Your mission should you choose to accept it: opening a beauty salon

Is opening a beauty salon in Luxembourg mission possible? Here are 5 key questions to make you say challenge accepted to your entrepreneurial project and to turn it into a sustainable entrepreneurial adventure.

 Am I qualified?

The Chambre des métiers (link in French) is the organisation of choice when it comes to trades (hairstyles, cosmetics, pedicures, manicures, make-up). On their website, you will find all of the information pertaining to the required qualifications to practise your chosen trade.

If you intend to provide services in the field of cosmetics, hairdressing or make-up, here are the conditions you need to fulfil:

• have a diploma for part or all of your chosen trade; or
• have a bachelor’s (or the equivalent) which covers the essential parts of your chosen trade; or
• have a bachelor’s (or the equivalent) which covers the essential parts of your chosen trade, as well as at least a year of experience in the desired field; or
• have a bachelor’s (or the equivalent) which doesn’t cover your chosen trade, but have at least two years of experience in the desired field; or
• have a business permit for another main trade (list A) which resembles your chosen trade. In this case, you must also have three years of experience:
  • in this trade or in an essential part of it (regular full-time job);
  • after receiving the business permit; or
  • vocational qualification (DAP, CATP, or CAP, etc.), as well as six years of professional experience as a manager or in an essential part of your chosen trade.

In any case, we recommend that you reach out to the Chambre des métiers as soon as possible when developing your business project. You can also contact a service devoted to the recognition of diplomas.

Am I up to date for all the regulations?

It’s crucial that you correctly identify the nature of your activity. If your services are linked to a trade (hairdressing, cosmetics – list A – or pedicures, manicures, make-up – list B), you will be asked to have certain qualifications based on your activity’s classification. You can find out more with the cellule entreprise de la Chambre des métiers to make sure that you know all you need to.

Permanent make-up is also subject to specific restrictions. In this case it’s – surprisingly – the Environment Agency that can provide you with information on the topic. This strangely makes sense due to the health risks linked to old needles being used to inject ink, which are closely monitored at the European level.

If you are thinking about providing massages and well-being treatments (and not pedicures/chiropody or massages for medical purposes), you should contact the House of Entrepreneurship.

Which legal form?

You can choose to be the sole proprietor (if your expenses are low and you work alone). However a Sarl or Sarl-s will be better suited if, for example, you have commercial premises or if your initial investment is high. Keep in mind that it is always possible to change status further down the line.

For this step, you can read our article devoted to legal forms to learn more on the subject before contacting the House of Entrepreneurship who will be happy to answer your questions.

Do I have the necessary financial resources?

This step is crucial: you need to estimate your startup budget. For this type of project, it will be highly dependent on your location. Can you work from home? Or from your customers’ homes? Or do you need to rent a space? Do you need to hire employees straight away? And so one…

You need to plan quite a few expenses when launching your activity such as:

• The premises (a few months of rent in advance – often three to six months)
• Renovation or furnishing of the space
• Purchasing materials/products
• The necessary training (you need to continuously train in the beauty industry to diversify your offer and to perfect techniques)
• Creating a website, plus your marketing fees
• Fees linked to your legal form (notary, lawyer, certified accountant if needed)

How to raise funds?

If you decide to raise funds without taking out a loan, we recommend following the advice given in this article devoted to bootstrapping.

You can consider asking a bank for a loan. Remember that you will need to provide a down payment of at least 25 to 30% of the total required amount. You will also have to present a business plan and financial estimates for the next one to five years. There is nothing like following the advice of an expert on the subject to help you along the way, by reading our article “How to convince your bank to grant you a loan?”! You can also reach out to organisations that provide micro loans, such as microlux. You can find a list of available financial aids via our article “Financial aids for entrepreneurs in Luxembourg”.

Whatever you choose, make sure that you get into as little debt as possible. This will allow you to have fewer drafts later on.

How should I work out my income and monthly expenses?

To estimate your income, you need to look into different factors:

• Your income will obviously depend on your resources. How many customers can you accept each day? How many days will you work every week/month?
• To set your prices, you can look into your competitors’ prices in the same geographical area, whilst also taking into account the time spent on a treatment, the cost of materials (oils, creams, make-up, etc.).
• If you decide to work from your customers’ homes, remember to add a “travel” fee to cover your costs.
• Finally, think of the minimum amount you will need to cover monthly costs that will include materials, rent, bills (water and electrics), personnel, insurance, accounting fees (about 2,000 €/year), taxes, other services such as software subscriptions, website hosting, charges linked to advertising and communication, etc.
• Then work out an average cost per customer: how many customers will you need per day to cover your minimum costs? Is this realistic?

Finally, compare your fixed rates to those of your competitors. Think about what you have to offer, what sets you apart from other beauty salons. This planning must be done before you launch your business!

What location should I choose?

The housing market in Luxembourg is obviously a challenge to take into consideration. Few spaces are available, and rent is high… Thus, you need to get an early start and be ready to sign a lease as soon as you find the one for you. This means that you will already have created a strong business plan and business model beforehand.

You can also contemplate working from home if your county and landlord (if you are a tenant) allow it and you have enough space.

Having a clear idea of your target audience will help you to pick the right location. Ask yourself the following questions:

• Who will be interested in your services?
• Which demographic and age group?
• Where do these people live?
• How can you reach them?
• You also need to think about the budget you can ideally allocate to paying rent, which will affect your decision.
• Look into the direct surroundings, the attendance ratios and the types of businesses around you at different times (nothing beats a good scout out!)

The last pieces of advice for your business venture:

• Plan an online booking system. Look into Salonkee, for example.
• Allow customers to pay by card
• In this type of business, your approach, personality, and way of welcoming customers will make all the difference
• Remember to vary your services (whilst keeping a coherent and appropriate offer for your target audience)
• Start “small” and grow your project with time: you can work from home or share a space the first year whilst you test the waters. Don’t put yourself in financial danger!
• Before hiring, take the time to run the numbers. Hiring is a huge responsibility and is costly. For example, starting out on your own and asking for help from time to time could be a safer bet.

You now have the main tools to start your fulfilling entrepreneurial venture! You’ve guessed it, just like many other industries, it is full of subtleties. Feel free to contact the organisations mentioned in this article as well as the team over at nyuko who can help you every step of the way.