It seems like every day I get emails from readers that want to own their own salon and seek advice. This is awesome. I love helping out, but before you contact me I expect you to do a bit of your own research first. This shows me that you’ve put some effort into the endeavor yourself instead of relying on me to do your legwork. I’ve covered this before in another post but there are a few things that need to be added here.
As always, I welcome any emails and questions you have. I just want to ensure that you all know exactly what you’re signing up for before you invest yourself and your money into a business that could potentially cost you everything. The best way to ensure success is to plan, prepare, and protect yourself.
In addition to the things below, I strongly advise reading AT LEAST ONE business book. I bought this one and enjoyed it a lot. It was incredibly helpful to me and the others I’ve recommended it to.
Before you even THINK about opening a salon, you need to know the following:
* How to write a detailed business plan.
The business plan is not something you can “hold off on.” It is the FIRST thing you need to do. It’s far better for your business to fail on paper than in practice. Go to LivePlan and use their service to write yours. If you don’t have the desire or drive to spend a few weeks working out your plan, you are not ready for ownership.
* Where to get help.
There are plenty of free resources you can take advantage of while planning your business. SCORE is one of them. USE IT.
* How to file for and get a business license.
If you have to ask me whether or not you need one, take a business class. You’re NOT ready for ownership.
* Where to obtain suitable professional liability insurance.
If you don’t know what this is or why you would need it, take a business class. You’re not ready for ownership.
* How to properly classify and compensate your staff.
This is a big one. Failure to adhere to federal tax and labor laws could get you sued, audited, or both at the same time (which is more common since misclassified employees typically file civil suits in addition to initiating audits with the IRS). Too many owners improperly classify their staff. Do not go by what you believe to be true based on your experience in the industry. Chances are, you’ve been misclassified your entire career. Do not trust the advice of an accountant or attorney. Visit the IRS.gov website. Check their resources and speak to a representative. Also contact the Department of Labor. Both are very helpful and will have the answers you need.
* What you can and can’t legally request in an employment contract.
A lot of owners ask for things that put them in violation of some federal labor and tax laws. Doing this invalidates your contract completely and can put you at risk of being sued and/or audited. Don’t be stupid. You can’t ask independent contractors to work a schedule. You can’t restrict ex-employees from working at another salon within a 50 mile radius for 5 years. You certainly can’t require booth renters to adhere to a dress code or use a central phone line. If you don’t know these things, you should not even be attempting to open a business.
* The FLSA: what it is, what it means, and yes…YOU have to comply with it like everybody else.
The FLSA states that all employees must make at least minimum wage for the hours they’ve worked during any given two week pay period. This means that your stylists DO NOT WORK FOR COMMISSION ONLY. If their commissions do not equal or exceed minimum wage at the end of a given two week pay period, you are required to make up the difference. If this is not an investment you are ready to make, do NOT open a salon. You cannot put employees on a schedule and expect them to sit there all day long for free. That is not how employment works.
I’m sure I’ll think of more, but as of late I’ve been incredibly busy at work (literally booked solid every day with a growing wait list that is getting out of control). Between my kids, the book I’m writing, my coursework for my podiatric medical assistant license, answering emails, and managing my business…I’m stretched pretty thin. If you can think of anything to add, please comment below and I’ll add it.