How To Protect Yourself When First Getting Into The Beauty Industry?

Are you Covered

Suggested Title: Learn How You Can Be The Next Untouchable In The Beauty Industry

If your dream is to enter the beauty industry, now might be one of the best times. According to Statista, revenue in the Beauty and Personal Care industry amounts to a whopping $564.40 billion in 2022. The market is expected to grow annually by 4.76%.

But it’s not as easy as putting on a cheerful face and inviting customers into your salon on your opening day. Finding your place in the Beauty Industry as a novice is like untying a Gordian knot.

Some years ago, beauty professionals only needed a handful of resources and a lot of passion for proving their worth in the beauty market. But today, you need more. Unless you’re a Jack- or Jacqueline-of-all-trades, who can equally dish out finances, marketing along with 5-star services, you and your salon business need a little help while starting.

But to begin with while keeping yourself safe from any sort of issues that might block your way through success, here are some important points you can focus on to protect yourself as you begin your career in this amazing beauty and personal care industry.

  1. Insurance

While insurance may not be a legal requirement for owning or managing a salon, it can be crucial in shielding you from legal claims or financial issues. If you stay in the industry long enough, you will hear of some horror stories like this nail salon that got sued for $1.75 Million for causing a woman to lose her leg… YIKES.

Also, an aspiring model went through a nightmare with her hair treatment and sued the salon for $1.5 Million.

Horrifying incidents like these do not happen every day, but they surely give you an important reminder, ‘Get your Insurance in Place!’

Having a beauty insurer on your side can make dealing with a claim a lot easier if the worst comes and a customer accuses you of negligence or harm. If you’re left to your own, you may find yourself scrambling to get a lawyer, which will be costly. It can not only ruin your beauty shop business but your personal life too.

Similarly, if you’re adding a new type of beauty service to your salon, check with an insurance company and your state board first to see what training or accreditations are required.

What Kinds of Beauty Procedures Do You Need Coverage For?

ALL PROCEDURES. It doesn’t matter what sort of services you offer; you should ALWAYS have insurance in place if you offer any services whatsoever.

Beauty insurance isn’t just for adverse reactions and botched treatments; it might also be for a client collapsing on your premises or their belongings being damaged by accident. Most of these issues may be resolved without insurance as well, but it would be better to be prepared for the unexpected.

What kind of coverage do I need while starting a beauty salon business?

Salon insurance is available in several different forms, and some are required by law, while others are voluntary yet appreciated.

When looking for a beauty salon insurance, you need to see what they cover and if anything is missing that you would like to have in place:

Insurance for Public Liability

Public liability insurance is one of the most important types of insurance for salons. This sort of insurance is excellent for beauticians since it protects them from any accidents in the salon.

This can include allergic responses, trips, falls, or other situations that result in damage. Public liability insurance protects your organization from expensive compensation claims that could substantially impact your finances.

In addition, if a claim isn’t handled appropriately, it might hurt your reputation. If everything goes well and the other individual is happy, your clients might even compliment you!

Accident Insurance for Individuals

It would help if you considered getting personal accident insurance as a salon owner. Since you are self-employed, any diseases or accidents that keep you from working can reduce your earnings, and this type of insurance reimburses you for any lost profits caused by accident.

Employers’ Liability Insurance

This form of insurance is required for a business with employees. It safeguards you if one of your employees makes a workers’ compensation claim against your business, and if you don’t see it, you risk being penalized.

There was one particular incident that happened with Yamaguchi Salon and Coastal Day Spa.

“When we opened the business, we didn’t establish set amounts of time for breaks and lunches,” says Melissa Yamaguchi. “We saw 15 clients a day without stopping for lunch, so we thought that was the industry norm.”

Six disgruntled employees sued the Yamaguchis, which cost the owners both emotionally and financially. So, what do we learn from this? Salon owners should always review the policies beforehand to avoid any hiccups.

  • Consider forming an LLC for liability protection against personal assets

It’s really important to cover up your tracks in order to thrive in the beauty industry. The idea here is not to scare you off but to make you the fort knox for when the time comes you are all ready. Just like a happily married couple who signs up for a prenuptial agreement to protect their assets, never to look over their shoulder you should do the same!

So to cut it short LLC stands for ‘Limited Liability Company’. The most important feature to know about an LLC is that it protects from personal liability for business or claims. For example, if your business is not that stable to pay out a supplier or a vendor, they won’t be able to come after your personal assets such as your car or house, hereafter known as the creditor. Here is where the LLC will protect you as only LLC assets can pay off business assets; so point to be noted!

The only thing you stand to lose is the money that you invested in LLC, this gives you more freedom and less accountability.

To start an LLC is quite simple! You just have to file articles of your organization with your relevant secretary of state’s office and move ahead with a successful deployment of an LLC for your beauty business. Here are some key steps to take to form an LLC:

  • Choose an LLC name
  • Appoint a registered agent
  • File articles of organization
  • Prepare an operating agreement
  • Get an EIN (Employee Identification Number)

This is just the tip of the iceberg. Research thoroughly and work to form an LLC for your business and save money on taxes.

  • Licenses and Permits

Obtaining licenses and permits is a crucially important part of opening a salon. An unhappy customer could sue you if you don’t have the proper licenses. More commonly, you could be fined, ordered to shut your business, or have your dream taken away from you before you even get started.

You’ll almost certainly require a retail seller permit if you intend to sell retail products at your salon. Some municipalities that collect their taxes may demand local retail permits. If you hold a business operating license in your state, you can legally run a business. Some of the more common licenses and permits to focus on are:

  • Cosmetologist/Esthetician License
  • Retail Seller Permits
  • Small Business License
  • Salon Operation License
  • Certificate of Occupancy
  • Building Permits

If you are unsure of what permits you need, you should 100% research your local state and city requirements before taking any clients. It can be a good idea to consult your trade association for more guidance as they should have experience in this area. Some examples of trade associations are Association of Cosmetology Salon Professionals, Professional Beauty Association, and Salon & Spa Professional Association.

  •  Find the right location

After you’re done with getting yourself legally secured, it’s time to choose a location for your salon. It might not be something you can do to ‘protect’, but something that you should know while starting your own beauty business that’ll help you stabilize your business in the longer run.

Choosing the right location makes all the difference between a business’s success and failure. You should look for a spot with good traffic, high visibility, and is located where your target audience shops or lives. A salon located next to Target would have better visibility and clientele than a salon situated in a cul-de-sac.

You don’t just want the right storefront—you want the whole package. So, do your homework. Know the local competitors, and think about how your customers will get to your salon. What is the parking like? How spacious is the shop? You should know everything you can about the area before you select a location.

Physically hunting spaces looking for ‘for sale’ signboards have been a thing of the past, now 25-something women entering the salon business prefer to find their salon space online. Salon Renter is a good place to start, with a number of salon rental spaces available.


To sum up, we’ve shared a complete protection guidebook for newbie salon owners. The key to success lies in staying consistent and sincere in your beauty enterprise. Weigh your options and get the legal protection you need necessary for a win-win situation. You’ll certainly make it up!      


https://howtostartanllc.com/should-i-start-an-llc/makeup-business [Accessed: 19/4].





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