How to Start a Home Salon Business: A Comprehensive Guide
According to a recent study, the number of salons operating in the US alone has crossed the 77,000 mark! It’s pretty clear that the salon industry is thriving. And in recent years, what has sort of become a comforting trend for salon owners is setting up a home salon business.
Starting a salon from the comfort of your home can indeed be a profitable business.
If you are planning to start one, here’s a heads up – you will have to wear several hats between a stylist, accounting, marketing, and continuous learning. Unlike regular salons, you have to manage everything yourself and be your own boss!
Now, if you have decided that starting a home salon is what you want to do, let’s move on to the key set of questions:
- What are the steps involved in kick-starting this form of business?
- What should you charge for your services?
- How do you get a steady flow of customers?
Worrying about how to get started? Don’t worry, we’ve got you covered!
Here are some easy-to-follow steps for you:
- Choose a niche
- Review your insurance
- Design your salon space
- Purchase all the necessary tools
- Price your services logically
- Manage your taxes and finances
- Spread the word about your home salon
- Keep a check on the legal side of things
- Don’t forget to keep your neighbors happy
- Find the right balance between your personal and professional life
Let’s jump right in!
1. Choose a niche
There are a lot of different kinds of home salons based on the services they offer. As you are just starting out, it is important to know what service you will offer and the audience you will cater to.
Choosing a niche helps you penetrate deeper into the market and reduce your competition. It gives you a clear idea and vision of the kind of target audience you’d cater to and helps you channelize your efforts.
Here is an example of a home-based salon niche – An in-home hair salon for women, providing services like hair cutting, blow-drying, hair coloring, other hair treatments, where an average haircut costs about $7.
To determine your niche, try answering the following questions:
- What services will you offer?
- Who is your target audience? Will you be focussing on children, men, women, or all of them?
- What is your price point?
- Is there enough demand for the services you offer in your locality?
- What services are your competitors offering?
Keep an eagle eye on your competitors. Get to know the services they are offering, their pricing, and analyze what you can do better plus how. After all, it is our competitors that push us to be the best version of ourselves, right?
When you are just starting out, it is wise to keep things simple. Eventually, as you expand your base, you can start offering more services to appeal to a larger audience. It is likely that offering multiple services will give you an edge over your competitors. Now let’s take a look at the key requirements involved in kick-starting an in-home salon.
2. Review your insurance
Just like any other business, having appropriate insurance is a no-brainer. Risks and hazards are part and parcel of any business. As a mitigation measure against such risks, it is better to be prepared with adequate insurance as your home and contents policy doesn’t cover home-based businesses.
As a business owner, you may want to consider these policies:
- Public liability: As a home-based salon, you would have customers in your home. God forbid, if a customer slips on the wet floor and falls, you could end up with a lawsuit in your hands! So public liability insurance covers the cost of claims made by the public in connection with your business activities.
- Professional indemnity: In simple terms, this insurance covers the legal cost and compensation payments when a customer sues a business for any mistake they’ve made in their work.
- Business insurance: It covers the cost associated with any property damage or financial loss due to an event interrupting your business. This insurance is a lifesaver – imagine paying a hefty sum out of your pocket for any damages!
- Personal accident and illness: In case of any event where you suffer an injury or have fallen ill and you can’t earn income, this insurance covers a portion of your income.
Before going for any provider’s policy, it is a good practice to compare the other policies in the market and make an informed decision.
3. Design your salon space
In order to build a loyal clientele and spread the word about your home salon business, focus on delighting your customers with more of that “salon feel”. Now to achieve this, you cannot simply pull out a chair in the middle of your house and break off.
You need to put in some effort when it comes to creating your salon space as it would make your customers feel comfortable and confident about your services.
Do you have an extra room that no one uses, or maybe a guest bedroom? Repurpose that and set up your own dream home salon! The best part about in-home salons is that you can design a setup and decorate it any way you want as a way to develop your brand.
This would also help you stay organized as all of your equipment would be in a single room and you don’t have to worry about making a mess in other parts of your house.
Assess the space that you have designated for your home salon, and try answering a few questions:
- Is there enough space to walk around comfortably?
- Does all the furniture and equipment fit into the room without overcrowding it?
- Do you have a washbasin installed and an attached washroom for your customers?
- Is there parking space available for your customers?
