Starting your dream salon? One of the first questions you’ll face is – how much capital to start a salon? Whether you’re opening a cozy setup in your neighborhood or aiming for a full-scale beauty lounge in a metro city, having clarity on your salon startup cost is essential.
In this guide, we’ll walk you through a complete capital breakdown, financing options, tips to reduce expenses, and everything else Indian salon owners need to plan a successful launch.
Understanding How Much Capital to Start a Salon
Average Salon Startup Cost Ranges
The capital required to start a salon in India can vary depending on several factors. On average:
- Small home-based/parlor setup: ₹1 lakh – ₹5 lakhs
- Mid-sized salon in a rented space: ₹6 lakhs – ₹15 lakhs
- Full-scale branded salon: ₹20 lakhs – ₹50 lakhs+
These are ballpark figures. Your actual salon opening costs will depend on your business model, services, and location.
Factors That Affect the Capital Needed to Start a Salon
Before you invest, consider what influences your total capital:
- Location: Prime areas = higher rent and renovation costs
- Size of your salon: More seats = more furniture, staff, and equipment
- Services offered: Hair-only salons need less equipment than salons offering skin, nail, and spa services
- Branding and interiors: Luxury look? Be ready to spend more
- Franchise vs independent: Franchise salons often involve upfront fees
Buying an Existing Salon vs Starting from Scratch
Buying an existing salon can reduce setup time but may involve:
- Higher upfront investment
- Renovation to match your vision
- Liability for existing issues
Starting from scratch gives more flexibility, but you’ll need:
- A detailed salon business budget
- Time for setup, hiring, and promotion
Breakdown of Salon Startup Costs
Here’s where your capital will go when you open your salon.
Real Estate and Leasehold Improvements
- Security deposit + 3–6 months advance rent
- Civil work (flooring, plumbing, partitions)
- Electricals, AC, lighting
- Shop signage
Budget estimate: ₹1.5 lakhs – ₹5 lakhs
Equipment, Furniture & Initial Inventory Expenses
- Styling chairs, mirrors, shampoo stations
- Hair dryers, steamers, trolleys
- Reception desk, waiting area furniture
- Product stock (shampoos, colors, wax, etc.)
Budget estimate: ₹2 lakhs – ₹8 lakhs
Licenses, Permits & Insurance Costs
- Local municipal health trade license
- Shop & Establishment license
- Fire safety clearance
- Business insurance
Budget estimate: ₹20,000 – ₹50,000
Marketing, Branding & Software Costs
- Launch promotions (pamphlets, influencers, local ads)
- Logo, business cards, salon menu
- CRM & salon management software
Budget estimate: ₹50,000 – ₹1 lakh
Legal, Consulting & Professional Fees
- CA/consultant for registrations, business setup
- Legal agreements (rent, franchise, staff contracts)
Budget estimate: ₹10,000 – ₹30,000
Developing Your Salon Business Budget Plan
Creating Realistic Financial Projections
Plan your budget around:
- Expected monthly expenses
- Time to breakeven
- Promotional cost in the first 3–6 months
- Backup capital for emergencies
Use tools like Excel or Google Sheets for planning or invest in a salon business budget template.
How Much Capital to Start a Salon: Looking at Averages and Scales
Type of Setup | Approx. Capital Needed |
Home-based/Small | ₹1 – ₹3 lakhs |
Mid-scale rented setup | ₹5 – ₹10 lakhs |
Premium/Branded salon | ₹20 lakhs+ |
Financing Options: Loans, Investor Capital, Owner Equity
Need help raising funds? Explore:
- Business loans from banks or NBFCs
- Startup schemes (like Mudra loans for women entrepreneurs)
- Private investors or partnerships
- Franchise funding if joining a chain
Tip: Prepare a business plan before approaching lenders or investors.
Managing Operating Capital After Launch
Monthly Operating Expenses to Budget For
After setup, you’ll face regular running costs:
- Rent and utility bills
- Staff salaries and incentives
- Product replenishment
- Marketing and loyalty programs
- Software subscriptions (CRM, billing)
Operating capital required per month: ₹50,000 – ₹2 lakhs (based on salon size)
Cash Flow Planning & Buffer Reserves
Always keep at least 3–6 months of buffer capital to handle:
- Slow months
- Staff turnover
- Unexpected repairs or market changes
Revenue Projections vs Expenses
Plan for a breakeven point within 6–12 months. Track:
- Average ticket size per customer
- Number of clients per day
- Monthly gross revenue vs expenses
Strategies to Minimize Capital Requirements
Starting Small: Booths, Mobile or Home-Based Salon Options
Low on capital? Start lean:
- Home-based beauty parlor
- Bridal makeup freelancer
- Rent a chair in a shared salon space
These options allow growth without huge initial capital.
Negotiating Equipment & Supplier Pricing
- Buy second-hand furniture in good condition
- Bulk-buy products at wholesale rates
- Partner with product brands for co-branded inventory
Gradual Expansion vs Full-Scale Launch
Start with basic services and expand based on demand:
- Phase 1: Haircuts and basic beauty
- Phase 2: Bridal, spa, nail services
- Phase 3: Retail corner or salon academy
FAQs: How Much Capital to Start a Salon?
What is the minimum capital needed to open a salon?
The minimum capital to start a small salon in India is around ₹1–2 lakhs, especially if you’re starting from home or using existing infrastructure.
Are ₹5 lakhs enough capital to start a salon?
Yes, ₹5 lakhs are enough to start a compact salon in a non-prime area or tier-2 city. Prioritize essential equipment and low-cost branding to stretch your budget.
How long before a salon becomes profitable?
Most salons take 6 to 12 months to reach breakeven. This depends on your service quality, footfall, pricing, and how well you manage costs.
Should I rent or buy a salon space?
Renting is a better option for new salon owners. It lowers initial capital requirements and gives you flexibility to upgrade locations later.
Can I start a salon without a business loan?
Absolutely! If you have enough savings or raise capital from friends/family, you can avoid loans. Otherwise, explore startup financing options tailored for small business owners.
Final Thoughts
Starting your own salon is exciting but understanding how much capital to start a salon is the first step toward long-term success. Break your costs into manageable chunks, keep a cushion for operations, and start lean if needed.
Whether you’re launching in a metro city or a small town, careful planning and realistic budgeting will take your salon dream from idea to reality.
Pro Tip: Use salon software like YourSalon to automate your bookings, reduce no-shows, and boost customer retention — saving time and money from day one.
