Setting up a Beauty Business

In this article

What is a Beauty Business?

The beauty industry in the UK is worth a huge £12.14 billion and that figure is continually growing.

The beauty industry encompasses many different markets. Many beauty businesses provide services and treatments in a salon or treatment centre and may utilise equipment and beauty products.

There are a huge number of services and treatments you can offer as part of your beauty business. You can choose to provide one beauty service or multiple.

Some of the most popular beauty services are:

- - Hair treatments, such as cutting, dying, styling and hair extensions.
  - Nail treatments, such as acrylic nails, gel nails, varnishes and polishes.
  - Dermatology and skin treatments, such as microdermabrasion, laser skin resurfacing and chemical peels.
  - Hair removal, including waxing and lasering.
  - Massages, including relaxing, aromatherapy and sports massages.
  - Facials, including hydrating facials, anti-ageing facials and IPL facials.
  - Manicures and pedicures.
  - Eyelash extensions.
  - Tanning, including fake tan, spray tan and sunbeds.
  - Make-up and makeovers.
  - Semi-permanent make-up, including eyeliner and eyelash enhancements and eyebrow make-up.
  - Permanent make-up, including microblading, lip blushing and permanent eyeliner.
  - Specialist treatments, such as Botox and lip fillers.
  - Aromatherapy and holistic therapy.

Some beauty services will require you to have specialist training and qualifications. You could choose to set up your own beauty salon or operate as a self-employed or freelance individual in someone else’s salon. Alternatively, you could operate your beauty business from your home or provide services in your clients’ homes.

Beauty businesses operate by providing one or more services or treatments to their clients. The client will then pay for the service. Many beauty businesses succeed as a result of repeat business and customer recommendations.

As part of the services and treatments you offer, you will also likely use a variety of beauty products, including:

- - Cosmetics (e.g. make-up and tanning products).
  - Skincare products (e.g. serums, moisturisers, exfoliators, toners, cleansers and eye creams).
  - Haircare products (e.g. shampoos, conditioners, hair masks, treatments and sprays).
  - Nail products (e.g. varnishes, gels, cuticle oils and hand creams).
  - Fragrances (e.g. perfumes and body sprays).

As well as using beauty products as part of their treatments, many beauty businesses also recommend or sell the products they use to their clients. Therefore, you need to ensure you thoroughly research the products you use, ensure their effectiveness and are aware of any allergens or chemicals that may be present.

A beauty business can be a financially and emotionally rewarding venture. Not only will you have the potential to earn a high income, but you can also work in a profession you love.

If you are considering starting up a beauty business that offers services and treatments to your clients, you will need to ensure you have perfected the necessary skills. You will also need to be a sociable and outgoing person who can be both attentive and compassionate towards clients.

As you will likely be performing the same beauty treatments day after day, having a real passion for what you do is important. The beauty industry is highly regulated, so a commitment to health and safety is a must.

Starting up a beauty business and ensuring its success can be time-consuming, you will therefore need to ensure you have a strong work ethic and are completely committed.

Types of Customers

Determining the types of customers who are likely to visit your beauty business is an important element of your business plan. Knowing your target customer base can help you plan your marketing and advertising strategies and determine your price points. It can also help your business to succeed.

There is not one particular type of customer who visits a beauty business.

Your typical customer base will depend on several factors:

The services and treatments you offer

This is one of the main factors that will impact your customer base. For example, a business offering aromatherapy and holistic therapy will likely attract a different client base than one offering manicures and pedicures. Decide whether you are going to offer one type of service, such as hair cuts and styling, or whether your business will offer different types of treatments and services.

Your location

Your location will have a significant impact, as many people choose a beauty business that is local to them or is easily accessible. If you are located in a city or town centre, you may attract local professionals who work in the area, whereas if you are located in a residential area, your clients are more likely to be people who live locally.

Your price points

Your pricing strategy will significantly impact your customer base. Some people may be willing to pay higher prices for superior service, whereas others may be looking for a budget-friendly beauty experience. Consider how you will price your treatments and the types of customers your prices are likely to attract.

