What Is The Cost of Opening A Hair Salon Business?

It’s costly to run a hair salon. It’s always good to know what the costs of running your business are, whether you’re just starting out or have been in the field for decades.

The cost of operating a hair salon varies depending on its size, location, and several employees, among other factors. However, there are some charges that are universal to all salons. They have interviewed hundreds of our clients who are hairstylists to learn more about their salon expenses and problems.

Breaking Down Salon Startup Costs

You must first select what type of salon you want to open before you can break down the costs of opening one. Hair? Nail? Is it possible to run an all-inclusive spa business?

The average cost to open a barbershop differs from the average cost to open a nail salon or spa, and the average cost to open a nail salon or spa differs from the average cost to open a nail salon or spa.

This is the most important decision you’ll make because it will influence how you estimate the costs of your enterprise. Regardless of the specifics, it’s useful to divide startup expenditures into two categories: onetime and ongoing.

Onetime costs

The initial, one-time expenditures of starting a salon will vary based on the type of salon you want to open and how you intend to do so. Do you want to rent or buy real estate? What will the size of your operation be? As you go along, these are the kinds of questions you’ll have to answer.

These factors can ‌estimate the expenses of your specific startup, such as “how much does it cost to operate a hair salon?” or “how much does it cost to build a salon from the ground up?”

Certification is the most important thing to get right before anything else. A state cosmetology license is required for all working stylists (or be in a beautician program that has passed accreditation).

You must get these permits in the same state as your salon, and they must be on display within the hair salon business premises. The cost of certification will vary depending on the specialty.

Before you start your salon, be sure you have all the ‌licenses and permits. To begin, you’ll need a business license, which varies in price depending on your state and city of operation.

You’ll also need to look into the ‌health and safety licenses for your site. Costs vary from one location to the next. A seller’s permit is another factor to consider.

Do you intend to have a retail area in your salon? A resale license may be worthwhile to get because this might be a wonderful platform for selling cosmetic products connected to your service offerings. Do your homework while you plan and remember required licenses and permits are a must.

Physical Location

Now that you’ve taken care of the back end, it’s time to think about the physical space. If you’re looking to rent, you’ll almost certainly have to pay a security deposit and a few months’ rent upfront.

Costs will vary depending on location and size, but doing comparative research within your target community is usually a good idea. If you intend to purchase a space, your expenditures will skyrocket.

To buy an existing salon, the budget is between $40,000 and $250,000. (this depends on the location, size, and condition of the property and equipment). To cost of starting a hair salon business can sum up to $100,000 to $500,000 on average.

Salon equipment

The cost of equipment will vary based on the type of salon. They estimate the cost of a full hair salon bill to be around $27,000. Everything you’ll need will form the budget,

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These items include hood dryers, shampoo and coloring stations, scissors, clippers, and more. Less equipment is required in a modest barbershop or nail salon.

Pick and buy equipment to meet your budget when you first start out. You’ll need styling stations with chairs for any sort of salon, which can cost anywhere from $200 to $1,000.

With shared stations, carts and trolleys are required to organize individual stylists’ tools. You can get a low-cost version for around $40 or a high-quality version for over $300.

Initial supplies

For client services, both hair and nail salons employ specific materials. Sanitizers, perm rods, hair capes, towels, shampoos, conditioners, specialty polishes‌ will vary in price depending on the brand. Stocking up on everything you’ll need can cost up to $20,000 just to get started.

Initial inventory

If your salon will include a retail component, you’ll need to start with a beauty product inventory besides shop supplies.

This cost is determined by the size of your salon’s retail display area and can change as your business grows and consumer demand changes.

You may require professional help in negotiating your lease, concluding the property transaction, or just navigating the essential salon licenses and permissions. These services will cost roughly $200 per hour.


Insurance is a legal requirement, so you’ll need to factor it into your budget. A salon costs between $500 and $700 per year on average.

Insuring your business saves you from a major loss in case of an accident. Discover: 15 Best Business Insurance Companies For 2022

Building improvements and remodeling 

If you’re taking over an established salon, you might not need to do much in the way of modifications.

If you’re starting from scratch, you’ll need to think about permanent and nonpermanent fixtures, as well as any design aspects that are required for your company strategy. When you include in furnishings and interior design, you’re looking at a total cost of $32,000.

Computer and POS system 

To accept current forms of payment, such as credit and debit cards, Venmo, and Apple Pay, among other alternatives, you’ll need to set up an Internet network and a point-of-sale system.

It will also be necessary for you to ‌print receipts. You’ll need to spend $550 to $2,300 annually, and ‌double that amount to get started, depending on which provider and type of hardware you choose.

Employee uniforms

This is yet an additional fee that is solely your responsibility. Although uniformity in employee attire is desirable, a dress code is a less expensive alternative to costly professional uniforms.

Responsive website

Every modern company needs an online presence. The initial build should cost between $300 and $700.

With cash for operations, don’t forget to keep some on hand! It’s critical to have at least $500 in cash reserves for routine business operations when you start.

Recurring and ongoing costs

Recurring expenditures are the expenses that will continue to appear as your company expands. These are the costs of routine business operations on a daily, monthly, and annual basis. You won’t be able to avoid them, so ‌consider the ones that apply.

Mortgage or lease payments

Regardless of whether you rent or buy, you’ll have to pay a monthly fee to keep the doors open. Costs will vary significantly, so ‌account for them in your budget.

