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How To Open A Nail Salon

How To Open A Nail Salon

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How To Open A Nail Salon

How To Open A Nail Salon

If you’re looking for financial independence and a rewarding career where you get to interact with people and help them look their best, then owning a nail salon might be the right option for you. This guide on how to start a nail salon can help you understand what startup costs you’ll face, what skills you’ll need, and the steps you should take to prepare to ensure your nail salon is a success.

Nail Salon Business Overview

Nail salons offer a wide range of services such as manicures, pedicures, nail enhancements like gel and acrylic nails, nail art, and other beauty treatments like waxing, and sometimes massage and spa services. Salons may also offer nail products and accessories for sale.

Nail salons cater to a variety of audiences and offer scheduled appointments and/or walk-ins. Because many clients return repeatedly, nail salons can quickly build up a recurring clientele. From pedicures and manicures to detailed nail art, nail salons offer a variety of beauty and nail care services.

Before you start your own nail salon business, do some local market research. Look at where competitors are located and assess whether there’s a need for an additional salon. Is there some unmet need or opening in the market you could fill?

Industry Overview

The nail service industry is a huge and thriving market. According Nails Mag, Americans spent $8.53 billion on nail services, with over 27,000 nail salons operating in the United States. This translates to the average salon generating almost $316,000 each year.

The fashion and nail industries are continuously evolving, so your nail salon will need to stay up to date with the latest trends and fashion to meet the demands of your clients. According to Beauty Packaging, one of the latest trends in nail art and intricate designs. We’ll probably see additional types of nail polish and nail treatments emerge over the next few years. Being able to embrace and offer these new trends quickly can keep your nail salon ahead of the competition.

We’re also in the middle of a movement toward healthy, organic, environmental-friendly products. As consumers continue to focus on healthier options and sustainability, we may see more and more clients looking for eco-friendly nail salons and offering healthy, safe products and nail care.

Another trend is toward mobile nail salons, where the business goes to the customer.  A mobile nail salon is more convenient for the customer and will usually cost less to start than operating out of a retail location. Mobile salons may target workplaces or even special events like parties.

The nail salon industry is a thriving sector within the beauty and personal care market, driven by increasing consumer demand for nail care services and the growing popularity of nail art. Despite rebounding from the COVID-19 pandemic, the nail salon industry continues to offer growth opportunities for entrepreneurs who can adapt, innovate, and provide a high-quality experience for their customers.

Steps To Start A Nail Salon

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If you’re thinking about starting your own nail salon, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Research the Market

Before you start your own nail salon business, do some local market research to make sure there is a need.

The first step is to identify your target market. Are you targeting high-end clients, busy professionals, college students, or a diverse demographic mix? Consider factors like age, income level, lifestyle, and beauty habits. How many potential customers are there in your area? What percentage of those do you need to be profitable?

Next study your competitors. Visit other nail salons in your proposed location and nearby areas. Analyze their services, pricing, salon ambiance, customer service, and client reviews. Identify what they’re doing well and where they fall short. This will help you understand the competitive landscape and find your unique selling proposition.

Also, by looking at where competitors are located, you can assess whether there’s a need for an additional salon. Is there some unmet need or opening in the market you could fill?

Step 2: Write Business Plan

After researching the market and having a good idea that there are enough customers to support your nail salon, the next step in starting your business should be to write a nail salon business plan. A comprehensive and well-thought-out business plan not only provides a roadmap for starting and operating your salon but can also have you further refine your idea, calculate startup costs, and create a detailed financial projections to see if the idea is feasible.

Not only will a bank require you to have one in order to get funding, but multiple studies have shown that a business plan helps increase the odds of starting a successful nail salon business.

Related: How to Write a business plan

Step 3: Secure Funding

Once you have verified there is a market for your salon and completed the business plan, it’s time to secure funding. You aren’t borrowing money at this point as there are still a lot of steps to complete, but you want to make sure you have the funding available.

Funding for a new start-up can be difficult as banks typically want the borrower to have good credit and personally invest 15-25% towards total project costs.

