How to open a nail salon in 10 steps

Nail salons seemed to burst onto the scene in the mid-2000s. From 2008 to 2018, the industry grew from less than $2 billion to nearly $6 billion in annual revenue.

With that success, nail salons proved that little luxuries were recession-proof, scalable businesses. They also came with the reward of helping people feel more confident and beautiful. After all, life can’t be perfect—but nails can be.

What does it take to nail this particular business model? While many nail salon entrepreneurs can file and gloss their way to success, 50% of new businesses fail within 5 years. Ask yourself these 5 questions before starting a business, and keep reading to get your new salon business off on the right pedicured foot.

1) Choose the type of services you’ll provide

Nail salons come in styles as different as the nail colors they offer. There are high-end services that compete with spas. Others are no-frills options that help busy clients quickly get walk-in services and specialize in high-volume work. Almost all nail salons will offer both manicures and pedicures.

How much can you make as a nail salon owner? The average owner brings in $78,000 per year, but this business model is scalable, and owners can add stations and even new salons to expand their income. Owners with multiple salons can make millions. The average revenue from nail salon ownership varies greatly based on location, management, and the size of the salon.

Types of nail salon services you can offer to create your in-demand nail salon are:

• Mobile nail salon services, where the technician travels to the customer
• Nail services using natural and non-toxic nail polishFull-service beauty salons offering hair, cosmetology, and nail services
• Niche services for specific clients, like men or children
• Elaborate or sculpted nail art

2) Create a nail salon business plan

Building a business plan is like shaping an acrylic nail: All the components are layers adding strength to your strategy. A good business plan will help convince partners and nail technicians to come aboard and could be instrumental in funding your new nail salon.

The Small Business Administration recommends your plan contain these sections:

• Executive Summary: Can you describe your business and its potential for revenue, including its mission statement, service, location, and employees
• Company Description: What is the problem your business solves? Who are your customers? What are your strengths?
• Market and Competitive Analysis: How much is the industry growing? Who else is successful in the industry, and what can you do better?
• Organization and Management: How will your company be structured? Who will be in charge of various aspects of your success within the organization, and why will they make your salon successful?
• Services and Products: What services and products will you offer? How will they benefit customers? Do you have a competitive advantage like a proprietary product line?
• Marketing: How will you attract new customers?
• Funding Request and Financial Projections: What are your financial needs in the next five years? What do you project your income, expenditures, and budget will be?

You’ll want to be specific about the finances needed to start the business, including categories like working capital, buildout, inventory, and equipment costs.

Then document the pricing for services you will provide. Multiply this figure by the number of services you’ll perform each day. Finally, subtract your fixed costs (like marketing, accounting, rent, insurance, etc.) and variable costs (like nail polish and labor) to estimate your profits.

3) Find your business niche

“The riches are in the niches.”

So says the marketing phrasebook. In other words, appealing to a narrow band of people or offering just a few specialty services can make you more successful than trying to appeal to everyone. Niches can include ideal customers or the kind of services you offer.

Here’s an example: Are you located right around the corner from a university? Focus on Instagrammable nails for college-aged clients. Then stay up on trends from ombre nails to fruity decals so that campus standouts can refer their friends. Offer finals week promotions and showcase graduation nails on the social media channels students use most.

While it sounds contradictory, concentrating your business on a small niche service or clientele can make it easier since you don’t have to attempt to be all things to all customers. There are more than 23,000 nail salons in the U.S., so standing out from what everyone else is doing is crucial to success.

Typical niches in the nail salon industry are:

• Gel polish, acrylic sets, or silk nails
• Acrylic forms and/or tips
• Hand-painted or intricate nail art
• Simple, beautiful pink or nude manicures
• Wedding nails

4) Uncover your USP

A unique selling position (USP) is the combination of what makes you unique and the benefit you offer customers. What do you do differently than everyone else? Distill this into a tagline that speaks to your ideal demographic.

Want to make sure your USP stands out? Start by asking yourself these three questions:

• What features make you one-of-a-kind? Are you of the highest quality? Do you have the finest nail care products? Is your pricing the lowest?
• Connect your features to the benefit they offer customers. For example, if you feature organic, plant-based polishes, your customers benefit from healthier products.
• Last, connect the benefit to your customers’ desires. You might land on a USP like, “Our plant-based products are full of natural vitamins for stronger nails.”

Your USP helps you serve your ideal client better, market your services, and make business decisions that help you differentiate your salon.

