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Jun, 2017

How to start a beauty salon?

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The beauty industry is vast and growing in the global market. Both men and women want to look and feel better about self and have healthy looking skin, hair & body.

Per Ms. Massooma, Editor, at New Age Salon & Spa magazine and knowledge partner for ‘International Beauty Mart’ (IBM) 2014, India’s cosmetics market is reportedly growing at 15-20 per cent annually, twice as fast as that of the US and European markets. Demand for skin whitening products by men as well as women, is driving the trend but other beauty products are not far behind.

There are many ways to step into the beauty industry as an entrepreneur, one of those ways is starting a beauty parlor. An entrepreneur can start a beauty parlor by three ways:

  1. Start their own beauty salon or a franchise of salon.
  2. Own a franchise of a reputed brand.
  3. Offer on-demand beauty services by using online medium (through an app or a website). It will reduce the cost of infrastructure.

A salon or a parlor can be of many types, the entrepreneur should make the decision on what services they want to offer to its customers beforehand. They can even retail products and sell it to customers but for that salon must have enough storage space to store the products.

A salon also needs certain beauty equipment for the business, it may vary as per business services offered at the salon.

The basic equipment required are:

  1. Salon chairs.
  2. Cash Registers.
  3. Furniture for the salon. (Reception desk, Sofa, etc.)
  4. Stereo sound system.
  5. Proper Ventilation/ air conditioning.
  6. Computer / Laptop (optional).
  7. Trolleys / Tables.
  8. Cabinets / Furniture.
  9. Big Mirrors, Handheld mirrors.
  10. Scissors, several types of combs, Tweezers, bowls, Towels, Sponges, tissues etc.
  11. Salon products. (Skincare & Beauty products)
  12. Hair styling tools.
  13. Facial equipment.
  14. Steamer, Dryer. (professional level)
  15. Wax melting equipment.
  16. Basic household thing- Cleaners, hand soaps, hand sanitizers, broom, dustpan, bottles etc.

Key success factors in the beauty salon business:

  1. Location:

Like for all other retail outlets, the location of the beauty salon plays an important role in the business growth. The entrepreneur must search for a place around a residential area or mall or any place where people visit often or which in the path of usual traffic flow or line of sight. Also, make sure it is not in an area which tend to get jammed by traffic as customers might avoid the salon.

  1. Skilled employees:

The entrepreneur must hire well trained and qualified employees for the salon because if untrained employees perform the cosmetics procedures, it may not only spoil the experience of the customer but in worse cases even cause health problems to the clients. Experience might give a beautician the ability to perform the treatment but without proper training, the employee would be unaware of the merits & demerits of procedures or how it affects different people.

It is the entrepreneur’s responsibility to ensure that your employees are trained and understand each procedure offered.

Having a short but clear salon procedures manual for the employees and the services offered right from the beginning can help manage the business smoothly. It will be a great help in the long-run.

  1. Marketing:

Marketing plays a key role in any business. A salon’s best marketing tool is word of mouth. If a client is happy with the environment of the salon and the services offered, they will come back and refer the salon services to their friends and family. You can also get their number or email address and text them or email them about future offers or new services offered.

The entrepreneur can also print flier and distribute in the nearby areas or give advertisement in newspapers, hoardings, social networks, other dedicated websites like purple.com etc.

  1. Ambience:

A salon must have appealing and attractive ambience / environment. It should be spacious enough so it does not look crowded. It must have a waiting room and light music playing in the background on TV as it will help the customers to relax and enjoy the longer beauty procedures. The salon must be clean and pleasant smelling as customers will likely avoid unhygienic and unattractive salons.

Having a proper restroom for its staff and customers, private rooms for certain procedures like waxing, body massage etc. will give your salon that extra advantage over others in the vicinity who may not have this facility.

Customers expect professional hygienic services from a salon. It is important to store all the products and tools properly and hygienically.

  1. Variety of Services offered:

Offering a wide range of services could give distinct advantage over the salon that only offer two or three services. Many customers prefer getting their nails, face and hair done at one place rather than going to three separate places.

  1. Rate list:

A rate list must be decided and a rate card must be made as it helps in conducting business smoothly. The customers can decide whether which service they want as per their budget. The rates of the products and services must be decided carefully taking in to consideration the prevailing rate vis-à-vis the service levels offered in the market.

The salon can also offer bundle services together and offer then as a complete package such as a bridal package, full body package, gold / silver / platinum packages etc. to get more revenue per transaction. But pricing for such packages must be lesser than the sum of the components services.

  1. Self-Grooming:

Self-grooming of the entrepreneur and the staff plays an important role in the beauty industry. It makes a good impression on the customers and might inspire them to get the certain service done which the staff member and entrepreneur has gotten done.

  1. Prompt service:

Customers prefer salons or online services that provide prompt and efficient services. It’s better to inform the client about the amount of time each service would require so they could set their schedule accordingly.

Also, the entrepreneur must prepare a systematic guide of performing procedures. It will help the employees in following steps and completing the task in the given time.

Compliance / Licenses required to start the beauty salon business:

  1. Gumatsa.
  2. Udyog Aadhar.
  3. GST registration.
  4. Contract with the Franchisor. (in case of franchise)
  5. Professional Certificate, if available.

 Investment required & financing options available:

Required investment would be around INR 5 lakhs approx. to start a beauty parlor.

One can even get finance through various sources like nationalized banks, private banks and financial institutions. You can even contact us at info@udyogcredit.com, if you require help.

A snapshot of the typical formal financing terms and conditions is given below:

  Contribution by Bank Contribution by Entrepreneur
Capital Investment 75% 25%
Working Capital Gap (Raw Materials+Debtors-Creditors) 75% 25%
Tenure of Loan 5-7 years  
Moratorium 6 months to 1 year  
Can be funded by Nationalized banks, Co-Operative Banks etc.
One can also enjoy the Mudra Yojna Scheme & Standup Scheme launched by the Government of India

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