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How Much Does it Cost to Open a Hair Salon?

How Much Does it Cost to Open a Hair Salon?

Congratulations, Future Business Owner!

Compliments to you, hair salon professional extraordinaire! You have worked hard to master your art and have grown a loyal and ever-expanding following of passionate patrons. The time has come for you to live the ultimate dream of owning your own salon. You can picture your space in your mind - an expression of your personal style and vision. You’re ready for the exhilarating emotions of entrepreneurship, but what about the cost of the business side? Will you purchase an existing salon, complete with equipment and customers? Will you set up shop in an available space because it’s in a stellar location? Or will you start from scratch building your dream salon from the ground up? How much does it actually cost to open a hair salon? 

The Budget Breakdown 

If you have the capital to set up shop without seeking financing, you will free yourself from a potentially massive monthly expense; a loan payment. Let’s assume that’s you, and proceed with a budget breakdown of opening a hair salon in an existing location or from the ground up:

  • Rent: Location, location, location. Prime property pays! And it also costs. Your rent will depend on what city and state you are operating in, so it’s impossible to give an exact number, but expect an expense of $10 - $25 per square foot which could put your rent in the range of $1,500 - $10,000 per month.
  • Salon Insurance ($50 - $1,000/month) This expense will depend on size of your staff, services offered, and location.The average monthly cost for a full service salon is around $250.00.
  • Salon Management Software (free - $250/month) There are a lot of ways to go here, and a wide variety of products to choose from. Most Salon Software Systems will include features that manage client profiles, employee management, product inventory, and point of sale. Software Search Services are available to help you find the best system for your salon - and they’re free to you because the vendor pays the fee.
  • Digital Marketing and Website Management( free - $250/month) Again, a multitude of options exist and will vary depending on the size of your operation and how much you have to spend. Free business resources are a great place to start, but having an impressive online presence is critical if you want to make a strong start. Your website is essentially an online glimpse into your business, so make sure it is an accurate reflection that captures the vibe of your salon. Consider hiring a professional unless website design is part of your skillset.
  • Salon Licenses ($500 - $12,000) The cost of securing a cosmetology license will vary from state to state, and if you already have one, you are ahead of the curve. If not, you will have to acquire one in order to run your business, and the cost can be significant.
  • New Business Legal Fees ($50 - $5,000) Legal costs associated with opening a hair salon will vary by state, but in general, you can expect to be required to secure a Federal Employer Identification Number, a Business Operation License, Certificate of Occupancy, and so forth. Consider hiring an experienced real estate attorney to negotiate the terms of your lease, whether you are renting existing space, or building on rented land. Many cities in the US have complicated clauses that give landlords rights that can present extreme challenges down the road.
  • Salon Equipment (approximately $10,000) Obviously you will need stations, chairs, mirrors,and everything you need for shampooing stations. Additionally, hair dryers and other smaller items.
  • Initial Inventory of Salon Products (approximately $5,000) The initial product purchase will depend on the size of your business, number of stylists, and how many days each will be working in the salon. You will want to invest in high quality salon products, so be sure to reach out to Lunica Beauty ( (602) 788-8086.
  • Design, Architecture, and Construction Costs - The sky is potentially the limit in this category and will ultimately depend on depth of pocket and location. It’s impossible to provide an average, but a good rule of thumb is to expect projected costs (and duration) to double the initial estimate.

Up and Running

Once you are up and running, you will be able to get a grasp on your monthly operating expenses. Prepare to include loan payments, rent, supplies, payroll, insurance, credit card processing fees, utilities such as water and electric, and ongoing marketing costs. An additional expense to consider is the cost of your Grand Opening Event, which can be as elaborate as your budget allows. Light some candles in the salon, fire up a jazzy playlist and host a simple wine and cheese mix and mingle. Offer a small take-away gift to entice future customers to stop by.

Ensuring Profitability

Now is a better time than ever to run a hair salon. The total annual salon revenue in the US is $63 billion. The average salon owner salary is around $50,000. Our device-dependent society is constantly bombarded with imagery of perfect people, so studies reveal that the average person is spending more and more on beauty salon services. One way to stack the deck in your favor when opening your new salon is by taking advantage of all the free tools available to business owners. Free business listings are available on Google, Yelp, Yahoo, Bing, Angie’s List, and so on. You can avoid digital marketing costs by using free platforms such as Wix, Network Solutions, or Squarespace to create your website.

Final Thoughts:

A long list of considerations await your attention if you are planning to open a hair salon. You are a top-notch stylist so be sure to stock your salon with high-quality professional products. Reach out to Lunica Beauty (, a family-owned distributor with 30 years of dedicated service to the salon industry at (800) 440-1862.

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