5) Pick your business name

Your salon name should be an extension of your USP—something that summarizes the personality of your business and speaks to your target market.

Once you’ve fired up your creative juices and decided on a few potential names, here are some questions you should ask yourself (and your friends):

• Is it catchy and memorable?
• Is it easy to spell and pronounce?
• Does it align with the target audience?
• Will it be easy to find using Google?
• If customers use an AI assistant, like Alexa, to find you, will your name be understood?

Finally, do a trademark search to see whether a comparable business already lays claim to your favorite name. Don’t forget to check to make sure the .com domain name is available, as well as social media accounts. You wouldn’t want to get your heart set on “Gel Stars” only to discover it’s unavailable.

6) Choose your location and supplies

Most states allow home-based salons (the exceptions are Louisiana, Hawaii, Maryland, and the District of Columbia). You can choose to start a salon out of your home or look for a commercial space. Home salons may be the most cost-effective option but still come with requirements. In some states, you’ll need a separate entrance and bathroom for clients.

If you’re considering commercial locations, let your USP guide you. For example, if you’re interested in a high-end clientele and have an appointment-only policy, your salon will not need a prominent street location with lots of foot traffic.

Because nail salons often get recurring clients, a storefront with plenty of parking close to where your customers live and work is ideal. To keep costs low, look for a location already built as a nail salon, which will have ventilation as well as salon equipment you may be able to purchase, from tables to clippers and cuticle brushes.

Calculate rent, the number of chairs you might operate or rent, and the number of clients you’d need to serve to profit from that location.

Supplies can be financed over time as you uncover used equipment, purchased wholesale, or sourced new. If you’re not in a hurry, you can watch for liquidations on chairs, tables, equipment, and decorative elements and slowly accumulate the things you’ll need to run your own nail salon business.

7) Figure out your financial plan

Business loans, grants, investors, loans from friends or family, and self-funding through credit or savings are all common ways of funding a new nail salon.

Money may not come from a single source. For example, you might self-fund the equipment and salon build-out from savings while applying for a loan to purchase a commercial building.

To get a sense of what’s best for you, take an honest look at your credit, savings, and the possibility of small business grants in your area that work with nail salons. The best financial plan uses as little debt financing as possible so that new salon owners aren’t strapped with the extra costs of paying interest while trying to launch their salons.

The average Small Business Administration loan size for would-be salon owners is $110,000. That gels with an average nail salon size of 1,000 square feet with industry average build-out costs of $100 per square foot. You can lower costs using preowned equipment or taking over a space that’s already being used as a nail salon.

If you can compete for a Small Business Association loan backed by the U.S. Small Business Administration, you’ll be rewarded with good rates and payback terms. A microloan program awards up to $50,000 (the average is $13,000) and works with new businesses with outstanding business plans with terms that allow for repayment periods up to six years. These loans can be used on furniture, equipment, and inventory.  

Equipment financing loans are one way to build out a new salon for borrowers with average credit. The purchases serve as collateral for the loan, making it easier to qualify for these types of loans. They’re also quick to apply for and receive.  

Self-funding through an introductory 0% APR credit card is another popular option for purchasing inventory if you pay off the debt before the standard APR applies. An advantage to this approach is that you’ll be building credit to help you get a traditional loan later.

After getting your finances in order, it’s time to protect your new business with good small business insurance. Coverage also lets customers know you put their health and safety first.

These are some core coverages for your nail salon business:

• Property insurance: Property insurance includes 2 coverages, one for your building and another for all of the personal property inside. You can get these coverages alone or as part of a Business Owner’s Policy.
• General liability insurance: This coverage protects your nail salon business if you’re sued for an injury or property damage claim. You can purchase it alone or as part of a Business Owner’s Policy.
• Nail technician insurance: If you hire employees, you will want to protect them against claims to protect their businesses and yours. This coverage can apply to your self-employed booth renters as well as employees.
• Workers’ compensation insurance: If you hire any workers, your state will almost certainly require workers’ compensation insurance. It protects against claims by sick or injured employees and will help pay for medical bills, rehabilitation, and lost wages. It’s affordable to get workers’ compensation insurance, and it’s easy to calculate your premiums.

With Huckleberry, you can get all of these insurance coverages and more in just minutes. Just enter some quick info about your business, and you can get a same-day, affordable insurance policy that fits your needs!

