business plan for booth rental salon

The Salon Booth Rental Guide 2023: Win-Win Space Sharing

Whether you’re a salon owner or stylist, salon booth rental offers a unique way to bring in extra income.

In this post, I have summarised the most important parts of the salon booth rental business. 

I have also added valuable tips on how to automate your booth rental system. This can help you decide whether you should charge a monthly fee or take a commission. This tip alone could save you thousands of dollars.

This guide includes the following:

What is Salon Booth Rental? 5 Ways a Salon Owner can Benefit from a Booth Rental System 5 Benefits for Stylists of the Salon Booth Rental Model How Can I Make Money With My Booth Rentals? Automate Your Booth Rental Program with a Salon POS Conclusion – Now is a Great Time to Try Booth Rental

What is Salon Booth Rental?

Salon booth rental is a business model that involves two parties directly benefiting from the arrangement. A stylist will lease salon space to provide hair services, and the salon owner will receive income from the temporary tenant. The stylist pays a fixed recurring fee and/or a percentage of their sales.

This arrangement benefits both parties because it can reduce costs and add revenue for both the stylist and the owner.

The agreement specifies the terms of the rental arrangement, such as how much the salon vendor will pay per month, how long they will rent the space for, and what services they are allowed to provide from that location. The agreement should also include a clause specifying what will happen if either party decides to terminate the contract early.

5 Ways a Salon Owner can Benefit from a Booth Rental System

If you’re a salon owner, renting chairs to stylists can be a great source of steady income. Here are some benefits of this business model.

• The owner can start making money immediately
• There are no or low start-up costs involved
• No benefits to pay like health insurance plans, 401 programs, or paid vacation days
• Provides easy-to-predict passive income each month
• It’s straightforward to set up with the right salon software

5 Ways Stylists can Benefit from the Salon Booth Rental Model

So which option is better for you: rent a booth, work as an employee, or start your own salon? There’s no correct answer. All options have advantages and disadvantages. To help you make the best decision, here are some benefits of renting a booth.

• It’s a low-cost way to start your own business without setting up your own expensive location
• Only pay a fixed monthly fee or a small percentage of your earnings and keep the rest
• Be your own boss and get paid more (or at least have the possibility to do so)
• Set your own schedule and have your own clients
• No need to hire employees

How Can I Make Money With My Booth Rentals?

Booth rental businesses can make money in several ways. The most common way is through monthly fees charged to booth stylists. Another option is to charge a set amount per hour. This can work well for salons where stylists work long hours, but not for salons that only operate during specific times. A third option is to charge a percentage of each stylist’s commission.

When renting out a booth at a salon, do you charge a monthly fee or take a commission?

Both options can be lucrative, but choosing which will suit your business model best depends on your accounting habits and business goals. When renting, you’re more likely to live comfortably with an even amount of income. However, if you opt for commission, you may end up making much more money if your renters are talented and bring in an ample income.

So far, a large majority of salon owners have opted for a fixed monthly fee. This is partly because the commission or percentage model requires more administration and accounting.

However, good salon software can automate commission sales.

Deciding on the Rental Rate for a Salon Booth

Renting out booth space in a salon opens up a whole new source of revenue. You need to decide on a profitable rental price point yet low enough to attract stylists who want to work with you.

If you can’t find enough stylists, consider offering more amenities or updating your location, so it appeals to more customers. If you have too many stylists interested in booth rental, remember that you can always raise the rates.

Automate Your Booth Rental Program with Salon POS Software

Booth rent collection is a time-consuming and tedious task for salon owners. But Salon POS software can automate it easily. With this feature, booth owners automatically charge their rent and fees to booth renters. There’s no need to use cash or checks, and the software makes the process easy to track.

Here are some examples of use cases to look for:

Make onboarding a breeze  and welcome your new salon booth renters with a prompt text or email. Send them their rental agreement and payment information, and they can enter it directly. With the payment information stored automatically in their employee profiles, stylists and other new booth hires can access it instantly.

Easily create legally binding documents . Your renters are entering agreements with you. How do you make sure they sign the right ones? Create legally-binding contracts for salon booth rental using forms. In this way, the renter’s agreement is accessible in a transparent and trustworthy manner.

Collect rent automatically . With the automation of rent, your business will never have to worry about chasing stylists, cosmetologists, or others for checks or cash again. Eliminating confusion over due dates is one less hassle on your plate.

Deduct commission from rent . Make it easier for your stylist by automatically deducting their product sales commission from their rent. This will save you time during tax season and stop confusing your independent contractors with 1099 forms. It’s a simple switch that saves salons time, money, and paper.

Rental payment information and history.  The stylist can easily see their payment information and update anything different. They can also find the booth rental agreements in the employee profile.

Mangomint makes it easy for salon owners to manage their booth renters with their seamless payment integration. With Mangomint Pay, salon owners can create different payment accounts for each service provider, ensuring all service sales are automatically routed to the appropriate bank accounts.

By using Mangomint Pay , booth renters can easily manage their own payments and track their earnings, giving them more control over their income. This not only benefits them but also benefits salon owners by reducing the administrative burden of managing multiple payment accounts.

Additionally, Mangomint allows you to create custom forms for your booth renters to sign. You can create these forms in Mangomint and have your booth renters sign them electronically.

Mangomint also allows you to track your booth renters’ performance by providing detailed reports on their sales and services. You can use these reports to see if your booth renters are bringing in their own clients or not.

Conclusion – Now is a Great Time to Try Booth Rental

Booth rental can generate more income for salon owners by allowing them to get paid for areas that might otherwise go unused. Still, it can also enable stylists to start their own businesses and work without the overhead costs of owning a physical space.

Automation is the key to running a successful salon business, and the old way of collecting rent with cash or checks is time-consuming and challenging to keep track of. But it’s easy with a good salon POS with features for managing a booth rental program.

Did you find this post helpful? Share it with your friends!

Related Posts

• 7 Best Salon Software (September 2023): The Ultimate Guide
• The Simple Hair & Beauty Salon Insurance Guide 2023
• How Much Does Salon Insurance Cost?

How to get started as a salon suite renter and make a business plan

Click above to watch the video version, or keep going for the written guide.

As stylists we are always thinking about how we can go out on our own, but how do we know when we’re ready? When is it the right time financially in our career to go out on our own? What are the challenges we face?

When we go from stylist to business owner on our own, we are putting on more hats than we’ve worn before. Today we’re chatting all about booth renters and suite renters, and how they can build their business, make more money, and get started going out on their own.

In this guide and interview, I speak with Nina Tulio, owner 1NAgency , about all of the numbers stylists need to know before they go out on their own as a salon booth or suite renter.

Nina Tulio is in her 24th year in the beauty industry. She started out as a hairstylist and was a hairstylist on and off for 20 years.

Nina sold her salon in 2016 and started 1NAgency, her consulting business. She is now in the fourth year of her consulting business where she works with both stylists and salon owners around the country and does virtual coaching and online education for stylists and salon owners worldwide.

Nina is particularly passionate about salon suite renting, because she’s seen so many stylists and beauty business owners go out on there own and either lose money, or struggle to make ends meet. Here is her advice for how to thrive and grow on your own, whether you’re a hairstylist, esthetician, waxer, or anywhere else in the beauty industry.

How to know if you’re ready to move in to a suite

Are you ready to go out on your own as a stylist? I started this interview off with Nina by asking her advice on when stylists know it’s the right time to go out on their own.

Just because you're a talented and busy hairstylist, it doesn't mean that you necessarily are going to be a great business owner, because you're now putting on a different hat. When you are a salon owner, it's different because now you're leading a team of people, and you’re 100% responsible for growing and managing your new business.

First things first, you really want to make sure that you're financially secure enough to move into a suite. If you're going to move into a suite, you have to have enough working capital.

Even though moving into a booth or suite is not as involved as moving into a separate brick and mortar building, you still have to design that suite and decorate it to make it your own. There might be furniture in there already, but maybe you want to make it your own by swapping out furniture or adding in sinks. Nina advised that it’s important to have a little nugget of cash for your salon buildout (because you will want this!)

You also want to set aside at least two to three months of your expenses for a cushion. Now that you’re moving out on your own, you are a one-man show. It’s so important to have this cushion if something happens to you, and you aren’t able to operate and see clients for a period of time. With the COVID pandemic, we all saw how unpredictable the world can be.

Unique challenges for suite renters

While there may be a handful of stylists who do this that have been successful, you want to be at least 85% booked with clients before you start thinking about moving into a suite. Nina advised that when you move into another location, whether it is a suite or booth, be prepared for about a 30% drop in clientele and revenue, as not everyone will follow you over. It’s important to be prepared for this!

Being 85% booked out at least gives you a little bit of cushion, then when you do move into a suite or booth, you can build yourself back up without having a huge impact on your revenue.

So if you are a commissioned stylist, or if you're thinking about converting to a suite or a booth rental, wherever you're at in your career, you have to ask yourself an important question: are you really going to be making that much more money? Because now there's a time commitment that goes along with being your own boss. You are now the person taking care of all of Instagram, Facebook, and other marketing and advertising. You are also the person taking care of your books. So you’re investing a lot more time into this. This is why being at least 85% booked out is nice, so you’re not going to have to spend too much time attracting new business but retaining the business that you have.

Tips on setting up your business plan

Do you actually need a business plan before you go out on your own as a suite renter?

“Absolutely yes,” says Nina. If we want to consider ourselves entrepreneurs or solopreneurs, then we have to take it seriously. Nina highly recommends doing a business plan because it lays out what your next two years are going to look like in terms of revenue and then your expenses. Typically if you've been in the business for a while and you're busy and you have your clients, you can take the revenue, service sales, and retail of what you have now and convert that into a business plan. A business plan just lays everything out pretty systematically for you.

You also want to make sure that you have timelines laid out for the next six months, one year to even two years so you can see where you’re growing and where your business is going. Hoping for the best and hoping clients just come to you is not the best plan - especially when you are out on your own.

A business plan allows you to see and dive deeper into your demographic, your target market, your mission, and your vision for your business. Because if you're in a suite, you are running a business. Having a mission, being very clear on who you are, what your brand is, and what your brand promise is, are all things that need to be in your business plan.

If you’re thinking that doing a business plan is a pain, still do it, says Nina. It’s very time consuming and we often as entrepreneurs have a vision and want to act on it immediately, but you want to do it right. It’s so much better to take the time to do it right instead of just kind of taking a stab at the dark and then leaving after a year.

But how in depth do you need to go in your business plan?

There are templates that you can actually use to create your business plan. You can just go on sba.gov and they have business plans on there that are very helpful and very in depth. You can find templates for many different business types there, including beauty businesses.

