11 Steps to Start a Small Salon Business in India

Today, looking good isn’t just about style. The new definition of beauty has changed. Confidence, empowerment, and self-care are epitomised in an individual’s beauty and style. 

The beauty industry in India in 2024 is projected to reach $20 billion and the key drivers for this growth are demand for grooming services, increased focus on premium and wellness treatments and advancing digital adoption. With the beauty landscape continuously growing, salons have a key role in this change helping people look and feel confident in style. If you are passionate about beauty and well being, venturing into a salon business might be just right for you - it's a fulfilling business opportunity that combines creativity with entrepreneurship 

Maybe the idea of owning a salon has been in the back of your mind for a while, but now you want to make this a reality. While you have followed industry trends to ensure legal compliance and managing finances, you still have a lot of queries on how to start a salon business that is a cut above the rest?

In this blog, we will guide you through everything you need to know about salon business from creating a checklist to answering some common questions that will be helpful for your business’s long term success.

Tips on how to start a salon business

Step 1 : Write a salon business plan

A business plan is the first step to starting a salon like any other business. A business plan will help you set clear objectives, outlines and other areas of business and the method to achieve them to succeed. Factoring in Financial planning in your salon business plan is imperative as a huge investment is required for even a small salon business. Focus on your staff.

 Understanding the existing salon market is important to decide on the kind of salon business you are going to set up and who will be your target audience. Competition mapping is a key factor in a business plan as this will determine how you’ll be different from competition. For better understanding, you could perform a competitive analysis of your competitors' strengths and weaknesses so you can position your salon optimally.

Step 2 : Look into regional compliance guidelines.

For your salon business in India you need to acquire a licence from the local government body. Licences vary for the type of salon you have. For example, if your salon provides haircare services, you will require a different business licence from a business that offers only facials or massages. Research well for an informed decision on acquiring licences for your salon business. 

Remember the cost of getting a licence varies from one place to place . Its recommended to apply for the permits early to avoid any hassles in future after the launch of your small salon business operations.

Here is a list of some significant licences, regulations and permits required for salon businesses in India:

• Trade licence from the municipal corporation- this depends on the size of the salon, issued for a financial year and needs to be renewed in March every year.
• GST registration - Salons need to be registered under GST and get their GSTIN Number. GST registration is state specific so incase of centres in other cities, separate registrations are required.
• Employer Identification Number(EIN)- you need to register your salon business with IRS for EIN so that you can file your taxes
• Cosmetology licence(s) - A cosmetology licence shows that you have undergone extensive training and possess the skills and knowledge required to provide high-quality beauty services. 
• Building permit -A building permit is required to ensure that the salon complies with local building codes and safety standards.
• OSHA requirements - Occupational Safety and Health Administration( OSHA) is a set of guidelines and requirements that employers must follow to protect their employees from health and safety hazards. Employees are exposed to chemicals and machines in beauty treatments for customers.

Step 3 : Develop ways to make your salon unique

A speciality service in your salon offering is always unique. With so many salons entering the market place even in small towns, developing a niche can increase your buzz dramatically. A salon experience and repeat customers are due to many reasons. You need to find out yours - whether it would be exceptional service, your attentive staff, customised experiences? Whatever It is, you need to define a focal point of your salon and grow your business around it.

A niche market has many benefits like: 

• Security against failure
• Opportunity to find out what works well for your customers
• Attract loyal customer base
• Lends credibility

If you identify and dominate a business niche, it's easier to succeed in a large market than in a general market.

Step 4 : Partner with distributors for strategic growth

You need furniture for the decor and products for your salon. You need to find local and national distributors to procure the beauty parlour equipment. For larger items like furniture and dryers a wholesale distributor is a wise choice. For smaller items, local distributors or manufacturers can be contacted.

.Always remember to shop carefully and consider every prospect by comparing price points and customer support services and never shy from asking for deals or perks. 

