The beauty and personal care market is on the rise. Projections show the local beauty market will expand at a compound annual growth rate (CAGR) of 3.33% from 2024 to 2028. With increasing demand for qualified estheticians, the market for beauty schools is booming.

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Have you ever considered opening your beauty school? The industry growth and earning potential may surprise you. Graduates can earn upwards of $25 per hour as licensed estheticians or makeup artists. With the average tuition over $10,000 for an esthetics program, beauty schools themselves are quite profitable.

This guide will walk you through how to start a beauty school. Topics include market research, sourcing materials, marketing strategies, obtaining business insurance, registering an EIN, and more.

1. Conduct Beauty School Market Research

Market research is integral to beauty industry professionals. It offers insight into your target market, trends in the cosmetology industry, trends among beauty professionals, and more.

Some details you may learn through market research for aspiring beauty professionals include:

• Regions in the South and West are seeing the fastest expansion, while more affluent areas generally have greater demand for beauty services.
• Competition is fierce, so research what other schools operate in your region.
• The average tuition nationwide is $10,000 to $15,000 for a cosmetology program.
• Costs are lower for specialized training like makeup artistry or nail technology.
• Graduation and job placement rates directly impact admissions.
• You’ll need a licensed instructor on staff, adequate equipment and classroom space, and approval from state boards and accrediting agencies before opening.
• Expect startup costs between $50,000 to $250,000.
• Ongoing expenses like payroll, supplies, and marketing can range from $3,000 to over $15,000 per month.

Thorough market research is critical for launching a successful beauty school. Analyzing industry growth, local demographics, competition, and costs will set you up to offer programs that meet demand while running a profitable business. Revisit your business plan annually.

2. Analyze the Competition

Thoroughly researching your competition is crucial when starting a beauty school. Begin by identifying existing schools in your target region and those offering remote/online training.

For local schools, visit in person to get a feel for the facility and programs. Evaluate factors like the condition of the building, classroom sizes, salon equipment, and student-teacher ratios. Also, look at display areas to see if student work is showcased. These environmental elements impact the student experience.

Review their website and collect data on tuition rates, enrollment periods, program lengths, and any specialty offerings like advanced makeup training. See if past graduation rates or job placement numbers are posted to gauge effectiveness. Identify potential areas where you could improve.

Search online reviews to see feedback from past students. Pay attention to commonly mentioned negatives like heavy workloads, unengaging instructors, or disorganization. Highlight places your beauty school could outperform.

Analyzing competitors gives invaluable insight into parent and student priorities when selecting beauty schools. It also shows where competitors are falling short so you can integrate improvements into your program offerings and operations. Ongoing market research helps you maintain your edge.

3. Costs to Start a Beauty School Business

Starting a beauty school requires a significant upfront investment. From securing a commercial space to buying salon equipment, be prepared to spend $50,000 to $250,000 just to get your business off the ground.

Startup Costs

• Leasing a space suited for classroom instruction and practical training generally runs $3,000 to $7,000 per month.
• Budget at least $3,500 per styling station for seats, mirrors, and electrical hookups. A
• Expect to spend $5,000 to $10,000 outfitting administrative offices.
• Plan on $2,000 or more for incorporation fees, school licenses, and facility inspections. You’ll also need $3M or higher in liability insurance.
• Work with an accrediting agency like NACCAS or NHSC on meeting standards for curriculum, instructor credentials, and achievement tracking. Accreditation consulting averages $5,000.
• Instructors often start around $25 per hour. You’ll need office support staff, custodial services, and potentially security personnel as well.

In total, have $125,000 to $175,000 available to cover all start-up costs before opening your beauty school.

Ongoing Costs

Once open, expect monthly expenses between $25,000 to $40,000. This includes:

• Instructor payroll
• Supplies like shampoos or hair color for student clinic work
• Ongoing advertising
• Utilities

You’ll also have annual payouts for accreditation renewals, insurance premiums, and taxes. Consider charging $10,000 to $15,000 tuition per program to sufficiently cover costs and turn a profit.