Some business plans are extremely in-depth, and others are more surface level. It really depends on how specific you want to be. You can also add some market research into your target demographic in your area and key location that will really help you.

Most stylists who are moving into a suite have been doing this for a while so they are aware of who their clientele is, but when you’re starting to think bigger and think of growing and scaling a business, you really want to become very clear on exactly who you are and who you want to spend your time with.

Both in your business plan, and also for your own knowledge, it’s important to close in on your craft and then close in on what really makes you stand out, besides offering every service. Choosing one or two services that you offer and mastering those is a great way to start.

And don’t forget, one of the most important things in planning your business is the “why” behind it all. Your Why is the driving force behind everything that you do, and you have to become very clear on that. Your business plan will help you along with that.

One thing I asked Nina in our interview is about a competitive analysis. In your business plan, should you also look at what other businesses are out there, aka your competition?

Nina says to focus on who you are and what you have to offer, while also keeping one eye on what's going on outside. We can't really dive in and focus on what the competition is doing. You want to know who your competition is and you want to have a feel for what’s out there, but you're not going to base your business off of theirs. If you did that, then your business wouldn’t be your own. A little market research should be done, but it should only be a little bit to determine demographics, not pricing or what they’re doing specifically. 

Now let’s talk pricing

When you finally make the move and go out on your own, there will be a lot of changes for you, and a number of big changes for your clients to digest.

But it’s important to keep in mind that humans by nature do not like a lot of change. So when you’re communicating with clients about your big move, don’t tell them: “Oh, by the way, I'm leaving and I'm moving 5-10 miles away, so we're going to take you to a new location. Oh, by the way, I'm changing my color line. And we're having a price increase.” You have to hit people in small doses of info, says Nina.

Apart from that, let’s talk about how to determine what your pricing will be as an independent beauty professional. You should already be planning your pricing with your expenses and your target profit racked into it before going out on your own.

Pricing is determined by a lot of things, including your expenses, how booked out are you, how much money are you spending on education, and what your demographic is. To learn more about Nina’s approach to pricing your services, check her blog post here .

She suggests that you move into your new booth or suite with your same pricing, and then six months later you can have an increase that you announced after everyone’s settled. That gives you six months the understand the ebb and flow of your expenses and where you are with being booked out, so you can adjust your pricing accordingly.

The numbers that you now need to know as a suite renter

Rent percentage.

Your rent percentage means the % of your monthly gross revenue that you spend on rent every month.

It is one of the most important percentages aside from your supplies percentage. Nina says to aim for a 12% rent percentage. That means that your rent makes up just 12% of your revenue. So if you’re making $10,000 a month in revenue, you can spend up to $1,200 per month in rent, or $300 a week.

If you start out with a really high rent percentage, the only way that your rent percentage goes down is if you increase your revenue. Increasing your revenue is very hard to do if you don't have a marketing strategy or branding. So to start off on the right foot, do not invest more money in rent than you absolutely have to.

Nina also notes that on average, the suite renter business model is makes between 25% and 35% profit margins.

Client retention: New and Existing

Client retention is one of the simplest ways for you to continue to keep your business thriving and growing, however it's one of the most overlooked things in the beauty industry. We are often so focused on attracting that we forget to pay attention to our bread and butter clients that are loyal every single day.

There's typically a breakdown of a new guest retention percentage and existing retention guest percentage. It's important to look at both of them; you can probably find this information in your point of sale system or booking system.

The big question to ask yourself is: how often are your people coming back?

There’s a lot of things that go into this. If you have 10 new clients come in this week and only two of them end up returning, that’s a problem. “I would rather have you get five new guests and have all of them return,” Nina says. To increase your retention, it’s all about the guest experience from start to finish.

Frequency of Visits & Average Ticket

There are so many ways to increase revenue in your business, and two of the overlooked ways are increasing the frequency of your guests’ visits and their average sales ticket.

If just six of your guests return to you every four weeks instead of every six weeks during the year, that’s a revenue increase of several thousand dollars over the year.

In the same way, if you increase your average ticket just just $5 (which should be very do-able), depending on how many clients you're doing and what your average ticket is, that could be thousands of dollars over the year.

It’s important to really pay attention to of the clients that you see daily, how many of them are new, and what your average ticket is. Is it climbing or is it decreasing? Do you need to add on services? Are you talking about conditioning treatments and glosses and all those things? 

Once you pay attention to the details for a bit, you’ll understand exactly where you need to be, how many people you need to see, and the average ticket. It's a very systematic way of looking at your numbers that should be reviewed every day, every week, and every month.

One golden piece of advice for getting started as a suite renter

My final question for Nina was, what advice would she give someone who is ready to start dipping their toes into either booth rental or suite rental?

Nina’s number one tip is to just be yourself: be your authentic self. Because that is when you attract your perfect clients. That is when you build the best relationships, by showing up every day as yourself and just be true to who you are. 

Be prepared for the work, but also just be okay with who you are, and feel good about what you have to offer in terms of value for your guests.

Lovely words to live by!

Are you prepared to get started as a salon booth renter or suite renter? If you have questions for Nina and would like to connect with her, give her a shout on Instagram !

Join my free advertising class for solo beauty pros!

Build Your Appointment Book Using FB & IG Ads

Small Business Trends

Booth rental guide for salon owner and stylists.

There are multiple ways to run a salon business. The owner can rent or buy a space and hire employees who work for a set wage. Or they can set up a salon booth rental arrangement. The latter option provides some unique benefits both for business owners and those who rent the space. The following post is your complete guide for finding a booth and/or renting booths to stylists.

What is Booth Rental?

With a booth rental salon, the salon owner simply rents chairs to other licensed cosmetologists instead of hiring them to work for a set wage. The owner gets the profits from renting the space. And those who rent the space essentially run their own business within the larger salon. They can set their own schedule and are responsible for their own marketing and client management. But they benefit from having the space and amenities of the established salon.

How Much does Booth Rental Cost?

The exact cost of salon booth rental varies based on the salon’s location and the type of amenities offered. The average cost falls around $400 to $600 per month. However, salons in upscale neighborhoods and high traffic areas like Manhattan may charge thousands per month. And salons in areas with less traffic may charge as little as $200 per month.

How does Salon Booth Rental Work?

If you are in the process of finding out how to open a hair salon or h ow to open a nail salon or your already own a salon, booth rental would simply allow you to earn income from renting each chair in your location. Each stylist pays a monthly fee and/or a percentage of their earnings.

If you’re a stylist, salon booth rental allows you to essentially start your own business without setting up your own location. You simply rent the space from a booth rental business and start bringing in clients. You pay a monthly fee or a small percentage of earnings and keep the rest.

Why You Should Consider Renting a Booth as a Stylist

If you’re starting out as a stylist, you have to consider whether to rent a booth or look for more traditional employment. Here are some reasons to go with a booth rental business.

Be Your Own Boss

When you rent a booth from a salon, you’re basically an independent contractor instead of an employee. This means you get to book your own clients, set your own hours, and build a brand that’s entirely your own. As long as you follow the rules of your rental contract, you don’t have to worry about traditional employment constrictions.

Set Your Own Schedule

Salon booth businesses don’t operate like other local businesses. Since you’re not an employee, you can schedule clients only for the times you’re available. If you’re a busy parent, you can just schedule clients when the kids are in school. If you want to build a robust business, you decide how many clients you can handle each day.

Save on Startup Costs

For those who know they want to start their own beauty business, booth rental provides a low-cost way to build a client base. You don’t need to secure an entire building, purchase all your own supplies, and go through complicated permitting processes. You only rent the space.

Have Your Own Clients

However, you’re still responsible for booking your own appointments. And your clients are your own – not the salon’s. So if you ever choose to start your own full salon or move to a different location, you can easily keep your customers.

Be Based in an Established Salon with Your Own Business

An established beauty salon can also provide some important authority for your new business. It provides a professional setting to host your appointments. And the brand name may even carry some weight.

What are the Disadvantages of Booth Renting?

Renting a salon booth provides a lot of benefits for certain stylists. But it’s not right for everyone. Carefully consider the following elements before signing on.

You’re Paying Rent as a Salon Booth Renter

When you work for a salon, you receive a paycheck without having to invest anything upfront. But as a booth renter, you pay for the space and amenities. This may be worth it for some, but could be difficult for those without any startup cash or clients.

Less Name Recognition than Larger Salons

Your salon booth is its own business. So you’re still going to be up against larger competitors. Your business model as an independent stylist needs to be able to gain clients steadily through the years.

You are Responsible for Your Own Supplies

The salon you rent space from will likely provide large items like chairs and access to sinks and phones. But salon renters normally use their own tools. So you do need to budget for these purchases.

Booth Rental Tips for a Profitable Business

If you do decide that a salon booth rental business is right for you, a well thought out business model and plan can keep you on track. Here’s how to maximize profits while growing your clientele.

Plan Your Business Model

Working as a stylist in a booth rental salon means you’re basically starting your own business. You offer your own services and prices. You determine if you only want to work certain hours and if you’ll accept walk-ins. List your services, policies, expenses, and projections early on so you can stay on track.

Develop a Pricing Strategy

Part of your business model should include prices for all your services. This helps you customers know what to expect and can help you determine how much you need to work to meet your earnings projections each month.

Get Your Record-Keeping Right

Once you get started, you need a way of tracking earnings, expenses, and customers. Some new stylists just use spreadsheets. But you may want an actual accounting software to manage finances, a CRM to track customer interactions, and a calendar to book appointments.

Know Your Products and Services

Many stylists offer a variety of hair care products along with their services. Keep a list of everything handy at your booth. And get to know each item and its price so you can speak intelligently when customers ask.

Schedule Your Appointments and Consider Salon Software

Appointment scheduling is a major factor that stylists work on daily. A calendar system or salon software can help you manage these. For example, Salon Iris allows you to customize forms to send to customers and easily collect data and complete transactions. And Boulevard is a business management solution that automates booking and personalizes appointment data.

Understand that Marketing Your Business is Incredibly Important

Marketing is a pivotal aspect of running a booth rental business. As a booth owner, you’re not just managing a physical space but also building a brand and attracting customers. Here’s a deeper dive into why marketing is essential and the strategies you can employ:

The Significance of Marketing for Your Booth Business:

• Self-Reliance: Unlike being part of a larger store or establishment, booth owners often don’t benefit from the overarching marketing strategies of a bigger brand. This makes individual marketing crucial.
• Building Brand Identity: Marketing helps carve out a unique identity for your booth amidst potential competition.
• Attracting and Retaining Customers: Regular marketing initiatives help in not only attracting first-time customers but also retaining them and encouraging repeat business.

