Business ideas
8 min read

How to Start a Profitable Hair Business [11 Steps]

Learn the 11 essential steps to start a profitable hair business with our comprehensive guide. From market research to branding and marketing, we'll show you how to turn your passion for hair into a successful business venture. Start your journey to success today!
Nick

By Nick Cotter
Updated Feb 02, 2024

image of a hair business
This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
What are you waiting for?
Quit that job & start your business with ZenBusiness today.

1. Perform market analysis.

Before launching your hair business, it is crucial to gain a deep understanding of the market. A thorough market analysis will help you identify your target customers, understand your competition, and position your product or service effectively. Here are some key points to consider:

  • Analyze the demographics of your potential customer base, considering factors such as age, gender, income level, and purchasing habits to tailor your marketing and product offerings.
  • Research current trends in the hair industry, including popular styles, treatments, and products, to ensure your business stays relevant and competitive.
  • Identify your main competitors, evaluate their strengths and weaknesses, and learn from their strategies to differentiate your brand and offer unique value propositions.
  • Assess the pricing strategies within the market to determine a competitive yet profitable price point for your products or services.
  • Understand the legal and regulatory environment of the hair industry, ensuring that your business complies with all relevant laws and standards.
  • Consider the impact of technology and online retail on the hair industry and adapt your business model to leverage e-commerce platforms and social media marketing.
image of a hair business

Are hair businesses profitable?

Hair businesses can be highly profitable if managed properly. Many hair businesses have strong customer loyalty, and repeat business helps to keep overhead costs down and profit margins high. Additionally, hair businesses often offer additional services such as styling, coloring and products that add to their revenue potential.

Business Plan Partners
LivePlan logo
LivePlan
Simplify Business Planning with LivePlan - Plan, Track, and Grow Your Business Effortlessly. Save up to 40% today!
Newfoundrz Rating ★★★★★

2. Draft a hair business plan.

Creating a comprehensive business plan is a crucial step when starting your hair business. This document will serve as your roadmap, setting the foundation for your venture's success. Below are key elements to include in your hair business plan:

  • Executive Summary: Briefly describe your business, the products or services you will offer, your target market, and your goals.
  • Market Analysis: Research the hair industry, identify your target demographic, and analyze your competitors to find a niche or competitive edge.
  • Organization and Management: Outline your business structure, detail the management team, and describe your staffing needs.
  • Services and Products: Provide a detailed list of hair services and products that you plan to offer, including any unique selling propositions.
  • Marketing and Sales Strategy: Explain how you plan to attract and retain customers, your pricing strategy, and your sales process.
  • Funding Request: If applicable, specify the amount of funding needed to start or expand your business, and how the funds will be used.
  • Financial Projections: Offer an overview of projected revenues, expenses, and profitability over the next 3-5 years to illustrate financial viability.

How does a hair business make money?

A hair business can make money by providing services to its customers, such as haircuts, styling, and coloring. They can also sell products related to hair care and styling. To target a specific audience, the business might specifically advertise to women with shoulder-length or longer hair. Additionally, they could target those who are looking to get a formal updo for a special occasion, such as a wedding or prom. Finally, they can create promotional offers to entice new customers who are looking for a good deal.

3. Develop a hair brand.

Developing a hair brand is a pivotal step in starting a hair business as it sets the tone for your company's identity, values, and the products you offer. Your brand is how customers will recognize and remember you, so it's essential to create a strong and cohesive image. Follow these guidelines to build a brand that resonates with your target audience:

  • Define Your Brand Identity: Determine your brand's personality, values, and unique selling proposition. Consider what makes your hair products or services stand out from the competition.
  • Choose a Memorable Name and Logo: Your brand name and logo are the first things people will notice. Ensure they are distinctive, easy to remember, and reflect the essence of your brand.
  • Select a Color Scheme and Typography: Visual elements, like color and font, play a critical role in branding. Select a color palette and typography that align with your brand's personality and appeal to your target market.
  • Develop a Brand Voice: Your brand voice is how you communicate with your audience. Whether it's professional, friendly, or quirky, make sure it's consistent across all marketing materials and platforms.
  • Create a Brand Story: Share the story behind your brand. Stories are memorable and can create emotional connections with customers, encouraging loyalty and word-of-mouth referrals.

