10 Steps to Start a Nail Salon Business

Last Updated January 29, 2024
11 Mins Read
Starting a Nail Salon Business

10 Steps to Start a Nail Salon Business

Table of content

In the US, there are around 56,300 individual nail salons and 395,600 nail technicians. Nail care makes up nearly 16% of the $42.8B beauty salon market with an annual spend of $8.36B. Despite the impact of the pandemic, industry experts predict that the beauty market will grow at an average of 9% annually for the next couple of years. Starting a nail salon is relatively simple, and the benefits include quick entry into the market, the potential for a great living, rewarding work, and high client retention.

Key Takeaways:

  • Starting a nail salon business can be a lucrative opportunity in the beauty industry.
  • The beauty market is projected to continue growing, offering favorable conditions for new nail salon businesses.
  • Opening a nail salon requires careful planning and consideration of various factors.
  • Your business name, legal entity, and licensing are crucial steps in establishing your nail salon.
  • Creating a comfortable and enticing space, choosing the right supplies, and implementing effective marketing strategies are key to success.

Assess Your Business Needs

Before starting your nail salon business, it is crucial to assess your business needs to ensure a successful venture. Here are some key considerations:

  1. Type of Salon: Determine the type of salon you want to run. Will it be a full-service salon offering a wide range of nail services or will you specialize in a specific niche, such as natural nail care or nail art?
  2. Employees or Renters: Decide whether you want to hire employees or rent stations to independent nail technicians. Each option has its pros and cons, so weigh them carefully based on your business goals and budget.
  3. Target Niche: Identify your target market or niche. Research the preferences and demands of your potential customers to tailor your services and products accordingly.
  4. Study Your Competition: Conduct market research to understand the existing competition in your area. Analyze their offerings, pricing, and marketing strategies to differentiate your salon and stand out from the crowd.
  5. Pricing Strategy: Set competitive prices for your services by considering factors such as market rates, your expertise, and the quality of products you use. Striking a balance between affordability and profitability is key.
  6. Create a Budget: Develop a comprehensive budget that covers the costs of salon setup, equipment, supplies, licensing fees, marketing, and ongoing expenses. A well-planned budget will help you stay on track and prevent overspending.
  7. Business Plan: Draft a detailed business plan that outlines your goals, target market, marketing strategies, financial projections, and growth plans. A solid business plan will serve as a roadmap for your salon’s success.
  8. Funding: Determine how you will raise the necessary funds to start your nail salon. This could involve personal savings, loans, or seeking investors. Consider all available options and choose the one that best suits your situation.

By carefully assessing your business needs and planning accordingly, you’ll be well-prepared to launch and operate a successful nail salon business.

Choose Your Business Name

Your business name plays a crucial role in defining the identity of your nail salon business. It represents your brand, communicates your niche or personality, and helps you stand out from the competition. When choosing your business name, there are a few key factors to consider.

  • Keep it simple and memorable:
  • Choose a name that is easy to pronounce, spell, and remember. A simple and catchy name will make it easier for people to recall and refer others to your salon.

  • Reflect your branding:
  • Ensure that your business name aligns with your branding and the image you want to project. It should convey the essence of your nail salon and appeal to your target audience.

  • Uniqueness:
  • Make sure your chosen name is distinct and not too similar to another nail salon’s name. Conduct thorough research to avoid legal issues and confusion among customers.

  • Check availability:
  • Before finalizing your business name, check its availability on social media platforms and trademark databases. It’s important to secure your chosen name across different online platforms.

  • Website address:
  • Consider if a relevant website address for your nail salon is available to buy. Having a website that matches your business name can enhance your online presence and make it easier for potential customers to find you.

Take your time to brainstorm and choose a business name that represents your vision, values, and unique selling proposition. Remember, your business name sets the foundation for your brand identity and can greatly influence the perceptions of your customers.

Create a Legal Entity

When starting a nail salon business, it’s important to establish a legal entity to protect your personal assets and ensure smooth operations. The most common type of legal entity for nail salons is a Limited Liability Company or LLC.