Related: Finding the money to start a business

Step 4: Select your Location

The location of your nail salon will play a significant role in its success. Factors to consider include:

High Traffic Area: Ideally, you want a location with plenty of foot traffic. This could be in a busy shopping center, near a large office complex, or in a popular residential area.

Complementary Businesses: Being located near businesses that attract a similar demographic can be beneficial. For example, clothing boutiques, hair salons, gyms, and cafes can draw customers to your salon.

Parking Availability: Ensure your location has ample parking so it’s easy for customers to visit.

Visibility: A salon that’s easy to see from the road or walking paths can attract walk-in customers. It’s important to be located in close proximity to high-traffic areas such as shopping centers as walk-ins make up a large portion of sales. Rents in prime locations tend to be more expensive but are usually more desirable as there is more traffic and visibility.

Size and Layout: The space should be large enough to accommodate your salon equipment, a waiting area, and a storage area for supplies. Consider the layout for smooth customer flow and efficient operations.

Competitor Proximity: Avoid areas saturated with nail salons unless you offer something unique that creates competitive advantage.When you’re just starting up a nail salon, the cost of acquiring space can be expensive.

If you’re looking to save money, you could look at renting space within an existing business, such as a hair salon that doesn’t offer nail services or a booth at a mall. The upside here is that you have access to an existing pool of customers who already spend on beauty, and many will be willing to try your service.

Related: Tips and ideas for naming a nail salon

Step 5: Register the Business

The next step in starting your nail salon is to make sure it’s properly registered and legal to operate. It’s important to note, however, that the exact process can vary from state to state, so you’ll need to check the specific requirements for your location. Here’s a general guide to the key steps:

Form a Business Structure: The first thing you’ll need to decide is what legal structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity. Many small business owners opt for an LLC because it provides personal liability protection and has fewer administrative requirements than a corporation.

Related: Comparison of business structures

Register Your Business Name: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state. During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain Business Licenses and Permits: Depending on your location and the nature of your business, you may need certain licenses or permits to operate. This could include a business license, Seller’s Permit, Employer Identification Number (EIN) or even a home-based business permit.

In addition to general business licensing, many states require nail salon owners to have a cosmetology license.

Related: Common business licenses, permits, and registrations by state

Waste Disposal: Nail salons must adhere to federal and state regulations regarding the management and disposal of their waste.

The U.S. Environmental Protection Agency (EPA) regulates many nail products as hazardous waste. While these products are safe for everyday use in salons and spas, they require special disposal methods. Improperly disposing of these hazardous materials by pouring them down the sink, onto the ground, into storm drains, or mixing them with regular trash can pose risks to people, the environment, and your salon’s reputation. Moreover, improper disposal may lead to substantial fines.

To combat the improper disposal of these items, the EPA created the Resource Conservation & Recovery Act (RCRA), which outlines the responsibilities of hazardous waste generators, including those in the nail salon business.
Under RCRA, hazardous waste is defined by specific characteristics such as ignitability, corrosivity, reactivity, and toxicity. Many nail products fall under this category, which means that salon owners must adhere to the government-mandated guidelines outlined in RCRA and other applicable federal, state, or local regulations.

Compliance with these regulations is not only a legal requirement but also crucial for the well-being of your salon and the environment. Failure to comply can result in penalties and put your salon, regardless of its size, at risk. By following proper waste management and disposal practices, you can ensure the safety of your staff, clients, and the community, while also safeguarding your business’s reputation.

Step 6: Purchase Equipment and Supplies

Moving along, its time to start purchasing equipment and the supplies for your salon. The equipment and supplies you need depend on the services you plan to offer. Make a list of all your services, then determine the necessary tools, equipment, and supplies for each one.

You should of course compare prices from different suppliers, but also consider their reputations, delivery times, and return policies. Some suppliers are more willing to help a startup than others, so if you connect with a supplier who provides excellent customer service before you started can be an indicator of how responsive they will be as your business grows.