Step 5 : Nurture and retain a loyal client base

The popularity of a salon is the customer base and their experience for the services. You need to nurture the relationship with your customers as a top priority. If you have a client - centred focus, you shall create a reliable customer base for your salon.

It is recommended for aspiring salon business owners to build a client base gradually before launching your services as that will somewhat cover your expenses. Ensuring a solid client base will grow your business long term.

Step 6 : Select a strategic location to open your salon

 The right location for your salon is very crucial. Be it in an owned premise or a commercial lease on a retail area your location is one of the biggest expenses of opening a salon. Accessibility by car or public transport should be considered and you should try to be far from your competitors who offer similar services.

By making it convenient for clients to visit your salon, you’ll have more customers, that means more revenue toward growth expenses.

Step 7 : Engage a professional designer.

If you plan for a small salon and have the means, ensure that it is aesthetically done keeping in mind the comfort of customers. Hiring professional help to do your salon is a good idea. A professional designer can create the overall look and feel with the image you want to project.

Step 8 : Support a skilled team

A beauty salon is a personal industry, thus employing skilled and knowledgeable staff is crucial. It is important to train and motivate your staff for the best customer services. 

Customers remember the experience in which the stylists and technicians play a major role. They ensure the customers are comfortable with great products and other treatments for a remarkable experience.

Your employees can maintain a professional reputation of your beauty salon. Also give importance to employee growth and this can bolster your business. Your leadership skills are very important for employee engagement.

Step 9 : Add value to Client relations

Client experience speaks volumes about your salon’s success. You must know your clients well to create a great experience for them. By creating a vision of what your clients feel and what you want them to experience and how they describe their experience will help develop a look and feel atmosphere. 

In your effort to give your best to clients, you can gather client feedback and demonstrate that you value their inputs and will take prompt action on it. Conducting customer surveys can act well to fix a problem and also consider suggestions from clients that can strengthen your business.

Step 10 : Charge what you’re worth

In your small salon business a very important aspect is how much would you charge your customers for services. By conducting research you can get a ballpark idea about what someone of your level of training could charge. Always consider your unique skills and training and decide a price based on those factors. It should not be what others are charging in that area as you are not aware of their skillset.

Step 11 : Fund your beauty salon

Funding your beauty salon can be done in several ways depending on your financial needs and goals. Some of the options are:

• Personal funding
• A small business loan from financial institutions
• Government grants or subsidies for small businesses
• Angel funding
• Crowdfunding

Conclusion

How to open a beauty parlour requires good planning, creativity, and a strategic approach to funding, staffing and marketing. Be it a small beauty parlour or a big one, securing the right financial funding, complying with local regulations and a solid client base with a robust team are the main steps for success. As long as you remain focussed in your beauty service offering, you are going to make a mark in the growing wellness and beauty industry. 

FAQs

Q1. What is the role of a salon owner in driving the business?

Ans. A salon owner is a driving force behind a beauty business—the person behind every aspect of the company. The owner is responsible for budgeting, branding, marketing, hiring staff, securing finances, scheduling, product restocking, and much more.

Q2. Can I design a small salon aesthetically?

Ans. In a small salon, the interior design should focus on creating a spacious and welcoming atmosphere. This can be achieved by using a light colour scheme, incorporating lots of natural light, and having minimalist décor. A feature wall or a statement piece can add interest without cluttering the space.

Q3. Is a salon service profitable?

Ans. Salon services are highly profitable due to their ability to record high-margin profits. No wonder you can make significant profit with every service that you provide. Further, you may increase your revenue by adding packages filled with incentives and other such perks.

Q4. What skills do you need to run a salon?

Ans. If you have these skills, you may have what it takes to run a successful beauty salon:

• Financial Management. To run any business, you need to have a solid sense of budgeting and money management
• Customer Service at Your Beauty Salon
• Attention to Detail
• Marketing a Beauty Salon
• Time Management