An LLC provides personal liability protection, meaning that your personal assets, such as your home or car, are separate from your business finances. This protects you in case of any legal issues, debts, or liabilities that your nail salon may encounter.

To form an LLC, you’ll need to complete certain steps and pay filing fees. These steps may include:

  1. Choosing a unique name for your nail salon business that complies with state regulations.
  2. Filing the necessary paperwork, such as Articles of Organization, with the appropriate state agency.
  3. Obtaining any required business licenses and permits, such as a cosmetology license or a salon operation license.
  4. Deciding on the business structure that suits your needs—considering factors like your investment, the number of owners, and the desired level of control.

Creating a legal entity for your nail salon business is an essential step in establishing a solid foundation for your venture. It provides the necessary protection and legitimacy to operate in compliance with local regulations and industry standards.

Complete Tax Registration

When establishing your nail salon business, it is crucial to comply with tax requirements. Register for local, state, and federal taxes to ensure you are meeting your tax obligations. This process involves reporting your business income, expenses, and deductions for tax purposes.

One essential step in tax registration is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This unique identifier is used to identify your business for tax purposes. You can apply for an EIN online on the IRS website, and the process is typically quick and straightforward.

Each state may have specific tax requirements for nail salon businesses. It’s important to research and understand the tax regulations in your state to ensure compliance. Some states may have additional taxes specific to the beauty industry, such as salon services taxes or sales taxes on retail products.

Understanding your business structure is crucial, as it determines the types of taxes and benefits or exemptions you may be eligible for. Different business structures, such as sole proprietorships, partnerships, or limited liability companies (LLCs), have different tax obligations and deductions. Consult with a tax professional or accountant to determine the most advantageous business structure for your nail salon business.

Properly managing your business taxes is essential for the smooth operation of your nail salon. Keep accurate records of your income and expenses, and understand the tax deductions you are eligible for. Deductions may include salon supplies, equipment, employee wages, advertising expenses, and more.

By completing the tax registration process and obtaining an EIN, you demonstrate your commitment to operating your nail salon business legally and responsibly. Compliance with tax regulations not only protects your business but also ensures the stability and growth of the beauty industry as a whole.

Get Licensing and Permits

Starting a nail salon business requires obtaining the necessary licenses and permits. Ensuring compliance with regulatory requirements is crucial to operate legally and avoid potential penalties or closures.

Here are the key licenses and permits you need to acquire for your nail salon:

Cosmetology or Nail Technician License

In order to provide nail services professionally, you’ll need to obtain a cosmetology or nail technician license. This license ensures that you have the necessary skills and knowledge to perform nail treatments safely and effectively.

Salon Business Operation License

A salon business operation license is required to legally operate your nail salon. This license verifies that your business complies with local regulations and health and safety standards.

Retail Seller Permit

If you plan to sell nail products, such as polishes, lotions, or accessories, you may need a retail seller permit. This permit allows you to engage in retail sales and collect sales tax on your products.

Certificate of Occupancy

Before opening your nail salon, you’ll need to obtain a certificate of occupancy. This document confirms that your salon’s building or premise complies with local zoning and building codes.

Building Permits

If you intend to renovate your nail salon’s building or make any structural changes, you may need to obtain building permits. Building permits ensure that your renovations or modifications are in compliance with safety and construction standards.

It’s important to check with your local government or licensing agency to determine the specific requirements and application processes for these licenses and permits. Adhering to these regulations will help you establish a professional and reputable nail salon business.

Remember to display your licenses and permits in a visible location within your salon to demonstrate your commitment to compliance and reassure your clients.

Now that you understand the licensing and permit requirements, let’s move on to the next step: arranging banking and accounting for your nail salon business.

Arrange Banking and Accounting

When it comes to running a successful nail salon business, proper banking and accounting are essential for staying on top of your finances and ensuring smooth operations. To get started, open a dedicated business bank account. This will keep your personal and business finances separate, making it easier to track your income and expenses.

