Navigating the different licenses and permits you need to open your salon can be challenging.
It may feel like there is an overwhelming amount of things to get your head around. And, frankly, this is not the most fun part of starting a salon.
But don’t worry. I have made this easy for you.
Today, you’ll get a simple overview of all the licenses you need when opening a salon.
This article is part of a complete, step-by-step, guide to opening a salon. If you haven’t done so already, I strongly recommend you go through the full guide when you’re done with this article.
What Licenses do I Need to Open a salon?
The licenses and permits you need to open a salon are:
- State Cosmetology or Beautician’s License
- Salon Retail Seller Permit
- Salon Business Operation License
- Federal Employer Identification Number (EIN)
- Certificate of Occupancy
On top of the above salon permits and licenses, you’re also required to have salon insurance.
In this article, I’ll take you through what all of the licenses and permits are and how you can obtain them. To learn more about required salon insurance, you should read my guide to salon insurance here.
How Much does a Salon License Cost?
How much is a salon license? The total license cost for a salon is approximately $12,000 where the biggest cost is the Cosmetology License. If you already have a Cosmetology License, the additional license costs should be less than $500.
How Much does a Salon Insurance Cost?
A full salon insurance costs about $2,900 per year (aprox. $240/month) for a salon with two employees. However, the exact salon insurance cost can vary greatly, from $50/month to $1000/month, depending on the number of employees, business turnover, which state it is based in, as well as the type of services provided. There are also ways you can combine insurances to bring the cost down.
To get the exact salon insurance cost for your salon, you can request a free insurance cost quote online with Hiscox. Just fill out the simple questionnaire and Hiscox will provide the exact cost to expect. You can also learn more about the cost of salon insurance in my article here.
Getting it Right
Remember that neither you are I are lawyers (most probably). There are several legal requirements that come with opening a salon. The salon license requirements listed here would typically apply to all states. However, there could be specific business license requirements governed by local state authorities as well.
The purpose of this article is to give you a simple overview of the common licenses and permits you need. This is a good place to start. However, I would still encourage you to take legal advice before you get into the practical work on starting on your new salon.
A good place to turn for help when forming a business is Zen Business. They offer complete support for forming a new business (at very low cost). They also have legal experts who can assist you so that you get it right from start.
What is a Cosmetology License?
A cosmetology license give salon employees the right to provide beauty salon services in the salon and is issued by the state government. The owner of a beauty salon must also have a cosmetology license. Cosmetology licenses need to be renewed approximately every two years but this can vary by state.
The cosmetology certificates should be clearly displayed in the salon so that both inspectors and salon clients can see them without effort.
The requirements for obtaining the license varies by state but is depended on the completion of certain hours in a cosmetology school. To understand the exact requirements for a license in your state you should go to the American Association of Cosmetology Schools website. On the AACS website you’ll also find training providers in your area.
What are the Different Cosmetology Licenses?
The different cosmetology licenses are Cosmetologist, Barber, Aesthetician, Manicurist, Electrologist, and Esthetician.
This is the most comprehensive license and includes all types of beauty treatments. It covers both skin, hair and nails and has a long training time. It requires 1,500 hours training time in Texas and 1,600 hours in California.
Barber licenses are typically for those who work with male hair and the courses are similar to the Cosmetologist even if additional focus is added to shaving/trimming of facial hair. Getting a barber licence in California would require 1,500 training hours.
Here the focus is on skin care and Aestheticians could perform services such as permanent make up, dermabrasion treatments, and reflexology. Texas requires 1,200 training hours for such license and in Colorado it is 600 training hours.
This licence is for pedicures, manicures and other nail and hand services. In California this requires 400 school training hours.
Electrologists uses electricity to perform hair removal services on both legs, arms, back and face. In California you need 600 training hours for this license.
Estheticians are similar to Aestheticians as both perform skin care treatments. Estheticians typically perform their services in a salon or spa while Aesthetician typically work in a medical setting. An Esthetician license requires 600 training hours in California.
How much does a cosmetology license cost? To attend a good Cosmetology school costs $5,000 to $15,000. Top beauty schools costs $10,000 to $20,000. The more specific programs cost $3,000 to $5,000.
General Business Licenses
On top of the salon specific cosmetologist license, there are a few general business licences and permit you’ll also need to start your salon business. These are licenses are not specific for salons but applies to almost any local business. Let’s go through what they are.
Retail Seller Permit
Your state may require you to have a specific permit in order to sell retail. For example, the California Department of Tax and Fee Administration (CDTFA) requires you to request a specific permit when you sell or lease any merchandize.
You can see what the requirements are in your state at The U.S. Small Business Administration website. You can also talk to your city’s Chamber of Commerce to learn about the specific permit requirements in your location.
How much does a seller’s permit cost? A seller’s permit typically does not cost anything. However, you may be required to place a security deposit to cover any un-payed taxes in case the business closes. The amount of the deposit will be determined at the time of application.
Salon Business Operation License
All US states require that you have a business license.To apply for your business license at you state department you can go to The U.S. Small Business Administration. You just need to fill out a form with your social security number and profession.
How much does a business license cost? A business license typically costs around $100 but the cost can range from $50 to $400. An additional processing fee of about $25 can also be added.
Federal Employer Identification Number (EIN)
Your state collects sales tax on products you sell to consumer. Typically you pay 8% of your retail price in state tax.
You need to go to your state’s tax office to register for this free Tax Identification Number. You’ll typically need to provide your business operation license, personal details, and a description of the items you are planning to sell.
How much does an Employer Identification Number cost? Online incorporation services charges around $75 for an EIN. However, the IRS does not charge anything for it so you can get this yourself for free by going directly to them.
You can apply for a Federal Employer Identification Number online at the IRS.
Certificate of Occupancy
You need validate that your property is fit for the salon business your are planning to set up. A salon business typically require specific water installation and treatment of chemicals so you want to make sure you have the property inspected before you setup your business.
What is a Certificate of Occupancy? The Certificate of Occupancy is a document that is issued by a local government agency or building department that certifies that your property is compliant with the requirements for the type of business you are planning to run. You should request this certificate before any work is done on the property.
How much does a Certificate of Occupancy cost? The cost for a Certificate of Occupancy is around $20 to $80 depending on where your business is based and the size of your property. Commercial businesses spaces under 1’500 sqft are typically around $30 where bigger ones goes up to $80.
The certificate will be issued when all inspection checks have been done. These inspections include an electrical inspection, plumbing inspection, fire safety inspection and a general building inspection.
Where to Get More Help on Licences
The exact licenses you need, how you can obtain them, will vary by state. Thus, it can be a good idea to talk to your trade association for more guidance here as they should have experience in this area. Some examples of trade associations are: Association of Cosmetology Salon Professionals, Professional Beauty Association, and Salon & Spa Professional Association.
To simplify the formation of your business, I’d recommend you use the service from Zen Business. For a very small fee, they’ll take care of all document filing to get your business set up correctly. They also have legal experts available to help.
I hope you found this article helpful. Which licenses and permits do you have in your salon and what’s required in your state? Share your experience in the comments box below.