You will also need to look for furniture and this is an area where you don’t want to under-invest. Both your clients and technicians will be sitting for extended periods. Ergonomic seating that’s adjustable will help keep everyone comfortable. For clients, luxurious seating can add a sense of pampering.

Step 7: Set Up the Salon

Our next step gets even more exciting as you start outfitting the salon space. A few tips to consider when you are setting up your space include:

As an experienced nail salon owner, I’d suggest considering the following tips when setting up your salon space:

1. Think About Flow: Your salon should be set up to facilitate a logical flow of operations. For instance, when a client walks in, there should be a clear path to the reception or waiting area. From there, it should be easy to move to the nail stations, drying areas, and finally, the payment and retail area.

2. Maximize Natural Light: If possible, set up your space to make the most of natural light. This not only creates a pleasant atmosphere, but it also ensures your technicians can see their work clearly. Supplement with high-quality artificial lighting, particularly at workstations.

3. Make it Personal and Inviting: Decorate in a style that reflects your brand and makes your salon feel welcoming and clean. This could be anything from modern minimalist to cozy and homelike, depending on your target market.

4. Keep Cleanliness in Mind: Hygiene is paramount in a nail salon. Ensure you have dedicated areas for cleaning and sterilizing tools. Install plenty of trash cans and consider a sink for handwashing that is easily accessible to technicians and clients.

5. Optimize Your Retail Display: If you’re selling products, ensure they’re displayed in a high-traffic area, ideally near the reception or waiting area. Keep this area well-lit and rotate products often to keep it looking fresh.

6. Plan for Adequate Storage: Nail salons require a lot of supplies. Plan for storage that keeps necessary items close at hand but out of sight. This could be shelving under workstations or a dedicated storage room.

7. Ventilation is Vital: The smells associated with nail products can be overwhelming. Good ventilation is not just for comfort—it’s a safety issue for both your employees and customers.

8. Have a Dedicated Waiting Area: A comfortable waiting area with amenities such as magazines, a beverage station, or a television can enhance the client experience.

10. Consider Privacy: If you offer services that require more privacy (like waxing), plan to have a separate room or partitioned area.

When setting up your salon space, always keep your clients’ comfort and experience at the forefront of your planning. A thoughtfully arranged and decorated salon can make a big difference in attracting and retaining clients.

Step 8: Get your Marketing Ready

Now that you are getting close to opening, it’s time to get marketing materials planned and created. It’s important to understand your market and what media they consume so you can effectively reach out to advertise and let them know you’re open. Effective marketing is crucial for a nail salon’s success, and there are several strategies that can work well.

First, establishing a strong online presence is a must. This includes a well-designed website outlining services, prices, and contact information, as well as active profiles on social media platforms where you can engage with potential customers and showcase your work. User-generated content, like customer reviews and ratings, can be powerful, so consider encouraging satisfied customers to leave mentions on social media platforms such as Facebook, Instagram, and Pinterest, is very effective at bringing in new clients and managing online reviews such as Google and Yelp. Additionally, loyalty programs will tend to encourage repeat visits from your existing clients.

Participating in local events, sponsoring community activities, or partnering with complementary businesses can help increase visibility in your local area. Offering introductory discounts or a loyalty program can incentivize new clients to try your salon and existing ones to return. You can also use email marketing or SMS (text) marketing to send appointment reminders, special offers, and news about new services or products.

Also, don’t underestimate the power of exceptional customer service and a well-maintained salon environment in turning first-time customers into loyal, recurring ones, who can become word-of-mouth promoters of your business.

Related: Low-cost ideas to market a new business

Step 9: Hire and Train Staff

Wages are typically the largest cost for nail salons, so it’s important to manage employees well to protect profits. Even though this is a large expense, remember that staff are the face of your salon to your customers. Taking the time to hire the right people and invest in their training can greatly contribute to your salon’s success.

