This article was written by our expert who is surveying the industry and constantly updating the business plan for a beauty salon.
Our business plan for a beauty salon will help you build a profitable project
Running a beauty salon requires careful financial planning to ensure profitability.
Monthly operating costs for a beauty salon typically range from $12,000 to $30,000, depending on location, size, and services offered. Understanding these expenses is essential for new salon owners to create realistic budgets and maintain healthy cash flow.
If you want to dig deeper and learn more, you can download our business plan for a beauty salon. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our beauty salon financial forecast.
Monthly expenses for running a beauty salon include fixed costs like rent and insurance, variable costs like inventory and utilities, and staff-related expenses that typically represent the largest portion of the budget.
A mid-sized beauty salon can expect to spend between $12,000 and $30,000 monthly, with rent averaging $1,500-$4,000, staff wages $8,000-$15,000, and utilities $300-$2,000.
| Expense Category | Monthly Cost Range | Key Details |
|---|---|---|
| Rent/Lease | $1,500 - $4,000 | Largest fixed cost; prime locations cost more |
| Staff Wages | $8,000 - $15,000+ | Includes stylists, receptionists, assistants |
| Utilities | $300 - $2,000 | Electricity, water, gas, internet |
| Product Inventory | $500 - $2,000 | Shampoos, conditioners, colors, retail items |
| Insurance | $100 - $300 | Liability, property, workers' comp |
| Marketing | $150 - $1,200 | Social media ads, print materials |
| Equipment Maintenance | $100 - $500 | Repairs and replacement reserves |
What are the main monthly expenses for running a beauty salon?
The main monthly expenses include rent, staff wages, inventory, utilities, insurance, marketing, and equipment maintenance.
Rent typically ranges from $1,500 to $4,000 monthly for a mid-sized salon, while staff wages represent the largest expense at $8,000 to $15,000 or more. Product inventory costs between $500 and $2,000 monthly, depending on service volume and retail sales.
Utilities including electricity, water, gas, and internet average $300 to $2,000 monthly. Insurance costs run $100 to $300, while marketing expenses range from $150 to $1,200.
Equipment maintenance and replacement reserves should be budgeted at $100 to $500 monthly to avoid unexpected disruptions. Additional expenses include laundry services, cleaning supplies, and business software systems.
Planning for these expenses helps ensure your beauty salon maintains positive cash flow throughout the year.
How much does monthly rent cost for a beauty salon space?
Monthly rent for a beauty salon typically ranges from $1,500 to $4,000 in mid-tier cities, with costs reaching $10,000 or more in major metropolitan areas.
Location significantly impacts rent costs - prime spots with high foot traffic command premium rates. A 1,500 square foot salon in a suburban shopping center might cost $2,500 monthly, while the same space in downtown Manhattan could exceed $8,000.
Most commercial leases include the physical space only, though some may include basic utilities or shared amenities. You'll need to clarify what's included before signing, as additional costs for utilities, maintenance, and property taxes can add substantially to your monthly expenses.
Consider negotiating lease terms that include a grace period for build-out or graduated rent increases as your business grows. Many landlords offer incentives for multi-year leases, which can reduce your monthly costs.
This is one of the strategies explained in our beauty salon business plan.
What are typical monthly utility costs for a beauty salon?
| Utility Type | Monthly Cost Range | Factors Affecting Cost |
|---|---|---|
| Electricity | $150 - $1,200 | Hair dryers, lighting, air conditioning, equipment usage |
| Water | $75 - $500 | Shampoo stations, client volume, water pressure needs |
| Gas | $100 - $300 | Heating, hot water heaters, location climate |
| Internet/Phone | $50 - $150 | Speed requirements, multiple lines, POS systems |
| Waste Management | $50 - $100 | Chemical disposal, regular trash, recycling services |
| Security Systems | $30 - $80 | Monitoring services, camera systems, alarm features |
| Total Range | $455 - $2,430 | Combined utilities for typical beauty salon operation |
How much should I budget for staff wages and salaries?
Staff wages typically represent 40-50% of a beauty salon's total monthly expenses, ranging from $8,000 to $15,000 or more.
Licensed cosmetologists earn between $2,500 and $5,500 monthly, depending on experience and location. Entry-level stylists might start at $30,000 annually, while experienced professionals in high-end salons can earn $65,000 or more. Many salons also offer commission structures ranging from 40-60% of service revenue.
