The beauty and wellness industry is growing leaps and bounds, – leading to mushrooming of nail salons, spas and hair studios all around you. If you’ve decided to join the industry and are looking to open a nail salon but have no idea about the costs involved in establishing a nail salon, read on. First and foremost, the costs will be under do heads – fixed one-time cost, and monthly operating costs. In this post, we shall discuss the break-up of the fixed one-time cost, which can also be considered as your startup cost or invested capital.
- Qualifications & Certifications
The very basic requirement to starting a nail salon is to ensure that you, and your employees have the cosmetology certification. The certified courses must be taken up at a recognized institute, preferably, within the same jurisdiction where you plan to operate to avoid any regulatory issues later. These certifications must be prominently displayed at your store. The cost of the certified program depends on the rating of the course, and the level of skills it will develop
- Physical Location
The major expense head will be on account of the physical location of the store. This is where will have to do a lot of research to find the right space which will not only fit into your budget, is easily accessible and has enough footfall of potential clients. Buying a space will shoot up the cost, and may not be in your budget instead consider leasing. It will greatly reduce your initial investment. Do bear in mind that over and above the monthly rent, your landlord may seek an upfront payment of one-time refundable security deposit. These amounts usually range between 2 months and 4 months of rent. Use your negotiation skills and to arrive at a consensus on security deposit to keep it as low as possible.
- License and Permits
With an address to operate let’s talk about licenses and permits. Create a legal entity such as a sole proprietorship, or an LLP, or a corporation. All licenses and permits such as Business License, Tax Registration, consent to operate, employee identification number, and a no-objection clearance from the health department will be granted in the name of your legal entity Do note that this is not an exhaustive list, and the licensing and permit requirements change from one jurisdiction to another. Therefore, I recommend you get this information from your local statutory authority.
- Interior Design Cost
Your nail salon is a reflection of your style. Subject to the location that you select, you may or may not need to redo the interiors. In this case, for a new start-up it is recommend to look for locations where other stores used to operate. Figure out why that store got closed. Was it because of service quality or was it a disadvantageous location? If the place did not shut due to location issues, you may consider it. If it requires only minimal refurbishment and changes to suit your requirement, you can save money on the interiors cost.
- Equipment Cost
Let us now talk about equipment. You will manicure tables, pedicure chairs, rack to display nail colors, cabinet to store small equipment after use and store inventory. Equipment selection must be done with utmost care. Opt for padded chairs as it accords better comfort to the clients. Pedicure chairs with built in foot-bath although expensive but will allow you to stand out. Always bear in mind that the customers come in for an entire experience and not just service. So skimping on equipment is never a good idea. If you’re not looking to deploy high capital in equipment, you can consider leasing equipment or buy second hand from a store going out of business.
- Initial Consumables & Inventory
With the physical infrastructure in place, it is time to stock up on consumables and inventory. Nail polishes, buffing tools, nail clippers, lotions, sanitizers, and other specialty products etc. are your consumables. Whatever you sell separately is your inventory. Keep a bare minimum buffer for the consumables. The cost will depend on the brand selected and the services that you would be offering.
- POS System
Investing in a state of art POS system is a necessary expense. A POS system can change the way you operate and automate most of your administrative work from taking appointments to processing payments and accounting. Advanced POS systems also have in-built modules that assist you in inventory management and marketing. Zenoti, one of the best nail salon POS is system is renowned in this space.
- Initial Working Capital
This is the amount you set aside for your day-to –day operations and running costs. Initially a part of the invested capital, it will eventually come from your sales and revenue.
Aside from others there would be other costs such as legal, and consultancy fees, signage and insurance fees, initial employee hiring costs and marketing costs, including digital marketing. Most renowned nail salon software development companies such as Zenoti, Sage, Vagaro, MindBody & Phorest can now assist you in developing a professional nail salon business plan. Zenoti takes it a step forward and also assists you not only in setting up a nail salon but also initial running.