How to Properly Run a Home Salon for Big Profits
Business in The Comfort of Your HomeSo you want to start running a hair salon from home? Good for you, there are so many perks with being a small business owner! Being a small business owner gives you the convenience of working at home, lower overhead cost, and a relaxing atmosphere! Although there are many pros about setting up a beauty salon at home, there are also in home salon requirements you must adhere to. It can feel intimidating initially and may seem overwhelming since there are many steps and tedious things to be done to ensure you are properly running a legal at home salon. No worries, I am here to smoothen out the path and guide you to properly running an in-home hair salon.
Cosmetologist meet Cosmetology LicenseThis is a significant requirement, and without it, you can be fined big time! The basic requirements to enroll into Cosmetology are at least the age of 16, and having a GED or high school diploma. Although some states are stricter than others, be sure to call your states Cosmetology State Board to see the requirements for enrollment. From start to finish obtaining your Cosmetology License can be done in these easy steps!
Meet the minimum requirements
- At least 16, GED or High School Diploma
Enroll in a Cosmetology School
- Tuition ranges from $10,000 - $20,000
- Be sure to look at all options, visit at least 2-3 schools
- View the campus and speak with the counselors
Complete cosmetology school
- Completion hours range from 1,000 - 2,300 hours
Pass your license exam
- Both practical and written exams have to be taken and passed
Pay for your licensing fee
License and Permits to Permit Your Day to Day BusinessIn addition to obtaining your cosmetology license, you also will need to get other business permits before all the fun begins! Register with your state or province, choose your business structure and apply for your EIN (Federal Tax Identification Number). When choosing a business name, be sure to use something catchy and memorable, while keeping your target client in mind. But be sure it’s a name that's not overused. If unsure about your legal structure consult a lawyer. A Limited Liability Company (LLC) is the ideal choice for many small business owners, to be sure their assets are protected if they may face a lawsuit or bankruptcy. If you plan on selling products to your customers, you may also need to file for a resale permit or tax identification number. Depending on your residence location, a zoning permit may be required to offer in-home hairdressing. Lastly, you will need to prove everything is up to code, an inspector from the Board of Cosmetology will come to your salon to complete this step.
Securing the bag!Starting a new business can be a bit expensive, and expenses tend to become larger the further you go into the process. If you’re in need of some capital to finance your expenses for your new home salon, there are a few options.
- A business loan from a bank or credit union ( most credit unions are more lenient with their loan approval odds vs. the bank ). Shop around and be sure to get the best APR and loan repayment options available to you.
- An open line of credit
- Silent partner
- Crowdfunding from family and friend
Making Sure The Bag Stays Secure!One huge mistake entrepreneurs/small business owners make regarding their finances is not keeping track of them. You must keep everything organized if you are not good managing finances be sure to hire an accountant. There are many helpful apps and resources for small business owners. If you’re in need of help, I will list a few resources for you, as well as a checklist to follow, to ensure the bag stays secure!
Step 1.Open up a business bank account, mixing business and personal finances is a recipe for disaster come tax season!
Step 2.Look into your options, different banks/credit unions require different things. For example, opening a free business account vs. a business account where a minimum is necessary can cause significant issues.
Step 3.Track your expenses, the foundation of securing the bag is effectively keeping a record of your revenue and costs. This way you can monitor the growth of your business, track deductible expenses, prepare and support what is on your tax returns come tax season. Here are a few expenses you should pay close attention to:
- Meals and Entertainment, yup, you can deduct this, be sure you conducted business during the meal or at the place of entertainment. Make a side note of who attended and purpose of the meal/outing.
- Out of Town Business: IRA and CRA are skeptical of business owners claiming personal trips as a business expense. A paper trail will help show the activities during your trip.
- Vehicle-related Expenses: Record when, where, and why you used the car for business. You can also deduct mileage as well.
- Home office Receipts: Calculate what percentage of your home is used to conduct business and apply the percentage of home-related expenses.
- Develop a Bookkeeping System: You will need to be able to create a system to track your day-to-day transactions, categorize them, and look over your bank statements.
- You can choose the DIY route where everything is separated for you, using software like Quickbooks is ideal for that method.You can also hire a part-time bookkeeper
- Cash App
Establish your Sale Tax Procedures:Figure out your states sales tax and charge accordingly for any goods sold.
Determine Tax Obligations:Tax obligations depends on the legal structure of the businesses. As Self-employed (LLC, partnership, sole proprietorship), you will claim your business income on your personal income tax. Corporations, are separate entities and are taxed independently. Self-employed people need to withhold taxes from their income and will need to pay estimated quarterly taxes if they owe more than $1,000 in taxes per year.
Setting Up ShopYou are in the home salon should match your personal taste as well as creating a soothing, calming atmosphere. Think about your goals and the clientele you are trying to attract. Another thing you should think about is the experience or feeling you want your clients to feel while in the chair. Figuring out the answers to these question should help guide you in establishing a plan for color schemes and decor. To visually see the ideas in your head, try creating a mood board to ensure everything correlates and fits in with your brand.
Your Salon Equipment Must-Haves
A wet stationA wet station, also known as the shampoo bowl is a must-have for every salon. Although a sink or tub would work, having a professional wet station will gain more loyal customers, and you will be viewed as far more professional. If you are unable to have a shampoo bowl mounted, there are also portable shampoo bowls/stations available.
