How to Start a Nail Salon Business | SkillsAndTech

Do you feel like you have some untapped creativity? Could you see yourself chatting with customers while prettying up their nails all day? Then starting a nail salon business could be a great fit.

Running a nail salon is all about pampering and beautifying. Whether you offer simple manicures and pedicures or are all about artistic design, this line of work offers a variety of niches — and one may be perfect for you!

See Also: What Is A Business Loan

Of course, starting any business takes a great deal of work. Thankfully, you’ve come to the right place. This step-by-step guide has all the info you need to start your very own nail salon. From understanding and researching the industry to getting your business registered and making good money, we’ve got you covered.

Let’s get started!

Table of Contents

Decide if the Business is Right for You

Before you start your nail salon, it’s a good idea to scope out the industry and see what you’re getting yourself into.

Pros and cons

Starting a nail salon business comes with many pros but there are a few cons to consider as well.

Pros

Many niches to choose from, find the one that fits you
You’re the boss — choose your clients and make your own hours
Travel to clients, open a home salon or rent out a shop
High margins and easily scalable business model

Cons

Business may slow amid recession
Inventory management needs to be a focus
Building a brand can be difficult and take time and money

Nail salon industry trends

When it comes to customer demand, Google searches have seen steady interest in acrylic nails over the last five years, while searches for local nail salons have been increasing steadily.

Industry size and growth

Industry size and past growth – Total spending on nail salon services in the US grew more than 30% over the 10 years prior to the pandemic to surpass $8 billion in 2018. Unsurprisingly, the market experienced a downturn when the pandemic struck. Market analyst Marketdata values the US nail salons industry at $6.5 billion in 2020, about 20% lower than the previous year.
Growth forecast – The market is recovering and expected to grow 9% yearly and surpass $22 billion by 2025.
Number of businesses – There were nearly 28,000 nail salons across the US in 2019.
Number of people employed – In 2020, a total of 123,000 manicurists and pedicurists were employed in the US, according to the Bureau of Labor Statistics.

Trends and challenges

These are some of the trends in the nail industry:

Most Americans still think of nail care as an affordable luxury
Increasing use of online booking programs or apps
Creative nail art designs persist, but there’s also a push for minimalism

Here are some of the common challenges:

Building and retaining clientele
Stiff competition from discount salons
Maintaining social media presence

What kind of people work in nail salons?

Gender – 84% of nail technicians are women, while 16% are men.
Average level of education – 28% of nail technicians finished high school while 27% obtained a bachelor’s degree. It’s a good idea to obtain relevant professional certifications to succeed in this industry.
Average age – Nail technicians are between 35 and 45 years old

How much does it cost to start a nail salon business?

There are many factors that will determine the overall cost of opening your nail salon. These include the type of salon you open, renting vs owning, types of equipment, and the location and condition of your property.

Starting a nail business could cost from $20,000 to more than half a million dollars for a brick and mortar shop, depending on whether you start from scratch or purchase an existing salon. You could save on startup costs if you operate alone as a nail technician and simply rent a booth for $500 to $1,000 a month or just make house calls.

Let’s dive into an example:

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 – $200	$175
Business licenses and permits	$100 – $300	$200
Insurance	$100 – $300	$200
Business cards and brochures	$200 – $300	$250
Salon	$1,500 – $10,000	$5,750
Equipment, furniture, and supplies	$20,000 – $30,000	$25,000
Uniform per Employee	$175 – $300	$240
Website	$1,000 – $3,000	$2,000
Total	$23,225 – $44,400	$33,815

How much can you earn from a nail salon business?

A manicure cost nearly $23 while a pedicure cost more than $35 in 2019. Assuming an average cost of $55 for a manicure and pedicure, you could serve 5 persons a day for six days a week and earn more than $85,000 in annual revenue in your first year or two. With a profit margin of 50%, you could easily net more than $42,000 a year.

As your brand gains recognition and you get repeat customers, you could hire three nail technicians and increase your clientele to 20 persons a day, but reduce your profit margin to about 20%. This will bring in annual revenue of more than 340,000 and a tidy profit of nearly $70,000.

Since minimal space is needed to provide services you can hire multiple employees to work within the same salon. Later, you could open up another location if the demand is there.

What barriers to entry are there?

There are some barriers to entry for a nail salon business. Your biggest challenges will be:

High startup cost
Stiff competition, especially from discount salons
License requirements and certifications

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

Hone Your Idea

Now that you know what’s involved in starting a nail salon, it’s a good idea to hone your concept in preparation to enter a competitive market.

Why? Identify an opportunity

Make sure to scope out the local competition and their offerings. Doing this will help you develop and provide a better, different, or more valuable service.