How to come up with a name for your hair business?

The process of coming up with a name for a hair business can be quite difficult. Start by understanding what makes your hair business unique and figure out the best approach to capture that in the name. Brainstorm ideas that reflect your brand’s identity, values, and messages. After you have several ideas written down, ask people you trust for their opinion on which ones they like best. Finally, search to make sure no one else is using the name before you make it official. Taking these steps will help you to come up with the perfect name for your hair business.

Featured Business Formation Partners
image of ZenBusiness logo
ZenBusiness
Turn your business vision into reality with ZenBusiness's streamlined LLC formation and expert support services.
Newfoundrz Rating ★★★★★
image of Northwest Registered Agent logo
Northwest Registered Agent
Secure your business's future with Northwest Registered Agent's personalized LLC formation and privacy-focused expertise.
Newfoundrz Rating ★★★★★
image of Bizee logo
Bizee
Kickstart your business effortlessly with Bizee's comprehensive LLC services and free first-year registered agent support.
Newfoundrz Rating ★★★★★

4. Formalize your business registration.

Once you've laid the groundwork for your hair business, formalizing your business registration is a critical step to legitimize your operations and protect your brand. Registering your business is a process that varies depending on your location, but generally involves a few common steps. Here’s what you need to do:

  • Choose a Business Structure: Decide whether your hair business will be a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has different legal and tax implications.
  • Register Your Business Name: Check for the availability of your chosen name and register it with the appropriate state agency. If you plan to operate under a different name than your legal name, file a 'Doing Business As' (DBA) registration.
  • Obtain Necessary Licenses and Permits: Depending on your location and the nature of your hair business, you may need specific licenses, such as a cosmetology license or a general business license. Check with your local and state governments for requirements.
  • Apply for an EIN: If you have employees or operate as a corporation or partnership, you'll need an Employer Identification Number (EIN) from the IRS for tax purposes.
  • Register for State Taxes: If applicable, register with your state tax department to handle sales tax, payroll tax, and any other state taxes.
  • File Necessary Documents: Submit any required formation documents, such as Articles of Incorporation or Organization, to the relevant state authorities.

Resources to help get you started:

Explore valuable resources specifically curated for hair bonnet entrepreneurs aiming to understand market trends, optimize operations, and accelerate business growth:

  • Beauty Business Journals: Publications that offer insights on the latest trends, consumer behavior, and innovation within the hair care and beauty industry. These journals often have special segments on accessories like hair bonnets.
  • Industry Reports: Comprehensive market analysis reports from research firms such as IBISWorld or Mintel, providing detailed data on market size, consumer demographics, and competitive landscape for the hair bonnet sector.
  • Online Retailer Blogs: Blogs from platforms such as Shopify or Etsy, offering tips on running an e-commerce business, marketing strategies, and case studies of successful hair accessory businesses.
  • Fashion and Beauty Trade Shows: Events where entrepreneurs can network with suppliers, discover new materials, and gain insights from industry leaders. Specific sections or booths are dedicated to hair accessories and care products.
  • Email Newsletters: Regular updates from beauty and fashion industry influencers or trade groups that provide news, marketing tips, and business strategies relevant to the hair bonnet market.
  • Social Media Analysis Tools: Services like BuzzSumo or Hootsuite that help entrepreneurs track trending topics, consumer preferences, and competitor performance within the hair bonnet niche on social platforms.

5. Acquire necessary licenses and permits for hair.

Starting a hair business requires not only a flair for styling but also a strict adherence to local regulations. Before you open your doors, make sure you have all the necessary licenses and permits to operate legally and safely. Here's what you need to consider:

  • Check Local Business Licenses: Contact your city or county's business licensing office to find out the specific licenses required to operate a hair business in your area.
  • Professional Cosmetology License: Most areas require hair stylists to have a valid cosmetology or barber license. This typically involves completing a certain number of hours of training at a recognized school and passing a state board exam.
  • Salon License: If you are opening a salon, there may be a separate salon license that you need to acquire, which ensures your establishment meets health and safety regulations.
  • Building Permits: If you're renovating a space for your hair business, ensure you have the necessary building permits for construction and signage.
  • Health and Safety Permits: Since salons deal with chemicals and tools that can be hazardous, a health and safety inspection may be required to get a permit from the local health department.
  • Specialty Services Permit: If you're offering services like hair coloring or chemical treatments, additional permits may be required for those specific services.

