How much does it cost to open or run a hair salon?
Apr 21, 2021
Running a hair salon can be expensive. Whether you’re just starting out or you’ve been in the industry for decades, it’s always good to know what the costs are of running your business.
The cost of running a hair salon can vary depending on the size, location, number of employees, etc. However, there are some general expenses that most salons have in common.
So we’ve interviewed hundreds of our clients who are hairstylists to find out more about those hair salon expenses and struggles. Here’s what we’ve learned:
How financially difficult was it for hairstylists to start a salon business?
When talking about how difficult it was to open a hair salon, these are a couple of things some of our users mentioned:
- “It was rough you have to expected the first year is not a profit at all!”
- “It was quite difficult l had to take a loan from friends”
- “If you don’t have financial support, very hard.”
- “It was very hard. Having enough money to lease space, buying equipment, tools, decor, maintenance ( painting, cleaning supplies, and toiletries ) insurance, and have enough money to maintain my household bills.”
- “Struggling and still am”
- “Very difficult I worked as a hairstylist for over 10 years until I was financially able to open my own”
Over 60% of hairstylists stated that starting their own hair salon was “Very hard” and “Harder than I expected.”
Keisha Wallace from CeeCee’s Creations
“It is extremely expensive, yes, but it worked out. At least for a suit owner……to get all you need; color and supplies, for all hair types, and the right cleaning supplies, you’ll need at least $5.000 – $10.000. “
Keonah McCullough, Certified Sisterlocks Consultant at Naturally Adorned Beauty
“Deceptively difficult. I say this because it seems like it’s a business with low start-up costs but you start to realize you need more things. It’s easy to start working but in order to build a brand and set a standard level of services you need to inject more cash initially.”
Lacy Iverson from Lavish Hair Designs
“The upfront costs in product, inventory, salon equipment and supplies, marketing, the right software to run your business; are just some examples of what makes any hairstylist cringe when thinking about starting their own salon business. As a single woman on a single income at the time of starting her own salon business, it was very difficult, and oftentimes I wondered if the long days and weekends and endless social media posts to attract business, would even be worth it.”
So what’s the total cost of opening a hair salon?
The cost of opening a hair salon can vary depending on the size, location, number of employees, etc.
However, we’ve calculated that the average cost of opening a hair salon is $14.000. The lowest cost hairstylists reported in our survey has been $3.000 and the highest one $75.000.
The idea of owning a hair salon may seem glamorous, but the truth is that it can be difficult and expensive. You need to worry about things like rent, utilities, inventory costs, advertising costs, health insurance for your employees, and more.
And those are just the major expenses; there are other hidden costs too. To help you understand what running a hair salon really entails before you get started on this business venture, we’ve put together this list of real costs of running a hair salon.
Surprisingly, when asked which step was the most expensive in opening their hair business, rent was not at the top of the list. Most hairstylists considered that renovation, supplies, and equipment are the biggest expense.
How much do hair salon owners spend on rent every month?
If you want to open a physical location and don’t already have the real estate, or if you’re not a mobile hairstylist, you’ll probably have to rent a place. Rent usually costs between $10/sqft to $25/sqft, depending on the location. Besides the monthly fee, you’ll also have to pay upfront a security deposit.
2. Utility bills
What is the average monthly electricity bill for a hair salon?
The average monthly electricity bill for hair salons is $150. Some stylists pay as low as $30 per month, and some stylists pay over $300 every month.
Less than 1% of the hairstylists who participated in our study use solar or green energy and have $0 cost with their electrical bill. You can consider solar panels to trim down your electrical bill every month and help the environment, but it’s also worth mentioning that it will cost you more upfront, just like any other investment.
Another good way to reduce costs is by using less electricity or natural light during the day and relying more heavily on artificial lighting at night.
What is the average monthly water bill for a hair salon?
40% of our study participants said that their water bill is included in their rent. Salon owners who pay the water bills themselves said that the average water bill for their hair salons is around $75. Distributed quite equally across salons, depending on location and salon size, the cheapest water bills are around $30 and the most expensive ones around $150.
3. Equipment, tools & accessories
How much does hair salon equipment & tools cost?
Equipment for hair salons is expensive. You’ll need hairdryers and hood dryers, coloring and styling stations with chairs, scissors, and many other tools. The average cost for equipment and tools is $5000, and the salon furniture usually costs between $4000 and $5000.
You can also opt to buy second-hand equipment, which is cheaper. Some of our users mentioned that they had bought second-hand equipment for their salon for around $2000. An excellent price, right? Well, there’s also a bit of a risk involved. It depends if your second-hand equipment comes with or without a warranty. In case of the latter, you’ll have to set some money aside just in case you need to repair or replace your equipment.
4. Professional products
How much do hair salons spend on professional products per month?
Professional products such as shampoo and conditioner are also hair salon monthly expenses. They usually range between $100 and $600 per month, but most people spend on average $300 per month on professional products.
How much is the average hairstylist salary in the United States?
And don’t forget about salaries! If you’re not paying yourself anything, then that’s another expense on top of all the others. You should also factor in any salaries for staff members. The average hairstylist salary in the United States is between $25,000 and $50,000 per year.