8) Get your paperwork in order

Your first stop will be applying for an Employer Identification Number (EIN) from the IRS. It is a tax identification number for business entities and will let you open bank accounts and lines of credit, apply for business licenses, and file taxes. It’s simple to apply for an EIN.

Next, you’ll want to register your business. The most common are sole proprietorships and limited liability companies (LLCs). Sole proprietorships are simple, but as an LLC, you’ll have advantages over a sole proprietorship. Your personal assets will be protected in the event the business is sued. You can also have co-founders and partners if you choose to go the LLC route for your nail salon.

You’ll likely need a state operator license. It comes with requirements like a high school education and completing a nail technician program, plus hours in the field. Then you’ll need to pass the operator licensure examination and pay a fee to get licensed.

In some states, if you plan to rent booths to nail technicians, you’ll need a cosmetology license and/or a booth rental license as well. You’ll likely need a physical address to apply for the license, so finding your location before this step is important.

Finally, many counties also require a general business license, which is required of businesses regardless of industry. General business licenses are required at the state level for nail salon businesses in Alabama, Alaska, Delaware, the District of Columbia, Nevada, and Washington.

9) Hire your first nail technician

One of the biggest controversies in the nail salon world is whether to hire nail techs, cosmetologists, and manicurists on a commission basis or rent booths to independent contractors.

Here are the benefits of each approach:

Without employees, your startup costs will be lower. Booth rental may be the norm in your area, as many experienced nail technicians expect to control their own clientele. However, this is not always the case. Some experienced technicians may jump at the chance to have lowered taxes, benefits, and paid days off. It will all depend on your market. Most nail technicians work on commission, whether as a booth renter or employee, and the vast majority provide their own supplies and tools.

The average booth rental fee is just over $300 per month. It ranges from $150 to $600 with location, amenities, and access to walk-in clientele.

There is no right answer to this hiring dilemma, but the path you take will help define your nail salon.

Regardless of the employee status of your nail technicians, you’ll need to consider hiring employees for reception, managing the property, cleaning, bookkeeping, and marketing.

10) Spread the word about your nail salon business

There are many ways you can reach out and grow your clientele, but the best ideas will stem from knowing your USP and understanding where your ideal clients are located. Here are some marketing ideas to get you started:

Local visibility

Forget subtle—you want your salon to stand out as much as a set of your wildest neon nails. Signage and local newspaper ads, claiming your Google my Business Listing can add to your presence and draw in new clients.

To increase your visibility, put out a chalkboard sign with events, loyalty programs, or promotions. Generate word of mouth by asking your clients for testimonials to print on flyers, your digital channels, and on your chalkboard.

Find local partners by reaching out to businesses that offer services to the same ideal clients that you do. For example, if you specialize in nail sets for weddings, reach out to local wedding photographers, caterers, and venues to share resources.

Social media

Salons have great visual appeal. Asking clients to photograph and feature their nails can be a source of endless visual content for a nail salon. Consider the platforms where your clients are most active, don’t be afraid to go live, experiment with local hashtags, and tag clients. You can also follow clients and comment on their posts. Consider giving demos, posting helpful quizzes to help readers find their perfect nail shape, or announcing new products on your social media accounts.

While you’re at it, incentivize reviews. Word-of-mouth marketing reigns supreme in the nail world, where your product gets compliments from all your customers’ friends. Incentives to refer you or leave reviews on booking sites like Yelp can encourage new clients to take the leap.

Paid advertising

Facebook and Google targeting allows you to spend less than newspaper ads to target your potential clients in your local area and even narrow the ads you show by income and gender. You can pay for clicks, not impressions, so that you only pay when potential customers click your ad.

Bonus: Check out these tips for running a successful nail salon business

Even if you’ve dipped your nails into the world of running your own booth, you may still be hesitant to take the dive and start your own nail salon. Successfully running a nail salon business takes hard work and commitment to your craft. Ultimately, you’ll be rewarded by helping your customers feel better about themselves.

While you’re getting started, be sure to prioritize yourself and check out 4 Ways to Stay Sane as an Entrepreneur.

Check out these professional associations in the nail world for more information about how to grow your nail salon:

• The Salon Business
• International SalonSpa Business Network
• International Nail Technicians Association

When you’re ready to realize your dream of a nail salon business, you can get a business insurance quote from Huckleberry in less time than it takes to prep for an acrylic set of nails. Getting a quote is free, easy, and online.