Have at least six months of operating capital lined up before launching. Starting a profitable beauty school hinges on making these major upfront and ongoing investments.

4. Form a Legal Business Entity

When establishing a beauty school, carefully weigh the pros and cons of potential business structures.

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The most common business entities for a cosmetology school include:

Sole Proprietorship

A sole proprietorship is the easiest and cheapest option, requiring minimal paperwork. You have complete control as a solo business owner but also assume unlimited personal liability if sued. This exposes personal assets like your home to risk, dangerous in a hands-on industry.

Partnership

Partnerships let multiple owners divide operations and financing. However, each partner is equally liable for debts and lawsuits against the business. Disagreements between partners can also sink the company if shared authority and responsibilities aren’t clearly defined upfront via an operating agreement.

Limited Liability Company (LLC)

LLCs cost more and involve additional paperwork for articles of organization and operating agreements. However, they limit liability to the assets of the company itself if sued. Taxes are also passed through to the owners to avoid double taxation. Most regulatory compliance can be outsourced to a registered agent.

Corporation

Corporations offer the highest liability protections but come with more complex regulations like issuing stock certificates, electing directors, and holding shareholder meetings. Significant record-keeping and annual fees also apply for incorporations. Large beauty enterprises may still opt for C-corp status to attract VC funding.

5. Register Your Business For Taxes

Beauty schools must obtain an Employer Identification Number (EIN) from the IRS to handle payroll, file returns, and open business bank accounts properly.

Applying for an EIN is free and easy to do online. Simply navigate to IRS.gov and search “apply for an EIN”. Select the option for viewing forms and instructions. You’ll be walked through a short questionnaire to generate your unique 9-digit EIN.

To begin, choose the type of legal entity you formed earlier like an LLC or corporation. Next, enter key details about your business – official name, address, principal activity, start date projected employees, and more. These help customize your filing responsibilities going forward.

On the final page, provide contact information for someone handling company taxes. Once submitted, save the confirmation notice containing your new EIN for record-keeping.

Your beauty school must also register with your state revenue or taxation department for sales tax collection. First, locate the website for your specific state, try searching “[State Name] Sales Tax Registration”. Forms are typically accessible online.

Completing federal EIN and state sales tax registration early on ensures your beauty school operates fully legally right out of the gate. Both are quick digital processes costing little to make your business entities official. Reach out to an accountant or attorney if needing support navigating any confusion points.

6. Setup Your Accounting

Proper accounting is crucial for beauty schools given sizable transactions like tuition payments plus regular purchases of salon products. Without orderly record-keeping, it’s impossible to accurately track profits or catch faulty payments.

Open a Business Bank Account

Start by establishing dedicated business bank accounts and credit cards. Never co-mingle company finances with personal funds. Opening a free small business checking account keeps operations separate for easier reporting.

Accounting Software

Next, implement small business accounting software like QuickBooks to automate tracking income and expenses. Connect bank/credit card accounts for seamless import of all transactions. Generate financial statements with one click. QuickBooks also smoothly handles payroll, invoicing, and inventory.

Hire an Accountant

While programs like QuickBooks simplify reporting, consider retaining an accountant as well. Expect fees between $200 and $500 monthly if outsourcing all bookkeeping and reconciliation tasks. This frees you to focus on students instead of spreadsheets.

7. Obtain Licenses and Permits

Beauty schools must secure an array of state and local licenses before opening their doors to students. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

Navigating regulatory requirements should begin at the state level. Nearly all states mandate vocational or career schools become licensed education facilities subject to strict operational standards. Applications have a $2,000 or higher filing fee in most areas.

Licensing boards carefully vet proposed curriculums, teacher qualifications, classroom facilities, and achievement-tracking processes. Schools may need multiple program-specific licenses if offering comprehensive cosmetology plus focused tracks in barbering or esthetics.

