If you’re a small business owner, you know how important it is to keep a careful eye on expenses.

But even the savviest business owners can be caught off guard by unexpected startup and operating costs.

With so much that goes into running a business — appointments, emails, marketing — it’s no wonder that a few things slip through the cracks.

For those in the salon or spa industries, these surprise expenses could include massage therapy insurance, salon owner licenses, inventory costs, or payment processing fees. 

To help make sure you’re not caught off guard by any surprise expenses, we gathered up the most common unexpected costs for new spa and salon owners.

In this article, we’ll look at:

  • Insurance
  • Licenses & Permits
  • Operating Costs
  • Inventory
  • Booking Software
  • Credit Card Fees

Salon and Spa Insurance Costs 

Insurance Costs

Whether you’re a massage therapist, hair stylist, or nail technician, you need business insurance. Let’s take a look at the different kinds of insurance you need and their average costs. 

Massage Therapy Insurance

Professional Liability Insurance: Professional liability insurance covers things like “errors and omissions”, protecting you against claims of negligence, malpractice, or claims due to professional advice that lead to a client’s financial loss.

This type of insurance is crucial for any healthcare provider and definitely a necessity to run a massage business.   

Average cost? $500 to $1,000 per year.

General Liability Insurance: General liability insurance covers injuries and property damages that occur to a third party. It helps cover costs like medical expenses and attorney fees.

Average cost? Most business owners pay $30 or less per month, while some business owners pay up to $100 per month. 

Hair and Nail Salon Insurance

General Liability Insurance: Salon owners and nail technicians need general liability insurance as well. It protects you and your business against client injuries, property damage, and personal injuries that can happen in a salon.

Average cost? $720 per year.

Commercial Property Insurance: Commercial property insurance covers property repairs as well as loss of income due to property damage. 

Average cost? $750 per year.

Professional Liability Insurance: This type of insurance protects your business against claims that your advice or salon services caused a client financial harm. 

Average cost? $920 per year.

Workers Compensation Insurance: If you have employees working for you, whether they’re salon assistants, receptionists, or other nail techs, workers compensation insurance is a must-have.

It covers your employee’s lost wages and medical expenses in the event of injury. 

Average cost? $450 per year / per employee

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Salon Permits and Licenses

There are different licenses and permit costs depending on your industry: hair, beauty, massage therapy, nails, and so on.

Let’s break down the different licenses and permits you need to consider as a salon or spa business owner. 

Business License

Before you can operate as a salon or spa, you need a business license. Every state requires a business license, and while the U.S. Small Business Administration can give you specific details on your particular state, typical licensing fees are anywhere from $50–$100. 

In addition to state licensing fees, you may also have to consider county or local-based business requirements.

Retail Seller Permit

Whether you’re a hair stylist or a massage therapist, if you offer products to your clients, you need a retail seller permit.

While a retail seller permit is typically free, your state may require an up front security deposit to cover any unpaid taxes in the event that your business closes. 

Again, you can check with the U.S. Small Business Administration on requirements for your state. 

Certificate of Occupancy

Salons and spas have property requirements that need to be met — such as water installation and treatment of chemicals — in order to set up shop. That’s where a Certificate of Occupancy comes in. 

A Certificate of Occupancy certifies that your space, the literal salon or spa building, is compliant with the requirements for your business. It runs you anywhere from $20–$80 depending on the size of your property. 

Bonus: Don’t miss our free pro guide to massage certification and licenses!

Operating Costs

Hair Salon Operating Costs

There’s no hiding that starting your own salon comes with some up front costs, such as equipment and furniture.

Here are some common expenses to keep in mind, as well as typical prices for each expense.

Equipment List:

  • Combs and brushes ($100)
  • Scissors/shears ($150)
  • Electronic styling and grooming equipment ($300)
  • Salon chairs ($750)
  • Shampoo station/backwash unit ($800)
  • Hood dryer ($600)

Spa Operating Costs

A lot goes into setting up and operating a successful massage therapy business or nail spa, so we put together a checklist of the most common items needed and typical costs.

Equipment List:

  • Massage bed ($300–$1000)
  • Candles ($15-$60)
  • Facial machinery ($500–$3000)
  • Sanitizer unit ($100–$300)
  • Hot towel unit ($80 – $200)
  • Massage oil ($19 – $60)
  • Blankets ($70 – $160)
  • Sheets ($40 – $60 per pack)
  • Pillows ($40 – $70 per pack)
  • Facial steamers ($150 – $1,000)
  • Body mud ($50 – $150)
  • Nail polish supply ($120)
  • Nail art brushes ($20 – $50 per set)
  • Herbs ($100 – $150)
  • Lotions ($20 – $50 per bottle)
  • Face masks ($20 – $60 per set)
  • Wax ($150 – $200 per pack)
  • Wax warmer ($80 – $250)
  • Wax applicator ($80 – $130)
  • Body salt ($60 – $150)

Small Business Payment Processing

Collecting quietly in the background, credit card fees often sneak up on small business owners.

Those little per-transaction percentages definitely add up, so it’s smart to make sure you’re using a payment processor that fits your business needs and one that saves you money.

Here’s a handy breakdown of the biggest payment processors for folks in the service industry: 

  • Schedulicity: $2.9% + $0.30 with Stripe integration
  • Stripe: 2.9% + $0.30 (additional fees / rates apply for other processing, including terminal and recurring billing)
  • Square: 2.6% + 10¢ (for contactless, swipe, and dip) – 3.5% + 15¢ (for cards on file)
  • PayPal: 2.9%, plus a fixed fee based on currency for online transactions (in the U.S., it’s + $0.30) – 2.7% for in-store transactions
  • Shopify: 2.4% + 30¢ + $299 per month, 2.6% + 30¢ + $79 per month, 2.9% + 30¢ + $29 per month
  • MindBody: 2.75% (qualified), 3.5% + $0.15 (non-qualified) +a $15 monthly minimum fee, if you process less than $550/month
  • Vagaro: 2.75% for “small businesses”, i.e. any business processing less than $4,000 per month
  • Quickbooks: 2.4% for swipe, 2.9% for invoice, 3.4% for keyed-in + 25¢ per transaction
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Appointment Booking Software

If you’re a salon or spa, you need a strong scheduling software — for your sake and your clients’. A good scheduling app helps eliminate phone calls and emails and prevents any double (or triple) bookings on your calendar.

While we believe Schedulicity is the best scheduling app for salons (wink wink), we gathered a list of the biggest names out there and their costs.