Depending on how large and busy your nail salon is, you may need to hire a salon receptionist $11.96/hour average, a licensed nail technician (salary range of $20,730 – $27,040), and potentially even a salon manager (salary range of $24,000 – $52,000). In addition to wages, you’ll need to pay taxes for your employees, and you may offer other perks like paid time off, sick leave, health insurance, and more to your full-time employees as an incentive for them to stay with you.

Keep in mind that salary ranges will partially depend on the cost of living in your area and what comparable positions in other salons pay.

Instead of hiring nail techs, many nail salons instead charge booth rent to their techs. While this is far less costly, be sure to understand your state’s rules for bringing on contractors to stay out of tax trouble.

Related: Hiring your first employee

Once you’ve hired your staff, provide comprehensive training. This should cover your specific service procedures, safety and hygiene practices, customer service standards, and any software or tools you use for bookings and sales.

Step 10: Open for Business

The path to opening your salon will likely involve some additional steps than what I’ve mentioned above. There are some final pieces to complete before opening your salon. These may include:

Getting Insured: Your business should be properly insured to protect against potential risks. This includes general liability insurance, property insurance, professional liability insurance, and workers’ compensation insurance if you have employees.

Related: What insurance do nail salons need?

Set Up a Reliable Bookkeeping System: Keeping track of your financial transactions is crucial. This includes tracking income, expenses, payroll, and taxes. You can either do this manually, hire a bookkeeper, or use accounting software such as Square or Stripe, or specific software designed for small businesses. Regularly reviewing your financial data will help you make informed business decisions and keep you tax-compliant.

Related: Accounting 101

Accept Credit Cards: In this digital age, many clients will expect to pay with credit or debit cards. Setting up a reliable, secure credit card processing system is important. There are many merchant services providers to choose from, so do your research and find one that fits your needs in terms of cost, reliability, and customer service.

Set up Booking Software: Using booking software can provide many benefits for nail salons. It can help you manage appointments, reduce no-shows, and improve the overall customer experience. With booking software, customers can easily book appointments online, receive reminders, and even make payments. This can save you time and effort, allowing you to focus on providing excellent service to your customers.

In addition to appointment scheduling, many booking software options also offer features such as marketing tools, payment processing, and customer management. These features can help you attract new customers, retain existing ones, and grow your business.

There are several popular booking software options available for nail salons. Some of the most popular ones include Varago, GlossGenius, and Fresha.

Create a Clean, Safe Environment: Hygiene and safety are paramount in a nail salon. Develop a sanitation checklist and ensure it’s followed consistently. Good ventilation is crucial, not just for customer comfort but also for safety reasons, as many nail products have strong fumes.

Greg’s Tip: Starting small can be a smart move when opening your nail salon. Not only does it help manage initial costs and financial risk, it also allows you the flexibility to test and learn about your market. Plus, the personal touch you can provide to customers in a smaller setting can enhance your service level, helping you build strong customer relationships from the outset.

Greg's Business Tip

Nail Salon Startup FAQs

How much does it cost to start a nail salon?

Starting a nail salon can be an exciting venture, but it also requires significant capital investment. The cost will be different for everyone as there are several factors to consider, including the location, the size of the salon, the quality of equipment and materials you choose, and your marketing budget.

That said, I have a rough breakdown of the potential costs:

Lease/rent for space: Depending on the area, this can range from $1,000 to $5,000 a month for a space of around 1,000-1,500 square feet. Alternatively, if you plan to purchase a location, this cost can be significantly higher.

Remodeling and decorating costs: You might need to adjust the interior of your salon to suit your needs. This can include workstations, customer seating, and decor. This can range from $5,000 to $50,000 depending on your design choices and the condition of your initial space.

Equipment and Supplies: Items such as manicure tables, pedicure chairs, nail polishes, lotions, sterilizers, towels, and more.

This can range from $5,000 to $30,000 depending on the quality and quantity of the equipment and supplies you need.

Business Licenses and Permits: The cost for these will vary depending on your location. Expect to spend anywhere from $100 to $1,000.

Operating Expenses: These are recurring costs like wages, utilities, internet, software, cleaning, maintenance, and more. Depending on the size of your salon, this can range from $500 to $5,000 a month. It’s typically a good idea to have 3-6 months of your operating expenses saved up as a buffer.

