consider applying for a small business loan, or seek out investors. Be realistic about the amount you need to cover startup costs like location, renovations, equipment, and initial operating expenses until you turn a profit.

7. Select the Right Location

You’ve already done the research from the standpoint of maximizing visibility and accessibility. But choosing the ideal space for your salon extends beyond finding a prime location to attract business; it’s about ensuring the size and cost align with your business plan and budget. The location should match your affordability criteria while still being prominent and easily reachable for your intended clientele. It’s important to factor in not only the cost of leasing the space but also the expenses associated with renovating it to reflect your brand, as well as ongoing costs like utilities, which will impact your monthly overhead. A strategic location, optimal in size and cost-effective, sets the stage for your salon’s success and growth.

8. Order Equipment and Supplies

Acquiring the right equipment and supplies is a pivotal step in setting up your salon. Assess your service offerings to determine what you’ll need, from quality styling chairs and washbasins to proper scissors and powerful hairdryers. Consider both purchasing and leasing options for larger equipment, keeping in mind that leasing can offer flexibility and reduce initial costs. As you weigh your choices, be meticulous with your budget. Allocate funds for not only these tools but also a selection of retail products, ensuring you can provide for your clients’ post-visit care. While the initial investment can be significant, opting for high-quality equipment can save you money in the long run due to lower maintenance and replacement costs.

9. Get Insurance

Protecting your investment with the right insurance policies is non-negotiable. This should include general liability insurance, professional liability insurance, and property insurance to safeguard against potential legal and financial risks.

10. Hire Your Dream Team

Your staff will be the cornerstone of your salon’s day-to-day operations. Hiring licensed professionals who share your vision and commitment to customer service is crucial. Look for team members with a passion for the industry and a personality that matches your salon’s culture. They should not only have the technical skills required but also the personality to create a welcoming and friendly atmosphere.

11. Stay Organized

From booking appointments to managing inventory, adopt tools that help keep your business organized. Consider salon management software to streamline operations, and don’t underestimate the power of a well-managed business calendar.

With each step, you are creating the framework for what will soon become a bustling hub of beauty and business. Don’t rush the process; each phase is crucial to your success. By moving methodically, you’ll build a salon not just outfitted for its grand opening, but one that’s structured for longevity and growth.

Your Salon is Open–Here’s What To Do Next

After the ribbon-cutting and celebratory toasts, the real work begins to sustain and grow your new salon business. This critical phase requires as much care and attention as the opening.

Market Your Business

Your salon’s doors are open, and now it’s time to invite the world inside. A robust marketing strategy is vital. Utilize social media to showcase your work, offer opening specials, create a website for your business, and share client testimonials. Develop a referral program to encourage word-of-mouth promotion, and consider partnering with local businesses to expand your reach. Your goal is to build a brand presence that attracts a steady stream of clients.

Control Costs

With your salon up and running, focus on cost control. Implement a system for tracking expenses and revenues, and review these numbers regularly. Look for areas where you can cut unnecessary costs without compromising the quality of your services or customer experience. Invest in energy-efficient appliances and bulk purchasing for supplies to save money in the long run.

Comply with OSHA

Adhere to safety and health regulations to ensure your salon is a safe environment for both clients and employees. OSHA compliance is not optional; it’s imperative for the wellbeing of your business and the trust of your clientele.

Streamline Processes

Efficiency is key in the day-to-day operation of your salon. Time management tools and salon software can automate appointment bookings, client communications, and inventory management. This not only saves time but also reduces the likelihood of errors. A smooth, efficient operation will not only impress clients but also help you manage the business with less stress.

Sustaining your salon’s appeal demands more than just day-to-day management; it’s about nurturing your business with constant care and strategic investment. Beyond the regular routine of appointments and services, it’s crucial to channel resources back into your salon. Whether it’s upgrading your salon with software that increases efficiency, investing in advanced training for your staff, or refreshing the decor to keep the aesthetics current and inviting, each decision to reinvest in your business is a step toward cultivating a flourishing business that stands out in the market.


How much does it cost to open a salon?
How can you open a salon with no money?
What do you need to open a salon?
Is owning a hair salon profitable?

The Bottom Line

Opening a salon is more than just a business venture; it’s the creation of a space where beauty, artistry, and customer service converge. With strategic planning, understanding of costs, savvy marketing, and a commitment to continuous learning and improvement, your salon can blossom into a thriving hotspot that not only beautifies but also builds a loyal community.

Written by
Team Lili