For many hairdressers, nail techs, and cosmetologists, opening up a beauty salon of their own would be a dream come true. If you’re a beauty professional and are considering starting up a dream business of your own, here are some of the steps you’ll need to take.
Make a Business Plan
Your first step when starting a beauty salon business is to create a business plan.
A study quoted by Harvard Business Review found that entrepreneurs who wrote out a formal business plan for their startup were 16% more likely to achieve viability than those who did not.
And if you hope to secure funding from a lender, you will likely need a well-structured business plan to even be considered.
Follow All Legal Requirements
On the legal front, your first task will be to choose a legal business model, register your business name and create a tax ID (EIN) for your new salon.
While choosing to set up shop as a sole proprietor may be the fastest, easiest and cheapest way to start a small business, it offers no protection for your personal assets against litigation or other financial liabilities. For many salon startups, an LLC is likely to be a better option. But you may want to consult a legal expert in order to choose the best option for you and your business.
Next, you’ll need to follow all local and state regulations regarding training and licensing for you and your workers, whether they are directly employed by you or are renting out a chair in your salon.
Some states have recently tightened their rules regarding independent contractors across a spectrum of industries. And public health and sanitation requirements for beauty salons have also shifted as a result of the recent pandemic.
So make sure to follow current guidance and fully comply with all regulations from your state’s board of cosmetology.
Get Your Financials in Order
You’ll have a lot to do to get your finances in order before you even open for your first day of business, opening up new bank accounts, credit cards, insurance plans, and more.
Most new salon business owners will also need a substantial amount of cash and credit to get their salon up and running. When you apply for a business loan, consider that your personal credit history will help or hinder your chances of approval. So do whatever you can now to improve your creditworthiness before applying.
If opening up your own beauty and hair salon business is a dream of yours, contact POM Capital and Funding Services today to learn more about how to fund that dream and make it a reality.