How to Open a Nail Salon

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If you’re looking for financial independence and a rewarding career where you get to interact with people and help them look their best, then owning a nail salon might be the right option for you. This guide can help you understand what startup costs you’ll face, what skills you’ll need, and the steps you should take to prepare to make sure your nail salon is a success.

Nail Salon Overview

Nail salons cater to a variety of audiences and offer scheduled appointments and/or walk-ins. Because many clients return repeatedly, nail salons can quickly build up recurring clientele. From pedicures and manicures to detailed nail art, nail salons offer a variety of beauty and nail care services.

Industry Overview

The nail service industry is a thriving market. According to Nails Mag, in both 2016 and 2017, Americans spent $8.53 billion on nail services. That figure represents a significant increase over the $8.28 billion that the industry brought in during 2013.

In 2017, there were 56,386 nail salons operating in the United States. Basic manicure prices averaged $20.93, basic pedicures averaged $33.56, and gels averaged $29.41 as of 2017. Some of the most common services offered at nail salons include manicures and pedicures, gel polish, nail art, acrylics, and hard gels.

Industry trends

The fashion and nail industries are continuously evolving, so your nail salon will need to stay up to date with the latest trends and fashion in order to meet the demands of your clients. According to Beauty Packaging, one of the latest trends is the use of nail art and intricate designs. We’ll probably see additional types of nail polish and nail treatments emerge over the next few years. Being able to quickly embrace and offer these new trends can keep your nail salon ahead of the competition.

We’re also in the middle of a movement toward healthy, organic, environmental-friendly products. As consumers continue to focus on healthier options and sustainability, we may see more and more clients looking for nail salons that are eco-friendly and that offer healthy, safe products and nail care.

Who is the target market for nail salons?

Your nail salon’s exact target market will depend on your business model, services, and location. For instance, a high-end salon will probably market to the affluent clients in the community and won’t market to children or teens.

Generally speaking though, nail salons primarily market to local women. Depending on your salon, you may wish to target the budget or economy market, the intermediate or midsection of the market, or the luxury and top end of the market. The sooner you can determine the market that’s right for your salon, the better you can cater your services and your marketing to reach those clients.

Skills, experience, and education useful in running a nail salon

To successfully run any small business, you’ll need some business knowledge, marketing skills, and management abilities. When it comes to running a nail salon, these specialized skills and experiences will be helpful.  

Education. All states require nail-technicians to have a cosmetology license. Typically, this license requires a high school diploma or GED.

Cosmetology experience. If you’ve attended cosmetology school and are a licensed cosmetologist, you’ll better understand the challenges and skills associated with providing services in your salon. You’ll also have an idea of the typical costs associated with the services, the equipment you’ll need, and what responsibilities you can reasonably expect your employees to take on.

People skills. You’ll need to be able to build relationships with your employees and your clients, so a focus on customer service that provides warm and welcoming nature can give you an advantage. The ability to make small talk during appointments is also a plus.

Problem-solving skills. As a business owner, you’ll face challenges as you start up and run your salon. Creativity and excellent problem-solving skills will help you cope with whatever challenges come your way.

Marketing capabilities. If you have some marketing experience, you’ll be able to put it to work in running and promoting your salon. Social media skills, e-newsletter creation experience, and branding knowledge are all valuable skills that you can use as a salon owner. Of course, you can also hire a marketer to take care of these responsibilities for you once your salon is up and running.

An eye for trends. The nail and beauty industries evolve quickly, and if you offer the latest nail trends, you can bring in new clients. The ability to stay on the cutting edge of the industry and spot new and evolving trends can help your salon to attract clients and then keep those clients coming back again and again.

Training capabilities. As you bring on new staff, you’ll need to be able to train them in your salon’s policies and approaches. Besides training skills, the ability to give and receive constructive feedback can make you a better manager.

Costs to Start a Nail Salon

When planning your new nail salon, you’ll need a detailed understanding of the costs of starting a salon business. You may need to save up money for your startup costs, find investors, or write a business plan and apply for a business loan in order to fund some of the larger common costs to start a nail salon business include salon chairs and stations, ventilation system, waiting area furniture, reception desk, scheduling software and point of sale system.

An assortment of supplies will be necessary such as polishes, acrylic powder kits, acetone, cuticle oil, lotions, clippers and towels to perform the services.   

In addition to equipment and supplies used during the appointment, you may also want to purchase inventory to sell to customers.  This is a great way to generate additional profits from existing customers.  The typical average markup for retail items is 100%. 

Some of the more popular items include; lotions, nail polish remover, nail care kits, gloves and sandals. 

How much can you potentially make owning a nail salon?

Concrete data about the average salary for nail salon owners is difficult to find. Because the nail salon industry is largely a cash industry, it’s possible that income is under reported. A nationwide study of the salon industry from the Professional Beauty Association, estimated that nail salon owners made about $48,700 per year, while non-owners took home about $36,300.

Many factors will influence how much you could make owning a nail salon. Your location and the average rates for nail services will partially determine how much you can charge for your services. Overhead factors, like your rent or lease, will affect your profits. Local competition may also affect your income, which is one reason why it’s important to carefully research any location you’re considering for your salon.

Ultimately, if you can identify an unmet need in your local area and market the salon so that it stands out from the others, you should be able to connect with clientele and build your business.