Effective Marketing Strategies for Booth Owners:

• Platforms: Utilize platforms like Instagram, Facebook, Pinterest, or even TikTok, depending on your target audience and product offering.
• Engagement: Regularly post updates, promotions, or behind-the-scenes content to engage your audience.
• User-Generated Content: Encourage satisfied customers to share photos of their purchases, which can serve as organic testimonials.
• Google My Business: Ensure you have a listing on Google My Business to appear in local searches.
• Pay-per-Click (PPC) Campaigns: Invest in ads that target local keywords related to your booth’s offerings.
• Visibility: This can offer significant visibility, especially if your target audience aligns with the event’s attendees.
• Partnerships: Collaborate with event organizers for special promotions or booth placements.
• Loyalty Programs: Encourage repeat business by offering loyalty cards or discounts for regular customers.
• Newsletters: Regular updates about new arrivals, special promotions, or events can keep your audience engaged.
• Personalization: Send personalized recommendations or offers based on past purchases.
• Collaborations and Partnerships: Partner with complementary businesses or local influencers for shoutouts, giveaways, or collaborative events.

Make Sure You Choose the Right Salon

The salon you choose should match your values and goals for your business. For example, if you plan to start a luxurious brand, choose a salon that is in an upscale neighborhood with modern decor and amenities.

Choose a Salon in the Perfect Location

You also need a salon that is convenient for both you and your customers. Distance is important, but also consider the types of customers in the area and local amenities like parking and walkability.

Starting a Booth Rental Business as a Salon Owner

If you’re a salon owner, renting chairs to stylists can bring a steady income source. Here are some ways to maximize this business model.

What to Include in Booth Rental

Before working with stylists, you need to make it very clear what they can expect. For example, your rental fee may include:

• salon chair
• hair dryers
• coffee, water, and snacks
• office tools like a phone and printer

How to Make Booth Rental Profitable for Your Business

When you own a booth rental salon, you turn a profit based on your ability to attract stylists. You can attract more stylists by offering features that may help them attract customers. For example, salons in high traffic areas tend to be popular. However, if you don’t have the best location, offer more options like spa services that renters can offer their clients.

Deciding on the Rental Rate

The rental rate needs to be enough for you to turn a profit. But it also needs to be low enough that stylists are willing to pay it each month. If you have trouble attracting enough stylists, you may need to offer more amenities or improve your storefront so it appeals to more customers. If you have too many stylists interested in booth rental, you may want to raise rates.

Advantages of Renting Chairs in Your Salon

Running a salon rental business can be significantly less involved than running a traditional salon. Here are some top advantages:

• No need to hire and train employees
• Ability to earn passive income through monthly rent
• Easy to predict income each month
• No need to build a full service and pricing list

Disadvantages of Renting Chairs in Your Salon

However, renting chairs to independent stylists can also have drawbacks. Here are some to consider:

• Lack of control over services offered at your location
• Damage to reputation if customers have a bad experience with a stylist
• Complications with employment law over dealing with independent contractors
• Losing customers to chair renters in your salon, if you also provide stylist services there

The Legal Aspects of Booth Rental

Before you can start a salon using this business model, it’s important to get the legal aspects right. Here are some issues to consider.

Contracts and the Booth Rental Salon Agreement

https://www.youtube.com/watch?v=nax__LYgqx0

Your rental agreement should lay out what space they’re provided and any add ons that are included. It also needs to state exactly what they can and can’t do. For example, are they responsible for doing their own laundry? Can they sell their own products? What behavior is not tolerated around other renters and their clientele? A signed agreement with all this outlined may help you cut ties with any contractors who don’t follow the rules.

Each state has different laws when it comes to booth rental. For example, you may have to meet certain requirements for working with contractors or supplying physical space. Check with your state business office for specifics.

Protecting Yourself

Stylists who rent booths are generally responsible for their own insurance. Professional liability can protect against some legal action from clients. For salon owners, general liability can protect against injury on site.

Chair renters are responsible for tracking and paying taxes based on their earnings. And salon owners must also pay taxes on their rental income. Specific rates vary by state.

Developing Your Own Company Policies

Each salon needs policies for what stylists are allowed to do and what’s included in rental agreements. And then renters need policies for what services are offered and how customers can book and keep appointments. For example, write out rates for all services and let customers know when payment is expected and how and when appointments can be canceled.

How do I start booth renting?

First, find a salon in your area that suits your needs. For example, if you need to bring in new customers, look for salons in high traffic areas. Then compare prices and amenities. Once you find a salon, invest in the tools and supplies that are not included, like hair tools and beauty products from your favorite brands.

What are booth renters responsible for?

Booth renters are usually responsible for running most aspects of their business, including:

• Creating service lists and prices
• Communicating with customers
• Appointment scheduling
• Providing services

Should I charge booth rent or commission?

When you rent chairs in a salon, you can either charge a flat monthly fee or a percentage of each renter’s commission. Rent is more predictable. However, you may earn more with commission if your renters bring in a solid income. Consider how much accounting you’re willing to do and how much predictability is worth to your business model.

Are booth renters considered employees?

No, booth renters in a salon are independent contractors. They basically run their own business. But they use some amenities at the salon.

How do I prepare for a booth rental?

If you’re thinking about renting a booth at a salon, here are some things to consider:

• Read your rental agreement to learn exactly what is included
• Invest in your own tools
• Market your services online or locally
• Get a salon software
• Schedule appointments

Image: Depositphotos Comment ▼

Comments are closed.

© Copyright 2003 - 2023, Small Business Trends LLC. All rights reserved. "Small Business Trends" is a registered trademark.

• Get Started

Home >> #realtalk Blog >> Manage a business >> How to run a booth r…

How to run a booth rental salon to maximize your profits

So, you’re a new salon owner wondering whether to rent out booths to increase revenue. Or maybe you’re already renting out booths in your salon and want to maximize profits? Either way, you’ve come to the right place.

Booth rental can be an excellent way to make sure your salon’s always bustling without all of the responsibility of full-time staff management or marketing.

But once you move to a rental booth business model, it can be a challenge to consistently fill your booths, decide whether to charge monthly or by commission, and master maximizing profits while maintaining a happy, thriving salon.

That’s why in this post, we: 

• Summarize what the booth rental business is
• Consider how much booth rentals cost
• Discuss the best ways to find chair rental tenants
• Compare the pros and cons of booth rental tenants vs. full-time salon employees
• Look at whether charging a monthly rental fee or by commission is best
• Share three ways owners can maximize profits while running a booth rental salon

Let’s get started.

Homebase helps you create a great place to work.

What is a booth rental salon?

A booth rental salon is a salon (such as a beauty, nail, or hair salon) where the owner rents out individual booths. For example, renting a chair and a mirror to an individual stylist in a hair salon.

This is in contrast to a salon with full-time employees on its own payroll, or stylists who rent an entire studio space rather than a single booth.

Booth renters usually have to sign a contract with the salon owner and stick to terms and conditions when it comes to clients, working hours, and services provided. They’re also normally responsible for bringing in their own business and setting their own rates and schedule, depending on their agreement with the salon owner.

What are the typical costs of running a booth rental salon?

The cost of running a booth rental salon depends on your location and outgoing expenses, as well as what you provide for your renters.

Will you offer booth renters only the necessities, like a chair, a mirror, lighting, heating, a hair washing sink, and water? Or will you offer extras such as free Wi-Fi, tea, coffee, or other refreshments, tools, materials, towels, laundry, private treatment rooms, and beyond?

Lots of booth rental salon expenses also come from managing the location itself, like:

• The rent you pay for your entire space, including parking if applicable
• Decor or aesthetic upkeep
• Daily cleaning
• Software for time scheduling and staff leave
• Building maintenance
• Building and/or contents insurance
• Liability insurance (if renters don’t have their own)
• The cost of complying with legal regulations (depending on your state)
• Utility bills The maintenance of essentials like chairs, hair washing equipment, electrical outlets, soap, and toilet paper

Don’t forget about the cost of essentials like computer equipment, software, and Wi-Fi. These costs can add up. But software like Homebase can help you easily manage many of the tasks it takes to run your team and business with free features for scheduling, time clocks, in-app messaging, and more. 

All in all, be sure to get crystal clear on how you want to run your salon before deciding how much to charge per booth to ensure you cover costs and make a sustainable income.

How much can a salon owner make?

When renting booths, you can choose between charging a monthly rental fee or charging commission on each job renters bring into your salon.

The amount you should charge for each booth also depends on several different factors, like:

• Location ( high-end luxury or affordable and accessible? )
• Foot traffic
• Competition ( are renters able to choose from a wide variety of nearby salons? )
• How much you’re providing to your renters ( in terms of materials and facilities )
• How in-demand your salon is as a place to work in the community

A recent estimate suggested that the average booth in the US rents for around $400-600 per month, but that price can drop as low as $200 in smaller, less-busy areas — or rise to thousands in luxury, high-traffic areas like Manhattan. 

How much you should charge per booth also depends on how many you have in your salon and how many hours each renter will work. For example, could you rent the same booth out to several part-time, independent stylists?

5 Places to find booth rental tenants

Finding booth rental tenants is similar to finding employees, except you’re offering people space where they can work rather than full-time employment with your company. 

That means you’re likely to find high-quality booth tenants by advertising in the same spaces you might if you were seeking full-time staff.

Just like when hiring employees, make sure each prospective tenant will fit in with your ethos, values, and overall vision for your salon. You should also perform background checks to ensure a safe environment for everyone. 

If you’re on the hunt for booth renters, some great places to find tenants include:

1. Job search websites

Salon professionals looking for more work, or a place to work, often look for opportunities on job search sites like ZipRecruiter, Monster, or Indeed. Someone who’s open to a full-time role may also welcome the chance to rent a booth.

2. Craigslist

Classifieds like Craigslist (or even Facebook Marketplace or similar) can be great places to post the availability of your booth rental salon, as well as your rates and terms.

3. Social networks

Posting on Instagram, Facebook, or even TikTok can be an effective way to spread the word about your salon and any booth openings you have. You can post direct ‘job’ ads, as well as regular content (such as how-tos, top tips, testimonials from existing renters, and behind-the-scenes of your salon) to increase awareness and interest.

4. Your own website

It makes sense to have a website for your booth rental salon, even if it’s just a few pages explaining your terms and sharing your contact details. 

You can send interested people to your website so they can learn more about your business, and you can advertise any booth vacancies there too. You can also make your salon look more appealing by including great photos, positive testimonials from happy clients, and a list of the services you offer.

