Opening your own spa or beauty establishment means you’re prepared to reach for the top. It’s an exciting time that involves a roller coaster of emotions and activities. Taking this leap is risky; there’s no way to sugarcoat that. But with the risk comes the potential that you will succeed in achieving your most ambitious career goals.
As a spa or salon owner you can shape your business however you see fit. You may want to model your business to include esthetician services along with other spa treatments. Dolce Vita Day Spa in Houston follows this model, offering a range of specialized facial services that include anti-aging, restorative, tinting, and skin resurfacing. Clients can also choose from any number of waxing services, massages, body wraps, and other body treatments.
Another option is to create your business model along the lines of Brad Duncan Skin Care in Boston. Ranked among the city’s best spas by the likes of Boston magazine, Improper Bostonian, and Allure, this business focuses on providing only esthetician services such as facial treatments and skin care products.
Many estheticians find that offering their services alongside other health activities is hugely rewarding. Just ask the owner of Lady Spa and Yoga in Toronto, where clients can enjoy a yoga session, steam room, spa, and waxing studio.
No matter what model you follow, as an owner of an independent esthetics business you’ll need to understand the ying and the yang of what you’re about to get into:
- Esthetician services
- Business activities
Establishing Your Own Esthetician Business: Considering Your Options
At this point you have no doubt proven that you’re a skilled esthetician. You’ve got the talent it takes to attract and retain regular clients.
The beauty of starting your own esthetician business is that you have so many options. In additional to offering packages of the most popular general beauty services, you also have the option of choosing a niche esthetician market to focus on, such as:
- Medical esthetician – requires extra training to provide medical esthetician treatments or open up a medical spa
- Makeup artist – weddings, Hollywood, television news, and fashion events all need makeup artists
- Holistic esthetician – incorporate homeopathic, naturopathic, herbal, and organic skin care treatments or detoxification regimens
- Wax specialist – Brazilian, bikini, face, etc
- Esthetician combo specialization – many estheticians choose to gain additional training or certification in a specialty area and offer combined services such as massage, yoga, or acupuncture
- Esthetician sales representative – this involves the sale and demonstration of beauty products
- Specially sanctioned esthetician services – depending on the your state’s regulations, you may be able to specialize in microdermabrasion, LED treatments, chemical peels, and permanent makeup
Your imagination is the limit when it comes to what services you want to offer in your own spa or beauty establishment.
If you want to open your own day spa you’re going to need to have at least a basic sense of business if you want to be successful. This can be a stumbling block for many experienced estheticians who are great at their craft but don’t take the necessary time to learn how a business works. The fact of the matter is, the business-side is just as important as the beauty-side. While taxes and city licensing might be new subjects, you can rest assured that once you conquer the business learning curve you can go right back to focusing on the services you provide as a professional esthetician.
Here is what you’ve got to learn about as a prospective independent esthetician business owner:
- Renting or buying a business location
- State board of cosmetology and health department regulations
- City or county business licenses
- State and federal employment law and taxes
If the thought of developing a business know-how is absolutely horrifying you can always hire or partner with someone who will do this for you.
Renting or Buying a Business Location
You know the adage – location location location. It holds just as true for an esthetician business. You can browse real estate near places where your target clientele already congregate or you can take a risk and open up a new location in an area you’ve calculated is under served with less competition. The number of walk ins combined with your already established regular clientele will determine how aggressive you need to make your future advertising campaigns.
Once you’ve selected a location you can also consider property and liability insurance.
Cosmetology Board and Health Department Regulations
When you’re shopping around for a business location it’s important to be aware of your cosmetology board and state health department regulations as they relate to the requirements for a salon or other type of beauty establishment. If the establishment you’re considering renting doesn’t have features like a public bathroom and sinks you will need to get these installed. That means potentially hiring an architect, electrician, and plumbers. This can increase costs significantly.
Check with your state’s board of cosmetology and health department to see exactly what building standards business like yours must abide by. These commonly include:
- Adequate ventilation system
- Hot and cold running water
- Potable drinking water
- Hand washing facilities
- Public toilets
- Minimum square footage requirement per esthetician chair or work station
City or County Business License
Before you can open your own salon or any other type of esthetician establishment you need a business license. Your city hall or county administration building usually issues business licenses. When filling out your business license application you will likely need the following:
- Business address
- Business name
- What kind of business you are registering, such as an LLC or sole-proprietorship
A sole proprietorship is a business in which you are the sole owner and operator. A limited liability company (LLC) can shield you from risk while allowing you to report business earnings as personal income, and is the model you can use if you plan to hire several employees or open a franchise.
Know State and Federal Employment and Tax Laws
If you’re thinking about hiring employees or working with partners then you must learn about your state’s employment law as well as federal employment law. Making a mistake in this aspect of owning an esthetician business can have huge ramifications, leading to fines and even bigger headaches.
Your state’s board of cosmetology should have the appropriate resources for you to learn about applicable state employment laws. For example, New Jersey and Pennsylvania do not allow you to rent booths or rooms to independent practitioners.
The beauty industry involves commission, salary/wage, and independent rental work. As a business owner you are responsible for fitting these professional work relationships into the federal tax code. Out of recognition that this can be complicated and confusion, the IRS has published a specific tax guide for beauty salon owners.
This is basically how things stand with federal employment law and the beauty industry:
- If you pay someone an hourly wage or annual salary then they are considered your employee
- If you pay someone a commission then they are considered your employee
- If you rent a booth or room to someone and that person sets their own hours, provides their own tools and supplies, sets their own prices, and sees their clients, then you can consider that person an independent contractor
If you choose the sole-proprietor route and you own a calculator then chances are you can get by doing your own taxes. If you have employees or room/booth renters then things get a little more complicated with W-2s, 1099s, and payroll taxes to name just a few. In this case you’re advised to spend your first tax year with someone who is experienced to help guide you through the paperwork.
Funding Your Esthetician Business Idea
Before you think about opening your own practice you should have years of experience, an established base of clientele, and enough savings to fund your idea. It is this author’s opinion – along with that of many others in the trade – that you shouldn’t go into debt to start your business. Ultimately though that decision is up to you, and plenty of other people will tell you that if you have an awesome business plan and experience then a loan can be worthwhile.
Regardless of how you initially fund your business, the following list shows expenses you can expect to incur along your way to opening (cost estimates are omitted as these can range widely from location to location):
- Monthly lease/mortgage payment
- Cost to renovate your business to meet state code
- Property and liability insurance
- Business license cost
- Cost of beauty supplies and esthetician tools
- Cost of basic materials like tables, chairs, mirrors, and waiting area furniture
- Business expenses like a computer, webpage, telephone, business cards, cable TV subscription, and magazine subscriptions
- Advertising and marketing campaigns
- Hiring employees
- Your own costs for your basic living needs: rent/mortgage, transportation, food, medical insurance, etc
- Accountant, if needed
- Extra expenses for repairs and other unexpected costs
While you must consider these expenses, they are not presented to discourage you. There are plenty of success stories out there; you need look no farther than the city or town where you live. Take Lisa Crosier Skincare and Beauty Boutique as an example, located in the town of Bellingham, Washington population 85,000. With a soothing hydra facial starting at $170, this business brings in enough revenue to support its eponymous founder and owner who is a master esthetician with 20 years of experience, as well as three additional employees.