How to start a beauty salon
Posted: Thu 9th Sep 2021
Prior to the pandemic, the hair and beauty industry had seen massive growth. It had become one of the UK's highest-performing industries in the UK before COVID-19 hit, with the number of salons and businesses increasing year on year.
While a report by the National Hair & Beauty Federation (NHBF) identifying the industry as one of the hardest hit by lockdown – with turnover falling by an average of 45% in 2020 compared to the previous year – a recent survey found that most hair and beauty business owners were confident they were going to survive. Many planned for growth.
Despite the bright outlook for the hair and beauty sector, however, success isn't guaranteed. But with the right preparation and planning, you can give your beauty salon the best chance for success. Read on to find out how.
Plan and calculate
The first and most important step is to have a clear business plan. One of the key benefits of a business plan is that it gives you a better understanding of how financially viable your business is.
It does this by comparing your projected earnings against your salon's outgoings. You can then refine your strategy in line with your financial forecasts.
A business plan will also allow you to understand if you need a business loan. Or you could get funding from a business angel – that is, an individual investor who provides funding in exchange for shares in your business.
Make sure you don't fall foul on your tax returns. If you're not comfortable with filing a tax return for your business yourself, you can hire a qualified accountant or use accounting software that makes the process easier.
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Find your niche
As a new beauty salon, it's best to identify a niche that will work for your business. One way you do this is by identifying the best target market in the location where you're setting up your salon.
For instance, a budget beauty business aimed at students could work in a town with a university, or a luxury beauty salon could appeal in an affluent area.
There are various types of beauty shops that cater for different needs and tastes, so trying to appeal to all types of clients at the very beginning may not be realistic.
It can help to try to choose a particular customer or specialism to focus on at first before attempting to be all things to all people. For example, specialising in an area as focused as bridal packages is a niche in which a small business could fully deliver and provide a high-quality service. That, in turn, makes success more likely.
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Take care of regulations and contracts
Once you find a location you like for your salon, it's likely you'll need to register your new business with your local authority's environmental health section.
Make sure you learn about the current beauty salon health and safety regulations. It's also worth finding out from the council what business tax rates you'll need to pay.
If you're setting up a business with a partner, drawing up a proper contract is vital. This should clearly set out what each party's responsibilities are, and how you'll divide the business and its assets if things don't go to plan and you need to end the partnership.
When opening a hair or beauty salon, you must make sure the products you'll be using aren't hazardous and that your staff are trained and experienced in using those chemicals. Many beauty treatments can be harmful if not applied correctly.
You should also follow the Control of Substances Hazardous to Health (COSHH) regulations. These specify how to use and store chemicals at work.
Register your business online and offline
Registering the business is usually the next step on the way to becoming your own boss. It's an easy and quick process. Once you know which type of company you want to set up – sole trader, limited company or partnership, for example – you can do it online.
If your business is going to have a website, before your buy your domain, it's worth checking if your business name is free to use online. There are lots of domain name checkers online – just search for one. To be consistent, ideally you should have the same name and branding offline and online.
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Insure and protect
Your business is only as good as your staff. Consequently, when recruiting your team, you must make sure they have the necessary qualifications. According to the National Careers Service, a fully qualified beauty therapist will usually need to complete a level 2 or level 3 qualification in beauty therapy.
But before you start hiring employees and greeting customers into your beauty salon, you need suitable business insurance.
Employers' liability insurance will cover your employees if they suffer an injury while working for you.
Public liability insurance will cover your customers and the general public if your business activities cause them an injury or damage to their property.
Specialist treatment liability cover insures you against any illness or injury your hair or beauty treatments cause to your customers.
Depending on the type of beauty business, some professionals require a licence. Check if your business needs one
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Networking and keeping up with the industry
Friendliness and great connections will help your beauty business flourish. Being a people person, and delivering a high-quality service, can inspire loyalty and encourage customers to come back again.
It's also worth spending time to develop your network. Attending industry-related shows and trade events may not only keep you up to date on the latest trends but may also help you attract new clients. Some of the big shows include:
the Beauty UK Show
the Professional Beauty Show
Going to events in your local community, as well as bridal shows, can help you secure additional customers. Joining a relevant trade association, such as the Professional Beauty Association (PBA), could also prove beneficial, as it can help you with legal and business advice.
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Starting a beauty business is a big challenge and requires a lot of work before you've even welcomed your first customer through the door. But with the right planning and preparation, your business will be best placed to reap the rewards of success.
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