How to Start a Salon: Entrepreneurial Cosmetology

Two entrepreneurial cosmetologists standing in front of their salon

Are you thinking about becoming a cosmetologist? Want to know how to start a salon? Starting a salon is an exciting journey, just make sure you are prepared and have a plan for the future. Start by getting your cosmetology diploma at a vocational school.  This education will prepare you to take the exam Getting some experience, building the right skills and obtaining the proper knowledge will help you start your own salon as an entrepreneurial cosmetologist.

What is an Entrepreneurial Cosmetologist?

An entrepreneur is someone that manages a business with passion and integrity. They feel comfortable taking on risk, leading their team, and managing the business day to day. An entrepreneurial cosmetologist will have passion for starting a cosmetology business. Do you work well with others, enjoy learning about hairstyling trends and have competency in business? Then starting a salon may be the right career move for you.

How to Start a Salon?

Again, the first step is getting experience in the industry. Start by getting a diploma in cosmetology and find an entry-level position at your local salon. Move up to become a manager at the salon and learn about all the moving pieces that keep a salon running. Learn about managing a cosmetology team, supplying inventory, preparing marketing, managing the bookkeeping, securing all the business licenses and paying taxes. These is all vital knowledge to successfully run a salon.

When you have some experience and confidence, you can start your own salon. Start by building out a business plan, securing financing, identifying a location, getting the proper permits and licenses, and understanding everything you must pay for to get the salon off the ground. Know where you are starting from, where you need to go and how to hit the break-even point. Do you need to reinvest your profits back into the business to expand and grow your clientele? Will it take you two years of business to break-even? These are all important questions to answer when creating a business plan.

Creating a Business Plan

Before you can secure financing, you will need to write a business plan. This is a blueprint of your salon, how it will work, what you will need to pay for, what the competitor landscape looks like, minimum number of employees, pricing structures, the consumer market breakdown, the product or service offering, the promotion or marketing plan, and finally the financial projections. By creating a comprehensive business plan, you will have a blueprint for the first few years of your salon. You will also be able to inform investors about your future plans and hold yourself accountable once the salon starts.

Secure Financing

There are many different ways to secure financing to start a salon. You may have some money saved up that you can use to get you started. Many entrepreneurs start with a friends and family round of investing to get some money to start their salon. Many organizations will help you start a salon in your local area. Look into your city’s chamber of commerce, the government offices of the Small Business Administration (SBA), or local credit union. The SBA offers many opportunities to get financing for first time entrepreneurs with grants, loans and other financing options. Visit your local bank or credit union to meet with their business loan department. These are all great ways to secure financing, just make sure you don’t borrow more money than you can pay back.

In a salon specifically, there are ways to get inventory on terms and pay once the products are sold. Some salons sell their shelf space to other business that offer hair care products. Other salons buy inventory on 30- or 60-day terms allowing the hair care business to extend credit to the salon, knowing that they will have customers to buy the products. A newer way to start a business is through crowdfunding. You may start a Kickstarter to allow customers to purchase a hairstyling service in advance. These pre-sells help you raise money to get started. Regardless of what you do, there are many different options to secure financing when starting a salon.

Identifying a Location

You have heard the saying, “Location, location, location.” This is an important part of your salon strategy. Do you have enough room to offer your salon services to your customers and most importantly can they find you? Are you going to rent a space in a high traffic location? Maybe you will hire cosmetologists that already have their own clientele and they just need a chair in a salon to manage their clients. Make sure that the location fits your aesthetic, provides enough space to offer good customer service and is in a location that clients can find. Many salons will choose high traffic locations near other complementary business, like gyms, restaurants, shopping centers or co-habitable spaces. The location can make or break a new salon.

Getting Permits and Licenses

There are many permits and licenses that need to be secured before you can start a salon. To start a salon, you will need a business operations license from the county, certificate of occupancy, a sales and uses license to sell retail, a building permit, fire permit, federal employer identification number (EIN), salon manager license and operator state cosmetology license. All of these licenses and permits can cost money so make sure you understand the cost of doing business and have all of them outlined in your salon’s business plan.

Cost of Doing Business

Make sure you fully understand all the costs you will encounter when starting a salon. You have to pay employees, spend money on marketing and advertising, build out an inventory of products, pay for licenses and permits, pay utilities, and pay taxes, just to name a few. Have all these costs outlined in your salon’s business plan and make sure you raise enough money to get your salon started on the right foot.

Entrepreneurial Cosmetologist Qualities and Skills

There are many important qualities and skills that are needed to be a successful entrepreneurial cosmetologist. Some of these qualities and skills include risk taking, fiscally responsibility, leadership skills and bookkeeping.

Risk Taking

One of the most important qualities of any entrepreneur is the ability to take risks. Not to jump head-first into the deep end, but to see a vision for the future and realize that vision. Taking a calculated risk is a better way to look at it.

Fiscally Responsible

Showing that you are fiscally responsible is important to investors, especially if you need to borrow money to start your salon. Whether you visit a bank, investor or family member, they will need to trust that their money is in safe hands. Being fiscally responsible means balancing a check book, getting multiple bids to understand how much something is going to cost and understanding the break-even point. By being fiscally responsible you will work toward expansion and profitability without taking on too much debt.

Leadership Skills

Starting a salon is about becoming a leader that cosmetologists can follow. It is important for you to have some experience in cosmetology before starting a salon, so you know the ins and outs of the business. Your team will also respect you more if you have been in their shoes as a cosmetologist. When starting a salon, you will be responsible for hiring employees, buying inventory, managing marketing, securing capital and building out the salon itself. This takes a strong leader that understands what they want and how to get it.


Every business has to keep the books for tax purposes, payroll, inventory control, utilities, and taxes, to name a few. Having a background in light bookkeeping and QuickBooks is important to properly manage the financial future of your salon. Most cosmetology programs will teach business management and bookkeeping to help you start a salon.

Final Thoughts

Although starting a salon is not an easy undertaking, if you have a passion for cosmetology and enjoy starting a business, you have a better chance of succeeding. Plan as much as you can before starting your salon. Make sure you have the financing secure, the right location, all the permits and licenses and a great team. With all of this, you will be well on your way to starting your own successful salon.

Cosmetology Program

At Minnesota School of Cosmetology, we are dedicated to helping our Cosmetology program students develop a solid foundation and a flair for style through hands-on training in basic and advanced industry techniques. You will learn how to cut, color and style hair, give manicures and pedicures, provide spa treatments and perform various skin care techniques from industry-experienced instructors in a professional salon setting.

Contact us today to learn more about becoming a cosmetologist and starting a rewarding career in the beauty industry.