Everything You Need To Know About Opening Your First Salon
You've taken the leap... Now what?
Opening a salon is the dream for many chair renters, mobile stylists and therapists. You might have been employed or rented space in a salon and thought, 'I can do this' when it comes to opening your very own place. Let me talk you through the good, the bad and the ugly of salon ownership...
I started off working mobile, then I rented a chair when I first took the leap to full time self employment, before opening my first salon after being in the industry for around 5 years.
I've owned or co-owned 4 salons in total, one of which we never even ended up moving into (I'll go into that one in a bit), so I'm pretty qualified to advise you on what and most importantly, what not to do.
PLAN, PLAN AND PLAN SOME MORE
Even if you have no intention of asking for funding/loans/investments, I would still recommend writing a business plan (there are tonnes of free templates from most banks online). It's a good way to get on paper EXACTLY what your plans are, how much it should cost, how long it will take you to make your money back, how you will deal with any potential risks.
TAKE ADVANTAGE OF FREE HELP
Find out where you can get free business advice from. Your local council website is a good place to start, but search online too as there is tonnes of help, advice and even funding for small and startup businesses in the UK.
MAKE A BUDGET, THEN DOUBLE IT
I wish I was kidding! There will be things that you had no idea you'd need to pull out for (or no idea how expensive things would actually be!). My salons have cost between £2k-£15k+ to renovate. The biggest costs for me were things like: installing a full central heating system, re-wiring, installing shutters, moving doors, building walls... the list goes on!
TAKE SOMEONE WITH YOU TO VIEWINGS
Ideally someone who knows a lot about buildings, then it's worth spending money on a professional survey to ensure all the things you can't see are in good working order. I find it's the stuff you can't see that can cost the most money! Even just having someone to look at things with a fresh set of eyes (and let's face it, without the excited blinkers on!), can make a huge difference.
CHECK THE CLASS OF USE
You can check this online, even if it was a salon before, double check as a change of use request can be costly and isn't always guaranteed.
CHECK WITH BUILDING REGULATIONS
Now this is where the salon that never came to be, comes in! Without going into too much detail, myself and my then business partner spent £15k+ renovating a salon that turned out not to have been signed off by building regs. After a VERY long, stressful and drawn out period, we ended up having to pull out and renovate and move into a different premises.
SCOPE OUT YOUR LANDLORD
Try and find out if they have other premises and have a chat with their other tenants if you can. I've had a VERY mixed bag when it comes to landlords, and in my opinion, a good landlord/lady is one who is there when you need them, but not around when you don't! They should leave you to get on with your business, but be available to contact should there be any problems.
TAKE YOUR LEASE TO A SOLICITOR
We might be amazing at hair/nails/massages etc, but I for one cannot read legal jargon! Pay an expert, they will explain it to you in simple terms and should have your best interests at heart. They can help you to negotiate your lease and potentially save you money and/or heartbreak down the line.
JOIN THE NHF/NBF
It might seem like another added expense, but they are a fantastic company and their legal helpline is second to none. They also have TONNES of resources like contracts, staff handbooks and templates to help you keep everything watertight. Check them out here.
DECIDE WHETHER TO EMPLOY OR RENT
This could be a whole other blog post, as there are loads of points to consider when it comes to making this decision (or having a combination of both!). If you do decide to employ, you'll need to register with HMRC as an employer, and will be responsible for paying their wages, tax, NI and workplace pension.
DECIDE ON SUPPLIERS
You can use a mix of suppliers, pick things up from the wholesaler or set up an account with a brand. Having an account usually means cheaper stock, you'll have your own rep and can usually open an account where you can order and have a little time to pay it back, easing cashflow. Have a think if you want to have a brand account and set up some meetings with their sales reps. Remember, as they say up North, 'shy bairns get nowt'... don't be scared to ask what special offers they have and what is the best price/payment terms they can give you.
THINK ABOUT YOUR PRICING
I get it, increasing prices tends to make people break a sweat and start shaking...but it really shouldn't! Please don't be tempted to keep your prices the same to keep your existing clients happy. You will have a tonne more overheads to pay out and will have spent potentially thousands to open which you need to recoup. Keeping prices low to keep clients happy is a race to the bottom - check out my pricing calculator if you wanna get this perfect.
TOTAL UP YOUR OUTGOINGS
You might have worked out your rent and a rough idea of bills and think it seems manageable, or you're paying more in chair rent at the moment. Here is a list of some of the things you'll be paying for:
- Business rates
- Insurance (contents, public liability, most leases will have you paying towards buildings insurance, employers liability if you have employees, sickness/accident insurance)
- Professional memberships (NHF/NBF)
- Magazine subscriptions
- Waste disposal
- Registration with the council if you carry out certain treatments
- Accountancy fees
- Accounting software
- Booking system costs
- Card processing costs
- Music licence
- Music subscriptions (I've always used Spotify)
- Website domain/hosting/email
- Banking fees
- TV licence
Now wages is a funny one, as a lot of my coaching clients come to me with an idea of what their running costs are, but they don't actually factor in a wage for themselves! Not only a wage, but a healthy profit that can sit in the bank in case of emergencies, repairs, training costs etc.
PLAN YOUR SPACE WELL
You should try to utilise the space as best you can, getting the most out of it without it feeling cramped. Check out Pinterest for cool salon storage hacks, if you could fit another section in then that's a whole new stream of revenue!
THINK ABOUT WHO YOU WANT TO SERVE AND WHAT KIND OF BUSINESS YOU WANT TO BE
This will help you make decisions when it comes to location, size, style, which services you want to offer, pricing, decor, brands, pretty much everything! This should be a part of your business plan so spend a lot of time getting this right and it will serve you well.
START AS YOU MEAN TO GO ON
Try not to be tempted to offer crazy, cut price offers to get people in the door, or offer super cheap space rental or high commissions to win staff over. It is SO much harder to change these things down the line so try and get crystal clear on where you see the future of your salon going.
I hope this hasn't scared you off too much! Owning a salon can be amazing and profitable, but it can also turn into a stressful, cash-eating monster. A lot of my coaching clients have had salons and then reverted back to renting spaces or having home salons and will tell you it's the best thing they've ever done. Think long and hard about WHY it is you want to own, is it to see your name above a door, or are you ready to put in the graft that it needs and give it all of your blood sweat and tears?
If there's anything I've missed, please get in touch and let me know so I can add it on!
If you do decide to open your first salon, I wish you all the luck in the world, take as much help and advice as you can get and try to be as prepared as possible, it's a rollercoaster!
If you want to join my FREE Facebook coaching group, check it out HERE.