How Much Does It Cost to Open a Hair Salon?
February 4, 2022 | Last Updated on: July 10, 2024
February 4, 2022 | Last Updated on: July 10, 2024
Looking to open a hair salon business, but wondering how much it’s going to cost? The amount of capital required to get started can vary greatly depending on a variety of factors including how you obtain your salon space, how many stations you have, the decor you choose, and more. To help you get a better understanding of what your hair salon costs will be so you can seek the right amount of beauty salon financing, we’ll take a look at common startup expenses such as:
Starting a successful salon requires creating a welcoming space that attracts your target clientele. The process begins with ensuring all the legal boxes are ticked. From there, you need to find the right space, equip it, decorate, open the doors, and spread the word. But what should you expect to pay for all of that? Here are some of the average costs to give you a ballpark idea.
First things first, before thinking about opening up a hair salon business, you’ll need to take care of a few housekeeping items. The legal requirements for new hair salon owners vary depending on where you live so be sure to check with your state and local governing authorities to find out what you need to do. Generally, you’ll need to have your cosmetology license, a business license, health and safety permits, a seller’s permit, and insurance.
These are the basic legal requirements you should know and be prepared to pay for when opening up a hair salon.
Next, the biggest expense you’re likely going to encounter will be the cost of the physical building for your hair salon. You have a few options when it comes to how you acquire a space — you can lease, buy, or build. Of course, the route you choose is going to greatly impact your costs. Here’s a closer look at each of these options.
The most affordable and flexible option is to find an existing commercial building for rent that’s a good fit and to sign a lease agreement. In this case, you’ll agree to pay a certain amount per month for a specified period of time. For example, a 912 square foot space in a commercial development in Austin, Texas costs $17.00 per square foot, per year. That amounts to $15,504 per year or $1,292 per month. Additionally, you usually have to put down a security deposit and a few months of rent in advance. The cost of leasing a commercial space is going to vary depending on not only your city and state, but also the area of town, local demographics, and surrounding developments. While the average rates for retail space in the U.S. sit around $18.09 per square foot, per year, the more popular an area is, the more it’s going to cost. For example, average gross rates in New York are $81 per square foot, per year. However, a good location can warrant your business to charge higher service prices which may cover the higher rent costs. An advantage of leasing a retail location is that if you want to relocate, you don’t have to sell any property. When your lease is up, you can simply find a new place to lease or buy, move, and continue business in the new location without much hassle. The downsides are that you will have limited control over what you can do with the space, you won’t be building equity with your lease payments, and you could potentially get kicked out.