5. Word of mouth

Stylists almost always know other stylists, and if you provide a great place to work (using tools like Homebase to boost employee communication and happiness can help), they’ll likely recommend your salon to others. 

Happy customers are good sources of positive recommendations too. So, don’t be afraid to ask if they know anyone who’s looking for a chair.

Booth rental salon vs. full-time employees

Booth rental salons take on tenants rather than hiring full-time employees. This has pros and cons for business owners, depending on your goals.

Pros of booth rental include:

• Estimating your income based on your number of contracted tenants and rental rate, not potential clients.
• Still getting paid even if you’re not bringing in any of your own salon work.
• No responsibility for marketing or finding salon work for staff.
• No responsibility for regular payroll or extra costs of full-time employees.

Cons of booth rental vs. full-time employees include:

• Tenants are essentially their own bosses, so you have little say over when or how often they work.
• Tenants may come and go, making it more difficult to build community, a solid team, or a brand.
• You’re responsible for the majority of salon upkeep even though your tenants use the space.
• If you charge a flat monthly rate, you don’t make more money when tenants do.
• You may need to continually recruit new tenants if you have high turnover, so the cost of hiring continually falls on your shoulders.

Booth rental vs. commission

Deciding whether to charge a flat monthly fee per booth or a commission per tenant client can be a challenge. Here are some pros and cons to help you decide:

Pros of a flat rental fee include:

• Income is fixed based on the number of contracted tenants, not hypothetical clients.
• You still get paid even if tenants don’t bring in any work.
• You still get paid even if you don’t do any salon marketing or services.
• You can easily predict income based on the number of chairs or tenants you have.
• It’s possible to scale your income if/when you’re able to increase your fee per chair.

Cons of a flat fee vs. commission include:

• Income stays the same even if your tenants have a great income month.
• You may hit a ceiling on your income due to a fixed number of booths.

3 ways salon owners maximize their profits

The above limitations don’t mean that salon owners can’t maximize their profits, save on excess costs , and scale their income while operating a thriving, happy, and profitable rental booth salon.

1. Try scheduling software

While booth rental tenants are usually responsible for their own schedules, you can still create a more efficient team environment by using tools like Homebase’s scheduling software .

Scheduling provides a dynamic, always up-to-date calendar, so you’ll always know who’s in which booth and when. That means getting maximum profit out of each chair without losing money on needless time gaps (or wasting your own time coordinating everything on paper).

Scheduling tools can also help tenants coordinate with each other, avoid double booking, claim empty spots (for extra commission) , and let you know when they plan to take time off. Homebase works on smartphones too, so you can communicate with tenants anytime, anywhere.

With Homebase, you can also link schedules to income forecasts so you can track booth occupancy and revenue in one place, and gain a greater understanding of how much each chair is really making.

2. Improve team communication and culture

Operating a booth rental salon can make it more difficult to build a solid community as everyone’s technically their own boss, and may come and go as they please. That’s where using an app like Homebase can help.

Having a single platform for team communication brings your tenants together under one roof (digitally and literally) , allows for easy messaging, builds rapport and trust, lets people get in touch quickly in case of illness or emergencies, and ensures everyone feels heard and included.

Fostering a culture of communication and loyalty for your tenants also makes them more likely to respect, work hard for, and stay at your salon — saving you the costs of hiring, absence, and turnover over time.

3. Optimize HR services

Salon booth rental operators have fewer HR responsibilities because they have tenants rather than full-time employees. But managing any necessary HR details is a must for responsible ownership, especially when you rely on real-life humans for your business!

Using an expert HR tool like Homebase can help you take care of necessary evil admin like keeping tenant data, tracking certifications, storing insurance policies, signing booth rental agreements, bookkeeping, complying with labor laws, and storing emergency contact details.

You can also use Homebase to send welcome packets for new tenants, helping them feel like a valued part of your wider team and reducing repetitive questions.

Managing and maximizing profits at your booth rental salon: The bottom line

Ultimately, managing a booth rental salon could be the best option for you if you want to operate a salon without the responsibilities of managing your own full-time employees. 

Salon tenants have more flexibility, set their own schedules, drum up their own business, and usually bring their own tools and materials. That can save you some serious money and time.

But even without employees, you will still have the costs and responsibilities of salon upkeep, managing tenants, and finding quality stylists to fill your spots—not to mention reducing turnover by making your salon a great place to work.

Luckily, all-in-one tools like Homebase are designed to manage exactly that, helping you get everything done and maximizing profit along the way.

Booth rental salon FAQs

What are the benefits of booth renting?

Booth renting means you can operate a busy salon without the responsibility of hiring full-time staff. Tenants often provide their own clients, set their own appointments and rates, and bring their own products and tools, saving you time and money. Your income may be more predictable as you can charge a flat rental fee per chair and aren’t dependent on variable bookings.

How do booth tenants get clients?

Salon booth tenants are their own bosses, and are usually responsible for bringing in their own clients. They might do so with word of mouth referrals, online advertisements, social media platforms, or their own websites. Word of mouth is often how new stylists get started and build customer loyalty.

How do I attract booth renters to my salon business?

Attracting salon booth renters is very similar to attracting full-time staff. The process might include using classifieds like Craigslist, job search sites, social network ads or groups, your own website, or sharing content on social media. Word of mouth can also be very powerful, particularly between tenants and their network — especially if you make your salon a great place to work.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

Related posts

July 31, 2023

5 effective timesheet reminders for employees and how to automate them

Whether you’re an entry-level employee, contract worker, or manager, remembering to track your time is a pain. Not only does…

July 28, 2023

The 10 best small business apps to manage your daily operations

Running a small business is an exciting journey, but means juggling customer management, expenses, inventory, and team coordination — all…

July 27, 2023

Small business clocking in and out policies (+ a free sample)

It’s the end of the month, you’re doing payroll, and you notice that one of your employees logged ten hours…

Benefits and best practices of timesheets for salaried employees

Salaried workers — and the companies that employ them — might assume timesheets aren’t relevant. Since they’re receiving a fixed…

July 25, 2023

Homebase vs. Time Clock Wizard: Which is best for your business?

As your small business grows, so does your stack of paperwork. So, instead of focusing on exciting new ventures like…

Employee Lateness Policy and 5 Tips on Managing Tardiness

Perhaps your customers have been complaining that your cafe isn’t up and running before 9:10 AM even though the doors…

Subscribe to our newsletter

Looking for ways to stay up to date on employment laws and small business news?

Homebase makes managing hourly work easier for over 100,000 local businesses. With free employee scheduling , time tracking , and team communication , managers and employees can spend less time on paperwork and more time on growing their business.

• Hiring & onboarding
• Team communication
• Employee happiness
• HR & compliance
• Integrations
• Food & beverage
• Beauty & wellness
• Medical & veterinary
• Home & repair
• Hospitality & leisure
• Education & caregiving
• Contact sales
• Accountants
• Become a Partner
• Careers – We’re hiring!
• #realtalk Blog

Booth Rental Salon Profit Planning: Landlord vs. Commission

It’s an age-old question. As a salon owner, is it better to be a landlord and offer booth rental or have employees who earn commission? As you may know, there are pros and cons to both sides, and there’s no “right” answer. Running a business is never easy, so let’s take a look at the two different business models from a young stylist’s perspective.

A tale of two stylists.

Cate and Nicole are both talented stylists. They’re both young, hardworking, ambitious, and eager to learn. Both took roles as stylists with local hair salons right out of cosmetology school.

Cate started as an hourly paid assistant stylist. She had access to in-house education, and as she passed specific courses, she could take her own clients and gain more experience. She worked hard to please her clients, but the salon took care of everything else. However, circumstances change, and sometimes people have to make hard decisions. For example, if such a job pays minimum wage and the stylist commutes an hour each way, she needs other support at home to make it work if something upends the balance, she may need to make different choices.

One of those choices could be booth rental at a salon closer to home.

After all, the stylists they know who rent a booth have more freedom and flexibility. They can set their own schedules, use whatever products they like, and wear what they want. From Cate and Nicole’s vantage point, the stylists who rent booths keep more of their money too.

But is it all a bed of roses?

Nicole started asking around. She reached out to stylists she knew who made a move to booth rental, and what she learned was eye-opening.

Is it Better to Rent a Booth or Stay a Salaried Stylist?

Nicole appreciated the training opportunities at her salon, but she had always thought she’d go on her own at some point. She saw herself renting her own chair and setting her own hours.

According to Andrea Miller, stylist, salon owner, and Business Development Associate at Daysmart Software, recent cosmetology graduates benefit from taking a commission-based stylist role. She says, “It takes time to build a clientele. Plus, the salon usually offers on-going education opportunities.” In other words, recent graduates receive paid on-the-job training.

Andrea Miller says, “I started as an hourly assistant at a salon with lots of in-house training. We had to pass certain courses to move into working with clients and taking on more responsibility. I was able to learn and attract the right type of clientele for my personality. It had the potential to grow to a six-figure job after many years.”

She also says, “ The main things that allow new graduates to be successful in their first year are their drive to work hard, drive to gain exposure through marketing and networking, learn more, and show up for any appointments no matter the time on their books.”

Fortunately, for employee-based salon owners who want to attract new talent, there’s good news. Today’s cosmetology students recognize the advantages of working in an established salon.

The 2020 Beauty Industry Workforce Report published by Talentmatch.biz found “69% of students want to work for a salon right after graduation.” However, keeping those stylists is a problem within the industry. The report also found, “71% of the survey respondents want to rent a booth after working in a salon.”

Stefanie Fox Jackson, the owner of Talentmatch.biz, who published the Workforce report, says, “94% of salon owners say they struggle to find and retain talented stylists.”

So, where is the disconnect? Why do 69% want to start in a salon but plan to move to booth rental later? And they have this plan while still in school, so why does booth rental look so appealing without any experience?

Let’s return to our fictional stylists Cate and Nicole. These women have both built up a good clientele, and they’re starting to consider other options.

Nicole is frustrated by her salon. She has little control over her schedule and spends most of her nights and weekends there. This schedule leaves her little time for family and friends. Plus, she’s thinking of starting a family, so flexibility is essential. Besides that, she doesn’t receive as much commission on the services she sells as she was initially promised. Overall, she feels underpaid and unappreciated.

As a result, she starts researching what’s involved with booth rentals. One of her colleagues tells her she needs a loyal clientele who’ll move with her to her new location. If she stays close geographically speaking, it’ll be easier for them to follow her to her new location.

She also learned that she needs to set up basic business entities. She’ll need a business license, insurance to buy her own products, pay for her own training and marketing materials.

