How To Open and Run a Salon

Dreaming of owning a salon? Now is a great time to turn this dream into a reality as the Australian beauty industry is booming. Monthly consumer spend data from the National Australia Bank (NAB) showed that Australians spent 2.3% more on personal care and recreation services in October 2025 than the previous month, even as cost of living pressures increase.

But opening a successful salon business is about more than opportunity. It involves the same groundwork as starting any other type of small business: there’s research, business registration, buying and installing equipment, hiring staff and other decisions to be made before you welcome your first customers.

And the competition for customers is fierce. A 2024 study by IBISWorld showed there were over 36,000 hairdressing and beauty services providers in Australia, an increase of 2.3% from 2023.

In the face of so much competition, how do you run a salon business that stands out and is profitable? Below, we’ll cover everything you need to know about opening a beauty salon, including an easy step-by-step checklist, costs to start a salon, how to run a successful salon business and strategies to help you attract and retain customers.

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How much does it cost to open a salon?

Average startup costs to open a salon in Australia range from $8,000 for a basic home business or micro-salon setup, while full-service salons in commercial spaces range from $20,000 to over $100,000. Before you can start generating income, you need to calculate the startup costs for your new salon business.

Costs vary depending on:

• Size of the salon
• Location and lease terms
• Licences and permits
• Business structure (e.g. chair rental versus hiring employees)
• Equipment and fit-out
• Ongoing operational costs
• Marketing and scheduling efficiency

Business startup costs can be divided into fixed and variable costs:

• Fixed costs are non-negotiable monthly costs that don’t change with sales volume, such as insurance, rent or lease costs, utilities and equipment expenses.
• Variable costs change with sales volume and can be reduced to save money. Examples of variable costs are labour, products and tools used by hair stylists, shipping and delivery fees for products and advertising and marketing expenses

Understanding your fixed and variable costs upfront is essential if you want to open and run a profitable salon business in the long term.

After you determine your salon’s expenses on a monthly basis, you should create a revenue forecast for your first year and then determine your break-even point, which is where your revenue and expenses zero each other out.

Use this information — your expenses and projected revenue — to create a budget that keeps you on track and helps you avoid overspending.

How to open a salon in 10 steps

Before we dive into more detail, here’s a checklist of what you’ll need to accomplish before opening your new salon:

1. Define your salon concept

Your salon’s concept is the foundation of a thriving business and makes it easy to run a salon that your customers will love. It covers everything from your business name, ambience, type of services offered, your target audience, the decor and design, pricing and style of customer service.

A clear concept is essential when opening a salon. It makes it easier to bring in your target clients, price services and run a profitable business from the day you open your doors. For example, your salon might cater only to female customers with curly hair or families with children.

Los Pastel in Perth, Western Australia, has become known as a salon that focuses only on blonde hair. Grace Clayton, the owner, niched down in this area as she understands how hard it is to get the right shade. “I love doing blonde hair because, as a blonde myself, I understand how frustrating it can be when it’s not done right.”

2. Create a business plan for your salon

A business plan doesn’t have to be complex. It can be a simple document that lays out how your salon will drive business, who its target market is and how much it could make after factoring in costs to operate day-to-day.

Your salon business plan should include:

• An executive summary
• Company description
• Industry analysis
• Geographic analysis
• Target market analysis
• Sample services
• Marketing plan
• Management strategy
• Financial plan, e.g. budget, revenue forecast and costs

A business plan isn’t a set-and-forget exercise. Refer to it at the end of a set period (quarterly or annually) to ensure your salon remains on track.

3. Register your business

You need to register your business with the Australian Government’s Business Registration Service to receive your Australian Business Number (ABN), a unique 11-digit number that identifies your business to the government, other businesses and the public. An ABN is like the business equivalent of a personal Tax File Number (TFN). You’ll need it to file taxes at the end of every financial year. It’s free to register for an ABN through the Australian Government’s Business Registration Service.

You might also consider protecting your salon’s name with a trade mark to avoid competitors from copying it in the future.

Register for Goods and Services Tax (GST)

Think about whether you need to register for GST. Registration is required if your salon’s GST turnover (gross income from all businesses excluding GST) reaches $75,000 (GST threshold) or is likely to reach this amount. Registration must be completed within 21 days of your GST turnover exceeding the relevant threshold. You only need to register for it once, even if you run more than one business.

If you’re just opening a beauty salon and not sure when you’ll hit $75,000 in GST turnover, speak to an accountant so you’re ready before you cross the threshold.

4. Select the right location

Choosing the right location for your salon is key to its success. Location affects your rent, visibility, the type of clients you attract and ultimately how profitable your salon can be. Your location also determines the type of council permits and licences you’ll need to operate your business.

