A COMPLETE GUIDE ON HOW TO START A SALON BUSINESS IN INDIA
Naturals Academy- Dec 15, 2020
- 7 min read
The first thing to consider while starting a salon business is deciding the idea. You need to keep many things in mind before deciding on a concept, the major one being the amount of capital you have for investment. The Average Price per Customer (APC) gives you a fair idea about the average amount of money a customer would spend in your salon.
Self-funding – If you have enough money in the bank, then congrats, you have crossed the first hurdle of opening a salon. It is also a good idea to open a salon in partnerships, as it reduces the risks of investment and also divide on the responsibilities.
Loan- You can take a loan to fulfill your salon dream. However, securing a loan from a bank may include hassles as they look for collateral or someone who can underwrite the loan.
VC/Angel funding- Getting investors on board can be difficult, especially if yours is a first-time venture. Investors usually look for your hair and beauty venture’s growth potential, quality, and the scalability of your business model. The performance of your first few centers is taken into consideration before one agrees to invest in your business.
Service Costs- Service cost is the cost of all the raw materials used in performing a service. Ideally, the product cost should be around 20-30% of your menu price.
Overhead Costs– Overhead costs are the other expenses that are not related to product or labor. These include:
Rent- The rent covers a significant part of your salon costs, and is profoundly affected by the location of the salon. However, the rent should never exceed 10% of your total revenues.
Interiors– You can decide on the interiors based on your salon concept and theme, and your budget.
Salon essential equipment- Purchasing right quality equipment may seem like heavy on the pockets, but they always recover their costs in the long run.
License- Licenses are an essential part of your salon, and cannot be ignored. Based on your region or state, the license fee varies.
POS- The new age, modern technology POS can smoothen your salon operations like never before. The price of POS depends on its features and functionalities, that should be chosen considering your salon needs. We have covered the topic of POS below in detail.
Marketing- You should ideally spend 5% of your revenues on marketing your salon. There should be a perfect balance between offline and online marketing. Word of mouth or referral marketing, along with digital marketing can do wonders for your salon.
Visibility and accessibility- The salon should be located in a place which is easily visible as well as accessible. Upper floor locations are generally not considered suitable as their visibility is low, and customers also find them difficult to locate. A salon right in front of the road and on the ground, floor has higher footfalls.
NOC- Before you open your salon, you would also need a No Objection Certificate (NOC) from at least three of your neighbors.
Trade license from the municipal corporation- Depending on the size of the salon, the cost varies. The licenses are issued for a financial year and need to be renewed in March every year.
GST Registration- Salon are required to register under GST and get their GSTIN Number. GST registration is state specific, so if your salon has centers in different states, then you need to have a separate registration for each state.
Professional Tax license- You need a professional tax license for employing salaried staff. This is payable on a monthly basis for all salon staff earning above Rs 10,000.
Business Registration- You need to register your business as a proprietor, partnership firm or a Pvt Ltd company. You’ll need to file annual returns, audit your finances etc. Hire an accounting professional or CA to help you with the economics of your business.
There are a few other licenses required as well such as fire safety, certificate, music license etc.
Housekeeping staff- Your housekeeping staff, comprises the cleaner, assistant staff etc. They will mostly be unskilled labor.
Service staff- The hairstylist, beautician, makeup artist, therapist staff etc. are your service staff. Since they have to interact with clients, they need to be good at communication and must be trained appropriately on your standards of service delivery.
Management staff- Your salon manager, receptionist, floor manager, store manager etc. comprise the management staff, and they need to be educated as well as experienced.
Hiring the right hairstylist or beautician is extremely important for your salon as your service is what’s going to attract your clients. Apart from servicing, your senior hairstylist or beautician can also help in your menu, keeping in mind the products that are readily available, and train and lead the staff to deliver the services and consult of the professional products. Therefore, an experienced hairstylist or a beautician is a must for your salon. Before you start a salon business, you must also remember to train your staff not only regarding their job but also on how they should serve their clients to deliver stellar customer service as per the standard of your salon business.
A healthy relationship with your supplier and vendor is essential for the smooth functioning of your salon. You must have at least two-three vendors in each category. This would help compare prices, and will also serve as a backup in case some problem comes up with one.
Salon technology is often the most ignored part of running and managing a salon, though perhaps the most important. With new age modern technology, the robust POS has come up with a number of integrated features that has streamlined the salon operations to a great extent. Niche salon technology solutions are available for different types of salons.
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