The equipment and products you will use

Many beauty treatments require you to use equipment and products. The type of equipment and the specification could affect your customer base. For example, facialists or aestheticians are able to offer different types of facials depending on their equipment. Some customers may also prefer products that are organic, vegan or cruelty-free, so keep this in mind.

Equipment You Will Need

The type of equipment you require can vary significantly, depending on the type of beauty business you set up. We will first look at a general list of equipment requirements.

This list is based on a beauty business that operates from a salon or other venue. If you operate a home-based or mobile business, you can adjust the list accordingly.

Some of the equipment you may require includes:

Client chairs

Different types of chairs will be required, depending on the type of treatment you are providing. You may require chairs that recline, raise and lower, or swivel. The chairs should be comfortable for your clients and easy for you to clean and maintain. Prices usually start at £200 per chair.

Styling areas

The type of styling areas you have will depend on the services you offer. You may need a built-in wall unit, an island unit, or a table. You may also choose to incorporate shelving, cupboards, or drawers into your styling area. You can expect to pay between £500 and £2,000 for your styling areas.

Mirrors

Mirrors are a must-have for many beauty businesses as customers like to see the results of their treatments. The type of treatments you offer will affect the type of mirrors you require. You could choose full-length mirrors, wall mirrors, hand-held mirrors or vanity mirrors.

Beauty trolleys

These are useful for keeping all your main equipment close by. You can then move your equipment around the salon more easily and reduce the amount of lifting and carrying you need to do. Beauty trolleys usually have shelves or compartments for storing different items. They can typically be purchased for between £80 and £500.

Stools

Stools are often used by the beauty therapist during a variety of different treatments, including massages, hair treatments, pedicures and facials. They allow you to sit down and maintain balance during treatments. Salon stools usually retail from £60.

Beauty couches or beds

If any of the treatments you offer require the customer to lie down, such as facials or waxing, you will need to purchase specialist couches or beds. These should be both safe and comfortable for your clients.

Beauty products

The types of products you will need will vary depending on the treatments you offer. You will likely have to purchase multiple types of products for the same treatment. For example, a facialist will need different products to suit different skin types and levels of sensitivity. You may be able to purchase the products directly from the manufacturer or buy them in bulk to save money.

Cleaning equipment

Maintaining a high level of cleanliness is essential for beauty businesses. You will need to wipe down chairs, equipment and surfaces between each client and ensure your premises is clean at all times. Some cleaning equipment you may need includes a sweeping brush or hoover, a mop, disinfectant, cloths, sponges and cleaning products.

Gloves, aprons and face coverings

Depending on the type of treatment you offer, these items can help to protect you, your staff and your clients. They also help to ensure your beauty business is operating hygienically.

Reception and admin equipment

Regardless of the size of your beauty business, or how it operates, you will need to purchase equipment, either for the reception area of your salon or for admin purposes.

This may include:

A laptop or computer – for advertising, making appointments and accounting purposes.
A phone – for customers to make appointments.
An appointment book or scheduling software – to keep track of appointments and cancellations.
A reception desk and chair.
A cash register and Point of Sale (POS) system.
Business cards and appointment cards.
Pricing signs and opening hours signs.
Shelving for displaying products.

Now that we have looked at some general equipment requirements for beauty businesses, we will take a quick look at some of the specific equipment required for certain beauty treatments.

Hair services and treatments:

If you offer hair styling, cuts, colours or extensions, you will have specific equipment that you require.

Some equipment a hair business may require includes:

Backwash units or shampoo bowls.
Hair washing chairs.
Scissors, shears, clippers, trimmers and razors.
Combs and brushes.
Hair sectioning clips.
Capes or gowns to protect your clients’ clothes.
Towels.
Blow dryers.
Hair straighteners and curlers.
Tool holders.
Hair dyes in a variety of colours, peroxides and bleaches.
Colour mixing bowls and applicators.
Haircare products, such as shampoos, conditioners, treatments, sprays and gels.

Manicures, pedicures and nail treatments:

A nail businesses will have very different equipment requirements.

Some of the things you may need to purchase include:

UV and LED lamps.
A variety of nail varnishes and gels in different colours.
Nail scissors and clippers.
Buffers and files.
Cuticle clippers.
Manicure stations.
Pedicure chairs and footrests.
A nail drill and accessories.
Acrylic materials.
Brushes for gel and acrylics.
Colour remover and cotton balls.
Shelving to display nail colours.

