What It Costs to Open a Hair or Beauty Salon

Choose a model first

Your model drives cost: a solo suite, a chair-rental salon, or a full-service salon with employees.

A suite rental needs little build-out and low overhead. A chair-rental salon earns rent from independent stylists. A full-service salon adds payroll, inventory and more upfront cost. Pick the model that matches your skills and cash.

One-time costs

Expect build-out, plumbing, stations, chairs, shampoo bowls, color and styling tools, signage and licenses.

• Lease deposit and build-out, including plumbing and ventilation
• Styling chairs, shampoo stations, dryers, mirrors, reception furniture
• Tools and starting product inventory
• Booking and point-of-sale system
• Cosmetology licenses, business license, insurance
• Branding, website, signage

Rules vary by state, so check your state cosmetology board.

Monthly costs and break-even

Rent, payroll or commissions, products, utilities, insurance and card fees recur. Know how many appointments cover them.

This is an illustrative example. If fixed costs are $9,000 a month and the average service ticket is $90 with 40% going to product and commission, you need roughly 170 appointments a month to break even. Work this out for your own numbers before signing a lease. See the break-even point formula.

Keep a cash cushion

New salons often take months to build a client base. Hold several months of fixed costs in reserve.

Retention drives profit. Rebooking, referrals and membership packages smooth revenue. Track income weekly with a daily cash report. For help with cost planning, read the startup costs guide.

Pricing services and setting commissions

Price from your costs and market, then decide whether stylists are employees, commission-based or booth renters.

Look at nearby salons, your skill level and your neighborhood. Include product cost and time for each service. Commission models align pay with revenue, while booth rent gives predictable income but less control. Each model has tax and legal differences, so ask an accountant before you decide.

Inventory, retail and client retention

Retail products add margin but tie up cash. Retention keeps chairs full without extra marketing.

Stock fast-selling items and avoid deep inventory of niche products. Use appointment reminders, rebooking at checkout and loyalty offers. A client who returns every six weeks is worth far more than a new one who visits once. Track rebooking rate along with revenue.

Lease terms and build-out negotiation

Negotiate free rent during build-out, a tenant improvement allowance and a reasonable personal guarantee.

Salons need plumbing and ventilation, which can make build-out expensive. Ask the landlord what is already in place. Seek a few months of reduced rent while you build your client base. Have an attorney review the lease, especially renewal terms and what happens if you leave early.

Insurance, supplies and ongoing compliance

Plan for liability insurance, sanitation standards and record-keeping.

Get quotes for general liability and professional coverage. Follow your state board's sanitation rules and keep records of licenses and inspections. Track product use so you can price services accurately. Small compliance lapses can lead to fines or closure, so build the routine from the start.

Keep a small repair and replacement fund as well. Chairs, dryers and plumbing fixtures wear out under daily use, and a broken shampoo station can stop revenue on a busy day. A modest monthly set-aside avoids a scramble later.

Funding a salon

ROI Funder does not place startup loans for businesses under 6 months. Established salons can use equipment financing or working capital.

Once you have 6+ months in business, $20,000+ monthly revenue and 500+ FICO, equipment financing can add chairs and stations, and working capital can fund a second location or a remodel. Estimate payback first: new chairs pay back only if they fill. Read health and wellness business financing.