Zoning licenses are crucial as well. Confirm your property lies in approved zones for educational or vocational school facilities. Expect extra application fees or lengthy review periods if seeking approval to operate in a space not previously designated for school use.

School leadership must pass criminal background checks in most states too. Any prior fraud or other finance-related convictions could sink your licensing outcomes.

8. Get Business Insurance

Given the hands-on services and hazardous materials used in cosmetology training, adequate insurance is non-negotiable for beauty schools. It shields your assets should accidents, natural disasters, lawsuits, or other unforeseen events strike.

Consider if a chemical facial peel solution improperly mixed by a student burned multiple classmates. Or a coloring product batch used in an educational demonstration suddenly triggered severe allergic reactions requiring hospitalization. Even slip-and-fall injuries can spur aggressive legal action.

Without at least $2 million in general liability coverage, you’d directly foot all medical and legal bills out-of-pocket. A single incident could easily bankrupt an uninsured school lacking proper protection.

Begin securing coverage by requesting quotes from leading insurers like The Hartford. Provide details on your entity structure, enrollment size, location, and types of training programs. Expect annual premiums between $3,000 to $10,000.

Compare policy terms to ensure adequate coverage levels for general liability, professional liability, employee injuries, and facility damage. For larger campuses, add directors’ and officers’ policies to protect ownership and management.

9. Create an Office Space

Having dedicated administrative office space is crucial for beauty schools to enable confidential meetings, store records and handle enrollment tasks.

Home Office

A home office can provide a cost-effective option for solo founders or very small schools. Expect just a few hundred dollars to add a desk, file cabinet, and computer to an existing room. Home offices lack the professionalism some parents expect when discussing enrollment.

Coworking Office

Coworking spaces like WeWork offer sleek, modern environments for small teams. Gain access to furnished private offices, conference rooms, printing/scanning, events, and front desk staff for $300 to $800 monthly. However, the open concept and traffic from other companies may compromise privacy.

On-Site Office

For schools with attached salons serving real clients, check local zoning to see if retail space with training facilities is allowed. This embedded model places all operations under one roof but may require extensive soundproofing measures to limit distractions.

10. Source Your Equipment

Outfitting a fully functional beauty school requires substantial upfront investment in salon equipment. Smart sourcing strategies help control these major costs.

Buy New

Buying brand-new stations, chairs, tools, and, machinery from retailers allows complete customization in quantity, styles, and colors. Leading suppliers like SalonGuys offer volume discounts above 10 units with financing options available. However, expect premium prices of up to $10k per styling station.

Buy Used

Seeking used equipment through resale sites like Craigslist and Facebook Marketplace can yield huge savings, with stations and barber chairs often found under $2,000. Cosmetology schools, salons, and spas regularly upgrade equipment meaning quality secondhand finds exist.

Rent or Lease

For the most flexibility, consider renting or leasing big-ticket gear not needing customization. Renting enables scaling up certain services quicker when needed. Leasing via equipment finance companies brings alternative funding for costly gear like top-tier color mixing or perm processing machines.

11. Establish Your Brand Assets

Crafting a distinctive brand identity helps beauty schools stand apart while conveying professionalism and quality. Strategically developed assets guide visual, verbal, and experiential impressions of your program.

Get a Business Phone Number

Acquire a unique local phone number through a voice-over IP service like RingCentral. Toll-free lines enable listing a single contact across all campus locations too. Expect around $30 monthly for a business line with call routing features.

Design a Logo

An emblem that encapsulates your vision attracts prospects browsing training options. When designing with a logo maker like Looka, consider an abstract design showing brushes, scissors, and other tools shaped into an ornamental icon. This implies skills mastery. Apply it across all materials.

Print Business Cards

Business cards from Vistaprint make connecting with prospective partners and student leads effortless. Include titles with all staff member names to highlight your expertise. Expect around $20 for 500 basic cards on quality stock.

