Opening a Salon in Canada | Complete Guide for 2022

Opening a salon takes a lot of tough work and preparation, but beginning a new enterprise is also enjoyable and an excellent chance to get to know all-new things.

Even skilled experts who have actually been in the salon industry for many years will inform you that starting a hair business requires online research and a strong salon business plan.

Salon owners require to be knowledgeable about changing requirements to open a salon, such as costs, licensing, and equipment for new services.

Keep reading if you find yourself thinking about how to start a salon business or what actions you'll need to take to develop a successful salon business.

What You Will Learn

In this article, we'll have a look at the process and requirements of starting a salon business, in addition to some salon start-up ideas, recommendations, and checklists of tasks and tools for new salon owners.

Jump to The Section You Like

  1. Requirements for Owning a Salon
  2. How Much Does It Cost to Open a Salon?
  3. Salon Opening Checklist
  4. Hair Salon Equipment List
  5. Owning a Salon Advantages And Disadvantages
  6. Conclusion

Requirements for Owning a Salon

 

As a business owner, there are many things you'll require to prepare when opening a salon.

Permits and licenses can vary between states and provinces and sometimes even between municipalities.

Make certain to do your research and learn everything you need in your area. It's a great thought to include these when beginning a salon checklist and estimating your start-up expenses.

Here's an overview of the basic business license actions and permit requirements to assist you begin:

1. Obtain Required Licenses

  • Cosmetologist License: Most states require that you be at least 18 years graduate and old from a certified cosmetology program or apprenticeship, pass a series of practical examinations, and have on-the-job experience performing services on clients to get your cosmetology license.

  • Salon Business Operation License: The standard business license needed to open your salon. You can apply at your state department or the U.S. Small Business Administration by providing your name, business name, and social security number.

  • Certificate of Occupancy: Your local building evaluation services or government agency can assist you in doing this. They'll examine to ensure that your salon space is safe and validate that it has the required water and electrical hookups to work.

  • Specific Licences: There are lots of kinds of licenses in the beauty industry, a few of which might be needed for your salon personnel, depending upon their area of expertise. Some states require a different license for this if you plan to have a barber or Aesthetician on the team.

2. Register Your Salon

  • Get your TIN: Also called a Tax Identification Number, you can get this 9-digit number by applying straight to the IRS. Even small company owners who don't plan to hire any other stylists or personnel still require this.

  • Check Name Requirements: You'll require a salon name for your business plan (more on this later), but some states additionally have specific requirements for businesses when it comes to names. Ensure to go over these when naming your brand-new salon.

Requirements for owning a salon in Canada
Requirements for Owning a Salon in Canada

3. Obtain Required Permits

  • Salon Retail Seller Permit: This lets salon owners offer retail items as well as provide services. In states that collect sales tax, you'll probably need a retail seller permit. Inspect the U.S. Small Business Administration or your state's website for more details.

  • Building Permits: These permits are managed at the state level and require assessments and approvals for any work that you plan to do to make your salon all set for business. Prices can differ; however, don't skip this procedure- it's by law required and essential for safety.

  • EIN: You will require your Federal Employer Identification Number to file your Federal and state taxes, salon's payroll, and other documents.

    You can get it from the IRS or your state's online website, and you'll require to provide your business license, personal details, and a basic description of your services and products.

Get Salon Insurance

The price of insurance coverage usually differs between about $50 to $250 a month, and it takes care of you, your personnel, and your clients. The most standard kind is called "general liability" insurance and protects against damage to your commercial property, claims made against you, or sometimes even damage to your business's reputation.

Sign a Lease Agreement

A legal adviser can assist you in drawing this up, although templates are readily available online. You'll wish to make certain to have this signed and ready to go before you invest any money in the existing salon or make any changes to the venue. If you're buying the space, make sure to speak with a legal professional to close the sale.

How Much Does It Cost to Open a Salon?

 

1. Salon Licenses and Legal Fees

  • Licenses: In the U.S., these can cost between $100-$ 400 for small businesses like hair salons. That includes the processing fees and the license itself.

  • Certificates: The inspections required to provide a Certificate of Occupancy differ by state, however you can expect to pay a minimum of $250. You'll have to fix them and have the location inspected again for another fee if any problems require to be fixed.

    Cosmetology licenses and certificates are normally needed for all of your personnel, and their training will require to be kept up to date, too. The charge to renew these differs by state but is often $50 or more.