5. Order salon equipment

Salon equipment makes up a large part of your startup costs, and many owners tend to overspend on this category. List your necessities versus nice-to-haves, and check this against your budget and financial analysis you completed in an earlier step.

To keep costs reasonable, create a basic checklist for salon equipment. Every salon needs the following:

• Salon stations: Chairs, mirrors and a storage spaces for hair and styling products
• Shampooing stations: Reclining chairs, a shampoo bowls or sinks and a storage space for products
• Drying stations: Hooded dryers or heat processors for colouring services

The amount of equipment you need depends on the size of your salon and the number of employees. Most salons have one salon station per employee, but hair stylists with opposite working schedules can share a station.

You’ll also need a seating area for clients waiting to see your stylists, as well as a front desk. Most importantly, a well-run salon needs to have a sleek point of sale for managing bookings and payments.

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6. Choose the right point of sale

The right point of sale (POS) system does more than accept payments for your business. It should also help you run your salon’s business operations, from tracking sales to managing staff and services. But before you sign up with the first available provider, research your options. Look for a payment processor with clear pricing and no hidden fees.

Your payments system should accept whatever form of payment your clients want to use, including contactless and digital wallets like Apple Pay, Google Pay and Samsung Pay. Many younger clients use buy now, pay later (BNPL) to cover their more expensive treatments, so look for a POS system that offers BNPL payments in person and online.

When you are evaluating different payment processors, ask the following questions:

• What is the setup process like? Look for a payment processing system that’s easy to set up and manage day-to-day.
• How fast will deposits hit your bank account after a transaction? You want to get paid for your services quickly without unnecessary delays.
• Is the payments processor secure? A payment provider system should be secure and PCI DSS compliant. Ask about their chargeback protection and fraud detection tools.

The right salon point of sale should integrate with all your salon operations, like appointment scheduling and team management to make your day-to-day salon management more efficient. Square point of sale for salons consolidates all your salon operations seamlessly on one platform, from bookings and staff management to payments and marketing.

“My clients love it because I spin the Square Stand around to them, and they can select whether they want a receipt. Half of them don’t even want a receipt these days, they don’t have to worry about having paper and losing it,” said Elizabeth Jayne, Co-owner, Regal Beauty Co.

7. Pick the right scheduling and booking salon software

It’s important that your point of sale integrates seamlessly with your online scheduling tool to ensure smooth business operations. With Square Appointments scheduling software, customers can check your team’s availability and book appointments 24/7. Clients can reschedule or cancel easily, while automated reminders help reduce no-shows. For salon owners, integrated booking software also gives you access to sales reports, team management across locations, and the ability to customise discounts and manage inventory in real-time.

Your staff can also add appointment notes for clients, and all client details are stored in a centralised customer directory for a smoother checkout and better service.

8. Outline your offerings and services

Treat your service descriptions as a marketing tool designed to persuade new customers to try your salon. Ideally, they should be a natural extension of your salon’s concept and brand. Keep the service descriptions concise, but provide enough information so that they attract a new customer base.

Use plain, benefit-focused language so clients immediately understand what each treatment includes, how long it takes and who it’s best for. It helps clients understand exactly what they’re booking and why it’s worth the price.

Here’s a real-world example:

• Before (functional description): Full colour service
• After (clear and compelling description): Full colour service includes personalised colour consultation, root-to-tip application, toning and a nourishing treatment. Perfect for clients wanting full coverage, rich depth or a fresh seasonal colour refresh.

Providing this level of detail makes your services sound more appealing and helps attract new clients who might be comparing different salons.

9. Hire the right staff

The quality of your staff’s work and their personalities are critical to your salon’s success. Before you start the interview process, create a list of what you are looking for in an ideal candidate.

• Skill set: The candidate’s skill set and capacity to learn are both important to think about when interviewing. Think about the years of experience you want your stylists to have. Do you want each stylist to have proficiency in colouring? Or are you going to hire dedicated colourists?
• Attitude: A candidate’s attitude and work ethic determine their dependability, ability to work with others and overall customer service. Their attitude will impact your brand and business, attracting or repelling customers.
• Personality: A candidate’s personality should match the company culture you infuse in the salon. Whether you are aiming to be an upscale boutique or a family-focused shop, you want your company culture to be naturally instilled in your employees. Think about how you want to define your company culture and the traits that each employee should have.

Hiring your first employees

When hiring your first employees, ensure you’re following the correct procedures. You need to:

• Confirm their eligibility to work in Australia.
• Complete the correct pre-employment background checks, such as identity verification, education, employment history, criminal record, address, and online presence.
• Obtain the correct workers’ compensation insurance.
• Set up records for withholding taxes and paying superannuation.
• Decide how to handle your team’s time tracking and payroll.

