Navigating the licenses and permits you need to open your salon can be challenging.
It may seem like there are an overwhelming number of things to understand. 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 my 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.
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 must also have salon insurance.
In this article, I’ll take you through the licenses and permits 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, whereas the Cosmetology License is the highest. If you already have a Cosmetology License, the additional license costs should be less than $500.
How Much Does Salon Insurance Cost?
A full salon insurance costs about $2,900 per year (approx. $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, and the type of services provided. There are also ways you can combine insurance to bring the cost down.
You can also learn more about the cost of salon insurance in my article here.
Getting it Right
Remember that neither you nor I are lawyers (most probably). Opening a salon involves several legal requirements. The salon license requirements listed here would typically apply to all states. However, local state authorities could also govern specific business license requirements.
This article aims to give you a simple overview of the common licenses and permits you need. It’s a good place to start. However, I would still encourage you to take legal advice before you start the practical work of starting your new salon.
What is a Cosmetology License?
A cosmetology license issued by the state government gives salon employees the right to provide beauty salon services. The owner of a beauty salon must also have a cosmetology license. Cosmetology licenses must be renewed approximately every two years, which can vary by state.
The cosmetology certificates should be displayed in the salon so that both inspectors and salon clients can see them without effort.
The license requirements vary by state but depend on completing certain hours in a cosmetology school. For example, you can read more about cosmetology licenses in New York State here.
You should visit the American Association of Cosmetology Schools website to understand the exact requirements for a license in your state. 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.
Cosmetologist License
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 of training time in Texas and 1,600 hours in California.
Barber License
Barber licenses are typically for those who work with male hair. The courses are similar to those of a Cosmetologist, even if an additional focus is added to shaving/trimming facial hair. Getting a barber license in California would require 1,500 training hours.
Aesthetician License
Here, the focus is on skincare, and Aestheticians could perform services such as permanent makeup, dermabrasion treatments, and reflexology. Texas requires 1,200 training hours for such a license, and Colorado requires 600 training hours.
Manicurist License
This license is for pedicures, manicures, and other nail and hand services. In California, this requires 400 school training hours.
Electrologist License
Electrologists use electricity to remove hair on both legs, arms, back, and face. In California, you need 600 training hours for this license.
Esthetician License
Estheticians are similar to Aestheticians, as both perform skin care treatments. Estheticians typically perform their services in a salon or spa, while aestheticians typically work in a medical setting. In California, an esthetician license requires 600 training hours.
How much does a cosmetology license cost? Attending a good Cosmetology school costs $5,000 to $15,000. Top beauty schools cost $10,000 to $20,000. The more specific programs cost $3,000 to $5,000.
General Business Licenses
In addition to the salon-specific cosmetologist license, you’ll also need a few general business licenses and permits to start your salon business. These licenses are not specific to salons but apply 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 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 merchandise.
You can see what the requirements are in your state on 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 unpaid 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 you can go to The U.S. Small Business Administration. You must 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 consumers. Typically, you pay 8% of your retail price in state tax.
You must 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 plan to sell.
How much does an Employer Identification Number cost? Online incorporation services charge around $75 for an EIN. However, the IRS does not charge anything for it, so you can get it 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 to validate that your property is fit for the salon business you are planning to set up. A salon business typically requires specific water installation and treatment of chemicals so you want to make sure you have the property inspected before you set up 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 business spaces under 1’500 sqft are typically around $30, whereas bigger ones go 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 general building inspection.
Where to Get More Help on Licences
The exact licenses you need and 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
- Salon & Spa Professional Association
I hope you found this article helpful. Which licenses and permits do you have in your salon and what’s required in your state?