Receptionists typically earn $2,500 to $3,500 monthly, with hourly rates between $15 and $18. Their responsibilities include appointment scheduling, customer service, and point-of-sale operations. Assistants who help with shampooing, cleaning, and preparation earn $1,800 to $2,500 monthly.
Don't forget to factor in payroll taxes, which add approximately 15-20% to base wages. Benefits like health insurance, paid time off, and retirement contributions can increase total compensation costs by another 20-30%.
You'll find detailed market insights in our beauty salon business plan, updated every quarter.
What are monthly inventory costs for beauty salon products?
Monthly inventory costs for beauty salons typically range from $500 to $2,000, depending on service offerings and retail sales volume.
Professional hair care products including shampoos, conditioners, and styling products cost $200-$600 monthly for a mid-sized salon. Color products and chemical treatments add another $300-$800, with costs varying based on the brands you carry and frequency of color services.
Retail inventory represents both an expense and revenue opportunity. Initial retail stock might cost $500-$1,500, but markup typically ranges from 50-100%, making this a profitable addition. Focus on fast-moving products and maintain 4-6 weeks of inventory to optimize cash flow.
Consider negotiating volume discounts with suppliers or joining buying groups to reduce costs by 10-20%. Track product usage carefully to minimize waste and identify which services generate the highest profit margins.
Effective inventory management prevents both stockouts and excess inventory that ties up working capital.
How much should I budget for equipment maintenance and replacement?
Budget $100 to $500 monthly for equipment maintenance and replacement reserves to avoid costly disruptions to your beauty salon operations.
Regular maintenance extends equipment life significantly - professional cleaning of hair dryers every 3 months costs $20-30 per unit but prevents $200-300 replacements. Styling chairs require annual hydraulic servicing at $50-75 each, while shampoo bowls need plumbing checks every 6 months.
Create a replacement schedule for major equipment: styling chairs typically last 5-7 years ($500-$1,500 each), hair dryers 3-5 years ($100-$300), and processing machines 7-10 years ($1,000-$3,000). Setting aside monthly reserves prevents large unexpected expenses.
Consider equipment warranties and service contracts for expensive items. A $200 annual service contract on a $2,000 color processing system can save thousands in repair costs.
Track equipment age and performance to anticipate replacements before failures disrupt service.
What are typical laundry and cleaning supply costs?
| Service/Supply Type | Monthly Cost | Details & Considerations |
|---|---|---|
| Commercial Laundry Service | $100 - $400 | Includes pickup/delivery, washing, drying, folding of towels and capes |
| In-House Laundry | $50 - $150 | Detergent, utilities, equipment maintenance if washing on-site |
| Disinfectants & Sanitizers | $30 - $80 | EPA-registered products for tools, surfaces, required by health codes |
| General Cleaning Supplies | $20 - $50 | Floor cleaners, glass cleaners, bathroom supplies, paper products |
| Disposable Items | $30 - $60 | Neck strips, cotton, foils, gloves, disposable capes |
| Professional Towels | $20 - $40 | Replacement costs for worn towels, typically 10-20% monthly |
| Total Hygiene Budget | $250 - $780 | Comprehensive cleaning and laundry expenses for typical salon |
How much do business software and booking systems cost monthly?
Modern beauty salons spend $30 to $400 monthly on software systems that streamline operations and enhance customer experience.
Basic appointment booking software starts at $25-$50 monthly and includes features like online booking, automated reminders, and client databases. Mid-tier systems at $75-$150 add inventory tracking, staff scheduling, and basic reporting. Premium platforms costing $200-$300 include advanced analytics, marketing automation, and multi-location support.
Point-of-sale (POS) systems range from free basic versions to $79+ monthly for features like integrated payment processing, loyalty programs, and detailed sales analytics. Many salons find integrated booking and POS systems at $100-$200 monthly provide the best value.
Additional software costs might include email marketing platforms ($20-$50), social media scheduling tools ($15-$30), and accounting software ($25-$75). Choose systems that integrate well to avoid duplicate data entry.
We cover this exact topic in the beauty salon business plan.
What should I budget for monthly marketing and advertising?
Successful beauty salons allocate $150 to $1,200 monthly for marketing, typically representing 3-5% of gross revenue.
