Where to start when setting up your own hair and beauty salon

2 years ago

The hair and beauty industry is worth £7.1bn annually to the UK economy, and is thriving, not least to the rise of style-conscious men. If you are thinking of setting up your own hair and beauty salon, what are the factors you should consider to make sure it is a success?

 

Get your strategy in shape – Beautify your business plan

Whether you are looking for funding and have investors to convince, or you are simply looking into the viability of a new salon in the area, a business plan is essential.

This should cover:

  • The background to your business and your experience
  • Your target audience
  • Competitors and how you will differentiate yourself
  • How you will promote the business
  • You location, facilities and team
  • Financial forecasts.

Take a look at the GOV.UK dedicated page for tips.

 

You should also carry out a SWOT analysis to identify your strengths, weaknesses, opportunities and threats. Take Emma, for example. She has been working as a hairdresser at a leading salon in the city centre for five years and wants to go it alone and set up an upmarket barbershop. Her SWOT analysis could look like this.

 

Strengths

·         Loyal customers who will move with her
·         Only one other barber’s in the area, very traditional approach

Weaknesses

·         Cost could put some men off
·         Trying to attract affluent men but the landlord will only let the building open during working hours

Opportunities

·         Sell complementary grooming products and services
·         Run events
·         Cross-promotion with local menswear stores

Threats

·         Will men pay extra for luxury treatment?
·         Unisex salons
·         Trend for male grooming could pass

 

You will also need to consider as part of your plan whether you want to be an independent hair salon or beauticians, or take advantage of a franchising opportunity with a leading brand like Saks and Toni&Guy. This will give you the security of a readymade structure to base your activity around – good if you don’t have so much business experience – plus a household name on your branding which could make a difference to passing trade.

However, if you go it alone as an independent you get a real feeling of control and the opportunity to create something really unique which you know meets the needs of your local customers.

 

Make your location a highlight

Choosing the right premises is crucial when you’re setting up a hair or beauty salon. You need to consider:

Parking. So important! Customers don’t want to blow the budget on their blowdry only to find that they’ve got a long walk back to the car in the rain. It’s also important to your staff if they don’t live in the area.

Rent and mortgage: It’s a balance between keeping your overheads low and being somewhere that is accessible with good footfall, for those spontaneous appointments. Don’t forget about business rates too.

Competition: Who else is in the area? If there are lots of beauty salons for example you will need to do something to differentiate yourself – perhaps offering a particular type of facials using an exclusive brand of products.
If you are planning to set up where there isn’t any competition you also need to ask why. What’s putting competitors off from running a salon in this area?

 

Get your financials straight

You may have enough money in the bank to get started, or you may need to look into a bank loan or investment. Take a look at the GOV.UK website’s business finance support finder to see if there are options for funding out there that you haven’t considered.

You will need to get the pricing right. What are your costs? You will need to pay for supplies such as shampoo, conditioner, oils, nail polishes and cotton wool, as well as staff, cleaning and rent.

Then you need to think about what you are going to charge. How does it compare to salons in the area? Are you competitive? If you’re charging more, what are you offering that makes it a more luxury experience?

Don’t forget to leave room for profit. You can reinvest that money into staff training, marketing and repairs and maintenance to look after the premises and equipment.

You will need to make sure you pay all the correct taxes.

  • Depending on your level of turnover, you may need to register for VAT
  • If you employ people, you will need to look after PAYE, making sure you deduct the right amount of National Insurance and income tax from their salaries and pay it to HMRC each month. The GOV.UK website features essential information about employing staff for the first time, from paying the minimum wage to checking people have a legal right to work in the UK
  • You will need to pay your annual corporation tax bill throughout the year
  • If you have registered as a private limited company you must prepare full or ‘statutory’ annual accounts plus your company tax return
  • If you are self-employed as a sole trader or in a partnership you must fill in a Self- Assessment return.

 

It will be sensible to get good online accounting software in place from day one. This will enable to you to keep clear records of all your income and outgoings, keep on top of payroll and submit accurate VAT and tax returns to HMRC.

A system like Sage One also integrates with Sage Pay, which allows you to take online and face-to-face payments, as well as over the phone.

To help you run an even more streamlined operation you can integrate booking systems like Booking Bug with Sage, so you can manage your customer appointments with your online accounting system. You can even take bookings and payments through your website or Facebook page.

And don’t forget Sage Payroll, to keep on top of staff salaries and help you stay HMRC compliant.

 

Make up the right team

To grow your business you will need a team of talented beauticians or hairdressers around you. Personality is important – you need people who are interested in your clients and sensitive to their needs, and who can build long-term relationships so they come back for repeat appointments.
You should also make sure they have the right qualifications. Beauty therapists will need to be fully qualified to work in your salon or spa:

  • NVQ levels 2 & 3 in Beauty Therapy.
  • BTEC in Beauty Therapy Sciences.
  • ITEC diploma.
  • CIDESCO diploma.

 

Hairdressers will train at college, or learn on the job at a salon. There are several qualifications they can take:

  • Level 1 Award / Certificate in An Introduction to the Hair and Beauty Sector
  • Level 1 (NVQ) Award / Certificate in Hairdressing and Barbering
  • Level 2 (NVQ) Certificate/ Diploma in Barbering
  • Level 3 (NVQ) Certificate/ Diploma in Hairdressing
  • Level 3 Certificate/ Diploma in African Caribbean Hairdressing

 

Get your legals in shape

To run your hairdressing salon or beauty practice you will need the right licence. Take a look at the GOV.UK license finder to find out more.

You will need insurance in place. Look out for hairdresser insurance packages, which offer cover to hairdressers, beauticians and nail therapists and covers the essentials like employer’s liability, public liability, product liability and professional indemnity insurance.

High on your list of priorities will be health and safety. With the chemicals in the products you use, heated equipment and the need to wash hands regularly, by default you may have more risks than in other, less public-facing businesses. The Health and Safety At Work Act (1974) explains how you can help your staff stay safe during their working day, in particular focusing on preventing dermatitis.

 

Give your marketing extra volume

Once you are up and running, if you are providing a good service, you will gain new customers through word of mouth. However, you shouldn’t rely on this. Cornerstones of your marketing activity should be:

A website. You don’t have to blow the budget and get an all-singing, all-dancing site. Customers need to know about the services you offer, the prices, opening hours and when to book. Some glowing testimonials are good too.

Social media activity. Facebook works really well for hairdressing and beauty salons. People love seeing before and after shots. Boosted posts and targeted advertising enable you to reach targeted groups of a certain age and in the local area. Don’t worry too much about fitting it in if you have your hands full all day – learn how to schedule posts and you can make sure you have content going out regularly.

Traditional marketing. Try local papers (don’t just settle for the first rate they offer) and printed flyers with promotions. The hardest thing is to get customers in the first time; after that they’ll be so blown away by your expertise that they’ll want to rebook straight away!

 

To see how Sage One can help you beauty or hair salon run more smoothly, sign up for a sign up for a free trial.