How much does it cost to open a hair salon?

There will be no letup in the current beauty industry frenzy. Both men and women are doing their best to appear their best, from perfectly coiffed hair to freshly painted nails. The way they look influences their mood and how other people see them, which just goes to show the demand potential that hair salons and other establishments can benefit from.

People drop serious cash every year to refine their style. Women spend over $1,000 per year on things like haircuts, color, blowouts, manicures, pedicures, and other beauty services. And guys? They’re in the mix, too.

For salon owners, this is a golden moment. The salon industry hit $122 billion in 2024 globally and is expected to flourish. There’s a ton of opportunity right now to grow, expand, and build something amazing.

So, here are the big questions, “How much does it cost to open hair salons, and are you financially ready to make it happen?”

This blog focuses on the actual costs to be ready for if you’re about to join the hairdressing industry in the US. It also describes some ways to save money for those who want to open a hair salon at a cost that won’t drain their savings.

From dreams to dollars

Opening a hairdressing salon can range from a modest $5,000 to upwards of $200,000, depending on the space you opt for. On top of that, you’ll need to plan for monthly operating expenses, which can fall between $2,000 to $30,000.

Launching a hair salon doesn’t always have to break the bank. It’s possible to get started with a lower investment. However, if you’re aiming for a luxurious experience shaped by premium furniture, independence, a top-tier location, and highly skilled talent, your costs can soar to $200,000 or even higher.

The cost to open a hair salon: What’s really involved

A lot of variables affect the total expenses:

• Whether you want to rent an existing salon or build one from the ground up will have a major impact on your expenses. Next, you’ll need to decide on the salon’s style and the services you’ll offer. The more hair services you include, the higher your setup costs will be.
• Do you have a polished website, a strong brand, and business systems in place? If you’ve already got these assets, you can save a lot on marketing and finding the right people to hire.
• The location of your hair salon and its size are two more elements that will greatly affect your expenses. A more spacious facility in a prime location is going to come with a pretty hefty rent or mortgage.
• Then, there’s a matter of budgeting for the core elements, such as furnishings and decorations. If you opt for luxury, your budget will go a long way. Minimize complexity to save money.

All these factors determine how much it would cost to open a hair salon. The trick is to plan a budget that works for you.

Should you rent or buy?

In the US, the costs to open hair salons through renting boil down to analyzing the current commercial property rate. Let’s take $40 per square foot as an example and break it down: if you rent a 1,000-square-foot studio at this rate, that would mean your annual costs will start from:

$40 x 1,000 = $40,000 per year or $40,000 / 12 = $3,333 per month

Purchasing a space will require a larger upfront investment, but it lets you build equity. If you’re buying a studio, expect to pay $200,000 for smaller spaces and more for more spacious facilities. It all depends on where it is located and its size.

Insurance and employee costs

The specific coverage you choose will determine your insurance-related expenses: 

• For general liability, be prepared to pay $35 to $85 per month. 
• Professional liability insurance averages between $120 per month. 
• Workers’ compensation insurance may set you back $500 to $3,000 annually, influenced by your state’s requirements and the number of employees.

Hiring new team members involves additional expenses beyond compensation that you should be aware of. Consider advertising jobs, conducting background checks, and training. The cost of bringing a new hair specialist can be calculated in thousands of dollars. Depending on the position and required training, an additional $1,500 to $5,000 can go toward getting them up to speed.

It’s helpful to have these numbers in mind so you can budget properly. But you don’t necessarily have to hire hairdressers after launching your business.

Marketing expenses

Marketing costs can vary. But just like any other investment, the more you invest in marketing, the greater your profit potential.

When opening a hair salon, it’s beneficial to give your marketing budget a little boost to drum up interest. If possible, do not skimp on online promotions, social posts, and physical and digital ads. These may cost you thousands of dollars in the early stages, but the game is worth the candle.

These marketing activities can help get people excited and make sure your grand opening is a hit.

What to do if you’re on a budget?

To save money when launching a hair service business, look for hair salons for rent. Rental spaces in California, New York, and Oregon are available at $295+ per week. The renting route allows any talented hair stylist to get started on their own without serious financial requirements, loans, and headaches.

The costs of opening a hair salon should always be juxtaposed with the expected profits to give you a good idea of whether it’s worth it. Doing so will allow you to determine the point at which you will begin to earn a profit. With rental spaces, the start-to-profit period is way shorter than if you were to buy a commercial property and go through the build-out process.

Hopefully, you now have a better idea of how much it costs to open a hair salon and why rentals can be a blessing for hair professionals in the US.