How to start a beauty business
If you’ve ever wondered how to start a beauty business, you’re certainly not alone. Hair and beauty-based training courses and apprenticeships are super popular, and new salons, brands, and beauty businesses launch what seems like all the time.
In 2022, the UK health and beauty market was estimated to be worth just shy of £40bn, and it is estimated to grow by around 2% by 2027.
The industry is clearly an attractive one for budding entrepreneurs and skilful beauticians. However, knowing where to start can be a challenge. This guide will give you the information and food for thought you need to get the ball rolling.
We’ve split our guide into two important parts: how to set up a beauty business and how to run the business once your set-up is complete.
What is a beauty business?
In a nutshell, a beauty business is as any business that provides services or products aimed at enhancing one’s personal appearance or general wellbeing.
Traditionally, beauty businesses may have focused solely on the distribution of cosmetic products, such as makeup, lotions, or haircare products. But due to the continual growth of the beauty industry, the scope of a beauty business can now vary hugely, with many incorporating a wide range of specialisms and practices, catering to a diverse set of customer needs.
What type of beauty business do you want to start?
The beauty industry is hugely diverse with a lot of potential career avenues. So, while that means there’s a lot of competition, the good thing is that it also means there are lots of opportunities.
Here are just a few examples of the different types of beauty businesses out there today:
- salon or clinic
- beauty education or training provider
- hair, beauty, or makeup brand
- mobile beauty service
- beauty supplier
- salon software
- freelance makeup artist
- beauty influencer
Think about your specific skills, strengths, and relevant experience and how each one could be best applied.
Market research and a proper understanding of your target audience are also key to setting up a business. So, consider any gaps that might exist in your area of interest, plus any existing beauty businesses that you may be competing with.
Finding a niche is also helpful. You can check out our separate blog on this here.
How to set up a beauty business: different business types
There are many different types of businesses that can be set up in the UK. Here are some of the ones more commonly associated with the hair and beauty industry:
- sole trader - you take all the profits but will also carry all the financial risk
- partnership - a business owned by at least two people
- limited company - a business that is either 'limited by shares' or 'limited by guarantee'
- franchise - a business whereby the owner licenses its operations out to other businesses for a fee
- rent-a-chair - a business run from another business' premises
More information on business types and how to set each one up can be found on the government website.
Unless you’re a sole trader, you need to register your business with Companies House in order to start trading legally. Sole traders usually only need to register with HMRC for Self Assessment. However, things can vary, so it’s wise to do your own research to make sure all your requirements are met.
How to start a beauty business
In this section, we'll talk about some of the key things you may want to consider when starting a beauty business—including demand, location, finances, your USP, business plan, insurance, and more.
Product and service demand
Whatever type of beauty business you want to set up, make sure that there is a demand for the products and services you’ll be providing.
Say you want to set up a beauty treatment salon in your local town, scope out the appetite for it beforehand and ensure there’s enough of an audience to target.
Knowing what other beauty businesses already exist in the area is also crucial in determining your point of difference, which leads us nicely onto the next point.
Your USP
Are you going to offer the same products and services as others or are you going to take a different route entirely?
Deciding on your USP (unique selling proposition) will let your customers know what differentiates you from your competitors and give them an indication of what to expect from you and your business.
Ask yourself—what does your business offer that’s different from other businesses out there, and what problems are you solving for people?
Is it that you offer a certain treatment or product that nowhere else does, or do you provide multiple services under one roof that a customer might have to travel around for otherwise?
Your USP should communicate your values and what makes your business unique. For instance, do you have an interesting backstory or a lived experience that led you to setting up the business? Let your USP sing your business’ praise!
Naming your business can also be a big part of your USP. It’s good to choose a name that is unique but easy to understand, as this can help you attract clients and customers. People should get an idea of what kind of beauty business you’re running from its name. Plus, people are more likely to use your business if it’s clear what it is from the outset.
Location and business premises
Your location and premises are key considerations when setting up a beauty business, but this can depend on the nature of your business.
If you’re a beauty brand or retailer, for example, you may find that all you need in terms of premises is storage space, such as a warehouse. Or, depending on your circumstances, you might find that you’re able to store goods at your home or in any secondary business premises you may have.
On the other hand, location is much more important if you’re setting up a salon space. Think about your target audience, where they live, and the areas they are likely to frequent. You’ll want to make sure your beauty business is visible to them—so choosing the right location is key.
Consider nearby transport links and the general footfall in the area, too. Are people able to get to your location easily?
