How I started my beauty salon business

Jason Storey and Amariyah Raheem started La Bella, their Islington-based beauty and hairdressing salon, in April 2008. Jason explains how they got the salon up and running

“Amariyah and I have worked for many organisations, so we had a lot of relevant skills to bring to our new venture. Amariyah had experience in retail, sales and events organisation and I had experience in banking, accounts and web design. We were tired of working for other people, so we decided to start our own business.

“I grew up in Islington, so I knew the area well. I researched places where there was a need for a salon and we found a unit five minutes’ walk from where we live. The rent for most high street properties was sky high, but we found premises where the rent was affordable and all they wanted was a six-month bond. We phoned the freeholder and negotiated a deal, then signed a 15-year lease. Just before we signed, the recession began to bite, which was a worry, but it also enabled us to negotiate the price down.

Getting funding

“We had £6,000 in savings and The Prince’s Trust gave us £5,000, after seeing our business plan. It was too detailed, but they told us what to take out, to help us get bank lending.

“We contacted the freeholder and said we were low on money and he invested £10,000 in us. He liked our idea and not many people were renting his units, because of the credit crunch and recession.

“At that time, we were filling in two or three grant forms a day and eventually we got a call back from the Bright Ideas Trust. [Ex- winner of The Apprentice] Tim Campbell, the main man there, loved our business idea and he authorised a £12,000 investment. We used that for the rental bond and started the business with a bit of money in the account. We also borrowed £7,500 from the bank.

Building the business

“The start-up costs for building the salon were low. We were getting quotes of up to £35,000, but someone we knew did it for £17,000.

“I painted the salon myself, did a bit of plastering and laid the floor. Our solicitors looked over the rental agreement to make sure it was fair and we sought advice about insurance. We had to get public liability insurance and beauty licence insurance. We brought in health and safety inspectors, who viewed the premises and gave us advice.

“I designed the salon myself — we wanted an Italian theme. There are specialist suppliers, but we avoided expensive brands and furnished it cheaply. Some suppliers were charging £500 for an almost identical hairdressing chair to the one we bought for £250.

“We registered the company with Companies House and made our most costly mistake – registering the company for VAT, when we shouldn’t have.

Making mistakes

“We made many mistakes early on, for example, employing too many staff and spending too much on beauty products. We also miscalculated our start-up costs. Our initial costs were the products, furniture, rent and the first month’s wages, but most things cost more than we’d anticipated. I do all our accounts and I’m still learning as I go along.

“A few months ago, the Bright Ideas Trust gave us a mentor, who is very helpful. I wish we’d had her all along. Mentors can help a lot, because they’ve been there and done it before. They have the experience.

“We had seven staff initially, but now we have four, with me and Amariyah as directors. We found staff by posting adverts on Gumtree and phoning beauty schools to ask them to recommend students. Amariyah’s aunty, who has experience in health and beauty, is helping us out, too. I’m putting together a training manual for staff, but everyone needs to multi-task when they work for a small business.

Pre-launch marketing

“Before launch, we created our own website and distributed leaflets locally. We know a printer, so we got a cheap printing deal of £50 for 5,000. We tried newspaper advertising once, but that wasn’t effective. We also put an offer on the leaflet for 15 per cent off and monitored the response, which wasn’t great either. Now we focus on free marketing, such as Facebook. After joining Facebook just before Christmas 2009, our sales soon increased by 30 per cent.

“There is so much to do when you start a business — it’s certainly a lot harder than we expected. But we’ve got two children and we can’t afford for the business not to work out.”

Jason’s three key lessons

• Make sure you are 100 per cent committed to your business idea, because you need to be focused if you are to succeed.
• Seek professional advice. Talking to someone who knows the sector you’re going into can prove invaluable. 
• Make sure you receive tailored advice about tax. Obviously, you don’t want to be paying too much – or too little.

More on this topic:

• Decide if running a business is for you
• Q&A: Pre-launch marketing
• How I balance my family and business commitments

Find more articles, videos and tools in the Resources box on the right.