"It is better to plan than plan to fail."
I have come across so many people in the beauty business who tells me that they want to own their own salon and want my advice. My best answer is always, “No matter what I tell you, make sure you do your own research.” As a potential business owner, the effort to do the initial legwork is a must. If you want to be successful, you must know that there is another side of beauty in this business…and all of it is not pretty.
When investing your hard-earned money as well as yourself in a business, it is vital that you educate, educate, and educate some more. Business planning is one of the first steps needed to prepare, protect, and play the game. Here is a simple checklist to keep in mind:
1. BUSINESS PLAN - Create a detailed business plan. This is one step that cannot be missed. You must make a plan or roadmap and work your plan. Do this first when the thought of salon ownership pops into your head. If you can’t take the time to do this step, salon ownership is not ready for you. “It is better to plan than not plan and fail.” We offer an on-line course in Business Planning. It is a step-by-step course that should get you on the right track.
2. LICENSING & INSURANCE - You will need a salon license and a business license. If you think you can avoid this step, salon ownership is not ready for you. You will also need liability insurance.
3. BUSINESS BANK ACCOUNT - You will need a separate bank business account. You do not want to comingle your salon business funds with personal funds. It does not matter who else you may know that does it. You should consult with an accountant so that you set your business up for financial success. There are all kinds of taxes and tax forms involved when you own a business. But don’t let that scare you. Just get informed.
4. LEGAL ADVICE - Get good legal advice. Violation of federal labor laws can send your business into an abyss that may be difficult or impossible to recover from. There are certain things that you must do when you have employees or contractors or booth renters working in your salon. There are certain things that you cannot require from independent contractors that you can require from an employee just because they work in your salon. You cannot legally require them to adhere to a dress code or prevent them from working their own schedule or insisting that they work yours. If they make less than minimum wage in a two-week period, you may have to make up the difference in their pay if they have to take family leave. If this is a problem, salon ownership is not yet ready for you.
5. FINANCING - Where is the money? It may take a village to raise capitol for your salon so plan well. Startup Capitol, and at least 6 months of operating capitol is ideal. It may be difficult to get bank financing these days but not impossible. There are also crowdfundings available so it may be a good idea to check those out. Be careful though, you don’t want to fall for any scams out there and they are plentiful. Start small. Your dream may be to have an 8-chair salon, but your money says a 4-chair. Listen to your money.
6. EQUIPMENT - What about equipment? Chairs, workstations, reception desk, shampoo bowls, storage cabinets, mirrors, office furniture, etc. Well, the equipment does not have to be new or the Cadillac of equipment at the on start. There are many salon equipment resale places available and with a bit of ingenuity, your salon can look like a million bucks at a fraction of the cost.
7. SIGNAGE and SUCH- You will need a business phone line, internet, utilities…We can work around many of these obstacles by bargain hunting and substituting some things that you would never think of putting into a salon. The key is to be creative.
8. STAFF - Two words—Hire Carefully
9. BUDGETING & GOALS – Having a financial goal ensures that your outgo does not exceed you income. Creating a monthly, quarterly, or yearly budget, even down to paper towel and toilet paper and soap must be reviewed on a regular basis and then adjusted as needed. Adhering to your budget helps you to understand the overall health of your salon so you don’t have to work ‘in the dark.’ There are some creative ways to meet your financial goals that should be explored. Network with other salons to see how they handle their budget goals. You may find someone who is willing to share their experiences with you.
10. NOW WHAT? Contact me for a free 30-minute consult here. Have your questions ready.