Consider installing a wet station in the room to give your customers added comfort when they’re getting their haircut and hair color. This way, you wouldn’t need to use your personal washroom for shampooing and hair coloring.
Once you have decided on a room, you can go about decorating your workspace just the way you like!
For more in-home salon ideas and how to make the most of the limited space available to you, refer to our informative blog here!
4. Purchase all the necessary tools
While your overhead expenses might be low as you’re saving up on location and staff, investing in good salon equipment becomes necessary. To ensure that customers ultimately feel like they are at a salon in spite of being at your home, invest in a good-quality salon chair.
Give your customers all the comfort they deserve.
While the products you purchase depend on the services your salon offers, there are some good-to-have tools for your business, like:
- A pair of scissors
- Combs and brushes
- Hairstyling and grooming equipment
- Make-up products
- Shampoo station
- Blow dryer
- Salon chairs
- Wall mirrors and hand mirrors
- Carts and trays
Apart from these tools, utilizing the power of an online salon scheduling software can prove to be extremely indispensable. A salon software makes bookings simplified for customers and gives you complete control over your schedule. It also helps in reminding customers about their appointments so that no-shows are reduced!
Do your clients want to pay via cards? Not a problem! Accept payments and prepayments in a flash with the software. Once you get a hang of the online salon booking system, there is no going back for you – that’s how easy your life becomes! 😌
5. Price your services logically
When it comes to setting prices for your services in your in-home salon, it can get a bit tricky at times. Your customers might expect you to charge less since you are working from home, but you have also made significant investments in your salon that you need to cover up.
When deciding a price for your service, you must remember that a customer not only pays for the service, but also for the experience and ambiance.
Be realistic of your prices, but do not sell yourself for too little.
To decide the pricing, you also need to consider what your competitors are charging. If you are offering the same services like them, it is best to keep your prices competitive to get an edge over them.
When you are just starting out, you may consider keeping the prices a bit lower so that you attract more customers. As you build customer loyalty and gain experience, you should work up the prices to what works for you.
Keep in mind the cost of products and utilities. You might also consider the maintenance costs of your equipment.
To set the right prices for your services by following a profitable pricing strategy, refer to our comprehensive salon pricing guide here!
Pro tip: As a work from home business owner, customers might expect huge discounts from you. Try avoiding giving discounts frequently as it would affect your profits in the long run.
6. Manage your taxes and finances
Operating a home salon business does not exempt you from taxes. The taxes that you pay depend on the state you are in, as not all States collect sales or income taxes. At the end of the year, most hairdressers will have to pay federal taxes.
As a home salon owner, most of your business expenses qualify as tax deductions.
- Your hair care products like shampoo, conditioners, hair colors, etc. qualify for tax deductions.
- You can deduct some of your house expenses like heating, mortgage, insurance, etc.
- The amount you spend for marketing your salon business also qualifies as a write-off.
- The professional journals you subscribe to, your education costs, industry memberships, cosmetology publications, etc. qualify for tax deductions!
In-home salon owners have a lot of perks, especially when it comes to taxes, don’t they?
7. Spread the word about your home salon
As you are just starting your in-home salon, you need to stay at the top of your marketing game. Already have an existing client base? Let them know about your new venture. Spread the word about your home salon to your friends and family and ask them to share it with their loved ones.
Getting new clients for your salon and ultimately retaining them is not very easy, but you shouldn’t lose hope. It might take some time but it will be worth it.
Here are some ideas that you can use to market your new home-based salon:
A. Build an online presence
Consider getting a launch website done for your home salon. You can list out your work hours, the services you offer, address, contact information, and even add a book button right there. Have an online scheduler integrated with your website so that customers can directly book appointments with you.
Set up a Facebook and an Instagram page so that your prospects can find you and book appointments with you. Adding a book button to your social media handles can ensure that customers are able to book your services once they come across your profile.
B. Get listed on online directories
Online directories like Google My Business, Yelp, Yahoo Small Business, etc. will make your home salon more discoverable for your customers. By registering on these directories, you will boost your Google search rankings and create your brand awareness.
C. Use flyers and coupons
Distribute flyers and coupons in local coffee shops, boutiques, and complementary businesses. Also, hand out your business cards along with them. It is sure to catch the attention of your prospective customers!
