HOW TO OPEN AND RUN A SUCCESSFUL SALON BUSINESS IN INDIA

Has opening your very own salon in a bustling city been a dream of yours? If yes, then what are you waiting for? We are here to help you out in every step of the way and help make the process much easier for you. So, sit back, and enjoy the start of a tough yet exciting new chapter of your life.

#1 MARKET RESEARCH:

– Location:

This factor plays a big role in the success of your business. You want a location that is situated in a marketplace or an area that has heavy footfall. Even in such places, it is important that you are clearly visible and stand out from the rest of the businesses. Make sure that your target audience forms the majority of the public that visits this marketplace. A hygienic and clean area is always preferred as it will have an influence on the reputation of the establishment. A few good websites to look for the ideal location for your salon can be:

99acres- link 

Magicbricks- link

– Target market:

Deciding on the target market is important to consider before opening the salon. You can choose if you want to cater to a higher income level group or to the masses with lower price points. Salons like Javed Habib, Toni & Guy, etc provide more luxury services and charge much higher prices as compared to the local salons.

#2 How to get funds?

Funding is very important. Without this, your salon will remain a dream. Fortunately, there are plenty of ways in which people can raise funds for their salons. The 3 major sources for acquiring funds for your project can be:

– Savings:

This is by far the best way to start your own business. You not only don’t have to pay any interest for this fund but you also have complete creative control over spending this money. It has the minimum risk involved.

– Loan:

This is the next option available to you. However, it is often difficult to obtain these loans as it is a lengthy process that requires a lot of documents and is not always approved. Moreover, the interest payments and repaying the loan can cause some stress.

– Loans from friends and family:

This is a good option for people who do not have savings of their own. It provides much more flexibility than bank loans as they are easier to get and the burden of interest payments is either not there at all or are much lower compared to banks.

But the real question is, how much do you need? 

It is estimated that a moderately sized salon can cost anywhere from 30-50 lakh depending upon the type of services and products you plan to provide and the rent and electricity bills. This cost can be bifurcated as :

  • 10 to 15 lakh in advance, rent and security payments along with electricity.
  • 20 lakh for the equipment and furniture as fixed cost.
  • 5 to 7 lakh to renovate and make changes to the interiors

All these details can change according to the location and the size of the salon. This is an estimate and you should make calculations according to your circumstance.

#3 LICENCES:

Once you have decided all the small details for where and how your business will run, it’s time to start registering your salon. The major registrations and licenses needed along with the documents required are listed below:

– GST registration:

This is a process by which you register your salon under GST. after doing this, you receive a unique pin for your business that is used while paying taxes. The documents you will require for this are as follows:

Proof of Constitution of Business (Any One)Certificate of Incorporation
Passport size photo of the applicantPassport size photo of Promoter/Partner
Photo of the Authorized SignatoryPhoto
Proof of Appointment of Authorised Signatory (Any One)Letter of Authorisation/ Copy of Resolution passed by BoD/ Managing Committee and Acceptance letter
Proof of Principal Place of business (Any One)Electricity Bill/ Legal ownership document/ Municipal Khata Copy/ Property Tax Receipt
Proof of Details of Bank Accounts (Any One)The first page of Pass Book/ Bank Statement/ Cancelled Cheque
Online portal for GST registration is: link

– Ownership registration

LLP, Private Limited Company, Partnership, etc.

– MSME registration:

This is required by every company to have if they wish to be a legal company operating in India (also, if you want to avail yourself of the benefits of the Startup India Scheme)

– Shops and establishment license:

Required by all commercial shops

– PAN registration:

As your salon is now a separate legal entity

– Trade License from the Municipal corporation:

This license permits a company to work and carry out its business in a particular area.

– Professional tax license:

Document required to pay tax on behalf of your employees.

– Trademark registration:

To ensure that the brand name is protected and cannot be used by anyone else. This one is not mandatory but is highly advisable. Other licenses such as fire safety certificates, music licenses, etc.

#4 EQUIPMENT AND PRODUCTS:

Now it’s time to start stocking your salon with equipment, furniture, and products. For this, you first need to write up the services you will be providing. There are many avenues and specializations that you can choose from depending on your expertise. Hair salons don’t just provide haircuts but a plethora of other services that need their own equipment. A few must things that are common for all salons are:

  • hairdryers , combs, scissors 
  • Chairs, mirrors, shampoo stations
  • Waxing kits, threading kits
  • Specialized facial equipment
  • Branded products  like shampoos, hairspray

#5 EMPLOYING STAFF AND VENDORS:

Once your business is in the setting up the stage and you have all the legal documents required, you can start hiring staff. The main things to focus on while doing so are:

– Quantity:

According to the size of your salon, you can hire anywhere from 4 to 6 stylists along with a receptionist and 2 more employees as cleaning staff. Another staff like an accountant and administrative head is optional as you could decide to do these yourself as well.

