The beauty industry is growing and full of opportunity. The industry continues to thrive with revenues expected to keep increasing at 3.2 percent each year to $58.7 billion by 2019. A recent industry report claims that the U.S hair services industry has around 86,000 businesses around the country. If you are looking for guidance, Beauty Insurance Plus shares these steps to get your new business started.
1. Craft a business plan
Most people plan ahead —at least if they hope to reach their goals. Your business plan is your map. Without it, you can become lost and lose sight of your goal. This plan should look ahead at least three to five years and should guide you along with a strategy that grows your revenue.
Sections of a business plan:
- Executive Summary
- Company Description
- Market Analysis
- Organization and Management
- Services and Products
- Marketing and Sales Strategy
- Funding Business Operations
- Financial Forecast
Before you start planning your business, you should decide if you are going to start a new business, buy a salon, or buy a franchise. Be sure to visit SBA.gov for new business worksheets and ideas.
2. Use free resources available to small businesses
By doing your own research, you can find and take advantage of the many programs and free resources available for new small business owners. Local community colleges often offer great tools and classes to learn basic business practices, but be prepared to pay for tuition or pay other fees. Your local public library probably has plenty of books about marketing, business startups, and other business related topics. Some libraries also offer free workshops for new business owners.
You may also want to find a business mentor. If you know someone who successfully started a business, ask them if they can help you figure out the process. Visit the U.S. Small Business Administration (SBA) website for more resources and ideas. They have a variety of free online courses in managing your business, marketing, and other aspects of owning a business.
3. Research and identify a great location
Your business stands the best chances of being successful if you choose a smart location. By researching your competition and learning more about the needs of your area, you can plan a great location for your new business. Keep in mind that many factors should influence your decision, such as the demographics of the area, number of competitor businesses, and other considerations. Decide how much square footage you'll need and identify possible locations to rent, buy, or build. You may be able to start with a smaller space and grow later on.
If you decide to rent a space for your business, be sure to read your lease carefully before signing. If you don't understand something in the lease, be sure to ask. If you are buying a new building, ask your real estate agent as many questions as you need to.
4. Obtain equipment
Your business loan, if you have one, may not provide financing for equipment. You may have to be creative and seek out high-quality equipment and decorations for your salon at thrift stores, auctions and sales. Government websites such as GovSales.gov or Bid4Assets.com may offer great deals. Alternatively, you may be able to find great equipment for lease.
5. Consider a partnership and find financing for your new business
Partnerships can provide you with a great business mentor while also helping you finance your business, so don't be afraid to consider forming a partnership. Evaluate potential partners carefully and make sure you are in agreement about the business and how responsibilities will be divided. It is ok if you and your partners do things a bit differently, because different personalities and approaches can help strengthen your business.
Usually, banks expect partnerships to have a contract, but writing a contract is a good idea even if you don't obtain a bank loan. A good contract protects everyone involved. You should obtain the correct professional advice in writing your contract and have an attorney review it.
At the bank, you and your partners can figure out financing and loan options. You should have savings to cover at least six months of business expenses. If you don't, you may be able to obtain loans to cover your beginning expenditures.
6. Complete legal requirements
Choose a business structure—sole proprietorship, partnership, limited liability corporation (LLC), or corporation—then register your business name with your state. Obtain a tax ID number from the IRS and your state's revenue agency. Register with your state for worker's compensation coverage, unemployment insurance, and disability insurance. Obtain and review a list of the federal, state, and local licenses and permits you'll need.
7. Recruit and hire professionals
Network with local beauty schools and professional groups because it will help you recruit your first employees and stay in-touch with sources of talented applicants. Find out about local, state and federal requirements for hiring employees and be sure to follow these laws carefully. SBA.gov offers detailed information about hiring and provides great tips for managing employees.
8. Market your new business and celebrate your grand opening
After you hire your new employees, give them business cards to hand out to their family and friends. This will build publicity and help bring in your first clients.
You can either invite only friends and family to the grand opening, or you can plan a bigger event and open your new salon to the community. If you decide to host a larger event, you could publicize a discount or special deal to bring in clients.
Advertise your event through newspapers, social media and via word-of-mouth. You may also want to write a press release and let your local chamber of commerce know about your event. A few simple decorations such as balloons, sandwich board signage and banners can attract passerby on opening day. Offer refreshments and keep it fun and lighthearted. Don't forget to enjoy the big day—you've worked hard, and you earned it!
[Image: Getty Images]