Steps to Starting a Nail Salon

Step 1. Write your Business plan

After coming up with an idea, the next step in starting any business should be to write a nail salon business plan.  Not only will a bank require you to have one in order to get funding, but multiple studies have shown that a business plan helps increase the odds of starting a successful business. A well thought out nail salon business plan will serve the entrepreneur as the road map for their business, helping them achieve their business goals.

Related:
How to write a business plan
Free sample business plans
Book: How To Start A Nail Salon Business Plan

Step 2. Form a Business Entity

A business entity refers to how a business is legally organized. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC.  Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements. 

Related: Comparison of Business Entities

Step 3. Select your Location

When you’re just starting up a nail salon, the cost of acquiring space can be expensive. It’s important to be located in close proximity to high-traffic areas such as shopping centers as walk-in’s make up a large portion of sales.  Rents in prime locations tend to be more expensive, but are usually more desirable as there is more traffic and visibility. You’ll probably at least start out leasing a location rather than buying or building outright, and lease prices vary depending on location, size of the space, and more.

If you’re looking to save money, you could look at renting space within an existing business, such as a hair salon that doesn’t offer nail services, or a booth at a mall.  The upside here is that you have access to an existing pool of customers who already spend on beauty and many will be willing to try your service. 

Related: Choosing a business location

Step 4. Apply for Business Licenses and Permits

The types of business licenses, permits and registrations that will be required to start a business vary on the activities of the business in addition to where it is located. 

While not a license on the business, each state requires nail technicians to have a cosmetology license in order to offer these services.  Be sure to contact your local health department to find out their policies for nail salons and their staff.  

As the salon owner, you’ll also need to look into other local and state business licensing and permits that may be required locally.  Some of the common local, state and federal registrations most businesses need include a sales tax permit, Employer Identification Number, and Occupancy Permit among others. 

 Related: Common business licenses, permits and registrations by state

 Step 5. Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a nail salon is another.  Fortunately, the cost to start a nail salon can be relatively low, with a majority of the costs going towards the stations, furniture, signage and inventory.  Funding for a new start-up can be difficult as banks are typically going to want the borrower to have good credit and be able invest 15-25% of their own money.  

 Related: Finding the money to start a business  

 Step 6. Get your Marketing Ready

Now that you are getting close to opening, it’s time to get marketing materials planned and created. It’s important to understand your market and what media they consume, so you can effectively reach out and let them know you’re open.

Getting mentions from your customers via social media is very effective at bringing in new clients as is managing online reviews such as Google and Yelp.  Additionally loyalty programs will tend to encourage repeat visits from your existing clients. 

Related: Low-cost ideas to market a new business

Step 7. Obtain Insurance

Plan to invest in several different types of insurance before opening a your nail salon.

  • Professional liability coverage protects you if an employee is negligent and injures a customer.
  • General liability insurance helps to cover the legal costs you may face if a customer is injured in your salon (such as if they trip and fall) and sues.
  • Property insurance can cover the cost of your equipment or building if there’s a fire or burglary. Most policies exclude coverage for earthquakes and floods, so if you live in an area prone to these disasters, you will want to carefully examine your policy and make sure you find the coverage that’s right for your business.
  • Workers’ compensation is required in all states. This insurance covers medical costs or lost wages if employees are injured while doing their jobs.

Insurance costs vary according to factors including your business size, the value of your equipment and building, and even the state that you live in. When shopping for insurance, request quotes from multiple companies and compare the policies and coverage to find the plan that’s best for your needs.

Step 8. Hiring Employees

Wages are typically the largest cost for nail salons, so it’s important to be able to manage employees well in order to protect profits.  Depending on how large and busy your nail salon is, you may need to hire a salon receptionist (salary range of $22,000 – $30,000), licensed nail technician (salary range of $20,730 – $27,040), and potentially even a salon manager (salary range of $24,000 – $52,000). Expect to pay salaries for part-time and full-time employees. Additionally, you’ll need to pay into taxes for your employees, and you may offer other perks like paid time off, sick leave, health insurance, and more to your full-time employees as an incentive for them to stay with you.

Keep in mind that salary ranges will partially depend on the cost of living in your area and what comparable positions in other salons pay.

Instead of hiring nail techs, many nail salons will charge booth rent to their techs. Be sure to understand your state’s rules for bringing on contractors to stay out of trouble.

Related: Hiring your first employee

State Requirements

Every state has specific requirements and regulations when starting a business.  Select your state below to find the guide to starting a business in your state. 

Things to consider before starting a nail salon business

Before you start a nail salon business, do some local market research. Look at where competitors are located and assess whether there’s a need for an additional salon. Is there some unmet need or opening in the market you could fill?

It’s also a good idea to take some business classes and work on a business plan. Before diving in, get quotes on rent, insurance, and more to create a detailed budget and calculate your exact startup costs. Find out how many customers it will take to cover all of the costs and provide enough profit to make this business worth all the time you are about to put in.  Also, be thinking about what your business could do differently to set yourself apart and appeal to your clientele.

Starting a new business always has an element of risk, but the more research and preparation you do, the less risk you’ll face in starting a nail salon.

Resources

Association of Cosmetology Salon Professionals
American Beauty Association
International Salon Spa Business Network
Professional Beauty Association
Salon Spa Professional Association

Additionally, Amazon has several good books for starting a pet grooming business such as:
Start to Success: A Nail Technician’s Guide into the Industry (free on Kindle Unlimited)
The Start-up Guide for Opening, Remodeling & Running a Successful Beauty Salon