What Licenses do I Need to Open a Salon? The Ultimate Guide

“Quick summary” One of the newest business fads is owning a salon, however, opening a beauty salon is harder than it seems.

It's likely that if you plan to create a beauty shop, you have been considering the necessary steps. You're likely considering every possible detail, including the associated legal obligations and the overall cost.

And one of the most important things to think about before opening a salon is the legal requirements! This will help to ensure that everything runs well and prevent problems down the road!

The specifics of this process may change slightly because each state or province has its company licensing regulations, cosmetology license requirements, and building codes as well.

However, getting the right information about the licenses required is not rocket science. It's simple to figure out what licenses do you need to open a salon with a little research. In this blog, we'll try to cover the most typical needs for starting a successful salon business.

What License Do You Need to Open a Salon?

Obtaining the necessary licenses and permits is a fundamental and non-negotiable step in establishing a salon business. These licenses serve as the legal foundation that ensures your salon's compliance with industry standards, health and safety regulations, and local ordinances.

Failure to secure the requisite permits can lead to legal complications, fines, or even the suspension of your salon operations. To provide you with a comprehensive understanding of these pivotal licenses, we will be adding the list of essential licenses and permits required to launch your salon business.

Let’s get started.

Cosmetologist License

A cosmetology license, which the state government grants, enables salon staff to offer beauty salon services within the establishment. Additionally, the owner of a salon or spa needs to hold a license in cosmetology. State-specific requirements to open a salon may differ, but cosmetology license renewals are generally required every two years.

The cosmetology certificates must be prominently displayed in the salon for easy viewing by both inspectors and clients.

Obtaining a cosmetology degree requires completing a 1,500-hour course.

Another option could involve a 3,000-hour apprenticeship. To figure out your training duration, follow your state's requirements. After completing the program, you'll need to pass an exam to secure your cosmetology license.

Note: States vary in license standards, but many mandate completing specific hours at a cosmetology school. Explore the American Association of Cosmetology Schools website for detailed license requirements in your state.

Salon Business Operation License

Obtaining a Salon Business Operation License is an integral part of establishing your salon business. Local government authorities or the relevant regulatory body issues this license for the operations of businesses and is a legal requirement to open a salon and its successful operations.

To secure this license, you'll need to go through the compressive application process while sticking to the specific requirements and eligibility criteria set by your local government. These requirements usually include education and training qualifications, compliance with health and safety standards, and adherence to zoning and business location regulations.

Additionally, compliance with local health and safety regulations, such as sanitation standards and infection control practices, is also quite crucial. You need to renew your salon business operation licenses periodically and prominently display them in your salon for both customers and authorities to see.

Be mindful of associated fees and ensure your business plan accounts for these expenses. Local regulations governing salon licenses can vary, so it's vital to thoroughly understand and adhere to the specific requirements in your area to ensure the lawful and seamless operation of your salon business.

Certificate of Occupancy

Unless you opt to purchase a franchise, your beauty salon will be set up exactly how you want it. One of the decisions you'll have to make is where to operate your firm. If you choose to start a salon in a standalone building, or perhaps in a location that is part of a shopping mall or another comparable venue, you may be needed to obtain a certificate of occupancy. The local government offices issue this document to salon businesses.

There are some general criteria when you need the certificate for occupancy:

• If you build a new structure
• If you intend to occupy a structure that was previously occupied by a different type of enterprise.
• In the event that a commercial building's occupancy changes
• If the proprietorship of a building changes

To get this certificate, there will be an inspection as part of the procedure. The building's conformity with the local government's building regulations is mandatory.

Salon Retail Seller Permit

If your store is in a state that collects sales tax, you will almost certainly require a retail seller permit. This enables you to give clients more than simply services at your salon—you can now sell them merchandise.

Without it, you need to forget about all the revenues from both retail sales and supplementary add-ons.

It is imperative to acquaint yourself with the intricate web of rules and regulations managing business operations within your state, and a beneficial starting point is to check out the US Small Business Administration website. Furthermore, for a better understanding of the specific permit requisites applicable to your area, reaching out to the Chamber of Commerce in your city is recommended.

While obtaining a seller's permission typically incurs no direct fee, it is noteworthy that a security deposit is required to mitigate potential liabilities due to unpaid taxes in case of insolvency. The amount of this deposit is decided when you go to submit an application.