Regardless of whether you plan to work mobile and travel to visit your clients, or base yourself permanently from a salon and have clients come to you, you should still consider your location and premises.
If you plan to work mobile, think about how far you’re willing to travel to different clients, as this may not only influence where your business is officially registered, but also the amount of work you’re able to take on.
Travel time is a huge consideration for mobile practitioners, so don’t skip this important planning step if this is your preferred business model.
Remember to factor your premises into your overall budget, too, and whether you plan to rent out any of your space to other practitioners to recoup your costs.
Beauty business regulations
Whether you’re going to carry out beauty procedures on clients or sell products for individual use, there are various rules and regulations you need to be aware of.
Running a beauty business comes with a lot of responsibility from a staff, health, and safety perspective. Plus, the actual day-to-day running of the business and everything this entails.
Here are some of the key regulations you should be aware of when setting up a beauty business:
- licensing - whatever the specifics of your beauty business, you’ll need to officially register it and apply for a license from your local authority or council. These licenses allow you to operate and carry out treatments legally. Licensing requirements generally vary between councils, so it’s wise to do your own research
- insurance - insurance is hugely important when running any business, as it can protect both you as the business owner and any staff you employ. You can find more information on hair and beauty insurance further down this article
- training and qualifications – these are a must for you or anyone you employ who will be carrying out treatments and beauty procedures on clients. Make sure you’re clued up on the relevant requirements for the services your business provides
- health and safety - staying up-to-date with the relevant health and safety regulations for your business is essential. The HSE sets out a number of basics here
It’s good to be aware of the ins and outs when it comes to the legalities, or have a dedicated member of the business who is. As your beauty business grows, you might find it beneficial to employ designated people to look after each of the areas outlined above.
Always double-check whether there are any specific rules and regulations related directly to the service your business provides, too. For example, if you’re based in England and offer treatments involving pulsed light systems or lasers, you need to be registered with the CQC.
Read more: Beauty salon legislation and regulations
Finances
Having suitable financial resources in place is essential to setting up a beauty business—or any business, for that matter.
Think about how much money you’ll need to launch and where that’s going to come from (i.e. self-funding or loans), as well as ensuring you have a solid financial foundation to cover your costs of running the business day to day.
An important part of financial planning is making sure you have sufficient cash reserves and money in the bank for emergencies and unexpected events.
If possible, it’s generally better to over budget than be too strict with money, too, as it’s tricky to plan and account for absolutely everything, so it’s always good to have a buffer. After all, you never know when the roof might start leaking, or the boiler might break! Beauty business insurance can also be a saving grace should anything like this happen.
If you’re going to be looking for funding or applying for an external loan to get you started, this is where you’ll need to pull together a full business plan and proposal to share with potential investors, so they can see your future vision for the business and what they’re investing in.
Even if you’re not applying for a loan or funding, having a detailed business plan is still a good way of ensuring you have accounted for everything.
Beauty business plan
A business plan is a comprehensive written document that outlines the goals, strategies, financial projections, and operational details of a business. As a business owner, your business plan serves as a roadmap for the future, providing a clear and organised outline of how you want the business to operate, grow, and achieve its objectives.
In the context of beauty businesses, business plans are typically used to:
- guide decision-making
- secure funding (as outlined above)
- communicate company vision and strategy
- monitor progress towards goals
When writing a business plan, include the following sections:
Executive summary
This is a concise overview of your business and plan for it. Make sure it’s attention-grabbing and provides a quick snapshot of what your beauty business is all about.
Business description
Building further on your executive summary, use this section to go into extra detail about your business and its services.
Market analysis
This should be a piece of thorough research into your target market and industry. Think about your potential customers, competitors, and what’s happening in your local area.
Competitive analysis
Building further on your market analysis, this is a chance to delve a little deeper into your competitors. Talk about them more specifically, and how your business has the edge.
Marketing and sales strategy
Outline your plans for attracting and retaining customers through your marketing efforts. You can find more on marketing further down this article.
Management and organisation
Use this section to provide details about the structure of your business, how it’s going to be set up, and what the day-to-day operations look like. You could include a team organogram here, too.
Financial projections
This is where you can demonstrate your business’ profitability and general financial health. If you’re looking for funding to set up your business, use this section to explain exactly how much you’re looking for and where the money will be spent.
For further reading, check out our full guide on creating a hair salon business plan.
Hair and beauty insurance
“Like any form of business insurance, hair and beauty insurance should also be considered by practitioners and business owners. Regardless of how you work, having the right insurance will ensure that you have financial protection in place should things go wrong, and protect you and any staff from accidents, theft, and damage.”
