Beauty schools are trade schools, which are sometimes also called vocational or technical schools. These schools are non-degree schools that can provide diplomas, certifications, or even associate degrees, depending on what type of trade program is completed.
A recent report published by IBISWorld shows that the Cosmetology & Beauty Schools industry in the United States rakes in a whooping sum of $2 billion annually and there are 1,737 cosmetology and beauty schools responsible for employing 17,928 people in the United States.
The US Department of Labor reported that the cosmetology job market is expected to expand by 16 percent between 2010 and 2020. Population expansion has something to do with it, but so too does a greater demand for advanced treatments like hair coloring, makeup artistry, and so forth.
Steps on How to Start a Beauty School Business
Table of Content
Conduct Market Research
The first step in the market research process for your beauty school business is to develop market-based research questions in line with your overall business goal and objective. In this regard, you should source information that will help you maximize your business, information that will give you reliable data of what your potential market will be looking out for from a beauty school business, the specific beauty courses people will be able to spend a premium on and also to help you operate your beauty school business with less stress.
a. Who is the Target Market for Beauty School Business?
If you are thinking of opening a beauty school business, then you should make your target demographics all-encompassing. It should include male and female, socialites, students, migrants, celebrities, and every adult in the neighborhood where your beauty school will be located.
b. Is Beauty School a Profitable Business?
Yes, a beauty school is a profitable business. According to federal statistics, for-profit cosmetology schools nationwide brought in more than $200 million in revenue from their salons in the 2015-16 school year. Most schools are small, privately owned entities that do not have to disclose their profits.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to beauty schools, and here are some of the niche ideas;
- General Cosmetology
- Salon Management
- Nail Care
- Makeup Application
- Skin Care
- Hair Care, Cutting, and Style
- Esthetics
d. Who are the Major Competitors?
- Empire Education Group
- Paul Mitchell Advanced Education
- Chic Studios
- The Aveda Institute
- Pivot Point Academy Beauty School
- The Sassoon Academy
- Tricoci University
- The Ogle School
- Xenon International Academy
- Hollywood Institute of Beauty
- Michigan Beauty School – Taylor Beauty School
e. Are There County or State Regulations or Zoning Laws for Beauty School Business?
Yes, there are county or state regulations and zoning laws for beauty school businesses, and players in this industry are expected to work with the existing regulations governing such businesses in the county or state where the business is domiciled.
In addition to that, it is important to state that in the United States, government agencies and departments routinely grant variances to rules and regulations. Often, you only have to fill out a short form. In other cases, your request may have to be publicly heard before your city council, zoning board, or other body. Please check with your zoning or planning department to find out what options are available to you.
f. Is There a Franchise for Beauty School Business?
Yes, there are franchise opportunities for the beauty school business, and here are some of them;
- Paul Mitchell Partner School Program Franchise
- SPEC Franchise
- Bella Marie Training Academy.
g. What Do You Need to Start a Beauty School business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Facility and Beauty Lab
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Equipment, Machines and Teaching Aids
- Employees (Faculty Members)
- Startup and Working Capital
Memorable Beauty School Name ideas
- Loveth® Beauty School, Inc.
- Tine and Tyler® Beauty School, Inc.
- Beau Nation® Beauty School, Inc.
- Ted Capstone™ Beauty School, Inc.
- Esther Lane® Beauty School, Inc.
- Al Baroness® Beauty School, Inc.
- Lady Annie® Online Beauty School, Inc.
- Macron Martins® Beauty School, LLC
- High End® Beauty School, Inc.
- Nelly B® Beauty School, Inc.
- Maria De La Rosa® Beauty School, Inc.
- Stacy McRib ™ Beauty School, LLC
- Bridget Decoster™ Beauty School, Inc.
- Broadway™ Beauty School, LLC
- Mark Fernand® Beauty School, Inc.
- Jacinta Borrow® Beauty School, Inc.
- Eyes of Beholder© Beauty School, Inc.
- Georgina Paulson™ Beauty School, LLC
- Jill Noel™ Beauty School, Inc.
- Madonna Whyte® Beauty School, Inc.
Register Your Business
a. What Type of Business Structure is Best for Beauty School Business?
Even though there are several options when it comes to the business structure of a beauty school business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Beauty School Business?
- General Business License
- Fire and Safety Permit (Fire certificates)
- Zonal Permits
- Signage Permit
- State Occupational Licenses
- Operational State Facility Inspections (Building Permits)
d. What Type of Certification is Needed to Open a Beauty School Business?
- Cosmetology Certification
- BarberSAFE Children Safety Certification
- Professional Makeup Certification
- Master Makeup Certification
- National Esthetician Certification
- Board Certification in Therapeutic Massage and Bodywork.
e. What Documents are Needed to Open a Beauty School Business?
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a beauty school business, you may need to file for intellectual property protection or trademark. This is because you can easily challenge anybody in court for illegally making use of your company’s intellectual properties especially as it relates to your designs or logo et al.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Beauty School Business?
When it comes to starting a beauty school business, the startup cost varies. It can range from $10,000 to over $500,000.
b. What are the Costs Involved in Starting a Beauty School Business
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as accounting services – $3,300.
- Marketing promotion expenses for the grand opening of the beauty school business for $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- Cost for hiring a Business Consultant – $2,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
- Cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $53,300.
- Cost for facility remodeling (construction of classes, beauty lab, racks, and shelves) – $5,000.
- Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for equipping the beauty school – $45,000
- The cost for start-up inventory – $25,000
- Cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
- The cost of Launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Beauty School Business?
- The size of beauty school business
- The choice of location
- The required licenses and permits
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the beauty school
- The cost for furnishing and equipping the beauty school business
- The cost for insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for grand opening of the beauty school business.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Actually, it is not compulsory to build a new facility for your beauty school business, but, if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility for your beauty school will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Beauty School Business?