Cosmetic services and treatments:

This can include treatments such as brow and lash tinting, waxing, facials and massages.

Some examples of the equipment you may need include:

Waxing equipment such as a wax heater, waxes, wax strips, spatulas and creams.
A spray tan machine and equipment.
Disposable underwear and hair coverings.
Lash and brow kits.
Facial machines.
Facial steamers, vaporisers and ice rollers.
Massage beds.
Magnifying lamps and mirrors.
Hot towel cabinet.
Mapping tools and microblading blades.

Typical Pricing

When setting up and running your beauty business, one of the most important considerations you will need to make is the costs associated with your business. This could be your set-up costs, running costs and overhead costs.

Planning your expected costs can help you to obtain investment, plan your pricing strategy and predict your weekly, monthly and annual profits.

Some of the typical costs associated with a beauty business include:

A salon or other premises

This will likely be your biggest expenditure. The price will vary significantly depending on the size and location of the premises. For example, if you are located in a city centre, you will likely pay more for rent. Rental costs are often calculated per square metre and can range significantly, from £500 to £15,000 per square metre annually.

Refurbishment and installation costs

You will likely need to refurbish or convert your venue to incorporate the furniture and equipment you need for your beauty business. You will also want to decorate your premises to fit the aesthetic of your brand and make it attractive to customers. Renovation costs can vary, depending on the level and scale of work required.

Equipment

The cost of equipment can vary based on which of the equipment from the list above you require. You may choose to purchase less equipment initially and expand your equipment as your business grows. You could also choose to rent some of your equipment rather than buy it. Purchasing equipment could cost between £3,000 and £20,000.

Repairing and replacing equipment

Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Your equipment is an essential part of your beauty business, and without it, you would not be able to operate your business. Correctly cleaning and maintaining equipment can extend its life but repairs and replacements are still inevitable.

Replenishing your products

Any products that you use for your treatments will need to be replenished regularly. You will need to make sure you have enough of each product to do your treatments and that you pay attention to use-by dates.

Staff

You may choose to employ staff such as beauty therapists, receptionists or cleaners. When calculating the costs associated with employing staff you should consider the number of staff and their hourly wage. You will need to pay your staff at least the national minimum wage of £9.50 per hour. You should also account for holiday pay, sick pay and maternity/paternity pay.

Branding

Branding may be key to the success of your business, especially if you are competing with other beauty businesses and salons in your area. Branding could include creating your business’s visual identity, a logo, business name, your business website and your brand message. You can hire a professional to help you with branding or do some of the work yourself. Branding can cost between £500 and £10,000, depending on the level of branding you require.

Marketing and advertising

Marketing and advertising are great ways of growing your business. Some beauty businesses may require more advertising than others, for example, home-based and mobile businesses. It is recommended that you spend no more than 10% of your annual revenue on advertising costs. You may be able to reduce your advertising costs by utilising social media.

Typical running costs

Your running costs may include your overhead costs such as electricity, water, gas and council tax. Your running costs are often paid monthly or annually. Reducing your running costs can help to increase your profits.

Business insurance

Some insurance you may require includes:

- - Public Liability Insurance.
  - Employers’ Liability.
  - Product Liability Insurance.
  - Tools Insurance.
  - Stock Insurance.
  - Professional Treatment Liability Insurance.
  - Personal Accident Insurance.
  - Legal Expenses Insurance.
  Once you have calculated the typical costs associated with setting up and running your beauty business, you can plan your pricing strategy.
  
  Your pricing will depend on several factors:
  - - - The location of your business.
      - The services and treatments you offer.
      - The types of products you use.
      - The training and qualifications of you and your staff.
      - Any extras you provide.

Safely Running a Beauty Business

Safe practices in your beauty salon are essential for protecting the health, safety and wellbeing of your clients, employees and yourself.

As the business owner, you are responsible for ensuring your beauty business operates safely. You must provide a safe working environment and safe systems and implement health and safety policies and procedures.