Insurance For Employees

They usually calculate insurance premiums in annual installments, though you can divide them into monthly installments. The typical annual expenditure is $300 to $700. Another issue to consider as the owner is the availability of health insurance.

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Although stylists rarely get this benefit, you’ll have to figure it in if you want to offer it to your employees.


They usually calculate insurance premiums in annual installments, though you may divide them into monthly installments. The typical annual expenditure is $300 to $700.

Another issue to consider as the owner is the availability of health insurance. Although they rarely grant stylists this benefit, you’ll have to know if you want to offer it to your employees.

Payroll taxes or self-employment taxes

These fees are beside your wage costs and will vary depending on your business style. Make sure you consider both your employees’ and your personal circumstances when calculating the taxes you’ll owe. Keep in mind that these taxes are frequently due quarterly. Self-employment taxes usually sum up to 7.6% of total sales.

If you’re going to pay tax for your business, you need to know: 20 Best Small Business Tax Tips | 2022


Cleanliness is important not just for health compliance but also for the overall image of the company. Maintain a regular cleaning schedule. Mops, vacuums, toilet paper, bleach, all-purpose wipes, and access to laundry facilities should all be put into consideration.

The cost of supplies could be anywhere from $50 to $200 per month. You might also hire a professional cleaning staff regularly. You should expect to pay around $200 every visit for a professional service, while you and your team will still be responsible for day-to-day maintenance.

Equipment Lease Payments

If you opt to lease your salon equipment, keep these monthly expenditures in mind when planning your budget. They will differ based on the terms of your lease.


The type of equipment your salon uses will affect your electric, gas, and water expenses. Expect to pay $640 to $4,000 per month in this location.

The upper end more properly represents salons with many big-screen TVs, lit decor, and other energy-draining equipment. Most salons’ utility costs are on the lower end of the range.

Credit card processing fees

Here’s one expense that may not get a lot of visibility. You’ll want to accept credit card payments as a modern firm. Processing charge base rates in the business typically vary from 1.5 percent to 2 percent. However, many salons pay over 3%, so be cautious and shop around for your provider.

If you will accept credit card payment, then you need to know: How to check if a Credit Card is active | Step-by-Step Guide

Repairs and Maintenance

Normal wear and tear take its toll, and equipment breaks down from time to time. You’ll need to account for routine maintenance charges. You might expect to pay up to $500 every month.


To attract customers, you’ll need to spread the word about your business. You can choose from a variety of options (print, broadcast, web, and social advertising), each with its own set of costs. For an email marketing solution, you might spend as little as $20 or as much as $4,100 for more extensive advertising campaigns.

Unexpected expenditures

You never know when issues will develop. It’s ‌a good idea to set aside some money for unexpected expenses. We recommend a monthly budget of at least $500.

Common Salon Startup Myths & Mistakes

For operating a salon, there’s a lot to think about, but you probably already knew that. Aside from the challenges unique to your salon type, there are several general factors that every salon owner should know. Because they’re not always clear, we’ve compiled some sound tips to help you avoid the most typical blunders.

Don’t fear technology

Today’s organizations must fully use today’s computer resources. That entails gathering as much information about your customers as possible.

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Do your customers come in solely for nail services, or do they also use your spa, nail, and hair services? Keep it in mind!

The machine captures every transaction which goes into your digital file system. That information will be strategic to build best company practices and, in the future, for targeted advertising.

Don’t pass on quality products

In a professional salon, you can’t afford to scrimp on quality. It will reflect your service quality in the goods you use.

Some salon owners try to save money by adopting low-cost substitutes, but they end up spending more in the long term.

Clients come to you for a unique experience that they can’t find anywhere else. It’s as simple as that: better products equal a better experience.

Don’t skimp on cleanliness

We mentioned it before, but we can’t emphasize it enough: the salon environment should be spotless. You want your salon to be a haven for your clients, a small bit of paradise. The clientele will return if you keep the shop clean.

Don’t forget continuing education

Even the most sophisticated abilities can get some improvement. Every stylist in your salon should have the same education. To best service your salon’s brand and style, you’ll need a trained team that’s up to date on the current trends.

It pleases clients when all employees have training on alternative approaches and styles, keeping their skill set fresh.

Continuing education keeps you competitive with other salons, and clients know that when they walk through the door, they will always receive exceptional treatment.

Don’t ‌please everyone

You won’t appeal to everyone. So make a positive out of it. Maintain and perfect a sharp aesthetic. Attempt to establish your salon as a leader. Develop expertise in order to best serve your target demographic, and your ideal client base will seek you out.

But What if You Can’t Afford to Open a Hair Salon Immediately?

Approximately 30% of our consumers stated ‌they needed a bank loan to operate their own hair salons.

If you can’t afford to build a salon right now and can’t gain a bank loan, Kaye from Kaye’s Hair has a wise tip that might help you move closer to your salon aspirations.

She said she built her clientele while working as a stylist at another salon and doing hair for her personal clients after hours and on weekends. “It was a lot simpler for me to go on my own after that.” This is excellent advice since it allows you to work on your business without needing to invest immediately.


What are Core Hair Salon Requirements For Opening?

Licenses and permits: You’ll need a business license and any permits required in your area to start a salon.

What are the Major Hair Salon Expenses List?



It takes a lot of effort to open and run a salon. You devote your time, energy, and effort to creating something incredible every day.

So why waste time and effort keeping track of your expenses the old-fashioned way?

Administrative activities may be totally automated, so enhance your business model while saving time and money by implementing online accounting software. You already have a lot on your plate.


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