Launching a Salon Startup—Cost of Starting Your Beauty Business
Starting a new business is both exciting and frightening since it requires you to dip into your personal savings to finance the launch.
For that reason, it is best to come up with an itemized list of one-time and recurring expenses to help you prepare. In this article, we break down the expected salon startup cost and explain what to do if you cannot cover it.
When opening a beauty salon, you need an initial investment to account for the launching costs alone. Before you get started with the calculations, try to answer the following questions:
- Are you going to be a renter, or will you purchase the salon space?
- Will you specialize in hair care and styling, or will there be other available services (e.g., manicures, beauty treatments, etc.)?
- Are you going to lease or buy the equipment?
- Will you be selling any products in the salon?
Once you come up with a blueprint for your business, it’ll be easier to project the initial one-time expenses. You can refer to the table below for an overview of the average startup cost for a beauty salon:
|Salon Startup Cost||Average Amount|
|Licenses and permits:
|Remodeling and renovation||$15,000–$32,000|
|Initial supplies and inventory:
|Employee attire (i.e., uniforms)||$500–$1,000|
|Marketing and advertising||$500–$5,000|
Apart from the one-off salon startup costs, you need to factor in long-term expenses when setting up your budget. The recurring costs for hair and beauty salons include:
- Rent—The rent ranges from $10 per square foot to $25 per square foot
- Licenses and permits renewal—The budget for licenses and permits renewal ranges from $50 to $100 per year, depending on the local regulations
- Employee wages—The average wages for hair and beauty salon workers are:
- Salon manager—$35,800
- Beauty therapist—$27,000
- Insurance—Insurance is typically charged between $300 and $700 per year. It is possible to split the expense into monthly payments
- Payroll taxes—As the salon owner, you fall under the self-employment category and can expect 7.6% tax fees
- Credit card processing fees—The base rates for credit card processing are 1.5%–3%. If you decide not to accept credit cards as a form of payment, you will eliminate the recurring expense but also risk losing potential clients
- Cleaning fees—The cost of hiring a professional cleaner is approximately $200. If you choose to handle the upkeep yourself, you need to set out roughly $50–$200 for monthly cleaning supplies
- Inventory—The salon supplies costs can be anywhere from $2,000–$15,000, depending on the products
- Utilities—The average electricity bill adds up to around $150, but there is room for reduction (e.g., relying on natural lighting during the day). As for the water bill, the monthly expenses range from $30 to $150
If you cannot acquire the minimum working capital for your salon, consider getting a small business loan to get you through the first few months. Loans are a form of financial aid aimed at small to medium-size businesses that can cover a wide range of purposes, including startup costs.
- Having a good or excellent personal credit score
- Adhering to lender-specific requirements
- Gathering the right paperwork
You must also choose a loan provider. New businesses have a slight disadvantage when applying for a loan due to the lack of business credit and maturity. While you might have to work harder to secure funding, you still have plenty of viable options, such as:
- SBA loans—The Small Business Administration (SBA) provides some of the best loan programs, with great interest rates and flexible loan terms
- Asset-based financing—These types of loans work well with hair and beauty salons since they’re tied to tangible assets, such as equipment and real estate
- Crowdfunding—Crowdfunding websites such as Kickstarter and GoFundMe have been a reliable source of income for many budding businesses
- Personal loans—Direct online lenders are a way to bypass banks or non-profit lending organizations if you end up being rejected
Finally, you need to submit an official application with your chosen lender. Typically, you can do it one of three ways:
- Online application
- In-person application
A subscription to DoNotPay can help you secure funds to cover both one-time and recurring salon startup costs. Our Business Loan Request Letter product will process the necessary paperwork and generate an official application letter based on the provided data.
All you have to do is:
- Gather all the financial documents, such as:
- Balance statement
- Profit and loss statement
- Cash flow statement
- Sign in to your DoNotPay account and select the Business Loan Request Letter product
- Provide details about your salon and the loan
- Upload the required documents
You can rely on our AI-operated app to forward the loan request letter to your chosen lender, and if you don’t have one yet, we can help you look! Use our Find Online Business Loan Lender product to search for the best loan provider.
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