The American beauty industry is booming. From hair to nails, everyone wants to look Instagram-ready. But even without our image-obsessed tendencies caused by social media, appearance matters. It impacts how we’re perceived and our confidence levels.  

This fact is crystal clear in the salon and spa industry. As you know, people are willing to invest thousands a year in salon services. 

On average, women spend close to $1,800 a year on haircuts, styling services, manicures, and pedicures. Even men’s haircuts and other grooming services can total close to $600 a year. 

As a salon owner, the sky’s the limit right now. In 2023, the beauty industry reached a value of $69 billion. Globally, the beauty salon industry is projected to grow 8% year-over-year from 2023 to 2030. 

Opening a new salon location helps you grow your business and take advantage of these upward trends. But it’s also a way to put your name out there and grow your brand. 

If you have a well-known brand that people trust, you can attract an even bigger slice of your local market. That means more customer trust. More revenue. And even more growth potential. 

But how much does it cost to open a salon? Do you have enough capital to get started now? 

This article breaks down the startup costs for a new salon. We also explore tips for cutting costs without sacrificing quality so you can expand and stick to your budget. 

Let’s dive in! 

How Much Does It Cost to Open a Salon? 

It can cost anywhere from $60,000 to $130,000 to open a basic beauty salon. You should also plan for monthly operating costs of $30,000 to $40,000. 

However, it is possible to open a new salon for less. And, if you start from scratch and go for high-end everything—furniture, location, and talent—you can easily spend $500,000 or more. 

The cost varies widely because there are so many factors impacting startup costs. Here are some of the main cost influencers: 

• Whether you buy an existing salon or a space to build out. 
• The type of salon and how many services you’ll offer. 
• Existing assets. Do you already have a professional website? Branding? Business processes? Certified talent? These existing assets will help you save on everything from startup marketing to hiring costs. 

• Salon size and location. Your lease or commercial mortgage will be some of your largest expenses. These costs will be higher the larger the salon and the more desirable the location. 
• Capital investments. Will you splurge on high-end decor and furniture? 

FROM ONE OF OUR PARTNERS: Salon Expansion 

Knowing how much it might cost to open a new salon can help you make smarter decisions as you plan to expand. 

For instance, you can make spending decisions to help you save upfront. By negotiating with suppliers and comparing vendors to find the best deal, you can lower your costs from the beginning. 

You can also plan for profitability. By understanding startup costs, operational costs, and revenue projections, you can determine your break-even point. 

When you figure out how much it costs to open a salon, you know how much financing you need. That allows you to start preparing for a business loan now if you need one. 

You can also decide when to open a new salon. If growth is out of reach right now, that doesn’t mean you have to put your dreams on hold. Instead, you can create a financial plan to put you on track for expansion in the upcoming year. 

RELATED ARTICLE: 6 Tips for Creating Business Goals for Your Salon 

Salon Location Startup Costs to Consider 

So, how much money will you need? 

How much it costs to open a salon in total depends on the sum of all the parts. Rent, staff, legal fees—there’s a lot to add up. 

Let’s dive into all your potential startup costs so you have clarity on what opening a new salon might look like. 

Rent and Location Expenses 

Whether you rent or purchase a retail space, the building itself is your biggest expense outside of labor. 

In the US, the average annual cost per square foot for retail space is about $18 per square foot. Bigger cities are more expensive. In Los Angeles, for instance, commercial space is $44 per square foot a year. 

Let’s take, for example, a 1,500-square-foot salon at $30 per square foot. At this rate, your lease would cost $45,000 per year. That comes out to $3,750 per month. 

Buying a space is more money upfront. However, it allows you to build up equity. And, if you already have a profitable salon, you will have an easier time getting financing for a new commercial space. 

Buying a new salon space outright will cost you around $250,000 or more. 

RELATED ARTICLE: How to Maximize Your Salon’s Productivity Per Square Foot 

Salon Equipment and Initial Inventory 

Once you have a space, you can start building it out. How much will this cost? 

Unless you purchased a space with existing equipment, you’ll need to buy the following: 

• Chairs 
• Salon stations for washing, drying, and styling 
• Stations for manicures and pedicures, if you’re also offering nail services 
• Mirrors 
• Proper salon lighting 
• Front-desk furniture for your administrative staff 
• Furniture for your waiting area 
• Shelves for showcasing hair and other beauty products 
• Decor 

You should budget between $50,000 to $100,000 for your salon equipment and furniture. You will need another $5,000 to $10,000 for supplies. Your stylists or nail technicians will need: 

• Professional haircutting shears. These can cost between $200 and $800. 
• Dryers. You’ll pay around $100 or more per dryer. 
• Styling equipment. This includes combs, brushes, diffusers, curling irons, and straightening irons. 
• Task lights. Good quality nail tech lights can cost between $100 and $400. 
• Manicure tables, if you’re also offering nail services. These range in price from $200 to $500 each. 