But Nicole’s not daunted by any of this because she’s sure she’ll make a lot more money independently. She learns she’ll probably keep about 50% of what she makes. So if her haircut is $60, she can expect to save $30 after paying for her booth rental and other expenses. Like a salaried stylist, her most profitable services will likely be color or commissioned to sell retail products. Of course, she’s reminded she’ll have to buy her inventory on all of those products.

However, there are other considerations. What if a snowstorm keeps Nicole closed for three days that she didn’t expect? What if she’s sick and there’s no one to cover for her? How will she handle her vacation time? Nicole thinks about her salaried stylist position and recognizes that she gets paid even if a client misses their appointment. She receives ongoing education on new products and techniques. She even gets paid time off.

She learns the average hair salon makes anywhere from 0- 9% profit, which is a big swing. Thanks to her investigation skills, she now recognizes some of the overhead that the salon owner invests in the salon. As a result, she starts looking at her reasons for wanting to go out on her own. Sure, she wants more autonomy, but at the same time, she likes most of her colleagues. She wants to work in a place where she feels the staff cares about one another and has a helpful attitude. In other words, she says, she wants to work with people who feel like a family.

“36% of respondents to the 2020 Beauty Industry Report said they want to work with “a team that feels like a family.”

However, she also wants flexibility. Andrea Miller says, “The biggest reason I believe people choose booth rental is for flexibility. They can have the option not to work certain evenings and maybe even eliminate weekends. That’s not an option as an employee.”

When you combine that desire for flexibility with sometimes a disappointing first year’s earnings, booth rental can look very appealing.

The Salon Owner’s Perspective

As a salon owner, you might consider the two business models yourself. Is it better to be a landlord and rent booths to promising stylists, or do you want to build a brand and grow a talented team?

With the booth rental model, you’re a specialty landlord. The stylists are free agents who pay rent and manage their own clientele. Your profit is based on how many chairs you have and the market rate for hair care in your area. If you have business-minded stylists who bring in a steady stream of clients and pay their rent on time, it can work for everyone.

However, the downside is there’s no shared culture or standards. Stylists wear what they want, use the products they want, and if they don’t keep their skills up-to-date, that’s on them. Yet, customers still see you as the “boss,” and you’re the brunt of complaints from unhappy customers and stylists.

Furthermore, every stylist is self-employed. There’s little continuity from one booth to the next. The stylists can treat their clientele the way they want and choose any conversation topics, including contentious topics like politics or religion. The stylists themselves have no control over who they’re next to, so if they find themselves with an off-putting neighbor, there’s not much they can do about it.

Besides the lack of shared culture, there’s an incentive to keep the booth rental low, so you retain stylists. At times, some of the stylists can form cliques and threaten to leave if you don’t meet certain conditions. However, with the employee salon approach, you’re in charge from soup to nuts. This is a good thing when you want to create your own culture and lead a team. You can require your stylists to have specific training, dress a certain way, and uphold protocols. There’s an intention behind everything you do.

Running an employee-based salon can be rewarding. It also has the most profit potential.

Of course, the employee-based salon also comes with all the responsibilities of leasing or buying a salon space, outfitting it, attracting, training, and retaining talented stylists, maintaining inventory, providing training, marketing, and all the other associated costs with running a salon. This brings us back to the salon owner’s complaint that it’s hard to find and retain talent. However, when you think about what your stylists want, it’s easier to think of ways to make the employee model a good fit for everyone.

The 2020 Beauty Industry Report says, “89% of stylists would stay at the salon they work at instead of renting if they felt the salon could meet all of their needs.”

You’ve already seen that flexibility is a big part of why they leave. Stylists also want to work in a place where they feel trusted and appreciated. They also want to have the opportunity to grow. Andrea Miller says, “ stylists will sacrifice things to be at the right place for them. It is really important for salon owners to define their image, stick to it and follow through so that their staff remains loyal.”

When the salon owner has a vision and understands how to lead and inspire a team, they can create a place of business that attracts and retains top talent. Another part of today’s leadership is transparency and clear communication. From communicating expectations to compensation, the more open your leadership is, the more your staff will feel comfortable.

There’s no one-size-fits-all solution for anyone, and at different points in your career, you may find owning a booth rental salon is a better fit at that time than an employee model. Only you can decide.

No matter which salon model you choose, you still need to market, take payments, and manage inventory. Our software can help you manage the business side of your salon. Try it free for 14 days.

Related Posts

Schedulicity, Scheduling has never been this simple.

Hair Salon Business Plans: An All-Inclusive Guide for (Finally) Writing Yours

Chances are, if you want to open a salon, you know that you need a salon business plan. But it can definitely feel intimidating, so where do you start?

That’s where we come in. We created this in-depth guide to help you get started writing a simple hair salon business plan, including an outline of what to include, tips and resources.

First things first, though, let’s dive in to what a salon business plan actually is and why it’s important.

In this article:

• What is a salon business plan?
• Where to start
• What to include in your business plan
• Additional resources

What Is a Hair Salon Business Plan?

To break it down, a business plan is a document that outlines how an individual or group of individuals will start a business. A salon business plan outlines how someone would start a salon, including how the problem the salon is solving, marketing research, financial plans, and more. And unless you have enough capital to open a salon on your own, you’ll need one of these to secure a loan.

How to Start Writing Your Salon Business Plan

If you’re thinking “Well, that sounds like a lot of work,” you would be correct. But! We’re here to help. We’ve included a checklist of all the things you’ll need in your salon business plan, including just where to start — because sometimes, that can be the hardest part.

Research And Budget For The Tools You Need

There’s definitely going to be quite a bit of research that goes into this plan, and as our resident beauty industry expert Nina Tulio says, pricing (or in this case, asking for a loan) is the most accurate when it’s based on facts and numbers . Think about what tools you’ll need to run your salon successfully, and build that into the loan. Here are some things to consider:

1. Space: Will you be renting, or purchasing a space to work out of? 

2. Furniture: What do you need to get the salon all set up to start taking clients? 

3. Employees: How many employees will you need, and how much will you pay them?

4. Booking Platform: How are you going to reach new clients? From reaching new clients to connecting with an existing one, Schedulicity is your one-stop-shop for all your booking, communication, and payment needs.

Actually Getting Started – The Writing Portion

Charts and graphs will be your BFFs during this process. It’s much easier to show your profits and losses in a chart, rather than describing each and every one — there are tons of examples online (check out our resource list below!). Also, don’t be afraid to ask for help with proofreading, either from a friend or family member with a Type A reputation or even a professional. This is an important piece to starting your business, so if you aren’t sure if you have all the answers, somebody else does!

What to Include in Your Salon Business Plan: A Checklist

Now that you’ve done some research, you can start writing your salon business plan! There are quite a few pieces of information to include, so we’ve made a comprehensive list to help keep you organized!

First things first, you’ll need a cover page. This doesn’t have to be anything fancy, but it does make the finished product look a little more profesh! Your cover page should include your salon business name, address, owner’s name, phone numbers, email address, and all other contact information.

Executive Summary

Next, you’ll include an executive summary. This will basically be a brief overview of the rest of the business plan. This is where you highlight the key points that will be included in the rest of your business plan to prepare readers for what’s coming. This should be clear and concise, yet capture the reader’s attention.

Opportunity

Problem 

What need or problem will your salon be solving? Is there a need for haircuts or manicures in your area? Is there a need for affordable salon services in your area? 

How are you going to be solving this problem? What makes your salon different and what are you dedicated to?

Target Market

This is the group of people in which you are going to aim your services towards. They can be categorized by age, gender, income, and other aspects that make them unique, such as working or not working, has children or doesn’t, and more.

Competition & Advantages

What are the current alternatives to your business in your area? Are there other salons, and if so, what will set you apart? What do you have or what will you offer your clients that will be better than your competitors?

Keys to Success

What aspects of your business will lead to its success? This can include things like location, environment, convenience, reputation, and more.

Marketing Plan

How are you going to reach your target audience? Are you going to utilize organic social media, advertisements, direct marketing, word of mouth and referrals, or a combination? Make sure you’ve done your research on what works and why!

How do you anticipate your sales will look in a year? If so, this could be because of your marketing and growing reputation, and more. If your sales increase during year one, will you add another employee during year two? This of your goals a year, two, three down the road, how your sales will look, and how you’ll change your behavior moving forward.

This section refers to location and facilities, including the address of your salon and square footage. What is special or important about the location? Is it part of a strip mall or in a busy part of town? 

Milestones & Metrics

A table is a super clear and easy way to show your milestones. Milestones include things like acquiring financing, hiring employees, beginning your marketing plan, and your grand opening. Remember to include dates for each milestone!

As for key metrics, what are you going to measure to determine the success of your salon? This could include average revenue per month, new business leads per month, new clients from word of mouth, and social media engagement and follower growth.

Overview 

Include your company description and history. Is this part of a franchise, or a totally new business? What makes your salon unique and special? Just a short summary will do, since you’ve described this elsewhere!

Mission Statement

A good mission statement answers the ‘why’ behind your business. Why does your business exist, and what beliefs do you hold true? Don’t be afraid to ask your employees or team members how your mission statement sounds (and make sure it’s actually something you can stand behind).

Management Team

Identify the people that are a part of the management team and why they are qualified. 

Personnel Table

Create a table that includes your employees, their titles, and how much business you think they’ll attract (in dollars) each year for the next three years.

Financial Plan

This section will include a lot of charts and graphs. If you want examples of each one, check out this salon business plan example . 

Key Assumptions

Your financial projections will be based on some key assumptions. Include those here! Those assumptions can include things like:

• Pay structure – how will the owners be paid? Will your employees be paid based on commission, and if so, what percentage?
• Do you think you’ll have full-time employees, or will you utilize a booth rental structure? 
• What does your projected revenue look like? Will it start off increasing off the bat, or do you foresee a dip in your revenue when you first open?
• What are your projected costs? This can be categorical; it doesn’t have to be numerical.
• What are your projected sales? Again, this can be categorical; do they come from mainly services, or also products?
• Do you think you’ll run into any issues with reporting or sales? Include those here.

Revenue By Month

Use a chart to show your revenue by month over the next year. Take into account busy seasons, time it takes to get off the ground, and more!

Expenses By Month

Use a chart to show your expenses by month. This includes both direct and indirect costs. Direct costs are the costs directly involved with the service, including labor and materials. On the other hand, indirect costs are those not directly related to the service, including reception supplies, utilities, and technology. 

Net Profit/Loss By Year

Use a chart to show your net profit or loss by year for the next three years.