Some ways you can safely run your beauty business are:

Implement cleaning procedures

Having effective cleaning procedures is essential for your business. Especially as you will have multiple clients a day and are dealing with the human body and hazardous substances. A cleaning schedule and cleaning policies should be in place that cover the cleaning of furniture, equipment and surfaces. You should also implement handwashing procedures.

Conduct risk assessments

If your beauty business has five or more employees, risk assessments are a legal requirement. Risk assessments should be carried out before you open your business and then refreshed every year, or any other time they are required.

Keep a fully stocked first aid kit

If a client or employee has an accident or injury, it may not be serious enough to warrant medical intervention. Instead, you may be able to offer treatment yourself. Having a first aid kit that is checked and replenished regularly and is easily accessible is recommended.

Implement emergency procedures

If your beauty business is located in a shopping centre, ensure you are aware of emergency procedures, how to proceed in the event of an evacuation, and any assembly points. If you are a stand-alone shop or are located on a high street, you may need to implement these procedures yourself. Ensure emergency procedures are displayed on your premises and are easily visible.

Implement security measures

Theft can be a major problem for many businesses. Ensuring your stock is safely stored and your salon is secure can help to protect your business. Installing a CCTV system, a reliable lock, and an alarm system are just some ways you can protect your beauty business.

Safely store your products

Many of the products you use in your beauty business may contain chemicals or be potentially hazardous. Ensure they are stored in a temperature-controlled area and are covered, with no risk of leaks, spillages or contamination. Any particularly hazardous products should be kept away from customers.

Keep up-to-date records

You should keep clear, up-to-date records of cleaning schedules, risk assessments, health and safety policies, products and temperature checks of storage areas. Keeping these records not only helps to protect your business but also ensures safety procedures are followed at all times.

Legal Requirements

When setting up and running your beauty business, you must comply with all legal requirements. Failure to comply could result in a warning, a fine, the forced closure of your business, or even prosecution.

Some of the legal requirements of a beauty business are:

Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013

RIDDOR states that you must report all injuries, diseases and dangerous events to the Health and Safety Executive (HSE) using an appropriate recording document. The HSE may conduct an investigation into the incident. They can then provide advice or, in serious circumstances, may opt to prosecute.

Comply with the Control of Substances Hazardous to Health (COSHH) Regulations

The COSHH regulations state that you must control any substances that are potentially hazardous, appropriately assess, control and reduce any risks or potential hazards, and protect people from harm. As a beauty business, you will likely be dealing with several potentially hazardous substances, including chemicals and biological agents. You also need to consider the risks related to naturally occurring substances, such as mould and bacteria.

Use appropriate Personal Protective Equipment (PPE)

Depending on the type of beauty business you run, PPE may be a legal requirement. Even if it is not legally required, it is recommended to protect the health and safety of you, your employees and your clients.

Some PPE you may require includes:

- - Gloves.
  - Masks.
  - The types of products you use.
  - Gowns or caps (for client).
  - The use of trolleys, bowls and secure containers.
  Comply with the Manual Handling Operations Regulations 1992
  
  The regulations relating to manual handling can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects or people.
  
  Comply with the Electricity at Work Regulations 1989
  
  Much of the equipment you use will require electricity. You will therefore need to ensure you comply with the regulations. This includes constructing electrical systems in a way that prevents danger and maintaining electrical systems to ensure they are safe. Electrical equipment must be checked by a competent person annually and Portable Appliance Tests (PAT) must be conducted.
  
  Comply with fire safety procedures
  
  As the business owner, you are responsible for fire safety on your premises. This could include conducting fire risk assessments, implementing fire safety measures, ensuring staff are both informed and trained on fire safety, and implementing emergency procedures.
  
  Comply with the Data Protection Act
  
  This protects personal information. You must store any personal information securely and dispose of it correctly. You should also never share any of your clients’ information with a third party.
  
  Apply for a Notification to Process Personal Data licence
  
  As you will be employing staff, you must ensure you follow employment legislation. You must comply with legislation relating to recruitment, working hours, pay, sickness, discrimination, dismissals, and maternity or paternity pay.
  
  Comply with the legal standards for beauty products
  
  All beauty products you use and sell must meet the minimum legal standards, as set out by the Cosmetic Products Enforcement Regulations 2013.
  
