A hairstylist typically works as an independent contractor for a salon, paying a portion of profits or a flat fee to rent chair space from the owner. Combining your talent for taming tresses with your business savvy by opening a home-based hair salon is a way to control your hours and atmosphere while cutting your costs.

Step 1.

Investigate the zoning restrictions in your area at your local government offices to ensure you can operate a business in your home. Buy any required permits to run the hair salon.

Step 2.

Acquire a license and permits from your state's cosmetology licensing board to enable you to operate legally and perform services. In addition to your hairstylist license, you will need a salon permit, which requires compliance with fire, electrical and sanitation codes.

Step 3.

Form a legal business structure for your hair salon. Although you plan to run your business from your own home, it is in your best interest to form a separate company. According to Forbes, a limited liability company is the best bet for this type of business and will mitigate your personal risk if you are sued.

Step 4.

Obtain a federal tax identification number from the Internal Revenue Service. This number is the business equivalent of your Social Security number for reporting personal income tax.

Step 5.

Designate your salon space inside your home, taking into consideration adequate lighting and access to power and water sources. If possible, keep your living and business areas exclusive and maintain a separate entrance. This increases your potential business tax deductions and your family's privacy during working hours.

Step 6.

Equip your hair salon with the necessary supplies and equipment, including an adjustable chair, full-length mirror, handheld mirror, shampoo basin, smocks, scissors and brushes. You'll also need a phone and a paper or electronic calendar for appointments.

Step 7.

Contact your insurance representative and modify your homeowner's insurance policy to reflect your business use. This will help protect your supplies and equipment from theft and damage, as well as your business from liability if a client is injured on your property.

Step 8.

Keep your schedule professional by sticking to consistent hours and days of operation. Set up a voice-mail system so you won’t miss clients' calls when you're off the clock.


Increase your profits by purchasing beauty products at wholesale to sell at retail price and building on your menu of hair services with esthetic treatments like makeup application, waxing and facials.

Establish a marketing strategy to build your clientele. Mix high-tech tools like a website and active social media pages with printed fliers and frequent customer cards. Creating packages and promotions for holidays and special occasions like birthdays, Mother's Day, Valentine's Day, Christmas and New Year's Eve.

Enlist the help of additional staff as necessary, including an accountant to help you maintain financial records and an attorney to set up your LLC.

Commit to rigid record-keeping to maximize tax write-offs by saving proof of all your income and expenses.