What licenses and permits are needed to run a hair business?

Depending on where you are located and what services you plan to offer in your hair business, you may need any combination of permits, licenses, and certification. Some common requirements for running a hair business include a business license, cosmetology/manicurist license from your state's board of cosmetology, and additional permits issued by your local municipality. Depending on your location, you may also need to obtain an environmental health permit from your county health department.

6. Open a business bank account and secure funding as needed.

Starting a hair business requires careful financial management, which is why opening a business bank account and securing the necessary funding are essential steps. A separate account will help you keep personal and business finances distinct, while funding will fuel your growth. Follow these guidelines to get started:

  • Research banks that offer business banking services and compare their fees, services, and customer support. Choose one that best fits your business needs.
  • Prepare the necessary documents to open a business bank account, such as your business license, EIN (Employer Identification Number), and ownership agreements.
  • Consider applying for a business credit card to build credit history for your hair business and to keep track of expenses more efficiently.
  • Explore various funding options, including business loans, lines of credit, or investors, if your initial capital isn't enough to cover startup costs.
  • Look into special grants or funding opportunities for small businesses, particularly for those owned by women, minorities, or veterans, if applicable.
  • Create a solid business plan to present to potential lenders or investors, showcasing your market analysis, projected financials, and growth strategy.

7. Set pricing for hair services.

Setting the right pricing for your hair services is crucial to the success of your business. It requires a balance between being competitive in the market and ensuring profitability. Consider the following points to help guide you in establishing your pricing structure:

  • Research local competitors to understand the going rates for similar services, ensuring your prices are neither too high nor too low.
  • Calculate your costs, including rent, supplies, labor, and utilities, to determine the minimum price you need to charge to cover expenses and make a profit.
  • Consider the level of experience and expertise you or your stylists bring to the table, as higher skill levels can command higher prices.
  • Be transparent with your pricing by displaying it clearly in your salon and on your website to build trust with clients.
  • Offer tiered pricing for different levels of stylists, if applicable, to cater to a wider range of customers.
  • Introduce special promotions or discounts for new clients or off-peak times to attract business without undervaluing your services.
  • Regularly review and adjust your prices as necessary to reflect changes in the market, cost of supplies, and the growing expertise of your stylists.

What does it cost to start a hair business?

Initiating a hair business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $12500 for launching such a hairbusiness. Please note, not all of these costs may be necessary to start up your hair business.

8. Acquire hair equipment and supplies.

Starting a hair business requires not just skill and creativity, but also the right tools and supplies. From basic combs and scissors to specialized styling tools, having the right equipment is essential for providing top-notch services to your clients. Below is a list of essential items you should acquire:

  • Basic Tools: Scissors, combs, brushes, and hair clips.
  • Electrical Appliances: Hair dryers, straighteners, curling irons, and clippers.
  • Hair Care Products: Shampoo, conditioner, hair spray, gels, and serums.
  • Coloring Supplies: Hair dye, bleach, gloves, and application brushes.
  • Sanitation Supplies: Barbicide, disinfectant spray, towels, and aprons.
  • Personal Protective Equipment (PPE): Gloves, masks, and protective eyewear for safety.
  • Salon Furniture: Styling chairs, shampoo bowls, and hairdressing trolleys.
  • Salon Accessories: Mirrors, hairdressing capes, and appointment books or software.