Consider obtaining a business credit card to simplify your accounting and tax filing processes. A business credit card allows you to conveniently make purchases for your salon while keeping a clear record of your business expenses.

When choosing a bank for your nail salon business, look for one that offers flexible and affordable services tailored to small businesses like yours. Compare different banks and consider factors such as fees, transaction limits, online banking options, and customer service.

Effective record-keeping is crucial for understanding your salon’s financial performance. Keep detailed and accurate records of all your business transactions, including sales, expenses, and payroll. This will help you analyze your profitability and make informed decisions to improve your bottom line.

By arranging banking and accounting practices early on, you’ll set a solid foundation for managing the financial aspects of your nail salon business and ensuring its long-term success.

Next Steps: Financial Tips for Your Nail Salon Business

  • Create a budget to effectively manage your expenses and allocate funds towards growth opportunities.
  • Monitor your cash flow regularly to ensure you have enough funds to cover your salon’s expenses and future investments.
  • Consider employing accounting software or hiring a professional bookkeeper to streamline your financial management processes.
  • Stay updated on tax regulations and consult with a tax professional to maximize deductions and minimize tax liabilities.
  • Regularly review your financial reports, such as profit and loss statements and balance sheets, to evaluate your salon’s performance and identify areas for improvement.

Choose Business Insurance

When starting your nail salon business, it’s crucial to consider obtaining the right business insurance. Business insurance provides protection against incidents and losses that may occur in your nail salon. While general liability insurance is recommended for all businesses, there are other insurance types that you may need to consider based on your specific needs and state regulations.

General Liability Insurance: General liability insurance is the foundation of any business insurance policy. It provides coverage for bodily injury, property damage, and advertising injury claims. This type of insurance protects your nail salon business from financial loss if a customer slips and falls or if there is damage to someone else’s property while they are at your salon.

Product Liability Insurance: If you sell nail care products in your salon, product liability insurance is essential. This insurance protects your business from legal claims related to any harm or damage caused by the products you sell.

Professional Liability Insurance: Professional liability insurance, also known as errors and omissions insurance, is crucial for nail salon businesses. It provides coverage for claims of negligence, errors, or omissions in your professional services. If a client claims that you caused them harm due to a mistake during a nail care service, professional liability insurance can help cover legal fees and settlements.

Commercial Property Insurance: Commercial property insurance covers the physical assets of your nail salon, including the building, equipment, tools, and inventory. This insurance protects against losses caused by fire, theft, vandalism, and certain natural disasters.

Home-Based Business Insurance: If you operate your nail salon business from your home, you may need home-based business insurance. This insurance provides coverage for your business equipment, inventory, and liability arising from operating the business out of your home.

Business Owner’s Policy: A business owner’s policy (BOP) combines general liability insurance and commercial property insurance into one package. It provides comprehensive coverage for your nail salon business, offering protection against property damage, bodily injury claims, and other common risks.

Choosing the right business insurance for your nail salon can provide peace of mind and financial protection. Assess your specific needs and consult with an insurance professional to determine the insurance coverage that is best suited for your nail salon business.

Pick a Space and Set It Up

Choosing the right location for your nail salon is essential to attract customers and stand out from the competition. Look for a space in a high-traffic area with ample parking and accessibility. Consider the proximity to residential areas, shopping centers, or office buildings to capture potential clients.

Once you’ve found the perfect location, it’s time to set up your nail salon’s ambiance. Select the appropriate equipment, lighting, and furniture that align with your salon’s theme and target clientele. Create a welcoming atmosphere by choosing comfortable chairs, stylish manicure tables, and soothing lighting.

Connect with reputable salon brands and products to offer high-quality services and retail options to your customers. Choose products that reflect your niche and personality, whether it’s organic, eco-friendly, or high-end. Collaborating with well-known brands can enhance your salon’s reputation and attract more customers.

Remember, the overall setup and aesthetics of your nail salon play a significant role in attracting and retaining customers. Create a space that is both visually appealing and comfortable to ensure a positive experience for your clients.