Retaining your employees

Once you’ve hired and onboarded your employees, you might feel like your job is done. Not so fast! A high staff turnover is one of the biggest threats to running a successful salon business because clients often follow their favourite stylist when they leave an employer, so salon owners need to focus on staff retention.

Some employee retention ideas are:

• Building strong relationships with your direct reports and encouraging team bonding activities outside of working hours.
• Outlining a career path and learning opportunities for employees.
• Promoting from within before you hire outside your salon.
• Offering competitive compensation compared to other salons.
• Providing perks like flexible hours, travel allowances, birthday recognition and regular happy hours to keep your employees feeling valued.

Research from Bain & Company shows that happier and engaged employees feel a sense of purpose and deliver a high level of service, which boosts customer satisfaction and retention.

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10. Create a marketing plan

Before you open your salon, develop a marketing plan that will help drive awareness, bring in new customers and create a loyal following. Marketing tactics you might use include posting frequently on social media, inviting influencers to create User Generated Content (UGC) and hosting a soft launch that drives hype and online mentions.

Build a marketing strategy based on your salon concept

It’s time to revisit your salon business plan so you can create the perfect marketing strategy for your new business. Some points to consider when framing your salon concept or brand:

• What are your business goals?
• Who are your target customers?
• What makes your salon unique or sets it apart from the local competition?
• Do you sell retail products or offer extra value-added services like a coffee bar on site?

Next, think about where your target customers find new products and services through a market analysis and determine where you want to direct your marketing efforts: social channels, email marketing or paid ads. For a deeper dive into marketing strategies for your salon, consider new ways to attract clients to your business and use these ideas to boost your marketing efforts.

A simple, consistent marketing strategy helps attract new clients, increases repeat visits and grows your salon revenue over time.

Stay up to date with industry and marketing trends

In the beauty business, staying up to date with the latest trends is the secret to winning new clients and retaining them. Here are some ways you can stay ahead of trends:

• Ask clients about their pain points and what products or treatments are of interest.
• Gather intel on how customers want to hear from you. Do they prefer emails, SMS or DMs on social media?
• Join industry forums or communities to pick up tips from your peers.
• Follow influencers or well-known industry leaders on social media.
• Set up news alerts for the latest trends.
• Sign up for industry reports and data-backed customer research.
• Attend industry events.

As you gather information, think about your business concept: What is your salon known for that customers want and how can you get the word out? Also consider any new areas of opportunity. What are you learning about client interests and is there anything new you could incorporate in your services to cater to them? Think: new services, live classes, online tutorials or group events.

Be sure to talk to your staff and get their take on marketing opportunities and new ideas too, as they are in direct contact with your customers.

Offer gift cards or a referral program

Satisfied clients are the best source of organic word-of-mouth marketing for your new salon. Offer gift cards or a referral program where happy customers can refer their friends in return for perks. This marketing tactic immediately sets you apart from other salons that might be reluctant to offer discounts.

What makes a salon profitable?

Repeat clients and diversified revenue streams help salons succeed in a hyper-competitive industry. Beauty services benchmarks show total expenses often make up 59–82% of turnover, depending on business size. Even small improvements in repeat bookings and average spend can increase your salon’s profit.

Loyalty or referral programs and expanding your services beyond cutting and colouring services can help your business navigate economic downturns.

Loyalty or reward programs

Create a client loyalty program to reward your repeat clients and bring in additional clients. Research by McKinsey shows that loyalty programs influence consumers’ spending behaviours. 60% of customers surveyed said being a member of a loyalty program led them to buy more products often, choose the brand over competitors, recommend it to others and pay a premium for an upgrade in status or points.

Popular salon loyalty programs include:

• Points that clients can redeem for products and services
• Special offers and seasonal deals
• Free merchandise
• Invitations to exclusive events
• Testing out new products or services as ‘VIPs’

Once your loyalty program is up and running, track customer rebooking rates, average ticket size, and product versus service split to see how it’s working for you.

Square Loyalty helps you create a customer loyalty program that integrates with your operations and is easy to set up and runs within minutes. You can customise the type of reward customers receive and they can enrol easily at your point of sale or online.

Diversify revenue streams

Loyalty programs aren’t the only way to entice clients to return. Diversifying your revenue with new offerings attracts new clients and helps your business to adapt to financial pressure and industry changes.

Some ways to diversify revenue streams for your salon are:

• Offering a subscription to a beauty club
• Providing exclusive access to new products or services
• Selling retail products in-store, such as shampoos, conditioners or other products
• Organising events or festivals
• Running classes and workshops
• Offering online tutorials
• Collaborating with experts
• Selling branded merchandise
• Renting out chairs to freelance hair stylists
• Offering a complementary service with the main service
• Becoming an affiliate partner
• Leasing unused space in the salon

Research how other businesses have successfully expanded their offerings. Evolve your service offerings to match trends and customer interests.