Digital marketing dominates modern salon advertising, with social media ads on Facebook and Instagram costing $100-$500 monthly. These platforms excel at targeting local demographics and showcasing visual transformations. Google Ads for local searches like "hair salon near me" typically require $200-$600 monthly for competitive visibility.
Traditional marketing still has value - business cards, flyers, and loyalty cards cost $50-$200 monthly. Email marketing through platforms like Mailchimp costs $20-$75 monthly and generates strong returns through appointment reminders and promotions.
Consider allocating 20% of your marketing budget for seasonal promotions and special events. Track return on investment by asking new clients how they found you, then adjust spending toward the most effective channels.
Consistent marketing efforts build long-term brand recognition and client loyalty in your local market.
How much does beauty salon insurance cost per month?
- General Liability Insurance: $50-$120 monthly protects against client injuries, property damage, and slip-and-fall claims. This foundational coverage is required by most landlords and provides $1-2 million in protection.
- Professional Liability: $40-$50 monthly covers claims related to services provided, including allergic reactions, chemical burns, or unsatisfactory results. Essential for protecting against service-related lawsuits.
- Property Insurance: $30-$80 monthly protects equipment, inventory, and improvements against theft, fire, or natural disasters. Coverage amounts should reflect current replacement values.
- Workers' Compensation: $19-$80 per employee monthly, required in most states when you have employees. Rates vary by state and claim history.
- Business Interruption: $25-$50 monthly replaces lost income if your salon must close temporarily due to covered damages.
What are typical training and licensing costs?
Professional development and licensing compliance costs beauty salons $50 to $200 monthly when averaged throughout the year.
State cosmetology licenses require renewal every 1-2 years at $50-$150 per stylist. Many states mandate continuing education hours, with approved courses costing $100-$300 annually. Salon licenses and permits add another $200-$500 yearly, depending on local regulations.
Ongoing training keeps your team current with trends and techniques. Monthly education budgets of $100-$300 cover workshop fees, online courses, and product training. Many product lines offer free training when you carry their products, reducing education costs.
Consider hosting in-salon training sessions where one team member learns a new technique and teaches others, maximizing your education budget. Some salons allocate education dollars as employee benefits, improving retention.
Investing in staff development improves service quality and allows premium pricing for advanced techniques.
What unexpected expenses should I plan for?
| Unexpected Expense Type | Potential Cost Impact | Prevention/Mitigation Strategy |
|---|---|---|
| Equipment Breakdowns | $500 - $3,000 per incident | Regular maintenance, warranty coverage, repair fund reserves |
| Seasonal Fluctuations | 20-30% revenue swings | Track patterns, adjust staffing, promote during slow periods |
| Staff Turnover | $1,000 - $3,000 per position | Competitive pay, positive culture, cross-training programs |
| Regulatory Changes | $500 - $2,000 compliance costs | Stay informed, join industry associations, compliance audits |
| Emergency Repairs | $200 - $1,500 per incident | Preventive maintenance, reliable contractors, emergency fund |
| Supply Chain Disruptions | 10-20% cost increases | Multiple suppliers, strategic inventory, flexible pricing |
| Recommended Reserve | $2,000 - $5,000 minimum | Save 5-10% of monthly revenue for contingencies |
Conclusion
Running a successful beauty salon requires careful financial planning and realistic budgeting for all monthly expenses. Total costs typically range from $12,000 to $30,000 monthly, with staff wages, rent, and inventory representing the largest expenses. By understanding each cost category and planning appropriate reserves, you can maintain healthy cash flow and build a profitable beauty salon business. Remember to review and adjust your budget quarterly as your business grows and market conditions change.
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Starting a beauty salon requires thorough planning beyond just understanding monthly costs.
Success comes from combining financial knowledge with strong business strategies, effective marketing, and excellent customer service to build a loyal client base in your community.
Sources
- Salon Studios - Salon Suite Rental Budget Guide
- Salon Renter - Average Salon Suite Rental Costs
- Dojo Business - Hair Salon Budget Setup
- Salon Biz Software - Hair Salon Monthly Expenses
- Hey Goldie - Hair Salon Budget Plan
- Dojo Business - Beauty Salon Monthly Costs
- Business Plan Templates - Hair Salon Running Costs
- Zolmi - Salon Expenses List
- Insureon - Personal Care Business Insurance Cost
- Trafft - Salon Software Cost Guide