Financing – Use & Source of Funds

The use of funds includes initial expenses, tangible assets, and a cushion of cash to keep you up and running and in case of emergencies. How much do you think the initial equipment will cost? What about supplies and initial losses incurred before launch? Be sure to include a cushion that will help you feel comfortable moving forward!

The source of funds includes where you’ll be getting the funds from. This will most likely be a combination of owner savings and loans from a bank or investor.

Projected Profit & Loss Statement

Of course, this won’t be absolutely exact, but you’re just estimating here. Create a chart that includes direct costs, operating expenses (salaries and wages, marketing expenses, rent, etc), and operating income over the next three years.

Projected Balance Sheet

This will be another chart that includes current assets, long-term assets, current and long-term liabilities, and total equity over the next three years.

Projected Cash Flow Statement

This will be the last chart you’ll need, we promise! This will include net cash flow, investing and financing, and cash at the end of the period over three years.

Key Takeaways

Writing a business plan can definitely feel like a lot, we know! But it is important to remember to be thorough, do your research, and include all the information in order to secure a loan. There are tons of resources and examples out there, and use this guide as an outline to help you get started.

Additional Resources for Writing a Salon Business Plan

• 11 Sample Business Plans to Help You Write Your Own (Hubspot)
• [Template] Hair and Beauty Salon Business Plan (BPlans)
• Write Your Business Plan from U.S. Small Business Association
• A Financial Planning Guide for Hair Salons (Timely)
• 7 Best Banks for Small Businesses in 2021 (Fundera)
• The Best Online Tax Resources for 2022
• 25+ Salon Marketing Ideas to Increase Your Revenue
• How to Hire Your First Assistant
• For writing your business plan (and all future writing): Grammarly . Use this to make sure your salon business plan reads perfectly. 
• For your financial charts and maps: Google Sheets . Perfect for the financial section of your site, you can use Google to generate charts and graphs without paying for more expensive software.
• For appointment scheduling: Schedulicity . Ideal for online booking, marketing, and payment processing, we also offer reporting tools to track and project your monthly revenue. (Plus, start for free!)
• For bookkeeping: Our favorite beauty industry-specific accountant recommends QuickBooks Simple Start . Here are some of her other financial resources .
• For payment processing : Schedulicity . Our rates are the lowest in the industry and built into the same account you’ll use for everything else. Here’s a comparison chart of payment processors. 
• For automated text reminders: Schedulicity again! We offer automated text and email reminders for clients .  
• For newsletters (if that’s your thing): Mailchimp . If you’re planning on sending out regular newsletters, Mailchimp has some great tools for free (or really, really cheap.) Schedulicity also has built-in email marketing to send messages to your clients.

Webinars & Video

• Financial Freedom : Our ongoing webinar series is dedicated to finances for small businesses. Rewatch them at your leisure on YouTube. They’re also available as a podcast !

Business Resources Business Startup

Chances are, if you want to open a salon, you know that you need a salon business plan. But it can definitely feel intimidating, so where do you start? That’s where we come in. We created this in-depth guide to help you get started writing a simple hair salon business plan, including an outline of […]

Take back your days with Schedulicity. Sign up today.

Not ready to sign up? Learn More

More of the good stuff

Beauty Business Resources Hair

How Much Does Salon Software Cost?

Business Resources Features

How to Set Up Your Schedulicity Business Account

Barber Business Expansion Business Resources

Must-Know Barber Trends for 2023

Sign Up for Schedulicity

Already have an account? Log In

• Start Free Trial
• Write for Us

How To Write the Perfect Salon Business Plan for Your Salon in Just 7 Simple Steps

The US salon industry includes more than 80,000 establishments with a combined annual revenue of about $532 billion. So opening a salon, and owning a salon business is a pretty safe bet; it’s steady and profitable . But lack of proper planning makes it difficult to juggle all the aspects of your business, starting from marketing and sales, to accounting, and whatnot. 

Here’s a quick tip! Searched all over the internet for concrete information on how to open your own salon? Confused? Don’t worry, we’ve got you covered! Check out this blog on opening your own salon business that gives you a comprehensive 10 step guide to help you get started now.

Writing a properly structured salon business plan is crucial to guarantee your salon’s success in this highly competitive market. Whether you’re wanting to secure a business loan for your salon or trying to expand or reinvent your salon business, a business plan for your salon will help you get there.

So how exactly would a business plan help you?

• A business plan will help you to figure out what you want your salon to offer, where you aim to take your salon’s growth, what kind of people you want to cater to, and who you’re competing against . 
• If you are looking for investment from private investors, banks, or any other lending institutions or public grants, structuring a business plan is crucial. 
• A business plan will help boost your salon business’s productivity through improved oversight and direction, and help you make informed decisions.
• As your salon business starts to grow and gain clientele, a well-developed business plan can help you acquire the capital needed to expand to new locations.

How to make the perfect business plan for your salon business?

Whipping up a perfect business plan can be pretty daunting because it needs to be immaculate. No worries! Here we’ve broken down the entire process into 7 easy-to-follow , foolproof steps, along with their templates, to help you create a successful salon business plan. 

• Write a mission and vision statement
• Create an executive summary
• Analyze and identify your target market
• Perform a competitor analysis
• Write your salon’s business description
• Make strategies for advertising and outreach marketing
• Figure out your financial plan

Whether it’s a hairdressing salon business plan, a general beauty salon business plan, or even a  small salon business plan for opening a salon on your own from scratch, we’ve got you covered. This is a complete, comprehensive guide to help you in the process of making a business plan for a salon. It’ll give you a basic understanding of how to write a salon business plan in the easiest possible way. 

1. Write a mission and vision statement

I) mission statement .

It articulates the immediate purpose of your salon business. Under this, you can state all the short-term goals that you plan on achieving with your salon within 6 months , stretching up to a year.

Here’s how you can nail a perfect mission statement

• Value – What is the value of your salon in the market? How can it help your clients? 
• Inspiration – Why should people want to come to your salon?
• Remember to make your mission statement sound plausible and reasonable . Also, make it specific and concise – clarify all your short-term goals and the timeframe within which you’re planning on achieving them. 

ii) Vision statement

 Now, where do you aim to take the salon’s growth in the next 5 years ? Well, if you’re dreaming, dream big! And you can be as ambitious as you want, the sky’s the limit. 

Setting strategies for a longer-term makes sure that you don’t stumble on the road to success. It makes the overall structure of your business stronger. It prepares you for anything that the fickle market demands from you and throws at you.

Here’s how you can write a perfect vision statement :

• Review your long-term goals in a way that you can analyze how achieving your long-term goals could impact your business and the salon industry in general.
• Derive how your clients could benefit from the visions that you would be implementing.
• Your business’ end goals can drive your vision statement, For instance, if you’re planning to branch out to different locations after, say, 5 years, you can frame your vision statement in a way that states to make your salon a household name, popular in the neighboring areas and so on. 

2. Create an executive summary

After you write the mission and vision statements, you can summarize everything that you’re aiming to achieve with your salon under an Executive Summary. Whether you’re writing a business plan for a hair salon or a business plan for a beauty salon, you should be properly aware of what your intentions are with the salon. This section is the most important part of your business plan as it dictates the tone of your salon, and makes an impression. 

Remember to keep this section very brief and concise to give an overview, as you’ll be elaborating on these points in the later sections of your business plan. 

If you’re having trouble writing your salon’s executive summary, you can always write it after you’re done with all the other sections in the business plan . This will give you a better understanding of your salon business and help you succinctly put your points together to describe it. 

What can you do to write the most fitting executive summary for your salon?

• Start by stating all the short-term goals that you plan on achieving within, say, 6 months or a year.  Remember to keep your goals realistic and feasible. 
• Summarize your approach towards your business, to give an overview of how you will run things in your business.
• Clearly and briefly express the value proposition of your salon, and how it would potentially position your business in your target market.

How to write your salon’s executive summary: A simple template

Divide your business summary into sections of opportunities and expectations, and put brief points in those subsections in the most convincing way. The following template can help you with this :

• How are you trying to achieve recognition in your target market?
• What is your salon’s tagline/motto?
• What is your salon’s growth plan for the first 6 months after its launch?
• Which demographic is your salon meant for?
• How are your services aligned with your target market?
• How many salons are there in the area of establishment of your salon?
• What products and services do they offer?
• What is the range of variation of their clientele?
• What products and services is your salon offering?
• What is the unique selling point of your business? For eg: If your salon is the only one in the area that offers holistic services with spiritual healing, then put it down as your differentiating point.
• How are you different from your competitors? For eg: Is it the lower cost of services of your salon, or the vast range of services that make your salon stand out? 

Make sure you catch the eye of potential investors in the above section. Don’t forget to state how you can attract potential customers. 

• What is the salon costing you? List down the projected expenses and costs that come from daily operations, rent, staff hiring, cosmetics, appliance expenditures, etc. for the first 6 months. 
• What is the cash flow and how much profits are you bringing in for the initial 6 months? This is completely variable and the reaction of your target market to your salon decides this. So aligning your services with them is of utmost importance. 
• Why does your salon need financing? For eg: you can convey that you’re trying to meet the anticipated growth of your salon in the market.

3. Analyze and identify your target market

Analyzing and defining a target market for your salon is very important as it goes hand in hand with your salon’s growth and outreach . 

A beauty salon can service all genders and age groups. Your target audience can include working professionals, college students and teenagers, homemakers, to-be-Brides, and even children. And each group will require different types of services.  So make sure you list down each individual section of your target market and what services they would require. 

Here’s a checklist to make sure you’re going the right way about it. 

Steps to analyze and identify your target market 

• Find out what kind of people you think would resonate with your salon’s services the most. For example, if your salon offers low commitment (temporary) coloring services, you can get a lot of customer traffic from the millennials. 
• As an extension to that, find out if your services are more inclined to serve a particular demographic better, or if you’re good with people of every demographic.
• Keep up with the trends in the salon industry to know what’s hot and what’s passé.
• Peek inside the brains of your target clients to know exactly what they want or like and tune your salon accordingly.

An easy-to-follow template to proceed with your target market analysis

• Segregate the people in the market pool into different categories.

Do not forget these bases:

• Personal income/occupation
• List out the services that your salon would offer that would fit one or more of the stated categories above. 

For eg: If your salon offers Diamond Facial at $200.00, then you can list this service out as follows :

• Use social media to get an understanding of the trends in the market at present. Join salon and beauty communities on Twitter, Facebook, and Reddit, and follow beauty bloggers on Youtube and Instagram. 
• Look up the people who subscribe to or follow these beauty pages and beauty bloggers to identify which trends appeal to a certain demographic. You can tell a lot about your target market’s behavior from the posts they like and the thoughts they share in the comment section of these posts and videos.