How Much Does a Salon License Cost?

When planning your budget for your new salon, remember to account for the costs of company licenses and permits, as well as everything else. Licensing fees include application fees, training charges, and renewal fees, all of which are important investments for the legality of your salon.

Every US state mandates the acquisition of a business license. You can visit the U.S. Small Business Administration to submit an application for a business license at your state department. All you have to do is complete an application with your occupation and social security number.

Although the price might vary from $50 to $400, a company license normally costs about $100. It is also possible to add a $25 or so processing fee.

Retail licensing requirements to open a salon vary by state but are normally required if you plan to sell things to customers.

Other Legal Requirements to Open a Hair Salon

To ensure the success of your salon business, diligent attention to specific matters is quite crucial. In the beginning, it can be a bit overwhelming, but with adept professional guidance and thorough end-to-end research, success is achievable and rewarding.

Keep in mind that some requirements will remain the same in the whole country, while other permits, prices, and taxes may subtly differ by state. As a business owner, conducting meticulous research is more than crucial. Go through the materials at your municipal office and explore state websites online to get comprehensive information.

The right blend of insight and strategic planning will help your salon business succeed.

Building Permit

Obtaining a building permit is a crucial step in the process of establishing your salon business. This official document serves as permission from local government authorities, allowing you to make changes to an existing structure or construct a new building.

In the context of a salon business, you may need a building permit for various reasons:

• Renovations: If you're renovating an existing space to create your salon, a building permit is usually required. This could involve changes to the layout, electrical work, plumbing, and structural modifications.
• New Construction: At the start of establishing a new salon facility, obtaining a building permit is crucial. It serves as a necessary step to ensure strict adherence to local building codes and safety standards.
• Change of Use: If you are getting a space that was previously being used for a different business or had a distinct zoning designation, getting a permit is essential to smoothly transform it into a salon.
• Safety and Accessibility: Acquiring building permits is very important, to ensure compliance with stringent safety codes. It includes adherence to fire safety measures, electrical systems, and meticulous attention to accessibility standards designed for individuals with disabilities.
• Environmental Considerations: The location and regulatory environment of your venture require careful consideration, as environmental permits may be necessary. It is particularly relevant if your salon involves the use of chemicals or hazardous materials.

Federal Employer Identification Number (EIN)

One of the most important things you need to have in order to launch your salon business is this federal number. It is required for both state and federal tax returns. It is useful for paying your own taxes, creating tax paperwork for your suppliers, and processing employee payroll.

Additionally, it permits every state to levy taxes on any goods that your store sells to each individual customer. Your EIN will be required in order for you to pay tax on these purchases.

The IRS and your state's website will both give these services for free, however paying a third party to execute the paperwork for you can cost around $75.

To obtain this number, bring your business operation license, personal data, and identification, as well as an outline of what you'll be selling your consumers and the services you'll be offering.

Tax ID

If your salon business doesn't involve the hiring of employees, getting a Taxpayer Identification Number (TIN), commonly referred to as a tax ID, can be considered a crucial and foundational measure. This 9-digit number, issued by the Internal Revenue Service (IRS), serves the pivotal role of uniquely identifying individuals or companies for tax-related purposes.

Beyond its intrinsic value in facilitating tax reporting and compliance, a TIN number is also important for dealing with financial institutions.

Banks often require a TIN before extending credit or considering your application for a business loan. It's a means of establishing your financial identity and credibility. You can obtain a TIN for your salon business or yourself by directly applying to the IRS.

Having a TIN in place ensures that your financial and tax affairs are properly documented and can facilitate various financial transactions and legal compliance aspects for your salon venture.

Salon Insurance

Operating a salon business entails risks, and having the proper insurance coverage is critical to protecting your company, assets, and clients. Here are some examples of insurance you may require for your salon:

• General Liability Insurance: This includes any client injuries or property damage that takes place in your salon. It covers you in the event of equipment damage, slip-and-fall incidents, injuries from services, etc.
• Professional Liability Insurance: sometimes referred to as errors and omissions insurance, or E&O, is another essential for proprietors of beauty salons. It covers claims for negligence if a stylist causes damage to a client's hair or scalp while performing a service.
• Workers' Compensation Insurance: Required in the majority of states, this covers medical expenses and missed pay if an employee is hurt on the job. The size and location of the salon determine how much this insurance policy will cost.
• Property Insurance: This kind of insurance guards against financial losses brought on by theft or harm to your salon's inventory, furnishings, and other assets. Ensure that high-value products have sufficient coverage.
• Policy of Business Owners: A BOP is a policy that combines general liability, property protection, and business interruption protection into a single policy. This is more convenient than having distinct policies.
• Cyber Liability Insurance: protects your salon in the event of a data breach, a network outage, or the compromising of your client's personal information.