– Quality:

This goes without saying that you should make sure that you know the stylists you hire and are confident in their skills and are professionally trained. Depending on the services you provide, you should have at least 2 employees that know how to operate the equipment for that service.

– Training:

You should also make sure that you train your staff from time to time and keep them in the loop about which style is trending. You need to hire stylists that are capable of leaning on the go and have dynamic styles.

When it comes to vendors, you have to be very careful. You should ideally keep the following things in mind before hiring a vendor:

– Compare:

Make sure you compare at least 3 vendors in the prices they are offering for the products and choose the one that seems most appropriate. It’s not always a good idea to go for the cheapest vendor unless you are sure about their services.

– Stock:

Make sure that you stay stocked for the next week. This will ensure that even if there is a breakdown in the supply chain, you have a week’s time to arrange an alternate supplier.

– Trade Identification Number:

Before signing a contract with the vendor, make sure you check their trade identification number. This will verify their business and will protect you from any fraud.

#6 MARKETING AND GROWTH STRATEGIES:

In the initial stages, you will have to spread the word about your salon to potential customers. Once established, you will have to move on to undertaking strategies to grow the reach and attract more customers and retain the existing customers. To do this, you can undertake a bunch of techniques, some more traditional while the others are more recent techniques. Examples of traditional methods can be:

– Pamphlets:

printing and distributing pamphlets with details about your salon like the prices, services offered, and location along with any offers you wish to advertise to entice customers.

– Billboards:

This is an expensive option however, it has its benefits. Placing an ad in a well-placed and crowded area can significantly increase the reach of your salon.

– Opening ceremony:

Conducting and advertising for an opening ceremony will inform customers in your area of the new salon and will also intrigue them to try out the services. You can also advertise special offers along with the opening ceremony to get more customers interested.

Some more modern techniques that businesses are using to promote their services and products are listed below:

– Google My Business Listing:

make sure that your business is listed on google. This will maximize your reach to any potential customers that search for a salon in your area. Having a good rating along with good reviews from real customers will only increase your validity. Make sure all the information on it is up to date and is accompanied by pictures of your salon. This will encourage customers to choose your salon over the rest.

– Discount offers and gift cards:

These are some of the easiest techniques you can use to attract customers to your salon. Discounts on particular services that are not heavily availed in your salon will incentivize customers to try a new service and potentially become repeat users of this service. Gift cards also allow you to get advance payments for services and also act as a creative gift that customers might want to gift and increase your customer base in the process.

– SMS targeting:

Sending regular messages to your client list informing them about any offers you might be running or updating them about any new services you may be providing can help increase your engagement with your customers.

– Combo packs and student discounts:

If you are a salon wanting to target the younger crowd, it is definitely a good idea to run student discounts as this will make them go out of their way to choose you for all their salon needs and it’s no surprise that this group forms the heaviest salon user group.

– Social media marketing:

 It’s no secret that social media has taken over everything and people look for everything online. So why should your salon be an exception? Make pages on sites like Instagram and Facebook where you can advertise your services and post pictures on a regular basis of the work that happens in your business. This is an amazing technique to attract new customers and interact with your potential customers.

#7 SERVICES:

When deciding your list of services, it’s important to keep in mind who your target audience is and also the skill set of your employees. Some of the most popular services that every salon provides include:

  • Haircut, hair color and styling
  • Waxing and threading 
  • Hair wash and hair spa
  • Hair and nail extensions
  • Facials and massages 
  • Bridal packages

There are many options within these services as well like, there are many types of facials and hair treatments. Depending on your specialization, you can add services.

#8 FAQ

Q. Is starting a salon chain in India profitable?

Ans: With the increase in the spending habits of Indians and the growing emphasis on beauty trends because of social media, there hasn’t been a better time to start your own salon business. Doing it right and choosing the correct marketing strategies can make your business venture extremely profitable.

Q. How much will it cost to start a hair salon?

Ans: It largely depends on the area it is located in and the size of your salon. On average, combining the prices of rent, electricity, water, appliances, furniture, and other essentials, it can cost anywhere from 30 to 50 lakh to set up a good salon in India.

Q. How do I set up a beauty salon with minimum cost?

Ans: To avoid any extra losses or interest payments, the best way to start a salon business is by investing your own money in the project as this will not dilute your ownership, unlike angel investing, and nor will you have to pay high interest on bank loans.

Q. How can I start a salon business?

Ans: A solid plan about what your salon will offer and who it will target is the first step. Followed by acquiring property, and registering for the needed licenses. Once all this is done, you can move on to setting up your salon and employing staff. It seems like a lot in the beginning but by taking it a step at a time, you will be set up in no time.

If you are planning to open a salon in Delhi but don’t know how and where to start, this blog would have given you an idea of the things you will need but if you are still unsure and want a mentor to guide you through this complicated process, comment below and ask any questions you may have.  

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