4. Perform a competitor analysis 

With a great market demand, several strong competitors emerge. And we don’t want your salon to get lost in the sea of other salons now, do we? As it goes, keep your clients close but your competitors closer.

Figuring your competitors out gives you a necessary nudge in the right direction to take your business plan forward. It gives you an idea of what the other salons are practicing with their clients, and what gaps they’re leaving that you can fill up as you step into the salon business yourself. 

How do you analyze your competition?

• Find out what the other salons in the area are doing successfully or poorly.
• Get a rough idea of the cost of services that the competitor salons are offering. This helps you price the services for your salon.
• Identify how many salons provide services that focus on a specific niche and do not serve a wide group of customers.
• Find out the industry-specific challenges they are facing that you may also face while running your own salon.
• Analyze what they can do differently to improve their situation, and implement it in your business mission plan to avoid facing such challenges yourself. 
• Have your salon address these deficiencies in the market.

Follow these easy steps to perform your salon’s competitor analysis 

• Visit your competitor salons’ websites.
• Follow them on social media platforms (Facebook, Instagram, Linkedin) to get an idea of how much influence and reach they have. Check out who follows their social media page to get an idea of the target market as well.  
• Sign up for any interactive sessions that these salons might conduct and check how other people respond to these sessions, to understand their grip and dominance on the market.  
• Visit the other salons in the market as customers, to get an idea of their quality of services.

5. Write your salon’s business description

So now that you have your market and your competitors figured out, it’s time to work on your salon business . A beauty salon or a hair salon is fine, but what kind of salon do you want yours to be like? Setting a proper description for your business gives your salon a custom style and personality. 

Your business description should include an overview of the products and services that your salon would offer, and how your salon would stand out in the market. Setting a trademark vibe to your salon also helps with its brand image. 

To get started, you can answer the following questions :

• Would you specialize in any particular service like nail art or bridal makeup? 
• Would you want your services segmented for various types of clients?
• What services would you want to offer in packages? 
• Would you serve complimentary refreshments to the clients?
• What theme are you going for with respect to interiors and ambiance (Japanese zen, tropical beach day, etc, etc)?
• What would be your salon’s “it” factor that distinguishes it from the other salons in the area? 

Once you’re done with the salon’s description and personality, set a brand logo and a tagline to go with it. To get a professionally designed custom logo, you can always reach out to freelancers or companies that can do it for you, like 99designs . 

You can also use an online designing software like Canva to design your salon’s logo on your own. 

And that should complete the branding. 

Creating a business brand will prepare you to answer someone asking you “Why should I come to your Salon?” 

Remember to make your salon stand out, noticeable, and interesting.

6. Make strategies for advertising and outreach marketing 

Now you have to position your salon in the market in a way that makes people take an avid interest in “the new salon”. Your target audience will guide you towards the perfect approach to spread the word around about your salon. 

A simple guide to writing the marketing plan for your salon business :

• Your salon should be Google-able. To show up in digital searches, make sure your business is listed in online directories.
• Create a website or a mobile application for a better customer experience. 
• It’s always better to spread out to all social media platforms to promote your business so that your customers (and other potential clients) can get to know you on a more personal level. Connect with your business community by following other small businesses in the area. Actively engage with your target market and share behind-the-scenes content (like before and after photos of clients’ haircuts) to build your credibility and cultivate brand awareness.
• Partner up with other businesses that may share the same clientele as a salon would (like spa retreats) to offer coupons and vouchers, for outreach marketing.
• Offer “first-service” discounts to your customers.
• Keep service rates lower than the other salons in the area to attract clients. 
• Once the rapport is established, and your clients trust you with the service quality, you can cut out the discounts. It is also very important that you optimize the discounts in a way that you don’t run into a complete loss, but we’ll get to that in a minute.
• It is crucial to maintain the service quality to the highest degree after you start getting clients. Remember that your clients wear the marketing after they come out of your salon. This will definitely help you secure referrals from existing clients.

Marketing Tip! Want to pull off a great marketing campaign for your salon business but don’t know where to start? Do you feel like the marketing section in your business plan is incomplete? For more detailed marketing ideas for your salon, check out our blog on 7 hand-picked salon marketing ideas to boost your business .

7. Figure out your financial plan 

It’s time to play the number game. This is probably the trickiest part of writing a salon business plan because you have to be extremely careful while juggling your revenue and expenditure budget optimally. 

You don’t want to scare or throw off your customers by charging exorbitant prices for the services, but at the same time, you don’t want to crash and drown in debt yourself. Not to forget, cutting costs on cosmetics may affect the service quality. Cut hair, not costs!

Ergo, you need to have a proper financial plan for your salon. 

Writing a detailed financial plan will help you get a rough idea of how your salon would be progressing on a monthly/ yearly basis. Moreover, if you’re applying for a loan, your financial plan will determine your eligibility .

What can you do to create a solid financial plan for your salon?

• It helps to bifurcate all the expenses into Fixed costs, and Variable costs. Then you can analyze your fixed costs and variable costs to set an optimal budget.

Fixed Costs: This section includes all the costs associated with your salon business that must be paid regardless of the customer traffic in your salon.

• Rent or mortgage for the salon space.
• Payroll for the employees you hire.
• Equipment maintenance costs for hair spa and other services that are heavily equipment dependent.

Variable Costs : This section includes all the costs in your salon business that are directly associated with the customer traffic in your salon. 

• Expenses of purchasing cosmetics and other salon supplies.
• Electricity consumption by salon equipment. For eg: If you’re writing a hair salon business plan, make sure you include the electricity consumption by blow dryers, hair straighteners. 
• Have a clear idea of how much discount you plan on putting on your services during the first few months of opening your salon, and for what duration you will be offering these discounts. Note that during the first few months of opening your salon, your sales are likely to be lower than your projections, and that’s completely okay.
• Make a list of pros and cons for renting out space for your salon versus buying a place.
• If you’re renting and wish to own the salon space, spot out a tentative date of when you’ll become capable of buying the place.
• Figure out how many people you are going to hire in your staff, and how much salary you would be able to offer them. Note that you’ll have to improvise this according to how the customers respond to your salon.
• Reach out to your local chamber of commerce to get more insights on funding and loans.
• Tentatively figure out the time it will take you to break even, and start earning chunky profits.

Here’s an easy-to-follow template to proceed with your ‘financial plan’ section 

The following simple template can help you make the financial plan for your salon: 

i) Sales and revenue projections for the first five years :

Figure out how much you’ll charge for your services, and estimate how many services you may perform in a week. A periodic analysis of this over the next five years will give you the necessary projections. Put the details down in a spreadsheet to keep it organized. It also helps to collate all this information and analyze using bar graphs.

ii) Expenses’ budget :

Break down the expenditure of your salon for a given term, by referring to the “fixed and variable costs” list that you made. You can pick the term to be a month, a quarter, or a year long .

It’s a safer practice to stick to a month-long or a quarter-long term. You don’t want the budget analysis task to loom over you and become a burden. Not to forget, it keeps you in touch with the financial status of your salon business. 

iii) Estimated profit margins:

Accumulate the sales projections and budget report analysis to find out the profit for that term. Display the margins in pie charts or bar graphs for easy comprehension. 

iv) Liabilities:

Note all the losses that your salon business can possibly incur in the time period that you have defined as a term. For example, your blow dryers may stop functioning and need to be replaced.

Also include the factors that may stunt your business from growing. For example, you may be short on staff, or your nail salon is lacking an appointment scheduling and business management tool.

v) Cash flow statement:

Make a projected plan of cash flow-in and flow-out for your defined term, where you include cash flow from sources that are not directly related to your salon services or your salon business-related expenses. 

Include the cash flow from loans, loan payments, taxes, and personal funds that you used for your salon.

vi) Break-even analysis:

Predict the break-even point for the first five years of your business. Break-even is achieved when your salon business has covered all the expenses, and your sales surpass the expenditure costs. From that point on, your salon will start earning profits.

Other ways to create your financial plan :

Dealing with numbers can be tedious and scary, especially when you already have a lot of other things on your mind as a salon business owner. Moreover, documenting the financial projections yourself can be a pretty daunting task, especially because there’s no room for mistakes. 

Instead of making the document yourself, you can choose to consult professionals to help you write the perfect financial plan for your salon. 

• Hire freelancers : You can collaborate with business plan consultants to make your financial plan. All you need to do is give them your salon’s budgetary estimates and inputs. 
• Use Financial planning tools :  It asks you to enter all your financial information. They use built-in formulas to give you the most accurate financial statements that include all the charts and projections that an investor would expect to see in a business plan. 

Some important things to keep in mind :

• Keep reviewing the target market, competitor analysis, and marketing and advertising strategies once every while, however frequently necessary.
• Set realistic long-term goals that would be in sync with your current business performance. For example, you can think about branching out to two different locations after a few years. This will allow you to expand your local salon to an enterprise salon.

Go ahead with the pretty business plan 

Executing a well-structured salon business should reap good-looking numbers. And the first step towards that is making a killer business plan for your salon.

It gives you the courage to place your faith in your business, and we don’t want you to doubt something you’re passionate about. Remember that you can convince the people in the market about all the great things your salon has to offer, only when you truly believe it yourself. 

So go on ahead, start creating your salon business plan today, and give your dreams a much-needed flight. Good luck :))

About Appointy We at Appointy, help business owners grow and run their businesses with our online scheduling software. This blog was a part of our ‘Manage your Business’ category, where we provide expert tips, and resources, or simply talk about the challenges that small and medium businesses face every day.  If you have any thoughts on this blog or would like to chat about your business struggles and achievements, let us know in the comments below.  We love a good talk!

21 comments

Am really satisfied thank you

The blogs are really appreciable and one can trust the knowledge and information provided in the writing.

This blog was so helpful.. I really appreciate they way it was broken down and easy to understand.

Thanks Brittany 🙂

Very nice article .Thanks for sharing this great post.

Thanks a lot 🙂

Thanks this blog really helped me now I know where to start

Happy to help! 🙂

Great information. It’s really useful. Please shares these kinds of information in the future.

Thanks! Please subscribe to https://blog.appointy.com/ for more such information.

Very Informative thank you so much for this wonderful article

good article

Interesting & informative to read, thank you for sharing this article with us. it’s really helpful to me. Can you suggest something on started a homemade business plan?

Very nice content about salon buisiness,Its very informative.

Very insightful blog post. Thanks for sharing

The perfect salon business plan requires defining your vision, researching the market, outlining services and pricing, addressing operations and finances, and emphasizing exceptional customer service

It is really helpful. Thank you for the content

Thanks for your content, it is very helful.

