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How to Start a Beauty Salon Business

Beauty Salon Business

Beauty Salon Business

Running a Beauty salon business is one of the most profitable business enterprise, individuals who are passionate about fashion and beauty can do this business. A beauty salon is a rewarding career whether you are trained beauty therapist or planning to hire experts to do the work.

Steps to Start and Maintain a Beauty Salon

  1. Planning the Business

Planning is one of the biggest steps for doing any kind of business whether it may be small-scale or a large-scale business. A person can attain success when the business is well planned and has proper execution in place. So after deciding that you want to get into the business of salon, you need to figure out a suitable name for your business unit.

The salon name or business enterprise name may be any name that depicts the true spirit of your business. There are a number of services that you can offer to your clients, so first you will have to decide the services you are going to offer to your clients.

Different services you can offer are – body care, hair care, skin care, waxing, manicures, reflexology, aromatherapy, etc. usually most salons today are offering all services. There are different areas where one can put them as a specialty salon.

After deciding on this, you will have to employ a trained staff that can help you do the service for your clients. Other than this, you have to calculate overhead expenses such as buying the equipment, spending on the decor, accommodating the people, etc.

Ownership type to be Decided when Setting up a Salon

The beauty salon business industry is expanding at a very fast pace and the beauty of this sector is that it can accommodate all, right from a very smile and small business to a huge chain of beauty salon business. Thus, when planning to set up a salon business, it is imperative to choose the ownership structure and the scale of operations.

Independent Owner

This category is one of the most popular and commonly used ownership structures. Many people start up small, work independently and try to find a place in this sector. In this business model, an entrepreneur or a group of entrepreneurs can start a salon in the neighborhood and get customers from nearby areas. This model has been quite successful as it requires minimal operational and investment costs. The problem may occur when they have competition in the area, especially from beauty salon chains that have the better bandwidth for intensive advertising and brand-building. Independent owner sole Proprietorship registration, One Person Company or a Limited Liability Partnership proves to be the ideal business model.

Franchise Beauty Salon Chains

In the Franchise business model, the salon operates as one of the franchisees of a huge beauty salon chain. Since it is going to be a franchise, it would get full support in setting up, operations, branding, staff training, advertising, etc., of the salon by the franchisor. When compared with independent ownership, such a business model requires more infusion of money. Moreover, a franchise fee is also required to be paid to the franchisors on the basis of revenue generated from the services. The fee may range from 10-15 percent once the enterprise starts making profits.

It is best to establish a beauty salon franchise by getting Private Limited Company registration thereby ensuring lease rental, franchise rights, equipment, tax registrations and more besides the salon franchise to be transferred to another owner if and when required.you should also consult professionals for drafting of Franchise Agreement as its drafting is a very detailed and rigorous procedure.

Chain of Beauty Salons

If you are planning to open more than one salons or a chain of salons at varied locations to be managed by the same management, you need to take care of certain things. A chain of salons may take some time in setting up but when once it is well-established, it can evolve and grow exponentially. When the business swing is upwards, it will need more capital, vendor partnerships, planning, strategy making, advertising, branding and more.

Moreover, it is imperative to understand that the most important asset for any beauty salon chain is its brand which is an intangible asset, it is important to apply for a Trademark Registration to ensure ownership of the brand. A limited liability partnership or a private limited company would prove to be an ideal entity when planning to become a beauty parlor franchisor or an owner of a chain of beauty salons.

Other Required Registration

Trade License Registration from the local municipal authorities of the area where the beauty salon is to be established.

GST Registration if the annual turnover exceeds the threshold limits set by the authorities.

MSME Registration can also is done. Even though it is not a mandatory registration, one should register as an MSME as it entails various benefits and subsidies from the government.

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

Business Plan Consultant

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