The cost can vary depending on the choice of your location. More desirable locations will cost you more in rent. Less popular locations may be a good place for you if you have built up enough clientele to support you as you work to market and grow your business. If you are counting on walk-in business, then you will want to be in a retail location with ample parking. Get acquainted with a local commercial realtor or the City Planning Manager. Many municipalities have a contact person who helps new business owners find the perfect location. It is wise to get some help with this if you haven’t done it before. Some of the lease language can be off-putting for the layperson, so in this case use a professional to help walk you through the legalese.
An average sized salon runs between 1,000-1,800 square feet, and these spaces are leased by the square foot. If you are going for a lash and brow salon or studio your build-out expenses will be significantly less than a hair salon or spa. Build-out expenses are negotiated with your potential landlord. In most lease spaces that are brand new, the landlord will provide you with the interior walls, restrooms, and mechanicals (like electric, gas, and plumbing). If you are going into an existing space, your landlord may negotiate free setup time. This can range from a few months to longer. If you have to move or build walls, this will impact your initial expenses. Many areas require you to pull building permits to do any renovations.
My experience with remodeling in a small town was exhausting. We were located across the parking lot from the village offices. We were just removing trash from our newly leased space, when the ordinance officer came over and slapped a stop work order on us. We hadn’t done anything construction wise, but were basically told we needed to submit a plan to the village manager. We were only going to paint and put down flooring. We didn’t need a permit for that, but were warned they were watching!
So, my message is, get your permits, no shortcuts. If you get shut down, it will only cost you more in the long run. My first salon was small at 700 square feet. It was perfect. My rent was very reasonable, and my lease agreement was only the standard three pages long. I found a private building owner who was more flexible and kept things simple. A corporate landlord will generally be much more complicated. The corporate leases are about 20 pages long, and you need a decoder ring to understand. This is where you would need a lawyer to help.
Trust me when I say this: landlords will protect themselves in the lease. They are not your friends. They can and will be friendly, but this is their business. This is their livelihood. Do not be fooled - if you are late on your rent, they will hound you, and charge a late fee! You cannot walk away from a lease. You will end up paying, in court or with a black mark on your credit. Make sure you are prepared for the obligations you are about to take on.
You will need a minimum of $30,000 - $40,000 to get your business off the ground. Many new salon owners get financing for a good portion of the opening costs. This is where your relationships with your vendors come in handy. They will help you by splitting up the cost of getting started into a few payments. First and last month’s rent, a security deposit, deposits for utilities, licenses, insurance, products for back bar use and retail will all be necessary costs. You will also need furniture to work with, to register your trade name, and your business license - just to name the most obvious things! My biggest surprise was in needing to put up deposits for gas and electric. Back in the day, there was even a deposit for the landline for the phone. These unexpected deposits were a shock, and totaled around $1,000. There are other costs that you will need to consider: signage, business cards, banners, and promotional items for your business. A website is a must, and a presence on social media is also necessary in today’s marketplace.
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