How to start your own beauty business

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How to start your own beauty business

Many people who are interested in fashion and beauty have considered starting up their own beauty business. Maybe you are one of those who can go the extra mile to actually bring your dreams to life.

There are many beauty salons out there, and even if you have been working in the business for a long time and have many loyal customers there are significant challenges to setting up your own business and working for yourself. However, understanding these challenges could help you plan and meet them head on.

Here are some of the main challenges to starting your own beauty business and how you might deal with them.

Start-up costs and other expenses

Opening your own beauty salon is typically an expensive undertaking. Naturally you will want to start making a profit as soon as you can, but you could find the costs of setting up intimidating. However, if you plan your business carefully you can anticipate how to balance your spending and income to turn a profit as soon as possible.

The first thing to do is to calculate what fixed costs you will have per month. A fixed cost is a business expense that won’t change and that you will have to pay regardless of how many customers you are serving. Fixed costs generally include things like rental of your premises, insurance cover, utility bills, and equipment costs.

Then there are variable costs—those that will vary depending on how much business you are doing. For example, with fewer customers you will be paying less for materials and fewer staff hours. Some variable costs you might encounter include labour costs, stylist products and tools, shipping and delivery costs for restocking, and advertising and marketing costs.

Having calculated your expected business expenses, you should then calculate what your revenue will be in your first year and find the break-even point. This is the point at which you have earned enough revenue to cover all your expenses. You can use this information to create a budget that will keep you on track and help you avoid spending beyond your means.

Equipment and stock

Once you’ve found your premises and entered into a rental contract, you need to think about acquiring the equipment, tools and furniture you will need in your salon to make it an attractive, welcoming and professional environment for your clients. You probably want your business to look as luxurious and high-end as possible, but don’t forget that furniture, equipment and decorating can be expensive.

To keep your start-up expenses at a manageable level, focus on the basic requirements for a beauty salon first. You must have salon stations incorporating chairs, mirrors, and places to store products. You will also need shampooing stations with chairs, sinks, and more product storage. If you are offering colouring services, you will need drying stations as well.

How much equipment you will need depends on how big your salon is and how many stylists you are planning on hiring. Beauty salons typically have a salon station for each worker, however if you have stylists working shifts it may be possible for some of them to share.

Most salons also include space for a small reception area to receive clients and to book appointments. This reception area is also a good place to advertise your promotions and discounts. Your reception area doesn’t necessarily need to have a permanent receptionist, particularly when you are starting out. A simple set up with an iPad and the necessary connections and software to be able to take payments from customers may be all that’s required.

Furniture and equipment can be purchased at wholesale prices for businesses, and you will find that many beauty brands may offer you discounts or promotions that you can take advantage of when you are starting out.

Hiring your perfect staff

When you’re trying to attract new clientele, nothing will give you a better reputation than having skilled and experienced staff. Before you begin interviewing candidates, write down what sort of things you want from them. Use what you have written to create a list of interview questions so that you can make sure you find out about these qualities during the interview process.

Think about what skills each candidate has and how willing they are to learn new techniques. How long do you want them to have worked in the business? Do you want staff who can multitask, taking on several different responsibilities?

You should also think about personalities and work ethic for each candidate. Think about the image your salon is going to project and hire employees who will fit in with your desired company culture. How dependable do you think they will be? How will they get on with their colleagues and with the customers? Asking for references from previous employers should give you a good line on this.

Remember that employee retention is just as important as recruitment. If you have good employees, hang onto them by making sure they are priced for good work and setting up team activities outside work. Make sure that employees know that they can progress and that good work will be rewarded. Always try to promote employees where possible rather than looking for external candidates, and make sure that your salaries match or exceed those of your competitors.

Taking payments

Once you’ve got your premises, your staff and your stock lined up, you’re almost ready to welcome customers. However, you need to think about how they are actually going to pay for your services.

There are many companies and services available to help small businesses accept payments. Look for a company that has a clear price structure and no hidden charges. You should choose a payment system that accepts every type of payment swiftly and safely, including all major credit and debit cards as well as mobile wallets (payment via mobile phone).

Some other factors to consider include:

  • System set up – You don’t want to be delayed in your opening because your payment processor isn’t ready.
  • How much it costs – Not just to make a transaction, but whether there is a monthly subscription and/or payment terminal rental fees.
  • How quickly payments will be made to your bank account – Many providers can pays you on the next working day.
  • Length of contract – Some more traditional systems may insist on yearly or two-year contracts, with substantial penalties if you withdraw early.

 

In addition to the above, you should be looking for a payment system that can be incorporated into your point-of-sale system. This will make it easier to produce sales reports, track customer profiles, and do other admin tasks.

Reasons for failure

Working in a highly competitive field is tough, and unfortunately many businesses don’t make it. Being aware of the main reasons beauty salons fail before they are barely off the ground could help you avoid those pitfalls.

Four of the main reasons for failure are:

  • Inexperience – Successful salon owners often have years of experience in the business that helps them from making potentially fatal mistakes. It may be wise to slow down and make sure you and your staff are completely ready before opening your doors.
  • Not keeping up with trends – The beauty industry is constantly changing and sticking with one mode of operation could damage your business. Keep on top of the changes in your industry and make sure that your staff are given ongoing training so they can provide the latest services to clients.
  • Competition – The salon business is highly competitive and there are many businesses looking for customers. Make sure that you have studied your location and the prices of your competitors so you can have the best opportunity of attracting new clients.
  • Insufficient cash reserves – A robust cash flow or business savings account can help you pay for any unexpected fees or costs that arise when setting up your salon.
  • Not protecting themselves – Mistakes happen, and unfortunately, they can be expensive. Insurance for beauty professionals, such as Professional Indemnity and Public Liability, can help protect your business against customer claims or lawsuits. Without it, you could be left out of pocket or even forced to close up shop permanently.

 

While owning your own salon can be a very satisfying career move, there is no doubt that it is extremely hard work. Understanding the challenges you may face—from making a budget to finding insurance for beauty professionals—could put you a cut above the competition.

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Disclaimer

*The information provided on this page is general guide only and does not take into account your personal objectives, financial situation or needs. This information should not be construed as any form of advice. Consider your own personal circumstances, objectives, financial situation, needs, Product Disclosure Statement (PDS), and full policy terms and conditions before making a decision. Product descriptions on this page are intended only as a guide to coverage terms and conditions, and should not be relied upon to determine policy coverage. Policy coverage is subject to the specific terms and conditions of each policy wording.

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