There are three main types of nail salons: traditional nail salon, which is all about manicures, pedicures, basic gel nails, and nail treatment; specialty nail salon that might focus on more extravagant nail art like sculpting nails into long claws or painting them with fancy patterns and colors; and full-service nail salon that offers the whole beauty package, from nail service to treatments for hair and skin and even sore muscles.

The list of niches detailed above may not be exhaustive, but it’s a good place to start. Decide which option best matches your style, local market, and business preferences and start moving forward. If you love nail art, for instance, a specialty nail salon might be the best choice.

What? Determine your products or services

Among the services you could offer are manicure, hard gel nails, pedicure, acrylic nails, nail art, and nail reconstruction. Once you expand, you could also offer waxing, eyebrow or eyelash services, hair care, skin care, makeup, and massage.

How much should you charge for your nail salon services?

The best way to determine your nail salon prices is by reviewing competitors and weighing against your costs and services. The key, of course, is to make sure you give yourself enough of a margin to make a decent living.

See Also: What Is a DBA

Once you know your costs, you can use this Step By Step profit margin calculator

Who? Identify your target market

There likely won’t be one type of customer interested in your services but several. For example, specialty acrylic salons usually attract younger, fashion-conscious girls, but might also draw other demographics, such as independent professional women.

Where? Choose your business premises

See Also: How to Find Your EIN Number

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a booth or commercial space. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

When choosing a commercial space, you may want to follow these rules of thumb:

See Also: How to Start a Florist Business

Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed

Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “nails” or “salon”, boosts SEO
Choose a name that allows for expansion: “Jim’s Bakery” over “Jim’s Cookies”
Avoid location-based names that might hinder future expansion
Use online tools like the Step by Step business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

See Also: How to Start a Car Dealership

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your nail salon services in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assess their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.

Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to a nail salon business.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your nail salon will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

See Also: How to Start a Firewood Business

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Fund your Business

See Also: How to Start an Airbnb Business

Securing financing is your next step and there are plenty of ways to raise capital:

Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.

Applying for a bank or SBA loan is probably the best option for funding a nail salon business.

Apply for Licenses/Permits

Starting a nail salon business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level licenses and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

See Also: How to Start a plumbing Business

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your nail salon business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

See Also: How To Start Cookies business

Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

Digital tools that can help your nail salon business with scheduling, inventory and general management include Fresha, Salon Iris, and Versum.

Accounting

Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from the casual passerby, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.

See Also: How to Start a Drone Business

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:

Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase conversion.
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

Competitions and giveaways – Generate interest by offering prizes for customers who complete a certain action, such as ordering the 10th manicure on a Friday.
Signage – Put up eye-catching signage at your store and website.
Flyering – Distribute flyers in your area and at industry events.
In-Person Sales – Offer your products/services at local markets, trade shows.
Sponsor events – You can pay to be a sponsor at events that are relevant to your target market.
Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
Seek out referrals – Offer incentives to generate customer referrals to new clients.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your nail salon meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

See Also: How to Start a Karaoke Business

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your nail salon business could be:

Provide additional services and nail care products
Make house calls by offering mobile nail services
Complete sterilization system — hygiene will be a key customer concern post-pandemic

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a nail salon business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in salons for years and can offer invaluable insight and industry connections.

See Also: How to Start a Sticker Business

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in nail salons. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Build Your Team

If you’re starting out small from home, you may not need any employees right away. But as your business grows, you will likely need workers to fill various roles. Potential positions for a nail salon would include:

Nail Technicians — Manicure, pedicure, nail styling and so on
Office Manager — Hiring, scheduling, maintenance, inventory
Marketing Lead — SEO optimization, social media strategy and more

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

See Also: How to Start a Printing Business

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn or Facebook. You can also use free classified sites like Jobs and AngelList.

You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Start Making Money!

You should now know what you need to do to start a nail salon business and start your entrepreneurial journey. You may need to make a sizable upfront investment, but once your nail salon is up and running, you can look forward to a steady stream of income.

Keep in mind, it’s important to differentiate yourself from the competition and offer a distinctive service to keep the customers coming. Offering value for money could also make a difference. With a creative marketing campaign, you can easily scale and grow this business. Now, It’s time to go out and execute!

Frequently Asked Questions

Is a nail business profitable?

It definitely can be! On average, a nail business owner can earn between $40,000 – $70,000 per year. And this can be scaled if you hire employees.

How much does a nail technician make per year?

See Also: How to Start a Used Tire Shop

On average, a nail technician could earn between $20,000 – $35,000 depending on the state you live in. So as you can see, it’s much more profitable to start your own business and hire a nail tech to work for you.

What equipment do I need to start a nail business?

The main equipment that you will need are:

Nail polish racks
Manicure stations
Pedicure chairs
Perishable supplies – acrylic, monomer, nail polish, gel polish
Sanitation stations
Carts and trolleys