Let this be a guide for those starting salon business. Thank you for the blog.

Thanks for the information

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Notify me of follow-up comments by email.

Notify me of new posts by email.

Learn how to grow and manage your salon business like a pro!

Subscribe now and get valuable insights from credible sources - delivered straight to your inbox!

We promise to never spam you :) 

You have Successfully Subscribed!

How to write a hairdressing salon business plan

Key takeaways

• A salon business plan provides a roadmap for your team and makes outside funding more accessible
• Clarify whether your products and services are direct revenue streams or if you’re largely earning from booth rentals
• Perform a thorough market analysis and financial analysis for accurate insight into your potential growth

No matter what people say, it’s never “just hair.” U.S. consumers spend over $46 billion at hair salons every year. Quality hair care keeps people looking and feeling good, so it’s no surprise clients go back to their favorite hairstylists time and time again. Managing your own salon can certainly be a consistent and profitable career—but to maximize your revenue, you need a hairdressing salon business plan to guide your growth.

Writing a business plan can benefit any salon owner . Whether you’re established in the beauty industry or opening a new salon , a comprehensive plan acts as a roadmap for your growth. Your salon business plan also guides your decisions so you can meet business goals . And if you’re seeking business loans or investors, having a solid business plan is a must.

Below are the six sections that every hairdresser should include in their salon business plan outline .

1. Executive summary

An executive summary is a brief, one-page introduction to your company and what makes it unique. Placed at the beginning of your hair salon business plan , its purpose is to create a great first impression so your audience is compelled to read through to the end.

This section should provide high-level details about your hair salon , services, marketing strategy , and team. Put your best foot forward by highlighting facts that prove your potential to succeed. For example, if you’re the only salon offering keratin treatments and perms in your market, these are important facts to include. Many business owners include their mission statements and goals in this section too.

While executive summaries are the first thing a reader will see, it’s best to write this part of your plan last. That way, you can easily pick out and highlight the most impressive details from your business plan.

2. Business description

Writing a business description for your salon business plan gives you the space to expand on what makes your company great. Start with an introduction to your hairdressing salon, mentioning relevant details about your location and any specialized services you’ll offer. . Then, dive into the following specific details.

Management team

When writing your business plan, you need to show that you—and your team, if you have one— know how to run a successful salon. Introduce your owner-operators and describe their expertise. Professional certifications, business degrees, past experience, and awards or recognition can all build investor, lender, and team confidence in your leadership.

If you have any managers in addition to the salon owner or owners , explain who or what processes they manage, and highlight their experience and certifications. Otherwise, simply explain the primary roles of each owner-operator.

Legal structure

To help your readers understand how you operate, clarify your business structure—for example, if your salon is an LLC or an S corporation. If you’re seeking outside funding, this gives your audience insight into your tax obligations and liabilities.

You can also specify when your business was founded and your registered mailing address (especially important if you have more than one location).

Hiring plan

Hairdressing salon business plans must explain how you’re recruiting and hiring professional hairstylists for your salon. Even if you’re initially working as the sole hairdresser in your salon, eventually you need to hire more hair professionals to take on new clients . Also, if you plan to offer a wider range of beauty salon services —like adding skincare  services, or a nail salon or day spa c omponent—you’ll need technicians.

Your plan should clarify if you’ll follow a commission-based model or a booth rental model. Paying commission ( usually about 45% , often with a base rate) will tell your investors that you manage payroll, sales, and marketing for all salons and stylists, but earn from all services performed. 

Renting out booths (usually around $400 per month) tells investors your beauty professionals are independent contractors who market themselves, and much of your income comes from their rent. Clarify if any employees, like receptionists, will be paid on an hourly or salary basis.

Value proposition

Your business description is the perfect place to include a value proposition, which explains what gives you a competitive advantage , or why clients choose your salon over others. If you’re currently in business, chatting with existing clients can help you identify what makes you stand out, whether it’s your world-class stylists, affordable pricing , luxurious client experience, or something else.

3. Hair salon services and products

In this section, you’ll explain exactly what your salon offers. For each service, write a description that highlights base prices, time estimates, and what’s included—for example, a consultation and styling for a balayage, or shampoo and blowout for a haircut. Then, list out the products you sell and their prices, along with their profit margins.

If your salon follows a booth rental model, clarify which services you’ll personally perform. If rentals are a key income stream for your business, explain your pricing , rental options, and contract terms.

4. Market analysis

To run a successful salon, you need to understand the market beyond your business. Do thorough market research to provide insights about:

• Market trends : Explain how demand is changing across hairdressing services in your area and industry.
• Client demographics : Explain who the average hair salon client is and what services and products they’re buying. 
• Your competitors: Identify your competitors and their target audiences .

Once you’ve explained the broader market, put the focus back on your business. Define your unique target market and explain how you’ll overcome any challenging market conditions.

5. Marketing strategy

Getting the word out about your small business is essential to your growth. You don’t need to write a full-blown salon marketing plan for this section, but your lenders or investors should understand the specific strategies you’ll use to reach your target market . Offer an overview of how you’ll use each of your marketing channels, like social media , email, or search engines. For example, you could explain that you’ll claim your Yelp Business Page to manage reviews and run Yelp ads to reach more clients who are searching for the services you offer.

Remember to include your marketing and advertising budget here as well. You can also include the returns you expect to see from marketing activities as metrics for your marketing and sales team to track, or to reassure lenders and investors that your spending won’t go to waste.

Get a free Yelp Page

Promote your business to local customers.

6. Financial plan

One of the most important sections of your hairdressing salon business plan is your financial plan . Budgeting and planning for your financial future is key for business growth (and not going into the red). Here’s what you need to include in this final section.

Startup costs

If you’re opening a new business , you’ll have a significant amount of upfront costs just to provide your services. Break down all of your expected startup expenses, which may include the cost of business registration, business licenses , furniture, inventory, and equipment like blow dryers and curling irons.

Operational costs

Once you’ve officially launched, you’ll still have ongoing expenses to keep your salon running. Break down your recurring expenses, like rent, wages, contractor payments, and advertising costs. Also, include how much you expect to spend each month to restock products or replenish supplies like toners and shampoos.

Including a budget for miscellaneous expenses will help you prepare for the inevitable unexpected costs that come up.

Financial projections

Finally, work with an accountant or financial analyst to create realistic five-year financial projections for your salon. Lenders and investors look particularly close to this section, as it tells them how fast you can grow and how likely your business is to survive. Mock up a balance sheet , cash flow statement , and other projections for this section, with your market research and current sales in mind.

Create a salon business plan that guides your growth

Writing a hairdressing salon business plan can help you (and your team) make better decisions and obtain outside funding. The most effective business plans are thorough documents that explain what you do and how you’ll grow. With more insight into your business, marketing plan , and financial future, you can reach your goals with greater ease. As you start entering your next stage of growth, read our tips on how to expand your business .

The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.

Related stories

5 salon marketing ideas to fill your appointment book

Use these five salon marketing ideas that can help you reach more customers and set you apart from the competition.

Local SEO guide: 4 tips to stand out on local search

Use this local SEO guide to discover why you should prioritize local SEO in your business and how to rank high on local search results.

How to promote your business locally: 10 simple tactics

Learn how to promote your business locally with these 10 in-person and digital marketing tactics.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Retail Property Sub-leasing Business Plan

Start your own retail property sub-leasing business plan

Galerie de Beaute

Market analysis summary how to do a market analysis for your business plan.">.

Ourstate has approximately 4,800 licensed cosmetologists, barbers, nail technicians, and aestheticians.  

Per the Encyclopedia of American Industries, Third Edition, Volume Two: Service and Non-Manufacturing Industries, p110: “Hairdressing services have proven to be virtually recession proof, as consumers traditionally cut back on other discretionary expenses before decreasing their spending on personal grooming.”

Entities have concentrated on capturing market share through densely populated communities.  Ourcounty, Ourstate fits that description.  Approximately 64% of Ourstate’s population reside in Ourcounty, per the 2000 U.S. Census.

According to the 1998-1999 Occupational Outlook Handbook, approximately 586,000 hairdressers, hair stylists and cosmetologists were employed in the U.S. in 1996, with 43,000 jobs held by manicurists.  The Occupational Outlook Handbook expects employment in the cosmetology industry to increase as fast as the national average for all professions through 2006.  Manicurists are expected to experience the fastest growth, as are other such specialists as aestheticians and electrologists. 

4.1 Market Segmentation

Galerie de Beaute is making suites available by the following segmentation. The suites are segmented by potential use. Because there are approximately 2,300 licensed cosmetologists in Ourcounty, 18 suites were devoted to hairstylists. With nail technicians growing at a faster rate, we will look to devote more salons to nail technicians in the future. Currently there are approximately 237 nail technicians in Ourcounty, 202 barbers and 123 aestheticians.

4.2 Target Market Segment Strategy

Based on the growth rate of potential customers, Galerie de Beaute will need to investigate the opportunity to open a second location to service potential customers by year 2008.

4.3 Service Business Analysis

Although Ourcounty, Ourstate has many barber shops, beauty shops, spas and nail salons; the concept of a salon mall is new to Ourstate. There are no hair stylist or nail salons on the half mile heavily travelled route 13/40 from route 141 to the 13/40 split. The closest establishment is located on route 141 in the Sell-O-Mart on route 273.

Ourstate code does not address booth rental, but the advantage of Galerie de Beaute is the privacy of secure, individual leased unit mini-salon versus ‘booth’ rental. Nearbystate does not permit booth rental as an alternative to salon ownership, a point for Galerie de Beaute to consider in future expansion.

4.3.1 Competition and Buying Patterns

The driving factor in choosing one type of arrangement over the other will undoubtedly be cost. Owners of traditional salons face many challenges when starting a new business. Purchasing equipment and finding a location in a high traffic area with reasonable rent is often difficult. Although 40% of beauty professionals own their own business, 60% are employed in a privately owned shop.

In a traditional salon environment employees are paid 50% commission. These employees are often charged for supplies and products utilized. These issues sometimes lead to high turnover in the industry. Because of these challenges, salon owners have resorted to booth rental in those states in which it is legal.

The Solution is Galerie de Beaute

If a salon professional can increase earnings by making 55% commission rather than 50% commission the income difference will be the determining factor when choosing employment at one salon over another. We can offer an alternative to the commission environment. The qualities of salon ownership with less paperwork will be appealing. In the scenario presented above the potential income is 64% before taxes.

Start your own business plan

Your business plan can look as polished and professional as this sample plan. It's fast and easy, with LivePlan.

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software