Licensing and Permits 

If you already have a salon, you probably have a lawyer. That will help to speed up the process of applying for the right permits. You can also ask your lawyer how much it will cost to open a new salon in your preferred location. 

As a rule of thumb, salon owners should budget around $2,500 a year for legal expenses. 

Salon Insurance 

Business insurance protects you and your salon against lawsuits for unsatisfied customers, accidental damage, and accidental injury. You can also purchase insurance for business income if you want extra peace of mind. 

Hair salon insurance costs range from $67 to $85 a month on average. The price depends on your location, the number of employees, and the policy details. 

Staffing and Hiring 

Hiring new employees is expensive. You need to pay for job postings. There are also background check fees. And then there are onboarding and training costs. 

On the low end, expect to pay $2,000 to $4,000 per new hire. 

And that doesn’t include your salon staff’s salaries. 

Here are the average salaries for salon employees in the US: 

• Hairstylist: $46,180 
• Cosmetologist: $38,140 
• Salon manager: $42,116 

Marketing and Advertising 

Marketing costs are variable. But, like most business investments, the more you put in, the more potential for growth. 

In 2023, businesses spent 13.6% of their total budget on marketing. As a small business owner, you might spend closer to 7% to 10% of your budget. 

To drive interest in your new location, consider increasing your marketing spend temporarily. All the following marketing efforts can help create a more successful grand opening for your new salon. 

• Social media posts 
• Email marketing 
• Online ads 

Salon Software 

Salon software is your main control center. An all-in-one system will let you run your entire business from one platform. It’s where you and your team handle: 

• Scheduling and appointment reminders 
• Point of sale 
• Inventory management 
• Marketing 
• Customer communications 
• Reporting 

Also, consider any hardware that you’ll need to accept payments and run your software at your salon. 

Your technology is an important asset for running a successful salon. The good news is it’s also a cost that offers excellent value per dollar spent. 

With a cloud-based solution focused on salons and spas, you get a feature-rich system that streamlines your processes and scales with you. You can purchase a basic plan now. Then, as your salon business — and needs — grow, you can scale your plan without having to switch to a new system. 

The best salon software providers also have features built specifically for multi-location salon owners. 

RELATED ARTICLE: Learn How to Manage a Hair Salon Business with SalonBiz 

Cutting Costs Without Cutting Corners 

Don’t have a quarter to half a million ready to invest in a new salon business? 

You can still launch your growth plan! All you need are a few budget-savvy tips to help save money without skimping on the quality of your services. 

Here are seven ways to cut your salon startup costs: 

1. Shop Around for Salon Insurance 

Compare plans. Request quotes. And make sure you get the protection you need without overpaying. 

2. Ask Suppliers for Deals 

Offer to make bulk purchases or commit to future purchases for lower prices. Negotiating lower prices on salon supplies can save you hundreds in startup costs. 

3. Develop a Training Program 

Set up your staff for success from day one with a great salon training program. Create training materials for customer service, salon best practices, and safety.  

You can also consider asking some of your stellar talent from your existing salon to mentor employees for your new salon. 

4. Use Free and Low-Cost Marketing Channels 

Start promoting your new salon with budget-friendly marketing channels. 

Set up a Google Business Profile when you’re ready to open. Using Google is free. 

You can also set up an account on Yelp. That will help local customers find your new location. Add high-quality images and relevant details about your salon services. 

Build momentum on your social media pages, too. Share images featuring the new salon decor. Highlight new stylists and manicurists. Create a countdown for opening day so people get excited. 

If you have an email list, you can also use email marketing to tell your existing subscribers about your new location. 

5. Simplify Your Tech Stack 

Instead of buying separate software for booking, inventory, and marketing, invest in a comprehensive system. This will save money. It will also simplify processes and security because all your data is in one place. 

6. Improve Your Credit for Better Financing 

Will you need a business loan to cover the costs of opening a new salon? A lower rate can save you hundreds on your monthly loan payment.  

Start building your business credit now. Make sure you’re paying suppliers and creditors on time. Also, maintain a low credit utilization ratio. 

7. Consider a Long-Term Lease 

If you’re renting, see if you can negotiate a lower rent with a long-term lease. Opt for a three or five-year lease in exchange for a lower price. 

FROM ONE OF OUR PARTNERS: 15 Common Small Business Fees and Startup Costs You Need to Know 

How You Can Start Planning for a New Salon Location Right Now 

Excited about growing your beauty salon empire? Get the ball rolling today with these tips: 

• Estimate your salon costs. Now that you know what costs to consider, make a list of your expected costs. 
• Determine your budget. Costs are one thing. What you can afford might be another. Look at your current business finances to determine what you can afford. Factor in your savings and any financing sources, such as a business loan. 
• Scout out locations. Look at the neighborhoods you’re considering opening a new salon in. See if there are properties on the market that might be a good fit for your new business. 
• Start demoing software. Is your current salon software fit for scaling to your new location? If not, pick three systems that would be a good fit for your needs and request a demo to try out each one.