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Things you need to know when starting your own beauty or hair

Starting your own beauty business or hair salon can seem like a daunting prospect with so many things to think about. From the legalities of setting up a business to marketing and PR, and salon insura...

Things you need to know when starting your own beauty or hair

Starting your own beauty business or hair salon can seem like a daunting prospect with so many things to think about. From the legalities of setting up a business to marketing and PR, and salon insurance, there are plenty of things to cover in the process.

Planning, hard work and research is the key to unlocking success. 

In this article, we’ll cover some of the things you need to know when starting your beauty or hair business which will help get you started.

Business Plan

Your first step to starting your own beauty business is to create a business plan. A business plan is a written document that describes your business and is vital if you anticipate applying for a bank loan or if you want to secure investment. 

You should aim to make your business plan as detailed as possible by covering the following aspects:

  • objectives
  • strategies
  • sales
  • marketing
  • financial forecasts/projections for the future

A business plan will help to:

  • clarify your business idea
  • identify potential problems and issues
  • budget for stock, wages and other outgoing expenses
  • set achievable objectives
  • measure progress against objectives

Generally speaking, your business plan should include:

  • The immediate plans to set up the business
  • The plans for the first year of business
  • The plans for the first 3 years of business
  • The plans for the first 5 years of business

You should try to review your business plan annually to ensure you’re on track to achieve your objectives.

Finance, budgeting and funding

Finance, budgeting and funding is a crucial part of starting a beauty or hair business. Setting up a business is an expensive investment; you need to ensure your business plan is well thought out to attract potential investors or secure a loan from the bank.

There are many ways to source funding for setting up a business, including:

  • Self-finance
  • Bank loan
  • Government start-up loan
  • Investors
  • Crowdfunding

When you compile a cash flow forecast, this will help you identify the amount of funding you require and what source of funding will be the most suitable and attainable for your business. 

You will also need to set up a bank account, decide how you will take payment (cash, debit or credit card, contactless payments), and register your beauty or hair salon with the HMRC within the first few months of trading. 

The financial side of the business can often seem complicated; consider employing an accountant as this can be invaluable to the success of your business.

Type of business

There are a number of different business models to choose from. It is important to speak to a professional and get expert advice when deciding.

The different types of business include:

  • Sole trader - A sole trader is a self-employed individual who owns and runs their own business. 
  • Partnership - A partnership is when a business is owned by two or more people. 
  • Limited company - A limited company is a business which is ‘limited by shares’ or ‘limited by guarantee’. It ensures that the liability of company members is limited to their stake in the company.
  • Franchise - A franchise business is where the ‘franchisor’ sells the rights to use their company name, trademarks and business model to independent operators. 
  • Renting a salon chair or treatment space/room - This is a common setup for individuals within the hair and beauty industry if you’re not ready to set up your own salon; an agreement is reached between the salon owner and the stylist/therapist in terms of payment - a percentage agreement, fixed rent or mix and match.

Salon licences

Depending on the location of your salon, you will need to find out from your local council what licences you will require. For example, you may need a licence that covers particular treatments such as tattooing, piercing, laser hair removal, and electrolysis. 

Treatments aside, you will also need to have licences to play music on your premises, show TV programmes and serve alcohol.

Salon insurance

Salon insurance is vitally important for the protection of your business. You must select an insurance policy, whether that be for self-employed individuals or salon owners, that covers all the treatments and services you offer. 

Insurance policies are only valid if you and your therapists or stylists are properly trained and have the necessary qualifications.
Our salon insurance and self-employed insurance offers:

Public liability -  This ensures your business is covered in the event an injury occurs with the client’s home or third-party premises as well as if a client’s property becomes damaged during a visit.
Treatment liability - This ensures the treatment you perform is covered in the event an injury occurs or your client has a reaction.
Product liability - This ensures your business is protected in the event that you sell a product to a client which turns out to be faulty or cause a reaction.

Our salon insurance also includes variable contents and stock cover plus Employers Liability and costs from as little as £156.60 per year.

Our beauty therapist insurance costs from as little as £52.50 per year.

Health and safety regulations

As a future salon owner or self-employed therapist or stylist, you must comply with health and safety regulations. This is not only to protect you and your business but also your staff and clients. 

According to the NHBF, your beauty or hair salon must comply with the following legislation:

  • Health and Safety at Work Act 1974.
  • Control of Substances Hazardous to Health Regulations (COSHH) 2002.
  • Cosmetic Products (Safety) Regulations 2004.

It is also a legal requirement to display the health and safety post approved by the HSE in your premises if you’re a salon owner with 5 or more employees.

Taxes and bookkeeping

As mentioned above, you will be required to register with the HMRC in addition to keeping accurate financial records and paying your taxes on time.

We would recommend employing an accountant or a bookkeeper to look after the financial aspects of the business. 

Marketing and PR

Marketing and PR are going to play an important role in getting your business name out there. Just like setting up a business plan is important to the success of your business, so is setting up a marketing plan. 

Marketing and PR is what is going to get your business the exposure it needs to bring in clients. It can also help to develop client relationships, manage your reputation and shape your brand image. 

You need to ask yourself:

  • Who is your target audience?
  • Where are your target audience most present and active? e.g. offline and/or online
  • Where will you advertise your business? e.g. newsletters, leaflets, local magazines, website, email marketing, organic search, paid social, paid search, social media.
  • Are you going to utilise social media and what channels will you use? e.g. Facebook, Instagram, Tik Tok

Rather than focus on one marketing channel, try and formulate a holistic approach to your marketing efforts so you maximise the opportunity to increase awareness. 

Tips for starting your marketing efforts:

  • Create a distinctive logo to help build your brand identity
  • Have an easy-to-use website reflective of your brand that includes:
    • Contact details
    • Location details
    • Opening hours
    • Services and treatments
    • Prices
    • Online booking system (if applicable)
  • Create a Google My Business account
  • Hold an opening party
  • Host fundraising events and partner with a charity

Age restrictions

It is important to follow the guidelines and regulations with regard to age restrictions when performing treatments and services on your clients. 

It is not recommended that you carry out beauty treatments or services on under-16s and certain treatments should not be given to anyone under the age of 18. Your insurance policy wording will contain all the necessary information regarding age restrictions.

According to the NHBF:

You must have written consent from a parent or legal guardian to carry out treatments on under-16-year-olds, here are some examples of treatments you cannot offer:

  • Earlobe piercing
  • Waxing (not intimate waxing)
  • Facials
  • Manicures
  • Pedicures

You should also follow training and manufacturer’s advice as some products cannot be used on under-16’s regardless of parental consent.

The following treatments must not be given to anyone under the ages of 18 or administered by a therapist under the age of 18:

  • UV Therapy
  • Intimate waxing
  • IPL (intense pulsed light) treatments
  • Micropigmentation
  • Microblading

Are you looking for salon insurance?

If you are looking for salon insurance, please don’t hesitate to get in touch with us on 0345 605 8670 or email us at info@professionalbeautydirect.co.uk for more information.