  Register as self-employed with HMRC
  
  Running your beauty business as an individual or as a self-employed person requires you to register as a sole trader. You will need to register the name of your business and keep records of all your income, profits and expenses.
  
  Apply for a Music Licence
  
  If you plan to play any background music in your salon, you will need to apply for a Licence to Play Background Music from the PPL PRS. You will need to pay an annual fee for this licence.
  
  Comply with employment legislation
  
  If you hire any staff, you must comply with all areas of employment legislation, including recruitment, pay, working hours, holidays, sickness, maternity, paternity, discrimination and dismissals.
  
  Purchase insurance
  
  Some types of coverage will be legally required, such as Employers’ Liability Cover.

Positives of Owning a Beauty Business

Many beauty business owners will report on the many positives of running a beauty business. This can include:

Create your dream business

As you are in control of the business, you can do anything you want. You can choose the type of services and treatments you offer, which products you use, your brand, the design of your premises, and your price points. You will have the freedom to design your dream business and be completely independent and self-sufficient.

Constant demand

Demand for beauty treatments is consistently increasing. Even if you have a lot of competition in your local area, you will likely still have demand for your services. Whether you choose to set up your own salon or find a position in an existing salon, there will be a demand for your services.

People orientated

If you love face-to-face interaction and consider yourself a people person, a beauty business is an excellent option for you. You’ll be around people all day and can spend time with different people every day. This can make your work interesting and engaging.

Be part of the local community

Operating a successful business in your local community can help you to become an important part of the community. Beauty treatments are known for offering a personalised experience and require a high level of trust. People love to talk when getting treatments, meaning you will learn a lot about your clients and their lives and create real relationships.

You can offer a personalised customer experience

You can offer a tailored experience and personalised consultations and treatments. Not only can this improve your customers’ experience and result in repeat business and recommendations, but it can also make your job more enjoyable.

Option to work from home or go mobile

You can reduce your start-up costs and overhead costs by operating from home or going mobile. This offers you more flexibility with your working hours.

Be your own boss

Being your own boss allows you to create your own schedule, hire the employees you choose, create a better working environment and choose the direction your business goes in.

High customer retention

People are usually loyal to their favourite salon or beauty therapist for years. You will likely have regular clients and may even find yourself working with multiple people from the same family or friendship group. High customer retention and recommendations can help to ensure the success of your business.

Option to start small and grow your business

If you don’t have the large capital to start your beauty business, you can start smaller and grow your business in time. You can start a home or mobile business initially, meaning you won’t need premises or other employees. You could even operate part-time initially before working up to a full-time business. As your business grows and you begin to make a profit, you can invest your profits back into your business and purchase more equipment, hire employees, rent premises, or invest in marketing and advertising.

Rewarding work

If you are passionate about beauty, doing something you love and making connections every day can be extremely rewarding.

Unlimited income potential

As the beauty industry is so popular you could have the opportunity to grow your business, open multiple salons and even create and sell your own beauty products. This offers you the opportunity to grow your profits and your income. A beauty business has the opportunity to become a multimillion-pound business.

Gain exposure and experience

The rise of social media makes it easier than ever to gain exposure. You can post photos and videos of your clients and your work and become noticed online. This can grow your client base, increase your experience and profits and even allow your business to become well-known online.

Negatives of Owning a Beauty Business

However, before setting up your beauty business, you should be aware of some of the negative aspects of this type of business.

High start-up costs

If your beauty business requires premises, such as a salon, this can result in extremely high start-up costs. You also need to factor in the cost of equipment, beauty products and any employees. You may need to source outside investment to cover your start-up costs. Higher start-up costs will also mean it takes you longer to start earning a profit.

Your business could fail

Setting up your own business can be risky. Many new businesses fail which could result in you losing your investment. If you have a lot of local competition, you don’t have a strong business plan, or the UK encounters another recession or period of financial difficulty, you could see your business fail.

Work can be inconsistent

You may find that certain times of the year, such as the lead up to Christmas, are much busier than others. People tend to pay for beauty treatments before big events, such as when they’re attending a wedding or party or going on holiday. This could mean you have other times of the year where you are significantly less busy. Inconsistent work can result in inconsistent profits.