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How do I open a salon with no money?

If you don’t have much savings, you can still open a salon by starting small and being strategic about spending. Here are a few different ways you can get your new salon off the ground, Before signing anything, speak to a professional to obtain independent advice.

Limit your upfront costs

Lease equipment instead of buying outright, so you don’t have to pay the full cost of your salon equipment upfront. You can open your salon in an already established business, such as a salon suite or a booth rental, to avoid paying full rent for a shop.

Both of these options allow you to bring on clients, market your business and build your savings without a large capital outlay.

Recruit investors

There are plenty of avenues to raise money for your business, including:

• Asking friends and family, or people in your network or community, who may be interested in investing in your salon.
• Attending industry events or conferences to make new connections that could help lead to funding.
• Applying to an accelerator program to help broaden your connections and support new business growth.
• Finding an angel investor to provide initial funding for a return on their investment.

Before you commit to any kind of investment, do your due diligence to ensure the investment is sound, and consult a legal or financial adviser.

Apply for a small business grant or loan

If you’re set on owning your salon, different types of business loans can help you achieve your goal. Online lenders, banks and peer-to-peer lending sites can provide loans. Australian federal and state/territory governments also provide small business grants.

If you use Square, you may be eligible for a customised loan that you can automatically repay with a percentage of your sales.

How can I make running and operating my salon easier?

Once you’ve opened your doors, the next challenge is how to run your salon business efficiently so you’re not buried in admin.

Reliable staff and a consistent cash flow can make operating your salon easier; however, the right salon management tools and software can make or break your operations.

Square for Beauty Salons is built for and used by salons across the globe, helping sync and simplify all sides of your business — including bookings, payments, team management, inventory and reporting — so you can save time and focus on clients and growth. Square allows clients to book appointments 24/7, accept payments online and in-person, automate scheduling, and manage your entire team and multiple salon locations, all from a centralised point of sale.

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FAQs on how to open and run a salon

Can I open and run a beauty salon business in my home?

Yes, but it depends on several legal and regulatory requirements that govern home-based beauty businesses in Australia. Before operating, you need to check the following:

• Local council zoning or home-business permits. Some councils require a home occupation approval if clients will visit your home.
• Landlord approval if you’re renting.
• Services such as hairdressing, waxing, skin or cosmetic treatments may require a recognised qualification and compliance with health and hygiene regulations.
• Up-to-date business insurance, business registration (current ABN) and compliance with Australian consumer laws if you’re selling products or services.

Can you open and run a salon without a licence?

Whether you need a licence depends on the services you plan to offer and local and state/territory regulations. For example, some advanced skin or laser treatments may require specific qualifications and health approvals in your state or territory.

Common requirements include:

• A recognised hairdressing or beauty qualification if offering hair, nail or certain beauty services.
• Compliance with health and safety regulations, especially for treatments involving skin, chemicals, and hygiene.
• Proper business registration, including a current ABN and council permits if operating from home.

Skipping licensing for regulated services can lead to fines, the shutdown of your salon or liability issues.

What is the cost to open a salon?

The startup costs for a salon vary across states and according to size, salon location, fit-out standard and services offered.

Major costs include:

• Commercial wellness and beauty fitouts range from $1,800 to over $3,500 per square metre. A typical beauty salon is approximately 140 square metres, while a smaller salon is about 65-90 square metres.
• Salon equipment purchases can cost anywhere from $2,000 to over $50,000, depending on the brand and function. Leasing salon equipment can be a more affordable option for new business owners.
• Rent costs can range from 9% to 20% of annual turnover according to the Australian Taxation Office’s (ATO) business benchmarks for beauty services.

Use a start-up cost calculator to map your fixed and variable costs before committing to an investment.

What’s the best salon software?

Choosing the right salon management software depends on the size of your salon, services and the features it offers, including payment methods.

Some things to consider when choosing salon management software:

• Appointment scheduling and online booking website
• Client records, history and CRM features
• Payments and POS integration
• Inventory and retail stock management
• Staff and rostering functionality
• Marketing tools, automated reminders, loyalty program or promotions

Square Appointments is favoured by many new beauty businesses because of its free plan, $0 setup fees, and its wide variety of available payment methods. Customers can pay in-person and online with credit or debit cards, digital wallets, buy now, pay later, or gift cards and payment links. Businesses can easily create a free online booking website so customers can book appointments 24/7, with automated calendar syncing, appointment reminders, and waitlists.

Learn more about getting started with Square Appointments for free.