How to start a salon business in India: a step-by-step guide

You have the skill, maybe a few loyal clients, and a space in mind. What usually holds people back is the paperwork, the shopping list and the worry about the first few months. This guide takes each step in order.

Step 1: Decide what kind of salon you are opening

Decide your format first, because it decides your space, equipment, staff and prices. A ladies' beauty parlour, a men's grooming salon, a unisex salon and a skin and spa studio are different businesses. Answer these four questions on paper:

• Who is my client? Age, budget, and what they come in for most often.
• Which services will bring most of the money: hair, skin, nails, bridal, or grooming?
• How many chairs and rooms do I need on day one?
• Will I work on the floor myself, or run the front desk and the business?

Start smaller than you think. Three chairs that stay busy are better than six chairs that sit half empty. You can add chairs once you know your demand.

Step 2: Register the business and get your licences

Most salons need a business bank account, a Shop and Establishment registration, a municipal trade licence and, once turnover crosses the limit, GST registration. Names, fees and forms differ by state and even by municipality, so use this table as a checklist to take to your municipal office or a CA. It is not legal advice.

Shop and Establishment laws are made by each state. The Ministry of Labour published a model law that states can adapt, but the rules you follow are your own state's. Keep a copy of the certificate at the salon.

GST registration depends on turnover. For services, you must register once aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura, according to the GST Council's registration guide. You can register earlier by choice. For how GST shows up on your bills, read GST on salon services.

Step 3: Choose a location your clients can reach

The right location is one your target clients pass every day and can park near, not the one with the lowest rent. Check these before you sign a lease:

• Footfall at the times you will be busiest: evenings and weekends.
• Visibility from the road, and whether you can put up a signboard.
• Parking for two-wheelers and cars.
• Water supply, water pressure and drainage for wash stations.
• Electrical load for dryers, straighteners, steamers and air conditioning, plus space for power backup.
• Ground floor or lift access, for older clients and brides in heavy outfits.
• Lease terms in writing: lock-in period, yearly rent increase, and permission for commercial use and signage.

Stand outside the space on a weekday afternoon and again on a Saturday evening before you sign.

Step 4: Buy the equipment your menu needs

Buy for the services on your menu, not from a catalogue. Get the essentials below first and add the rest once clients ask for those services.

Step 5: Hire and train your first team

Hire for the services that will bring most of your money, then fill the gaps. A small salon often starts with the owner, one or two stylists or beauticians, and a helper for washing and cleaning. The owner usually runs the front desk at first.

• Ask every candidate to do a trial service on a model before you hire.
• Put salary, incentive, weekly off and leave in writing on day one. See salon staff commission structure for ways to pay incentives.
• Train everyone on hygiene, greeting clients and taking bookings the same way.
• Plan shifts so evenings and weekends are fully covered. Salon staff scheduling has a simple rota.
• As the team grows, ask your CA when EPF and ESI rules start to apply to you.

Step 6: Build your service menu and set prices

Price each service from your own costs first, then compare with salons nearby. Do not copy a competitor's rate card; their rent and salaries are not yours.

1. List every service and how long it takes, including set-up and clean-up.
2. Work out the product cost of each service: shampoo, colour, wax, face pack and disposables.
3. Add up your monthly fixed costs: rent, salaries, electricity, loan repayment and the rest.
4. Divide fixed costs by the chair-hours you expect to sell in a month. That is your cost per chair-hour.
5. Cost of a service = product cost + (hours taken × cost per chair-hour). Your price must sit comfortably above it.

An example with round numbers, not market rates: say your fixed costs come to ₹2,00,000 a month and you expect to sell 400 chair-hours. Each chair-hour costs you ₹500. A 45-minute service that uses ₹80 of product then costs you about ₹455 to deliver (₹375 of time plus ₹80 of product). Anything you charge above that is your margin. Our salon business plan template walks through the full maths.

Step 7: Plan your first 90 days

The first three months are about bringing the right people in and making sure they come back.

For ideas on getting those first clients without a big budget, see salon marketing ideas. To decide what to note about each client, see what to track in a salon CRM.

Taking bookings from day one

From the first week, bookings will come in by phone, WhatsApp and walk-in, often while your hands are busy. Zespa's Salon OS gives you one stylist calendar for all of them, with WhatsApp reminders to clients, and our team sets it up for you. It is free for 6 months for the first 50 salons. See how it works.