Adding up all these expenses, a small to medium-sized nail salon could cost between $50,000 to $250,000 to start. However, this is a rough estimate and costs can greatly vary based on the specifics of your business plan and local market conditions. Before starting a nail salon, it’s highly recommended to conduct a detailed business plan to understand all potential costs and revenue projections.

How much can a nail salon owner make?

Concrete data about the average salary for nail salon owners are difficult to find. Because the nail salon industry is largely a cash industry, income may be under-reported. A nationwide study of the salon industry from the Professional Beauty Association estimated that nail salon owners made about $48,700 per year, while non-owners took home about $36,300.

Many factors will influence how much you could make owning a nail salon. Your location and the average rates for nail services will partially determine how much you can charge for your services. The services you offer will also influence profits as you can focus on manicures and pedicures, but add-on services like nail art, massages, wax, facials, and eyelash extensions can bring even more profits. However, many of those services require additional training or specialists.

To help come up with a rough estimate, here is a simple formula for you to try:

Net Income = (Average Service Price x Number of Services Per Day x Number of Operating Days) – Operating Costs.

Assuming that the average service price is $40 (this can include manicures, pedicures, nail art, etc.), the salon serves an average of 20 clients per day, and the salon operates 6 days a week. This would be the total revenue per week:

Revenue = $40/service x 20 services/day x 6 days/week = $4,800/week

If we consider that the salon operates 50 weeks per year (giving 2 weeks for holidays or other closures), the annual gross revenue would be:

Annual Revenue = $4,800/week x 50 weeks/year = $240,000/year

However, we also need to subtract the operational costs. Let’s assume that the annual operational costs (including rent, utilities, salaries, supplies, insurance, marketing, etc.) amount to $140,000.
So, the net income for the salon owner would be:

Net Income = $240,000/year – $140,000/year = $100,000/year

This is a simplified example and actual earnings can vary significantly. Factors such as the quality and reputation of the salon, competition in the area, the efficiency of operations, and the salon’s ability to retain customers and encourage them to spend on additional services or products can all impact earnings. As always, careful planning and management are crucial to maximizing profits in a nail salon business.

What skills are needed to run a nail salon?

To successfully run any small business, you’ll need some business knowledge, marketing skills, and management abilities. When it comes to running a nail salon, these specialized skills and experiences will be helpful.

Education. All states require a nail tech to have a cosmetology license. Typically, this license requires a high school diploma or GED.

Cosmetology experience. If you’ve attended cosmetology school and are a licensed cosmetologist, you’ll better understand the challenges and skills associated with providing services in your salon. You’ll also have an idea of the typical costs associated with the services, the equipment you’ll need, and what responsibilities you can reasonably expect your employees to take on.

People skills. You’ll need to be able to build relationships with your employees and your clients, so a focus on customer service that provides warm and welcoming nature can give you an advantage and your customers the best possible experience. The ability to make small talk during appointments is also a plus.

Problem-solving skills. As a business owner, you’ll face challenges as you start up and run your salon. Creativity and excellent problem-solving skills will help you cope with whatever challenges come your way.

An eye for trends. The nail and beauty industries evolve quickly, and if you offer the latest nail trends, you can bring in new clients. The ability to stay on the cutting edge of the industry and spot new and evolving trends can help your salon attract clients and then keep them coming back again and again. Understanding popular nail shapes, offering a nail bar, and employing a nail artist can give you a true advantage against your competitors.

Training capabilities. As you bring on new staff, you’ll need to be able to train them in your salon’s policies and approaches. Besides training skills, the ability to give and receive constructive feedback can make you a better manager.

What is the NAICS code for a nail salon?

The NAICS code for a nail salon is 812113.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Resources:
Association of Cosmetology Salon Professionals
American Beauty Association
International Salon Spa Business Network
Professional Beauty Association
Salon Spa Professional Association

How To Open A Nail Salon

How To Open A Nail Salon

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