  • Permits: Retail requirements will vary by state but are often a requirement if you plan on selling items to customers. In California, for example, there is no charge for a retail seller permit, however a security deposit may be required.

  • Legal Fees: A legal adviser can assist you in reviewing your lease or bill of sale, check that all of your documentation is submitted correctly, and read any "fine print" on your state's requirements or insurance coverage documentation. They typically charge about $200 per hour for their services.

2. Salon Location

  • Rent Deposit: This will include your first month's rental fee but can also include an additional deposit in some instances (if the property is furnished, some states allow landlords to charge more).

  • Salon Fit-out: The cost of fitting out the salon you want will differ a lot depending on your taste, budget, and the square footage of the site itself. Do not hesitate to shop around and get numerous quotes.

  • Furniture: To start, you can expect to pay anywhere from $200 to more than $1000 for a high-end chair, and washbasins likewise start at several hundred dollars each. Do not forget furniture pieces for your client reception areas and salon break rooms, too.

  • Signage: It's important to have the right salon sign to draw in customers to your business. That said, a professionally-made sign done by a graphic design business can start at a few hundred dollars, so it's an excellent idea to look around prior to choosing one.

3. Salon Equipment

How much does salon equipment cost?

Salon owners have the option of leasing equipment or buying it outright. Both have their advantages and disadvantages.

A brand-new total set of hair salon equipment and tools will cost you around $27,000, whereas, with leasing, you make month-to-month payments. These rates will depend upon the provider, and many do offer you the opportunity to purchase the equipment or lease new items later.

Many providers will provide you with the possibility to lease larger, more costly units such as styling chairs, hood dryers, and backwash station chairs, however be prepared to look around for smaller-sized items such as carts, trolleys, and service accessories.

When you begin equipping up, bear in mind that your salon's requirements may shift in the future, so you'll wish to plan not just what you buy now but what you may require later on.

4. Salon Marketing

Your salon website is among your salon's most important marketing tools, especially if your target audience is younger or professional. They tend to value the practicality of online booking and use social networks to discover the services they're looking for.

You can build your salon website utilizing a free design template online or work with a specialist to help. They usually charge between $300- $700 for this service. Or, you can purchase solid salon management software that includes a website building function.

Do not forget business cards and flyers, too. Make sure to connect to the local community using printed products that you can hand out at your salon and local businesses.

You might even wish to invest in an ad on the radio or in the local newspapers.

How much does it cost to open a salon in Canada?
How Much Does it Cost to Open a Salon in Canada?

5. Initial Stock

Your overall stock will vary depending upon the size and staffing requirements of your salon. When you determine product requirements, make sure to include disposable items used in each service, in addition to expert materials and retail items.

  • Professional Products: These are your "back bar": what your stylists will utilize on clients and must be inventoried separately from sellable stock. Salon software can help you track these.

  • Retail Products: Track what you sell to clients separately from your supplies budget. How much money you invest in these products will depend upon your marketing and the products you pick, along with any specialties your salon offers (such as shampoos and conditioners for curly hair or treatments for greying hair, for example).

Salon Opening Checklist

 

Many people wonder how to start a hair salon. Much like with any new business enterprise, a little bit of planning goes a long way. Here are the steps that you can follow to help turn your dream into a successful business.

1. Choose a Business Model

Will you be working as part of a franchise (this includes a great deal of support however less independence), or will you run your own business? Likewise, you'll need to decide whether to pay your team on commission or rent booths/ space to independent stylists.

2. Develop Your Salon Business Plan and Price Menu

That helps brand-new hair salons to remain on budget and will provide you with a roadmap to establish your business. Include a marketing strategy, budget, your target audience, and the kinds of products/ services you'll offer clients. Add to this a breakdown of your basic recurring expenses like staff wages, insurance coverage, back bar costs, and marketing.

3. Find Perfect Location

That will depend a lot on your brand and target market. Will your customer base be professional and young? Then try to find something near a local downtown or business hub. Other salons may do well in quiet areas or towns if this fits their clients and brand.

4. How to Fund the New Salon

Inadequate money at start-up is one leading reason that salons struggle, according to the U.S. Small Business Administration. Attempt to have at least 6 months in reserve. Sources of funding can include your own savings, help from friends and family, your local credit union, and loans and grants for industry start-ups. Ensure that you have a budget and plan to pay it back, too.

5. Develop Your Salon Branding

Your brand helps define your business and customers. It includes everything from your logo design and name to your website and interior design. Pinterest is a great source of ideas to start. Pick some images and words that identify your brand and use them for inspiration.