Check your state's unique insurance regulations for salons for more details on salon business insurance. Depending on your operations and hazards, an insurance broker can also offer advice on the right coverage kinds and levels. Insurance often ranges in price from $50 to $250 every month and protects you, your employees, and your customers. These are only approximate amounts, so speak with an expert to obtain precise information.

Bill of Sale (or Lease Agreement)

When establishing your salon business, it's imperative to have a comprehensive Bill of Sale or Lease Agreement in place. This legal document serves as the foundation for the transaction or rental of the salon space and showcases crucial terms and conditions.

Whether you are purchasing the property or entering into a lease arrangement, a well-drafted Bill of Sale or Lease Agreement will specify the responsibilities of both parties, outline the financial arrangements, and provide clarity on any contingencies or obligations.

By having this document in hand, you not only protect your interests but also establish a clear framework for the smooth operation of your salon business within the chosen premises. It is advisable to consult with legal professionals or real estate experts to ensure that the Bill of Sale or Lease Agreement meets all legal requirements and safeguards your business's future.

Inspections Approvals

Absolutely, when embarking on the journey of starting a salon business, it is imperative to be well-prepared for inspections by your state board and other relevant authorities. Here are some additional nuances to consider:

• Facility and Equipment Inspection: State boards or local health departments often conduct meticulous inspections to ensure the safety and immaculateness of your salon. They will scrutinize the condition of your facilities, the sanitation of your equipment, and the overall salubrity of the environment for both customers and staff. Regular cleaning and maintenance of your equipment and facility are crucial to passing these inspections.
• Licensing and Permits: Ensure that you have acquired all the requisite licenses and permits mandated by your state and local government. It includes your business license, cosmetology or beauty establishment license, and any other specific licenses.
• Safety Materials: Display safety materials as prescribed by your state. It includes placards and notifications concerning health and safety practices, employee rights, and customer information. Also, you should stay updated with any changes in regulations.
• Policies and Procedures: Formulate and implement policies and procedures that conform to state regulations and exemplify best practices in the industry. This encompasses meticulous attention to sanitation, infection control, and rigorous emergency response protocols. Ensure that your staff is adeptly trained in these procedures, and maintain comprehensive documentation to substantiate their adherence.

Proof of Continuing Education

Proof of continuing education is a crucial consideration for starting a salon business. Regulatory authorities mandate ongoing education for salon professionals to ensure that they remain current with evolving industry standards, techniques, and best practices.

This requirement not only serves to enhance the knowledge and skills of salon practitioners but also upholds the safety and satisfaction of clientele.

The particulars of continuing education mandates can fluctuate by location, covering areas like sanitation, hygiene, customer service, and the adoption of new beauty products and technologies.

Adhering to these requirements not only facilitates the establishment of your salon but also cultivates a dedication to excellence and the provision of high-quality services in the dynamically changing field of cosmetology and beauty.

Salon Name

It is a pivotal decision as your company name expresses your brand throughout and will stay with your brand. Ideally, choose a name that is both meaningful and memorable. However, you cannot just keep any name for your business; as it necessitates thoughtful consideration.

To find out if your ideal name is available, search trademark databases and the state list of registered business names. Additionally, examine if there is a domain name that works.

There are certain naming regulations in place in many states, as well as words that are restricted in business names and marketing. These are frequently in place to prevent people from misrepresenting the type of goods or services that they provide. It's very important to get the correct name for your salon business.

If you're unsure, find out your state's criteria for LLCs (limited liability firms) and corporations' names, or consult a legal expert.

Note: The finest names are those that are simple to remember, pronounce, and spell.

Health & Safety Permits

Prioritizing your clients' health and safety ought to be your first concern.

Salons manage diverse equipment, sharp objects, and chemicals, necessitating rigorous health and safety regulations. It stands as a paramount requirement while starting a salon.

