How to open a beauty salon

Customisable business insurance
16 May 2022
7 minute read

Whether you love helping people feel their best or you’ve heard how lucrative the industry can be, there’s never been a better time to open a beauty salon. Since last year, the sector has seen a 54% growth and this upward trajectory is only expected to continue.

Setting up your own beauty business can be incredibly rewarding, but there are a few hoops to jump through first. Here’s everything you need to know to take your side hustle or personal passion to a fully-fledged salon.

Questions to ask before opening a salon

Before you even start preparing, it’s a good idea to sit down and ask yourself some questions that will help with your planning. These could include:

  • Where will your beauty salon be? Are you going for a quiet neighbourhood location with no local competition, or a highbrow venue standing shoulder-to-shoulder with sleek London salons?
  • If you’re not relying on your own savings – where will your funds come from?
  • What business skills do you have? When starting any new business, it’s helpful to have some knowledge of areas like marketing, customer service and accountancy
  • Will you need employees, and how will you hire them?

How to set up a salon – a 12-step guide

Now you’re up to speed on the first steps, it’s time to get the ball rolling:

1. Create a business plan

If this is your first experience putting a business plan together don’t worry. The main point of a business plan is to pin down business objectives and create a clear picture of your goals. Some key things to think about in your business plan are:

  • How will your business operate?
  • What will your costs be, and what is your projected cash flow?
  • Who are your main competitors? Do your market research and get a clear picture
  • How will your business be structured? For example – will you be set up as a sole trader or limited company?

If you want a full breakdown of what to include, check out Superscript’s guide for a full breakdown of how to write a business plan.

The main legal bases to cover when opening a salon are licensing, staff training, health and safety and salon insurance. Ensuring your employees and clients are protected and safe is of the utmost importance, so this is one area not to cut corners.

Firstly, you’ll need to register with your local authority and obtain a premises license (which might also require an inspection). You’ll also need individual licenses for any treatments you plan to carry out – have a look at the government’s license finder for further information.

Most salons require equipment, so it’s essential to ensure that equipment hygiene procedures are followed and that all of your equipment is safe, regulation-compliant and properly sterilized between uses.

When it comes to day-to-day health and safety, salon environments can be especially high risk (thanks to the increased probability of wet floors, trailing wires and sharp scissors), so workplace first aid training is a must, and you’ll need a first aid kit and accident book on site.

You’ll need to keep a close eye on any health and safety hazards that could cause injury. The best bet to stay on top of this might be to pay a health and safety agency for an annual service. They’ll take care of carrying out assessments and make recommendations to ensure your salon is compliant with health and safety regulations.

Finally, if you’re hiring employees – regardless of whether they’re full-time, part-time or temporary – you’re legally required to have employers' liability insurance. While other covers are useful in the salon world, this is the only one that’s required by law. It provides financial protection in the event of an employee suffering an accidental injury or property damage at work and they want to make a claim against you.

3. Nail down your services

Will you be doing best-in-class balayages and blow dries or a full menu of destressing and decompressing beauty therapies? While many beauty businesses multitask, resist the urge to go too big too soon. Playing to your strengths will help you find your speciality – there’s always time to expand your treatment menu later down the line.

4. Get some training

Nailing down the services you’ll offer will help you decide what qualifications you’ll need. These are a must if you’re going to be performing the treatments yourself. As head of the business, you should also consider obtaining a high level, not only so you have a thorough understanding of how to do the treatments but also so you can help out more junior staff if required.

The most common qualifications to get are NVQs, which could include:

  • NVQ Diploma in Beauty Techniques (Level 2)
  • NVQ Diploma in Beauty Therapy Services (Level 2)
  • NVQ Diploma in Hair and Beauty Services (Level 2)
  • NVQ Diploma in Beauty Therapy (Level 3)
  • NVQ Diploma in Advanced Beauty Therapy (Level 3)
  • Diploma in Beauty Therapy Treatments (Level 3)

Alongside NVQs, there are a number of other places to get qualified such as City & Guilds, Vocational Training and Charitable Trust (VTCT) certificates, BTEC HNDs and Confederation of International Beauty Therapy and Cosmetology (CIBTAC) qualifications.

5. Think about start-up costs

Start-up costs fall into two categories:

  • Fixed costs (like rent, staff wages and insurance)
  • Variables (like materials, software and equipment)

Before you open your doors, get a clear idea of the combined cost of things like paperwork and registration fees, training, equipment, fitting out your space, software, wages, insurance and stock. Head to our comprehensive guide to start-up costs for the full breakdown.

6. Think about finances

None of the leading UK beauty franchises would be where they are today without funding. The good news is there are lots of ways to finance your beauty business. The government offers several small business grants, which you may be eligible for.

Other ways of financing (if you’re not fronting the start-up costs yourself) include crowdfunding, seed funding, angel investment, venture capital, and small business loans.

While we’re discussing finances, it’s also a good idea to start preparing for when you’ll be making money. If you’re tackling accounting yourself, sign up for some accountancy software to easily manage costs.

Be sure to pick one that syncs with your card machine service so you can view your profit and outgoings in real time.

There are a few different options for how you legally structure your beauty business:

  • Sole trader
  • Limited company
  • Partnership
  • Limited liability partnership

A limited company is probably the best way forward for a beauty business (due to tax advantages and less personal liability) ­– but each setup has its advantages and disadvantages. Find out more about the benefits of setting up a limited company for a small business.

8. Get the right insurance

You’d be hard-pressed to find a salon which hasn’t faced at least one allergic reaction or bleach disaster in its time, which is why it’s an excellent idea to have public liability insurance (which can protect you in case of customer injury or damage to property).

The other insurance covers you’ll need will depend on the type of business you have, the services you offer and whether or not you have employees. Check out which industries we cover to see which insurance types suit you best:

9. Location, Location, Location

Working remotely might be the best way forward initially, but if you’re ready for an owned or rented premises, consider cost-effectiveness, convenience for staff and how likely you are to get customer footfall before signing the dotted line – and don’t forget to factor in any refitting costs.

10. Who are you going to employ?

As the face of your business, employees are a key ingredient to your success. Think practically about what sort of help you might need (for example accounting, front of house and additional beauty therapists) as well as the qualities you’re looking for. Our guides on recruiting for a startup and writing an effective job description will help with the rest.

11. What is your brand?

You may already have a really clear idea of your brand – but if not, it’s time to think about brand name, logo and colours. Every touchpoint should communicate your brand identity, from the moment a customer first follows your Instagram page right through to when they step through the door. If you’re stuck for inspiration, have a look at what your competitors are doing.

12. Market your beauty salon

The hard part is out of the way, now it’s time to get the word out!

In this digital world, having an online presence will do you wonders, which means building a website, creating a Google My Business page and setting up your social media accounts. These are all great ways to connect to your customer and show off reviews and testimonials.

Opening offers, discounts and vouchers are also a great way to get people through the door (but run the numbers to make sure you can afford it). And it goes without saying, nothing works as well as word of mouth, so always ask satisfied customers to share their salon experience with their friends and family.

The finishing touches

Last but not least, the final stage is to work out details. Things like opening hours and pricing your services might feel like a last-minute job but don’t leave them too late.

Once you’ve got the minutiae locked in, you’ll be ready for your first booking!

This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.

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