How to Start a Hair Salon Business

The hair salon business is all about customer satisfaction. Those salons that have happy customers thrive and grow. Those that have a problem with customer satisfaction will not grow, will not get referrals and will eventually lose customers, and go out of business. The message here is if you are not a people person, then this business may not be for you. A salon needs to be a pleasant place to visit and spend an hour or so. The beauticians need to be skilled and friendly. They need to be efficient in their work and professional in the service they provide.

A person with the knowledge, licenses, some business skills and the desire to work for themselves can be successful in this business. The first step, after putting in your time to learn the business, may be renting a space in an existing salon. This arrangement will allow you to gain more experience without going fully out on your own. Be careful about any contract you sign when doing this so you do not limit what you can do in the future. This is a way to build a following that will stay with you when you open your own shop. Depending on where you live, you may or may not be able to start in your own home. Zoning laws about home businesses will determine if this is a possibility. If not, it will take some money to start a shop, in the typical strip mall or small business corner. You may consider doing this with a partner and there by cut the expenses a little. You could also rent space to another beautician with her own following. In fact this may be a way to get a very nice salon off the ground with a bang.

A hair salon these days can be far more than just doing hair. It can also do nails, offer massages and body wraps. It could be part of a workout complex or part of a larger hotel or motel complex. The secret to growing a business like this is foot traffic and referrals. Starting from scratch is the hard way to go, but it is the least expensive out of pocket cost, compared with buying an existing shop and its client list. The problem with buying an existing shop is the customer list while valuable could also be very unstable. A buyer would have to make it part of the contract that a certain percentage of the clients must remain customers. The known entity has value and the location, but the client list can be hard to value.

Using a business broker correctly

A business broker may have listings in your area of shops that are for sale. Check with them and local papers for businesses for sale. Use the Internet to expand your search and the list of business brokers that may be able to help you find the perfect shop for you to buy. A solid broker can be of real service and speed up the process of finding what you are looking for. They also are very good at negotiating the deal and the terms if they are needed. Brokers that have been in the business for a while are excellent sources for getting answers to your questions. If they do not know the answer they know where to find it. A business broker can be of service and value far above what you will need to pay for their help. If nothing else they can evaluate the price of the business to see if it is fair. The fact is most of these professional brokers help far more than telling you the price is fair for the business you are considering.

You have the desire, but not all of the money

This is a common problem when buying a business. Where to find and get the extra money needed is part of the problem solving that is needed when buying a business. A loan from your friendly banker, a second mortgage on your home, a loan from family or friends and finally terms with the present owner are typical ways to come up with the money needed to buy a business. The first three are fairly obvious to understand. The answer is usually a quick yes or no. Terms from the current owner will depend on several factors. How much of the total price can you come up with and still have money left to operate the business. How much of the total price does the owner need right now? Are they going to stay in the area or move? This can be an important factor in making a deal How much of a premium over the cash out price are they going to demand if you want to buy on terms? How long will they give you to pay off the balance of the agreed to price? Terms are a matter of how badly they wish to sell, how much they will need to carry back in paper and what you can afford to pay back on a monthly basis. If the term price is high enough this could cement the deal. If they are just tired of the business and ready to retire, then you may be in a strong position to negotiate. In any event, this is a common way to make up the short fall between the money you have available and the asking price.

There is one other source you may try. The Internet list many businesses that make loans to business buyers to complete the purchase. These companies understand this type of loan and can evaluate it better than most lenders. It is certainly worth checking out if you need the extra money to make the purchase happen. The worst-case scenario is you have to go back to the owner and pay a higher price for the business to get the terms you need.


The beauty business is alive and a growing niche in the business world. People will pay good money to look their best and the salon is able to make that happen. When a shop is opened in a mall or a strip of commercial establishments, the traffic will help it grow right from the start. If the service is good, a loyal customer can be obtained. This is money in the bank as this business is all about customer care and satisfaction. Repeat customers guarantee cash flow and also referrals. As the business grows the fixed expenses stay relatively constant so the profit margin will grow significantly. There are several ways to enhance the business and improve cash flow. An owner can rent out chair space or just hire new employees as needed. The business can offer other services such as nails and massages etc. Beauty takes care to maintain and customers in this business are willing to pay for its maintenance. If they feel a new service will help with their appearance, they will spend the money for it. This business is not a costly business to start like many other new businesses. An existing salon may be quite a bit more in cost to buy, but the immediate cash flow will help it succeed.