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Dreaming of owning a salon? Now is a great time to turn this dream into a reality as the UK beauty industry continues to grow. Beauty’s GDP contribution reached a record-breaking £30.4 billion in 2024, increasing at a rate four times faster than the overall economy, 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 rising. The National Hair & Beauty Federation showed there were almost 64,000 hair and beauty businesses in the UK, an increase of 3.1% from the previous year.
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.
How much does it cost to open a salon?
Average startup costs to open a salon in the UK range from £10,000 to £25,000, but a contingency budget of 3–6 months of operating expenses is recommended to handle unforeseen costs like equipment failure, income shortfalls, or emergencies. 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, permits and insurance
- 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.
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
Before you start trading, you’ll need to register your business. How you do so depends on your chosen business structure.
If you’re setting up as a sole trader, you’ll need to register for Self Assessment with HM Revenue & Customs (HMRC). This allows you to report your income and expenses and pay tax on your profits each year.
If you’re starting a limited company, you’ll need to register with Companies House. This creates your company as a separate legal entity and means you’ll file company accounts and Corporation Tax returns, alongside any personal tax responsibilities as a director.
Many salon owners start as sole traders for simplicity, then move to a limited company as their income, team size or long-term plans expand. In both cases, you’ll also need to register with HMRC so you can pay the correct taxes and National Insurance contributions.
You may also want to protect your salon’s name by registering a trade mark with the UK Intellectual Property Office, particularly if you’re building a recognisable brand or planning to expand in the future.
Registering for VAT
You’ll need to register for VAT if your salon’s taxable turnover exceeds the UK VAT threshold (currently £85,000 in a 12-month period), or if you expect to reach this amount soon. Registration must be completed within 30 days of going over the threshold.
Some salons choose to register for VAT voluntarily, even if they’re below the threshold — for example, if they work with VAT-registered suppliers or want to reclaim VAT on large startup costs. If you’re unsure whether VAT registration makes sense for your salon, it’s worth speaking to an accountant early on so you’re prepared as your business grows.
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.
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) such as Klarna or Clearpay 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.
Square Appointments has created more ease and systemised processes within my salon, making it easier to take on more people, expand my business and take away the stress of feeling like I’m being stretched in every direction.”
Lois Williamson → Founder and owner, Si Belle
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 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 the UK and carry out the required Right to Work checks before employment begins. This includes a manual or online verification of original documents such as a passport and visa.
- Complete the correct pre-employment background checks, such as identity verification, education, employment history, address, and references. Depending on the services you offer, this may also include a DBS check.
- Obtain employers’ liability insurance.
- Set up records for PAYE, including income tax and National Insurance contributions, and comply with workplace pension auto-enrolment rules if applicable.
- Ensure wages meet National Minimum Wage or National Living Wage requirements for each employee’s age group.
- 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.
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 salon 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 beauty 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. 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 new ones. Research shows that 69% of consumers say their choice of retailer is influenced by loyalty programs, while existing customers spend around 67% more than new customers, highlighting how loyalty and reward initiatives can drive both repeat visits and higher spend.
The Square 2025 Future of Beauty Report also revealed that 82% of beauty leaders experience a positive return on investment through memberships and subscription models that reward loyalty.
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 rewards 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.
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 also 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. The UK Government 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.
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 the UK. Before operating, you need to check the following:
- Local council planning or home-business permissions. Some councils require planning permission or a home business approval if clients will visit your property.
- Approval from your mortgage provider or landlord if you’re renting.
- Services such as hairdressing, waxing, skin or cosmetic treatments may require a recognised qualification and compliance with health, safety and hygiene regulations.
- You’ll need to be registered as self-employed or as a limited company, have up-to-date business insurance, and comply with UK consumer protection 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 the requirements set by your local council. Many hair and beauty salons don’t need a specific salon licence, but certain treatments — such as laser, IPL, tattooing or advanced aesthetic services — may require council approval, registration or specialist qualifications.
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.
- Local council registration or permits for regulated treatments, and approval if operating from home.
- Proper business registration, either as a sole trader or limited company, and appropriate business insurance.
Skipping required approvals or offering regulated treatments without permission 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 in the UK vary widely according to size, salon location, furnishings and services offered.
Major costs include:
- Renting or purchasing a space: Premises are one of the biggest expenses, sitting between £600 to £2000 for an average mid-size salon. This varies on location, with areas like Central London costing significantly more. You’ll also need to budget for interiors, fixtures and decor to make the space functional and appealing.
- Salon equipment purchases: Essential items such as styling chairs, mirrors, shampoo units and trolleys can cost hundreds or thousands of pounds, depending on the brand and function. Leasing salon equipment can be a more affordable option for new business owners.
- Licenses and permits: A premises license varies according to your local council, ranging from £100 to £635. You’ll also need to consider a music license or specific treatment licenses for services offered.
What’s the best salon software?
Choosing the best 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.