- Charlotte Hughes, Product Development Manager at Ripe.
As we mentioned earlier, insurance is something to consider for any business—not just a hair and beauty business.
Whatever type of hair and beauty professional you are and whatever type of business you’re setting up, you’ll want to make sure you’re covered for all the services you’re offering.
Hair and beauty insurance can help provide financial protection and peace of mind for you and your staff should the worst happen. It can also protect your business premises from things like damage, theft, and vandalism. Employers’ liability cover is also a legal requirement if you employ staff, so make sure you’re aware of your obligations.
Through Ripe, you can easily build your own bespoke hair and beauty policy dependent on your needs. You can get Public and Products Liability up to £10m and treatment risk cover up to £5m as standard, and there are also various optional extras to choose from when you get a quote.
More information on hair and beauty insurance through Ripe is available here and in our Insurance Booklets.
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How to run a beauty business
In this section, we'll talk about some of the key things you may want to consider when running a beauty business—including pricing, transport, stock, your staff, health and safety, marketing, and more.
Pricing
Whether you’re a hairdresser, nail tech, or a product retailer, both you and your customers should be clear on how much certain things cost. So, setting your pricing structure is an important task, and one which should be carefully considered based on several factors.
You want to encourage customers to come to you instead of elsewhere, and getting your pricing right will certainly help you with that.
The aim is often to find the ‘middle ground’ between staying competitively realistic (i.e. looking at how much other businesses charge for similar services) and making a profit.
Your pricing structure should also reflect all the costs you need to consider behind the scenes. While you want your business to make money, you also need to make enough to cover all your necessary ongoing expenditures (such as staff costs, stock replenishment, licenses, and training and insurance costs) as a minimum before you can start thinking about profit.
Business finances
Aside from your day-to-day product and service pricing, as a beauty business owner, you also need to keep a record of your company’s accounts so that you can pay your taxes and comply with the law.
If you’re a limited company, financial records must be submitted to Companies House and HMRC on an annual basis.
Accurate bookkeeping is essential to say on top of your finances and keep your company covered from a legal point of view. This is why many business owners choose to appoint an accountant or financial advisor to make things easier.
Transport
The level of attention your business transport requires depends on the nature of your business.
Salon or fixed business HQ
Transport might not be a huge consideration if you’re operating full-time from a salon or fixed business HQ, as there might not be a great deal of travel involved in your operations.
That said, you may still want to consider the possibility of needing transport as your business grows, and keep some provisional budget aside for this should that time arrive. You can include things like this in your business plan.
Mobile business
If you’re a mobile practitioner, or you do regular deliveries or client visits as part of your beauty business, then transport will obviously play a huge role in your operations.
So, think about what type of transport you need, the required space, and what kind of budget this requires.
For example, will your standard car suffice, or do you need to invest in a bigger vehicle such as a van? You may find that your car is enough when starting out, but as your business grows, again, it might be worth channelling extra budget into your transportation.
It’s not just your transport you need to consider, either. You’ll also need to think about transport for any staff your business employs. However, as a responsible business owner, you should consider your business’ impact on the environment, so think carefully about your choice of transport and the amount you want to have.
Aim to have as few cars on the road as possible. Not only will this make you a greener and more sustainable business, but it’ll reduce your fuel consumption and costs considerably, too.
If staff are using cars for work purposes, however, remember to ensure that they have the necessary business vehicle insurance in place.
Equipment and stock
Every type of beauty business will require different types of equipment and stock. Depending on the nature of your business, your equipment could be anything from a laptop and printer to specialist salon treatment tools.
By the time your business is up and running, you will have already given good thought to your equipment requirements, but you should monitor needs on a regular basis and as your business grows.
Keeping an up-to-date stocklist and doing regular stock checks will help you to stay on top of things and highlight the need for any extra resources. Building a good relationship with a local wholesaler is also wise, as you may be able to strike a deal for your repeat bulk orders to ensure you’re getting good value for money.
In the early days, you may want to keep investment in your equipment to the bare essentials, but this may well change over time. Your needs on day one might differ entirely from your needs on day one hundred. Again, this is where your business plan can also be useful.
Staff
When you’re first starting out, you might find that you can manage all the demands of your beauty business yourself—especially if your plan is to start small.
However, it’s likely that as your beauty business grows and diversifies its offering, you’ll need to start thinking about recruiting staff or investing in tools and services that are going to make life easier for you. After all, nobody can do everything!
