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How to Start Salon Business In India

How to Start Salon Business In India
Good external appearance is always being in demand by youngsters. Salon business helps youngsters to do the same. But now a day people have high disposable income and would like to appear their best and age does not matter to them.
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As per survey conducted by lifestyle expert, in last five years the cosmetic industry has been grown by 60% in India. Along with this salon industry has grown up by 35%. A report from leading lifestyle magazine forecasts, that in the years to come the beauty industry will grow twice as fast as US and European market in India.
  1. Options of ownership
To start salon business basically you have two options to start your independent business or work as franchisee under chain of large salon chain.
    1. Independent salon
To establish independent salon you may have option to choose
      1. Sole proprietorship business or
      2. Limited liability partnership or
      3. One Person Company
      4. Franchisor of beauty parlour chain
In all above mentioned options venture into a chain of salon or to become a franchisor requires a lot of capital, high level of planning, vendor partnership, branding advertising and more. Further brand of beauty parlour is most valuable intangible asset in the model it is important to obtain the trademark registration for the brand name at start. Entities like private limited company and or limited company would be ideal for setting up chain of business.

    1. Franchisee of a beauty parlour
      1. Under this business model, the franchisor would provide support for setting up a salon operations, staff training, branding, advertising etc. to franchisee. However, this type of model would require a higher investment when compared to an independent business model.
      2. In addition to initial setup fee for setup salon, most franchisors also require fees to be paid based on revenue of the salon. Typical franchisee fee in the beauty parlour industry would be as follows:
        1. Royalty for first 3-6 months depending on the agreement is 0%.
        2. Next 3-6 months 10% -15% or more as per agreement.
        3. And 15% or more once the franchisee starts making profit.
  1. Requirements of salon
    1. Salon Space

Space is the primary requirement in opening a business establishment like a salon. The amount of space required normally varies because it is depending on the nature of operations.

    1. Personnel

Under normal circumstances, a couple of stylists and a receptionist can be considered ideal to start with. Some other necessary people in this regard are shampoo technicians, person who is specialised in providing facial, barbers, make-up artists, nail technicians, and massage therapists.

    1. Salon equipment

Equipment are depend on nature of services provide by the salon service provider but some basic requirements for salon business are
      1. Wash basin
      2. Supply trolleys
      3. Styling chair
      4. Manicure sets
      5. Hair dryers Aprons

    1. Qualification
Before starting a salon it is essential to undertake a certified program in cosmetology and learn the nuances of the trade. It is not absolutely mandatory to have a degree or diploma in order to start a salon but it always pays to have some knowledge in this regard before opening an establishment as such.
    1. Shop and Establishment Act (Business license)
The salon owners also need to file for their business licenses with the concerned authorities at the state and the central level. They should also determine with the authorities if their name has already been registered or not. They should also ask for safety and occupational licenses to give their businesses the authentic look.
  1. Marketing

  1. Customer satisfaction
    1. For a salon the best way to become popular is word of mouth publicity. Once a client is satisfied with the results it helps in increasing the repeat value of the salon and builds up trust between both the parties that sustains their relationship in the future.

  1. Location

    1. Location is also a critical component in the success of a salon. It is ideal to choose an area that has a lot of offices and other commercial establishments as that, more often than not, ensures a steady stream of customers.

  1. Hygiene and customer Safety
The equipment as well as whole established should be cleaned, sterilized, and disinfected as much as is possible on a regular basis. Equipment like towels should be washed, and clean, free of odours.
Safety is most important because in this business you are mostly doing work on human skin if anything affects adversely it may have great impact on client’s and your brand image also.

  1. Taxability

    1. Income Tax

If salon is your only profession then Income from salon will be your main source of income and taxable under the head “Income from Business/Profession”. However, if you are in receipt of any other main source of income like salary income, house property income or income from other business and in addition to this you are giving salon related services, then such tuition income will be taxable under the head “Income from other Sources”.

If your income from coaching as well as from all the other sources is more than basic exemption limit (i.e. Rs. 2,50,000/-in case of individual) in the whole financial year, then you are required to file Income-tax return.

    1. Service tax

Salon services are under the purview of service tax. So some general Exemption under service tax is:

      1. Small Service Provider: Vide Notification No 33/2012-ST, dated 20.06.2012 – Exemption to Small service providers having taxable turnover of less than 10 Lakhs and providing services other than by way of under a brand name.

    1. VAT
      1. VAT registration is required if you are going to sell cosmetic or toiletries products in salon because VAT is included in the sale of beauty products.
So, overall we can say that Salon business has great demand at present and its demand will continually improve in future. Hence, it is good business idea if you work with proper planning and good marketing strategy.


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