Get a Domain Name

An effective domain name is short, simple, and evokes beauty, creativity, or technique. Review domain registrars like Namecheap for available options combining “beauty/cosmetology” with local city or branding elements. Expect to budget under $20 annually.

Design a Website

Leverage an intuitive website builder platform like Wix to quickly launch an informational site with responsive templates, ready-made content blocks, and built-in SEO best practices. Expect monthly plans around $30. Hire web developers on marketplaces like Fiverr to construct a custom site.

12. Join Associations and Groups

Plugging into wider beauty education networks builds credibility while enabling valuable collaborations with industry peers.

Local Associations

At the local level, area cosmetology associations like the Professional Beauty Association unite regional beauty pros for networking events and continuing training. Expect $100 – $500 for annual memberships including access to seasonal runway shows and special seminars.

Local Meetups

Keep a pulse on wider industry happenings by attending major trade events like America’s Beauty Show or Premiere Beauty Classic. Use registration platforms like Meetup to find nearby gatherings too. Swap best practices for engaging digitally-native students or get student contest ideas from schools nationwide.

Facebook Groups

Virtual communities remove geography barriers so founders can consult specialty groups like Salon Business Owners Only. Participate in existing conversations or poll members to improve school management procedures. Facebook also hosts numerous niche communities.

13. How to Market a Beauty School Business

Implementing an integrated marketing strategy is imperative for beauty schools needing continuous enrollment influxes to thrive. Tactical promotions establish local visibility and trust to compel prospective students.

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Referral Marketing

Satisfied graduates who successfully land industry jobs make ideal brand advocates. Offer student referral bonuses like free advanced training courses. A simple social media shoutout from an admired alum reaches a wider audience.

Digital Marketing

Digital marketing efforts present highly targeted, measurable promotion channels. Consider Google Ads campaigns geo-targeting local makeup artistry program searches. Expect around $2 per click. Facebook’s detailed audience filters also facilitate narrow outreach.

Email marketing through providers like Mailchimp fosters consistent touchpoints with past inquiries and waitlisted applicants. Use promo codes in campaign links before application deadlines to spur action.

Expand your internet reach by launching a beauty school TikTok profile. Publish behind-the-scenes program glimpses, student experience videos, and gradient dye technique demos. Embed clear calls-to-action to your website for easy conversions.

Traditional Marketing

Traditional options like direct mail and other marketing materials enable personalized outreach. Purchase area high school graduate addresses to mail professionally designed postcards. Promote specialized courses like volume eyelash extensions for those seeking adjacency skills.

Take over local radio airwaves with 30-second vox pop student testimonials. Attempt coordinated messaging across purchased digital banners, streaming audio spots, and social advertisements for maximum exposure.

Ongoing marketing is non-negotiable in the highly competitive beauty education sector. Monitor analytic metrics on digital activities and request lead source data from registrants. Determine optimal community messaging and medical mix by evaluating response rates and enrollment conversions per channel.

14. Focus on the Customer

Skilled professionals in the beauty market hoping for successful careers should focus on customer service. Delivering exceptional student experiences must be the cornerstone of every beauty school’s customer service model.

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Create onboarding touchpoints to set clear expectations around training rigor while building early rapport. Small gestures like assigning student advisors and scheduling regular check-ins foster individualized support some competitors lack.

Cultivate an open, responsive culture encouraging questions and creativity. If demonstrations didn’t land for certain learning styles, adapt instructional formats. Or adjust clinic service quotas based on valid student feedback about quality over quantity.

Exceed expectations by coaching students on professional portfolio development for job searches. And promise interview prep and placement assistance during those stressful post-graduation months. Added guidance smoothing entry into beauty careers sparks powerful word-of-mouth.

By making student welfare the central priority, beauty schools reap reciprocal benefits as talent acquires skills, confidence, and advocacy.