The objective of health and safety permits is to mitigate the risk of infections, mishaps, and other potential hazards. Permits for health and safety address a number of topics, such as chemical disposal, sterilization, and cleanliness.

Health agencies conduct routine inspections to make sure your salon complies with these rules and maintains a secure environment for both employees and clients. By obtaining these health and safety licenses, you can ensure that your salon stays compliant and safe while ensuring compliance with government regulations.

Other Specific Licenses and Permits

Depending on your ideas for the business, these are some that you might need for a beauty salon:

• Liquor License: A few salons choose to provide their clients with alcoholic drinks. If you intend to do so, you should research what licenses you need on how to open a salon.
• Permit for Alarm System: Installing alarm systems in retail spaces is a quite frequent practice for business owners. You might need to obtain a permit to have one on your salon from your state, city, or other local agency.
• Health Permit: If you want to offer cooked food or beverages to the general public, you may need this. The health inspector will come to your business to ensure that it is clean, safe, and well-maintained in order to serve clients in a healthy atmosphere.
• Signage: Business signs that are permitted in the region must adhere to various regulations set forth by certain municipal governments. There are certain things that wouldn't be permitted since the regulating body simply doesn't want things to look crazy.
• Zoning Licenses: Zoning licenses are given to ensure that areas or properties are being used for the purposes for which they are authorized. Certain districts are zoned for particular purposes. You must be conducting business in an area designated for commercial enterprises. You must obtain the necessary licenses and permits if you wish to open a home salon.

Where to Find Information on Requirements to Open a Hair Salon?

When researching salon requirements, it is obvious that you need to consider licensing, permits, safety regulations, sanitation guidelines, insurance, zoning, and any other relevant legal and operational aspects. But the question is, where will you find this crucial information about getting the required licenses and permits for your salon business?

To find information on the requirements for opening a hair salon, you can start by accessing various resources and authorities that provide guidance and regulations for salon businesses.

Here are some key sources to consider:

• State Board of Cosmetology: In the United States, each state has its own State Board of Cosmetology or an equivalent regulatory entity, which manages the licensing and comprehensive regulation of cosmetology and salon businesses. To get profound insights into the requirements, licensing procedures, and regulations tailored to your business, a judicious visit to your state's board website is crucial.
• Local Government Websites: Beyond state-level regulations, you may need to embrace compliance with local ordinances and zoning requirements. Local government websites offer a treasure trove of information, including comprehensive data on business licenses, permits, and zoning regulations that apply to hair salons in your area.
• Industry Associations: There are industry associations, such as the Professional Beauty Association (PBA), that furnish resources and guidance on opening and operating a salon. They may provide checklists, best practices, and information on industry trends.
• Small Business Administration (SBA): The SBA offers valuable resources for small business owners, including information on starting and running a salon business. They can help you with business planning and financing.
• Chamber of Commerce: Your local Chamber of Commerce may offer support and resources for new businesses. They can provide guidance on local regulations and connect with other businesses in your area.
• Legal and Business Consultants: Consider consulting with legal and business professionals who specialize in the beauty industry. They can provide personalized guidance and ensure you are meeting all legal requirements to open a salon.
• Online Forums and Communities: There are online forums and communities where salon owners and professionals share their experiences and knowledge. Participating in these platforms can provide insights into the practical aspects of opening and running a salon.
• Networking with Salon Owners: Reach out to existing salon owners in your area. They can offer valuable insights into the requirements and challenges specific to your locality.

Conclusion

This may appear to be a large amount of information. It's critical that you avoid feeling overburdened by everything. All of the licenses, permissions, and certificates mentioned above are unlikely to be required. We just want to make sure you know what kinds of paperwork you may need when preparing to operate a salon business.

If it's needed in your area, don't skip it. You may believe it is redundant or unnecessary, or you may believe the cost of obtaining all the essential licenses and permits is overwhelming.

But, believe me, you don’t want to skip these licenses at all. If you do not obtain one mandated by a governing agency and are caught without it, you will wind up spending more than you would have if you had just obtained it in the first place.

Even worse, if the authorities have their way, you might have to shut down your business. It's advisable to secure all of the necessary licenses and permits for your restaurant business right away.

Pro-Tip: If you have started your salon business and are willing to streamline operations and optimize customer experience, then get your hands on OVVI’s feature-rich, customized POS system.