- Rent and lease
- Supplies and inventory
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Maintenance of machines and equipment
- Salaries of employees
f. What is the Average Salary of your Staff?
- Head of School (President) – $55,000 Per Year
- School Administrator – $40,000 Per Year
- Theatrical and Performance Makeup Artist – $39,000 Per Year
- Skincare Specialist- $36,510 Per Year
- Beauty Copywriter – $36,246 Per Year
- Accountant (Cashier) – $28,500 Per Year
- Marketing and Sales Executives – $28,000 Per Year
- Customer Service Executive – $26,000 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Beauty School Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Maria De La Rosa® Beauty School, Inc. is a registered and accredited trade and technical school with a bias in training professional beauticians. We are registered under the United States Government. We are well equipped to train people on various beauty skills to meet with international best practices as it relates to the industry.
b. Products and Service
- Hair design and barbering training
- Makeup artistry
- Nail care and manicuring training
- Massage therapy
- Skincare
- Instructor training
- Personal care services.
c. Mission Statement
Our mission is to build a highly successful business venture whose brand will be known all around key cities in the United States of America and the globe.
Vision Statement
Our vision is to be among the top 3 beauty schools in the world.
d. Goals and Objectives
The goals and objectives of a beauty school business are to offer training in barbering, hair styling and cosmetic arts, such as makeup or skincare. These schools provide job-specific certification for students.
e. Organizational Structure
- Head of School (President)
- School Administrator
- Theatrical and Performance Makeup Artist
- Skincare Specialist
- Beauty Copywriter
- Accountant (Cashier)
- Marketing and Sales Executives
- Customer Services Executives
- Security Guard
Marketing Plan
a. SWOT Analysis
Strength
- Ideal location for a beauty school business
- Highly experienced and qualified faculty members (instructors) and management
- Access to finance from business partners
- Excellent student testimonials.
- Unique teaching approach and styles
Weakness
- Financial Constraints
- The new business that will be competing with well-established beauty school businesses
- Inability to retain our highly experienced and qualified employees longer than we want
Opportunities
- A rise in people who want to join the beauty school trend
- Online market, new services, new technology, and of course the opening of new markets
- Increase in the number of human population within our target market area.
Threats
- The arrival of new beauty school business within our market space
- Unfavorable government policy and regulations.
- Steady wage expenses and increasing prices of gas amid the low demand during the pandemic will reduce industry profitability.
- Economic uncertainty
- Liability problems
b. How Do Beauty School Businesses Make Money?
Beauty school businesses make money by offering;
- Hair design and barbering training
- Makeup artistry
- Nail care and manicuring training
- Massage therapy
- Skincare
- Management training and other programs
- Instructor training
- Personal care services
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Place adverts on both print (newspapers and beauty magazines) and electronic media platforms
- Sponsor relevant community-based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Bill Boards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- Contact students, migrants, and every adult in the neighborhood where your beauty school business will be located informing them about your business.
- List your beauty school business in local directories/yellow pages
- Advertise your beauty school business on your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your beauty school business is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are well branded with your company logo.
Financial Projection
a. How Much Should You Charge for your Service?
Attending an accredited cosmetology school will usually cost anywhere from $5,000 to $15,000. To attend a top beauty school will usually cost anywhere from $10,000 to $20,000. When students are considering beauty school, they should consider the cost of the entire program, as well as room, board, and textbooks.
b. How Much Profit Do Beauty School Business Owners Make a Year?
It depends, but available reports show that on the low end, beauty school owners could expect to earn around $35,000 per year, while the most successful salons could bring in around $120,000 in annual income or more.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the beauty school business
- The location of the beauty school business
- The management style of the beauty school business
- The business approach of the beauty school business
- The advertising and marketing strategies adopted by the beauty school business.
- The number of years the beauty school is in business
d. What is the Profit Margin of a Beauty School Business?
Typically, beauty schools gain a handful of profit on all their students – margins usually range from 20 percent to around 60-70 percent.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $240,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $480,000
Set Up your Office
a. How Do You Choose a Perfect Location for Beauty School Business?
- The demography of the location
- The demand for beauty schools in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of beauty school businesses and other trade schools in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Beauty School Business?
- West Chester, OH
- Orlando, FL
- Wilkes-Barre, PA
- Chicago, IL
- Santa Monica, CA
- Bridgeview, IL
- Dallas, TX
- Omaha, NE
- Hollywood, CA
- Albany, NY
- Van Wert, OH
c. What Equipment is Needed to Operate a Beauty School Business?
- Beauty lab
- Teaching aids
Hire Employees
When it comes to hiring employees for a standard beauty school business, you should make plans to hire a competent head of school (president), school administrator, theatrical and performance makeup artist, skincare specialist, beauty copywriter, and security guard.
Launch the Business Proper
In recent times, no beauty school business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the beauty school business, you will officially inform people in your city that your beauty school is open for business.
a. What Makes a Beauty school business Successful?
- Choose a good location to launch the business
- Hire only competent teachers
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your beauty school business
- Leverage on all available online and offline platforms to promote your beauty school business
b. What Happens During a Typical Day at a Beauty School Business?
- The school is open for the day’s work
- Students are subjected to different lectures and practical sessions
- Administrative jobs are carried out
- The school is closed for the day.
c. What Skills and Experience Do You Need to Build a Beauty School Business?
- Creativity
- Physical Stamina
- Cleanliness and Organization Skills
- Time Management Skills
- Excellent customer service skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Work experience in a beauty school and trade school environment
- Experience in managing people
- Experience in business administration.