How To Start Your Own Salon | Part 3: Location, Location, Location

Welcome back to the last post in our three-part series on starting your salon! Today, we are focusing on the third step which is all about the space!

If you remember our previous posts, we really recommend starting small—we cannot emphasize this enough! As an industry professional and salon business coach, I talk to a lot of salon owners and their number one struggle is finding great talent. Because of this, you do not want to start too big and struggle to find amazing stylists to build your salon. Believe me, you do not want to be in a position where your salon can’t function without 15 stylists on board at all times. Even though you want to build the biggest and best salon in your area, please start small.

Build Your Team

The first step in looking for a salon space is to gather a small group of advisors. There are four main people who you want on your team: a commercial real estate broker, a business attorney, a CPA, and a salon designer.

First, your commercial real estate broker. Your broker is similar to a real estate agent when you are buying a house. Your broker works for you, but will be paid by the owner of the building that you decide to lease. Do some research and find a well-known and reputable broker in your area.

Business attorney—there is no question about this; no matter what! Your business attorney will look at every single document or agreement that you sign your name on. This is going to cost you which is why you need to build the cost into your financial plan. If you skimp on a business attorney, it can cost you a lot more in the long run! Your business attorney will even review the agreement that you sign with your broker.

A CPA is your accountant. You need someone in your corner who knows the financial implications that comes with each decision you make. Including growing your team! Why you ask? Because you have to pay taxes on each new hire, assuming you’re building a team of employees vs. independents. Which I believe is worth it in the long run, but that’s another discussion for another time. Just note, if you hire someone for $15 per hour, you’ll actually pay closer to $19 per hour after taxes. All of these little details mean everything. Another example is selling retail. You’re going to see all the money hit your bank account after daily sales, but remember, you will have to pay sales tax—typically quarterly. So, having someone advise you on your financials might be a must for you if this is not a strength of yours.

Now the fun part—find your salon design company. When you do some searching for a salon equipment company, they will usually include salon design as an added value to working with them! This is a great choice if it’s your first salon. You can do all of your research online or you can visit an industry beauty show to meet and greet with some representatives. To find our salon design company, I visited the Midwest American Beauty Show in Chicago. However, once you decide to build your forever salon home, I’d recommend working with a designer who is not associated with a company. This means, design is all they do and they can focus on being the best at design, period. Remember, you get what you pay for!

Pro tip: having a salon design company doesn’t exempt you from needing an official architect. Your architect will review your equipment and designs to ensure that your space is compliant with local building codes.

Call the Property Brothers

Now that you have your team together, it is time to start visiting spaces. When you start looking at properties, we recommend that you use a “grading system” to rate spaces as: A Properties, B Properties, or C Properties. While you will have some of your own criteria when determining how to grade a property, here are some basics:

A Properties are located in a well-visited area and are highly visible from the street. In other words, it is not a struggle to find your salon. An A Property is typically located on a main road and includes great parking. Remember, there is a time factor associated with our industry—we want clients to be on time for their appointment, so being easily accessible with good parking makes punctuality easier! For example, I only choose properties that can be accessible by taking a right or left hand turn into the parking lot—or road it’s located on. Think about this! The little things mean everything.

B Properties are similar to A Properties, but down one notch. They aren’t located on a main road, but they are right off the main road, and still relatively easy to find. On the other hand, C Properties would be challenging for a client to locate without using a GPS and have limited parking. But at the end of the day, if you’re great—people will come to you. We are a destination business, so luckily location isn’t the most important factor.

Okay, now you have some basic grading criteria. What else should you be looking for?

• Natural light. Great natural lighting can make a huge difference when doing makeup and hair color.
• Easy to build out. Typically, great spaces are going to square or rectangle. This footprint allows you to build internal walls if you are hoping to section of certain parts, build an office, color-mixing area etc.
• Entrance and exits. Is the space easily accessible for guests? Is it on the ground floor or on the fourth floor? If located in a shared building, are you able to post signage with directions? Is it front facing or do they have to walk through a maze to find you?
• Common areas. If you are in a shared building, are there common area spaces? For instance, at Be Inspired Salon, we have access to two common area bathrooms. If you have to build a bathroom in your space, it will be at least $10k. And in Wisconsin, you have to have one bathroom for every fifteen people in the space.
• Guaranteed parking. Are you able to ask for guaranteed parking spaces? This a question that your broker can negotiate in your letter of intent.

When reviewing our list, you may be thinking about building an awesome reception area that allows your guests to lounge in luxury. However, we strongly warn you against this impulse because your waiting area doesn’t make you any money! Think about how you can maximize your profits per square foot!

The Logistics

Now that you have found a space that satisfies all (or most!) of the criteria on your checklist, it is time to get into the nitty gritty business dealings.

First, your broker will write a letter of intent. The letter of intent is sent to the building owner and it outlines your conditions for leasing the space. Basically, you are saying: “we intend to lease this space, but we want to know if you would agree on these things…”

So what goes into the letter of intent? Think about: cost per square foot, will they include any free months, can there be a sliding scale ($15 sq/ft for 6 months, then $20 sq/ft), is there a buy-out option where you can terminate your lease early, is there a minimum or maximum to the lease, will the lease amount go up each year, ask for signage on both the inside and outside of your building, are their internet and phone plug-ins etc. Is your head spinning yet? The bottom line is that everything is negotiable which is why you want to work with a seasoned broker!

Another important concept to be clear on is whether the space is being leased as a gross or triple net space. In a gross lease, you will pay a base rent price per square foot, and your landlord pays property insurance, taxes, and maintenance. On the other hand, a triple net lease requires the tenant—you—to pay a percentage of the property taxes and building maintenance. Since property taxes and building expenses (snow removal and garbage collection) can change, a triple net lease can result in paying different amounts each year. Although a gross lease is much simpler and easier to budget for, a majority of leases are triple net. Regardless of the lease type, you need full clarity on your contract; don’t be afraid to ask questions! 

Last but not least, you need to make sure that your space is affordable. Think about the cost per square foot as well as your other expenses: stylists, purchasing retail, brochures, website upkeep, marketing, equipment, and more! Have we mentioned that it is OK to start small? You can always grow bigger, build an addition, take over the space next door, or find a new location.

You Did It!

Take a deep breath or pour yourself a glass of wine because you’ve made it through our three-part series on starting your own salon! Congratulations! Here is a rapid recap of what you have learned:

• Identify a strong vision of where you want to be someday, but understand that there is nothing wrong with starting small.
• Develop a plan to fund your salon—without proper planning, you will not see any profits.
• Find a terrific location with the guidance of a team of advisors who have your back!

Do you have more ideas, questions, struggles, or victories that you want to share with other salon professionals in a safe space? Join our private Beyond the Technique Facebook group! We will empower each other and move everyone forward!