6. Salon software
How much does salon software cost?
Good salon software can save you time and money. It’s going to help you schedule appointments but also reduce your no-shows. Hair salons usually lose around 20% of their appointments due to clients forgetting about them. A salon software sends automated messages to remind your clients about their appointments and cuts the no-show rate to nearly 0%.
We’d recommend using the Appointfix app as your salon software. It’s great because it has a free plan that’s perfect for hairstylists who are just starting out and don’t have many clients. Later, if you feel you can afford it, you can upgrade to a premium plan. You can download the Appointfix app and use it for free from the App Store or Google Play.
Insurance is important. You’ll want to protect yourself and your business, so make sure you get a decent insurance plan for your hair salon. Depending on your location, salon size, equipment, number of employees, and other factors, insurance usually costs between $100 to $1000 per month.
8. Advertising and marketing materials
Depending on how much you’ll want to invest in marketing from the beginning, you should at least consider getting a website, an outdoor sign for your hair salon, and some good-looking business cards. If you can afford it, it’s a great idea to invest in Instagram and Facebook ads to attract new customers.
If you’re on a very tight budget, you can create your own website for free on Wix. They have plenty of editable hair salon templates, and they’re very easy to use. You can also print your own marketing materials or cut back on the design fees by using our free and printable hair salon loyalty card templates.
If you’re planning to sell products, you’ll probably have to stock up your inventory unless you manage to make a deal to pay after you sell those products.
10. Repair and maintenance
It’s not a bad idea to set money aside in case you’ll need to have something repaired or serviced, especially if your equipment is not new or under warranty.
11. Certifications & salon licenses
All stylists need a license issued by the state in which their salon is located in order to perform their services. Depending on where your salon is based, you might also need a salon license to run your salon legally. These can be quite costly in some states.
What percentage of the monthly income of a hair salon is net profit?
The answers were wildly different. The percent of the net profit that a hair salon owner gets from the monthly income ranges from 10% to 95% based on their expenses and locations—very different percentages. We need to keep in mind that the monthly income from hair salons can vary greatly.
We calculated that around 45% is the net profit percentage from a hair salon’s monthly income.
How much does a hair salon owner spend on average on total monthly fees?
Again, it depends on the salon’s location and size, but our study shows that hair salon owners spend on average between $700 and $2000 on their monthly fees.
But what if you can’t afford to open a hair salon right away?
About 30% of our users mentioned that they had to get a loan from a bank to open their own hair salons.
For those who can’t afford to open a salon right away and cannot get a bank loan, this smart tip from Kaye, from Kaye’s Hair might get you closer to your salon dreams. She said she worked on building her clientele while she was employed as a stylist at another salon, and she was doing hair for her personal clients after hours and during weekends. “That made going on my own much easier.” This is really great advice because you can start working on your business without having to invest right away.
Another great hair salon story that caught our interest is the one told by Shelli Spengler. When we asked Shelli how hard was it for her to open her own salon, she replied: “Not so hard; I was gifted the salon from the owners I worked for over 30 years”. These salon owners made an amazing gesture to show their appreciation to a lifetime employee! We all love these happy stories.
Advice on opening a hair salon from one hairstylist to another
- “Shopping in person from local suppliers, maintaining good relationships and bulk buying saved me thousands. I don’t go by books but use my own experience and brain to improve the quality of work and give my clients a unique experience. I don’t stop until am not satisfied with the quality of results. Never relies on staff. Tried every product on my skin and hair. I offered multiple services and work with Appointfix that’s why never needed a staff.” – Sabra Syed from His Grooming
- “My observation is not to over-invest and focus more on quality of services you provide” – Piotr Lampkowski from Tønsberg in Norway
- “I never realized all the extra behind the scenes things and little things needed to start one.” – Michelle S
- “Charge your worth. Don’t discount or do regular sales as clients wait/expect it” – Hayley Louise
Myths about the costs of opening or running a hair salon
Our users shared some of their favorite myths about the costs of opening or running a salon. Funny enough, there have been hairstylists who said that a common myth is that it’s easy to open a hair salon, while at the same time, other hairstylists said that the most common myth they’ve heard is that opening a hair salon is hard. We’re guessing it all depends on the individual experiences, but here are some other interesting myths our users shared with us:
- “#1 I don’t need to be “mathy” or create a business plan, I’m an artist, my talent is enough.”
- “You make more money owning a hair salon.”
- “That owners make so much money off of stylists.”
- “The majority of money is spent on rental space.”
- “Clients are expensive to acquire.”
- “It’s easy money! Definitely a myth!”
- “You can keep costs down if your both rentals pitch in.”
- “Keep everyone happy.” – Shelli Spengler
- “Clients are expensive to acquire.”
- “That you would make loads of money.”
- “Hairdressers are not good with bookwork and money. A myth!” – Melinda Faye Matheson from Hair By Mel
- “Salon booking and receptionist cost a fortune. I previously paid $12p a month for another that didn’t work nearly as well as your app. I have recommended you to many salon friends.” Thank you, Salon LaRoc!
While the journey of opening a hair salon is not always happy or easy, it’s definitely challenging and rewarding. Let us know in the comment section below about your current or past challenges in opening or running a hair salon.