List of software, tools and supplies needed to start a hair business:

<ul><li>Styling chairs (approximately $200-$500 each)</li><li>Towels and cloths (approximately $50-$100) </li><li>Hair cutting scissors (approximately $30-$60) </li><li>Hairstyling tools (approximately $15 each) </li><li>High-end products (approximately $10-$50) </li><li>Hair color products (approximately $20-$150 depending on brand) </li><li>A computer (approxiamtely $400 - $1,000) </li><li>"Point of Sale" software and salon management software (from around $0 to around $600 depending on the provider and features) <,uL <,uL Hair dryers and straighteners, curlers, brushes and combs ( approximately 5-25 each depending on the brand and type of product) <,uL Washing basins ($100 - $200 each)

9. Obtain business insurance for hair, if required.

Securing the right business insurance is crucial for protecting your hair business against unforeseen events and liabilities. It provides a safety net for your investment, your employees, and your clients. Here's a simplified guide to help you obtain the necessary insurance:

  • Research Insurance Requirements: Find out if your state or local government mandates specific insurance for hair businesses. This may include general liability insurance, professional liability insurance, or workers' compensation insurance.
  • Assess Your Risks: Consider the potential risks associated with your hair business, such as property damage, lawsuits from unhappy clients, or employee injuries, to determine the types and levels of coverage you need.
  • Shop Around: Contact multiple insurance providers to compare coverage options and rates. Consider working with an insurance agent who has experience in the beauty industry.
  • Understand Policy Details: Carefully read the terms and conditions of each policy, paying close attention to coverage limits, deductibles, and exclusions.
  • Stay Compliant: Once you've selected a policy, keep your insurance up to date and in compliance with any regulatory changes to ensure continuous coverage.

10. Begin marketing your hair services.

Now that you've perfected your hair services, it's time to attract clients and grow your business. Effective marketing is key to standing out in the hair industry. Here are some strategies to help you begin marketing your hair services:

  • Build a Strong Brand Identity: Create a memorable logo, choose a color scheme, and develop a brand voice that reflects the unique personality of your business. Consistently use these elements across all marketing materials.
  • Develop a Professional Website: Launch a user-friendly website that showcases your services, prices, and portfolio. Include a booking system for client convenience.
  • Leverage Social Media: Utilize platforms like Instagram, Facebook, and Pinterest to showcase your work, share customer testimonials, and engage with your audience. Regularly post before-and-after photos to highlight your skills.
  • Network Locally: Attend local events, join community groups, and partner with other local businesses to gain exposure. Offer your services at community events or charitable functions to build goodwill.
  • Encourage Word-of-Mouth: Ask satisfied customers to refer friends and family. Consider offering a referral discount to incentivize word-of-mouth marketing.
  • Utilize Online Advertising: Invest in targeted ads on social media and search engines to reach potential customers in your area who are searching for hair services.

What licenses and permits are needed to run a hair business?

<ul><li>Styling chairs (approximately $200-$500 each)</li><li>Towels and cloths (approximately $50-$100) </li><li>Hair cutting scissors (approximately $30-$60) </li><li>Hairstyling tools (approximately $15 each) </li><li>High-end products (approximately $10-$50) </li><li>Hair color products (approximately $20-$150 depending on brand) </li><li>A computer (approxiamtely $400 - $1,000) </li><li>"Point of Sale" software and salon management software (from around $0 to around $600 depending on the provider and features) <,uL <,uL Hair dryers and straighteners, curlers, brushes and combs ( approximately 5-25 each depending on the brand and type of product) <,uL Washing basins ($100 - $200 each)

11. Expand your hair business.

Once your hair business has established a solid foundation and loyal customer base, it's time to consider growth and expansion. Expansion can take many forms, from increasing your product line to scaling your operations. Here are a few strategies to help you expand your hair business effectively:

  • Introduce new products or services, such as custom wigs, hair extensions, or specialized treatments that cater to a broader range of customer needs.
  • Invest in marketing to reach a wider audience. This could involve social media advertising, collaborating with influencers, or exploring new marketing channels.
  • Consider e-commerce if you haven't already. Selling your products online can significantly increase your reach and sales potential.
  • Explore partnerships with other businesses or salons, which can provide referral opportunities and expand your network.
  • Open new locations or franchise your business to create multiple revenue streams and increase your brand presence.
  • Offer training or education programs, positioning your business as an expert in the field and creating an additional income source.
  • Regularly seek feedback from customers and adapt your offerings to meet changing trends and preferences in the hair industry.