Salon Chairs, Stations, Mirrors, etc.Salon chairs, stations, and mirrors are a few of the “basic equipment” necessities to having your in-home hair salon running. When picking these items to be sure to get a little creative and don’t cut corners. You aren't obligated to purchase your mundane everyday salon equipment, for instance, create a station using a nice dresser with a mirror attached or separates to mix and match. Another thing to consider is flexibility if your home salon is small don’t buy bulky items, find lightweight, portable items for the salon to look more spacious. Also, be sure to purchase your hot tools, cutting tools, styling tools, and hair care products. If possible, try carrying a familiar line of hair care products that your customers have heard of or seen before! Tip: Anything you can place your logo or watermark on do so, it is great from a marketing perspective. For instance, if you’re taking a photo of your client while they are wearing your branded cape that is free advertising!
Marketing and AdvertisingUnlike a regular brick and mortar hair salon, foot traffic and high visibility are non-existent for a home salon. With proper marketing and advertising mixed with a consistent online presence, you will be sure to gain clients.
Socially Social VirtuallyWe are in the world of social media, so be sure to advertise your hair salon on all social media platforms. Instagram, Facebook, and even Snapchat are some of the largest sites to promote your home salon. Using these social sites can allow growth and engagement with your clients that will eventually form a loyal following.
SnapchatSnapchat is excellent to use to create behind the scene videos! It can be used to allow your customers to see the personal side of your everyday business affairs. Tip: When using any and all social media, high-quality photos and graphics go along way. Natural light is always essential when taking pictures. Try having a consistent angle or backdrop to create a cohesive feel.
Websites Are Still InContrary to popular belief, a website is still needed when you have a business. In a 2016 study, it showed 84% of consumers believed that small businesses with a website were more credible and trustworthy. Your site should do three significant things: inform, engage, and convert. Inform the consumer of what your brand is, engage your client looking for a specific service, and then turning them into an actual customer.
How Does It LookWhen creating your website, you have two options DIY or hiring someone. With many drag and drop options, business owners are choosing to save and create their sites. Rather you design your website yourself or hire a website developer, be sure that it is visually cohesive with all of your marketing material, SEO is factored in, and all graphics and photos are of good, clear quality. Here are a few resources for the DIY business owners. Drag and drop website options - WIX, Wordpress, and Weebly Tip: Be sure to include everything you may think your client will have questions about on your website. An FAQ page would be ideal for this. Also, try setting up a scheduling system for your clients to be able to book you via your website.
Lets NetworkAnother source of advertising is business cards, client loyalty cards, and flyers! Be strategic when placing these items for potential clients to see. Finding complementary businesses where your ideal client may shop is essential. Speaking with other business owners will help you create a community and network that will help gain more customers, as well as free advertisement. Have your current clients share your material also.
Customer CarePrice your services competitively, ensuring you are not overcharging, yet not undercharging so you can have an income. Base your prices on overhead cost, competitors pricing, and your area’s income median. Add up your expenses to operate (products, rent or mortgage, equipment, utilities, taxes, costs to maintain licenses and permits, and loans if you have any. You will then need to figure out how much it cost to cover the cost and keep a profit margin of a minimum of 10 to 20 percent. For example, if you want to make $50,000 per year to maintain a 15 percent profit margin, you need to make $961 per week. If $80 for a women’s cut and $40 for a men’s cut are reasonable prices in your area, you’ll need to book enough appointments at these rates to meet your weekly quota.
Before the meetBefore your potential client steps foot into your home salon, they must communicate with you to book their services. Talking openly about what they are looking beforehand is pivotal. While speaking with the client be sure to be friendly and courteous. Give your clients the attention and time they are looking for to express their concerns and expectations of their service, this way your client will gain trust in you, and you will better understand what the client is looking for to execute it properly.
Creating the ambianceCustomers generally look forward to a relaxing experience while visiting the hair salon. Your home salon should be relaxing, peaceful, with a beautiful interior, soft music, and attentive customer service.
- Offer beverages: tea, water, soft drinks
- Include small things: complimentary scalp massages, hand massages while color is processing
- Have soothing scents, for example, lavender
CleanlinessTry having a checklist of areas you know can become messy, and between clients tidy those areas up.
- Be sure you are using clean towels
- Barbicide all hair utensils in between clients
- Clean/sweep up hair between each client
- Regularly dust and mop your salon
- Make sure hair station is clean
- Be sure to swap out hair products once they've expired
- Keep bathroom tidy
Time ManagementLife happens and time goes by fast if your salon is running late and cannot accommodate an appointment, inform your clients in advance. Offer free extra service or a discount rate for their next booking. Show your clients how much you value them. Be sure to inform your clients on how much time each service they've booked will take, and provide the service effectively in that allotted time frame.
Send Appointment RemindersTry automating appointment reminders via text or emails to be sure your clients are arriving when they should.
Collect Personal InformationTelephone numbers, emails, birthday, etc. This way you can send birthday gifts, promotional items, for ongoing marketing communication!
Remember The DetailsThere’s nothing like having someone remember things you’ve mentioned while having a conversation. Recalling some shared facts about your client will impress them. Connecting on a personal level will guarantee repeats.
Give It Your AllOwning a home salon means you are in the service industry first and beauty industry second! Your clients will remember the experience and how receiving your services made them feel. The day to day necessities that comes with being a small business owner can become mundane, but remember how your clients are treated is important, your business depends on it. Give it your all, and you will be sure to flourish!
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