Salon opening checklist in Canada
Salon Opening Checklist in Canada

6. Prepare Your Salon Marketing Plan

Set up your website and social media pages, pick a logo design, and reach out to the community. Your family and friends can be invaluable when it comes to forming these connections with new clients.

Make certain that you also set up your Google My Business account info with photos so that customers can find you on opening day and leave reviews later. Salon software will make following up with them and managing review content easier, too.

To find out more, please see our post on Salon Marketing Ideas.

7. Get Salon Management Software

Salon software will really help you optimize your salon calendar, enable simple online booking, handle your personnel schedule, take payments, track and order inventory, and more, saving you hours of stress and money each week.

8. Choose Your Credit Card Processor

Various providers provide various equipment and rates, including basic app-based systems or more complicated devices with receipt printing. Do not be afraid to look around. We advise you to learn more from our post on Credit Card Processing for Salons.

9. Recruit Salon Staff

Promote any openings and select your dream team, then plan your training. Look at out our guide on How to Hire a Stylist if you wish to find out more about recruitment.

10. Choose Product Suppliers

That depends greatly on your branding and clientele, so choose a range that compliments your services and vision.

We've prepared an opening a salon checklist pdf to assist you to start.

Hair Salon Equipment List

 

That includes all the things from furniture to the tools and technology that your staff will require. Start by making a list of the big and small things that your space ought to have, separating "needs" from "wants" to remain on budget.

Keep in mind, the equipment can typically be leased or purchased, however tools and furniture will probably have to be purchased.

Your salon shopping list should include:

  • Furniture: Reception desks, chairs, waiting area furniture, backwash stations, salon chairs, product display stands, lighting, wall art, trolleys, and shelving are all needed things to place on this list.

  • Electrical Items: Blow dryers, drying hoods, curlers, clippers, heat lamps, washing machines, and any specialty items for other services.

  • Supplies and Tools: This includes disposable materials like curling papers and gloves, in addition to reusable combs, brushes, scissors, spray bottles, towels, mirrors, and aprons.

  • Management: Computers/ Laptops for running the salon, salon software to track scheduling, appointments, stock, POS system, a cash register, and phones are all needed for the business.

  • Safety: Fire extinguishers, masks, first aid kits, and hand sanitizer must all be kept on hand.

We've prepared an opening a salon equipment list pdf to assist you in getting started.

Owning a Salon Pros and Cons

 

Are hair salons profitable? They absolutely can be, however running a successful salon takes a great deal of tough work and commitment, too.

While there are a lot of advantages to owning your own salon business, there are also some downsides that you'll need to be prepared for.

The best parts of salon ownership are:

  • Autonomy: You make the choices to lead your business, set your own schedule, and keep the earnings.

  • Creative Freedom: Developing your dream business, mastering managerial skills, and helping to foster and mentor your team is both rewarding and an amazing learning experience.

  • Opportunity: A typical salon can generate an income of about 100,000 Euros every year. Out of this, about 50,000 Euros is profit for the salon owner. If you manage things well, this can add up.

Some probable obstacles to be mindful of are:

  • Administration: It's hard to handle all the administration work, from tracking payroll and stock to preparing and updating social media for tax season. Salon software can assist you to remain organized, optimize your calendar and handle scheduling and stock, among other things, however you'll still have a great deal of functions.

  • Taxes and Legal Necessities: You'll be the one ultimately accountable for paying taxes, insurance and making certain all your inspections and documents are up to date.

  • Losses: Even the best businesses might have their slower days, and you will require to be prepared for this. It's a salon owner's duty to see that staff are paid and expenditures are met, even if earnings are temporarily low.

Conclusion

 

Starting your own salon is a big step, however it can also be incredibly rewarding. The smartest thing that you can do is invest your effort and time in staying organized right from the start.

Tools like salon software can help with this, and it's essential that you prepare yourself by doing your own analysis and getting your checklists ready before you start making any purchases or investing any cash.

The appropriate planning, a clear budget, and a strong marketing strategy can make all the difference when opening a salon.

Citations

What makes a new business start-up successful?
https://link.springer.com/article/10.1023/A:1008168226739

The financing of business start-ups
https://www.sciencedirect.com/science/article/pii/S06

Sustainability issues for start-up entrepreneurs
https://www.jstor.org/stable/pdf/greemanainte.38.59.pdf

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