Don’t be frightened by the thought of recruitment, though, as there’s no one-size-fits-all approach, and the size of the team you require depends very much on the nature of your business and services.
So, bolstering your team may be as simple as hiring an accountant to manage your finances or working with a social media or website expert to handle your online presence—or, of course, fellow beauty practitioners to carry out treatments and maximise your business’ client capacity.
Before hiring a new staff member, make sure they have all the relevant qualifications and experience to carry out their role. As the business owner, it’s your responsibility to ensure they are properly trained to use equipment and are clued up on health and safety procedures.
GDPR
Your beauty business must comply with GDPR (General Data Protection Regulation).
GDPR can be a complex subject, so it’s well worth doing your own research. But to summarise, it essentially means that you must protect any data you hold regarding your staff and clients.
This could include:
- staff and customer addresses and other contact information
- staff and customer health records
- staff working hours
- product information
The regulations often also require you to seek permission from clients to hold certain information about them. Beauty businesses (or any businesses, for that matter) risk heavy fines if found to be in breach of GDPR.
More information on data protection and business can be found on the government website.
Health and safety
The health and safety of your staff and clients should be your utmost priority when running a beauty business.
The Health and Safety at Work Act 1974 is the primary legislation concerning health and safety for businesses in England, Scotland and Wales (the Health and Safety at Work Order 1978 is the Northern Ireland equivalent).
Legislation applies to all businesses regardless of size and nature, so make sure yours complies. Poor health and safety practices not only put you and your staff at risk of harm, but they could also land you in serious trouble as a business owner should the worst happen.
The Federation of Small Businesses (FSB) outlines the main legal principles for businesses as follows:
- the health, safety and welfare of staff should be maintained at all times. The workplace should provide clean and hygienic facilities, including the availability of drinking water, changing areas and toilets where required, and first aid rooms in larger organisations
- customers and employees should be protected against any risks that may occur as a result of activities on the premises
As a business owner, it’s your responsibility to regularly assess the potential risks your business poses to both staff and customers. These risks may differ depending on the nature of your business, but it’s important to keep on top of them.
For example, if you own a salon that contains potentially hazardous substances, such as peroxides, bleaches, and solvents, you should ensure these have been clearly identified with measures put in place to prevent harmful contact.
The HSE has guidelines on the Control of Substances Hazardous to Health (COSHH), specifically focusing on beauticians and beauty businesses. Read them here.
Marketing
The importance of marketing for your beauty business should never be underestimated. After all, it’s often your marketing efforts that get your business known across the wider community and spread the word about the services you provide.
When setting up your beauty business, you will need a marketing strategy in place—even if it’s only a basic one.
If you don’t have much marketing experience, though—fear not. Marketing your business can be extremely fun, and in the early days of running a business, you can split things out into three key areas of focus: website, social media, and direct community work.
You can build a basic website fairly easily nowadays, with lots of good online tools such as Wix available to get you started. Your website should contain all the relevant information you want people to know about you and your beauty business.
If you own a nail salon, as a minimum, your website should display all the different services the salon provides, your prices, where you’re based, and an appointment booking portal—the latter being especially important. Although you may still allow people to book appointments the ‘old-fashioned way’ (i.e. by phoning up), going digital here can save you a lot of time and admin. Not to mention it can actually be more convenient for customers—what’s not to love?
On the other hand, if you’re a beauty product retailer, your website should contain all the products you sell with detailed information about each one, prices, and information on how people can buy.
Your business’ social media accounts will also require some attention. Think about your target audience and which social media platforms they’re likely to use, as this will allow you to prioritise and channel your focus. What you don’t want to do is put lots of effort into an area that isn’t going to deliver what you’re looking for.
Consider Facebook, Instagram, X, or TikTok (or a mixture of all of them), and think about what you want each channel to achieve and their KPIs, whether this be sales, website visits, or bookings, and plan your social media content accordingly.
Direct community work can be as simple as producing flyers and leaflets and working with local businesses such as shops, cafés and libraries to advertise them for you. And although things like business cards are nowhere near as big as they perhaps were twenty years or so ago, they can still be a very effective marketing tool for small businesses starting out. Word-of-mouth is still one of the biggest forms of advertisements even in today’s digital world, and it’s free!
As your business grows and you develop a better understanding of your marketing needs, consider recruiting a team of marketing professionals to help you expand your activity. For example, email marketing can be a great next step for beauty businesses looking to grow.
Related: 8 top marketing tips for salons