Requires a high time commitment

Beauty businesses often operate 7 days a week and some also open in the evenings. As well as the time you will spend with customers, you will also be responsible for administrative tasks, running the business and advertising. This can be very time-consuming. You may find that you miss important events or lose out on time at home because of your business.

High risk

Running your own beauty business can be high risk. Some of the potential risks you could encounter include liability issues, employee accidents, and the risks associated with using chemicals and certain types of equipment.

Motivation of employees

If you employ staff, one variable you can’t control is their motivation. Unmotivated, disinterested employees are likely to create a less pleasurable experience for the customer. This can result in bad reviews or the loss of custom.

It can be stressful

As the owner, you are solely responsible for the success of your beauty business. This can create a stressful, high-pressure environment, especially when your business first opens.

The industry is highly regulated

You will be dealing with products that contain chemicals and other potentially hazardous ingredients. Depending on the type of beauty business you run, you may have to register and undergo an inspection by the relevant authorities.

Planning Your Beauty Business

An effective and well-designed business plan is imperative to the success of your beauty business. It can help you plan your finances, determine your price points and create your advertising strategy. These are all key to the success of your business.

There are some key considerations you should make when planning your business and creating your business plan:

What treatments and services are you going to offer?

You may specialise in one particular service, such as hair, or you may offer a variety of treatment options. Consider your own skills and the skills of your employees when deciding the types of treatments you will offer.

What type of beauty business are you going to run?

Will you open a beauty salon, or will you operate a home or mobile beauty business? A salon is likely to generate the highest profits, although the start-up cost will also be higher. Consider your funds and whether you can source an initial investment when deciding which type of beauty business to set up.

What are your equipment requirements?

Consider what equipment you will need for your beauty business. Calculate the approximated costs and consider the costs of renting the equipment rather than buying it. Consider if there is any equipment you can buy later on, once your business is more established and you have begun to make a profit.

Are you going to employ any staff?

Depending on the size of your business and the treatments you want to offer, you may need to hire employees. Calculate the costs associated with hiring employees and whether this is the correct move for your business.

Where will your business be located?

Your location will have a significant impact on the types of customers you are likely to attract. It will also impact your premises’ rental costs. If your business is located in an area with high footfall or a place popular with your target market, the increased custom and higher profits will be extremely beneficial to your business.

What local competition do you have?

Being aware of your competition is an important step to ensuring the success of your beauty business. Look at what other beauty businesses do well and areas you feel they could improve. Considering your local competition can also help you to focus on a specific beauty niche or determine the treatments you offer or the products you use.

Who is your target customer base?

Once you have determined your location and the treatments and services you will offer, you can now identify your target customer base. Some beauty businesses focus on one specific customer base, whereas others decide not to specify. Knowing your typical customers can help you to design the aesthetic of your premises and determine your advertising strategy.

What are your start-up and running costs?

Consult the list above to help you calculate the approximate costs of setting up and running your beauty business. Estimate how much initial investment you require and when you are likely to start turning a profit. You can then determine whether you can finance the business yourself or whether you require outside investment.

What will your price points be?

You will need to determine what your price points will be for all of your treatments and services. Take into account your start-up costs, running costs, how long each treatment will take and whether you will need to use specialist equipment or products. You must ensure that the pricing of your services provides you with an acceptable profit.

Do you require any specific training, qualifications or experience from your employees?

This may be a legal requirement, depending on the type of beauty business you set up. Training and qualifications can also help your business be more attractive to potential customers or could help you achieve a higher rating during your inspection.

What are your business objectives?

Business objectives are crucial for creating a successful business plan. Your business objectives highlight the targets and goals of your beauty business and help you to create a one-year, three-year and five-year business plan.

Your business objectives should be SMART:

- - S = Specific
  - M = Measurable
  - A = Achievable
  - R = Realistic
  - T = Time-bound
  Have you complied with all legal requirements?
  
  Ensure you have filed all your paperwork and are complying with all legal requirements before opening your beauty business. Failure to comply with the legal requirements could have a detrimental effect on your business and your profits.
  
  Download our business plan