Starting a nail salon business requires careful planning and execution. By following the steps outlined in this article, you can set yourself up for success in the beauty industry. Assess your business needs, choose a name, create a legal entity, complete tax registration, obtain licensing and permits, arrange banking and accounting, choose business insurance, pick a space, and let people know you’re open. With dedication and hard work, you can build a thriving nail salon business.

In the competitive world of the beauty industry, starting a nail salon can be a lucrative venture. By understanding the essential steps and having a comprehensive checklist, you can overcome challenges and increase your chances of success. Remember to conduct thorough research, stay updated with industry trends, maintain high-quality services and products, and continuously market and promote your salon to attract and retain customers.

Investing in your skills, hiring qualified staff, creating a pleasant and inviting atmosphere, and focusing on superior customer service will help you build a loyal client base. Stay organized, manage your finances effectively, and build a strong network within the beauty community. Starting a nail salon may require hard work and dedication, but with the right strategies and a passion for your craft, you can achieve long-term success in this thriving industry.

What are the initial costs and investments required to start a nail salon business?

The initial costs to start a nail salon business can vary widely, but typically include expenses for rent, salon supplies, licensing and permits, and marketing. Additionally, investments in quality furniture and equipment are necessary to create a welcoming and professional atmosphere for clients. Understanding the cost of nail services is critical for setting competitive pricing.


What are the steps to start a nail salon business?

Assess your business needs, choose your business name, create a legal entity, complete tax registration, get licensing and permits, arrange banking and accounting, choose business insurance, pick a space and set it up.

How do I assess my business needs for a nail salon?

Consider the type of salon you want to run, whether you want employees or renters, and the niche you want to target. Study your competition and set your prices accordingly. Create a detailed budget to match your business plan and raise the funds you need.

How do I choose a business name for my nail salon?

Choose a simple and memorable name that communicates your niche or personality. Make sure the name is not too similar to another nail salon’s name and check for availability on social media platforms and trademark databases. Also, consider if a website address for your salon is available to buy.

What is the process for creating a legal entity for a nail salon business?

Nail salons are typically formed as limited liability companies (LLCs) for personal liability protection. The cost of forming an LLC includes filing fees and obtaining business licenses and permits. Determine the most suitable business structure based on your investment and the number of owners and partners.

How do I complete tax registration for my nail salon business?

Register for local, state, and federal taxes and obtain an Employer Identification Number (EIN) for your nail salon business. The types of taxes and benefits/exemptions you receive will vary based on your business structure. Check your state regulations for specific tax requirements.

What licenses and permits do I need for a nail salon business?

You need a cosmetology or nail technician license, a salon business operation license, a retail seller permit if you plan to sell products, a certificate of occupancy to confirm building suitability, and building permits if you intend to renovate.

How should I arrange banking and accounting for my nail salon business?

Open a business bank account and consider obtaining a business credit card for easier accounting and tax filing. Choose a bank that offers flexible and affordable services. Keep accurate and detailed records of your expenses and sources of income to track your salon’s financial performance.

What types of business insurance do I need for a nail salon?

While general liability insurance is recommended for all businesses, additional insurance types such as product liability insurance, professional liability insurance, commercial property insurance, home-based business insurance, and business owner’s policy may be required based on your specific needs and state regulations.

How do I pick a suitable space and set it up for my nail salon?

Choose the right location based on accessibility and competition. Create a great ambiance by selecting the appropriate equipment, lighting, and furniture. Connect with reputable brands and products to use and sell in your salon to reflect your niche and personality.

What is the conclusion of starting a nail salon business?

Starting a nail salon business requires careful planning and execution. By following the steps outlined in this article, you can set yourself up for success in the beauty industry. Assess your business needs, choose a name, create a legal entity, complete tax registration, obtain licensing and permits, arrange banking and accounting, choose business insurance, pick a space, and let people know you’re open. With dedication and hard work, you can build a thriving nail salon business.