D. Give out introductory offers
Offering introductory discounts is one of the best ways to attract new customers to your salon. Let all your friends, family members, and neighbors know about the discount you are offering and give them the best service for a memorable experience!
E. Create a customer referral program
Word of mouth is the primary way most small businesses grow their customer base. Offer clients a referral discount if they refer a friend, family member, or coworker to your at-home beauty or hair salon.
F. Share your business card
Keep your business card handy and give out a few to your happy customers. A business card is oftentimes the first impression of your brand, so why not give it a personal touch!
You can handwrite your salon’s number, or if you’re comfortable, add your personal number too. Your customers can share your card with others which will give you a good reach.
For more ideas on how you can market your salon, check out this blog: Salon marketing ideas.
Now that we have our plan in place, there are a few things that you should look out for.
8. Keep a check on the legal side of things
While an in-home salon business is a lucrative option, if the legal requirements are not met, it can be a risky business! Most States allow operating home salon businesses, but the number of rules to be followed can be overwhelming at times.
Every area is unique, and so are the rules and regulations. To be on the safe side, you need to do a little homework before starting your venture. You need to inquire about a few things like:
- Are you allowed to run a business from your home?
- Is there any local governing body or residents association placing restrictions on home businesses?
- Are there any additional permits that you need to consider?
It is wise to contact your local attorney about how you can start your home-based salon business. Also, ask for permission from the landlord or mortgage provider before carrying out business from your home.
9. Don’t forget to keep your neighbors happy
Unhappy neighbors can be bad for business. Try keeping all the disruptions related to your business to a minimum and never give a chance for your neighbors to complain.
Try to make some parking arrangements for customers so that it doesn’t bother your neighbors and doesn’t break any parking rules.
Avoid accepting appointments at odd hours and have a visible sign outside your door so that customers don’t end up at the wrong house.
It’s also a good idea to thank your neighbors for their cooperation and let them know you are open to feedback if any disturbances become a problem. Ensure you’re up-to-date with local zoning laws.
10. Find the right balance between your personal and professional life
When you are working from home, there is a very fine line between personal and professional life. While working from home comes with its own set of perks, it is impossible to ignore the fact that you’re always at work, even when you’re not!
Oftentimes you may end up accepting last-minute appointment requests or taking too many bookings in a day. While it’s understandable that you want to put in a lot of effort to make your venture a success, it can have a negative impact on your health and personal life.
The best way to manage your personal and professional life simultaneously is to sign up for an online scheduling software.
To start with, you can try out Appointy’s salon booking system. With this, you not only move your appointment process online, but you can also avail a bunch of other tools it comes with, that will help you kickstart your business with ease!
Here are some features of the software:
- You can set clear booking rules and accept the fixed number of appointments you can actually accommodate.
- You reduce any no-shows or last-minute cancellations with the help of automated SMS and email reminders.
- Personalization is the key to customer satisfaction. With Appointy’s inbuilt CRM tool, you can keep track of all the likes and dislikes of customers so that you can give a personal touch to their every visit.
- Want to spend some quality time with family, but have a lot of paperwork left? Let your scheduling software handle all the admin work while you take some time out for yourself.
- Share your customer reviews on social media with just a few clicks! It will help establish your business and also attract prospective customers.
The perks of having a salon appointment software are endless! It lets you do better at every stage of your customer’s journey. To know more about how your business can benefit from the online scheduler, check out Appointy’s salon booking software.
Every great business has to start somewhere. Sometimes, everything might seem tough and you might feel that things aren’t exactly going your way, but have patience and things will fall into place!
We hope that this guide will help you in your entrepreneurial journey of starting a home salon.
We wish you all the very best! 😃
We at Appointy, help business owners grow and run their businesses with our online scheduling software. This blog was a part of our ‘Manage your Business’ category, where we provide expert tips, and resources, or simply talk about the challenges that small and medium businesses face every day.
If you have any thoughts on this blog or would like to chat about your business struggles and achievements, let us know in the comments below.
We love a good talk!
Thanks for mentioning how it is crucial to invest in good equipment for your salon. I think it would also be necessary to find salon products, like hair color, that comes from a reputable supplier. My mom wants to open a salon in her basement, so I will share these tips with her.
This information is very helpful. thank you for sharing. Keep Posting.