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Hairdressing is an essential and sought after service. Oftentimes, hairdressers end up building genuine connections and relationships with the customers they provide their services to, making it a profession that is about much more than just trims and cuts.
In this article, we’ll cover the basics of starting a hairdressing business, from registering a hairdressing business to complying with the relevant regulations and drafting the right legal documents.
Keep reading to find out more.
How To Start A Hairdressing Business
When starting a hairdressing business, determining the location of your business is essential. Traditionally, we’re used to seeing hairdressers at salons in public places, such as a shopping centre.
However, more hairdressers are breaking away from this tradition and opting for increased flexibility as well as control over their schedules. As a result, the prominence of home and mobile hair salons can be expected to rise.
Start A Hairdressing Business From Home
Starting a business from home comes with many benefits, from the flexibility of your working arrangements to the reduced need to rent out an additional space.
However, certain laws still apply even if your business operates from home.
For example, you’ll need to take a look at your local zoning regulations to see if it permits you to operate a business from home. You may also need permission from your local council. For more information, click here.
If you hire employees, your employer obligations under Work Health and Safety laws still apply. So, you have an ongoing obligation to ensure your employees have a safe space to work in.
Set Up A Mobile Hairdressing Business
Mobile hairdressing businesses are another way to add more convenience to your business as it allows you to travel to your customers.
It can also be a way to service more customers than you may in a stand-still location salon as customers don’t need to make the journey to you. This would also improve customer satisfaction generally.
A mobile hairdressing business still needs to be set up like a regular business in terms of registration and legal documents, so keep reading to learn more.
How Do I Register My Hairdressing Business?
Registering a hairdressing business is the same process as registering any other business.
Once you have gone through the registration steps we’ve listed below, ensure you open a bank account for your business and look into protecting any intellectual property you might possess.
This is particularly important in a highly competitive market where trade secrets should not end up in the wrong hands.
ABN
All businesses require an Australian Business Number (ABN). Getting an ABN is relatively simple. You can apply for it online by answering a few questions and paying the fee.
Once your application has been approved, you will be emailed your ABN.
Business Name
To start your hairdressing business, you will also need to register your business name. Before committing to a name, we recommend checking the register of names to see if the one you want is available to avoid disappointment.
Once you have selected a suitable name for your business, you can apply to have it registered online.
Registering your business does not necessarily mean you own it. In other words, it doesn’t prevent other people from using that name.
To further protect your business name, you may want to look into registering a trade mark with IP Australia.
What Licence Do I Need For My Hairdressing Business?
Other than the right qualifications (we’ll go into more detail about this later) you need a specific licence to operate as a hairdressing business in NSW.
A hairdresser must have held a licence at any point, under Part 6 of the Shops and Industries Act 1962. However, this excludes licences that are only for beauty treatments.
If you plan on having a salon that provides more services than hair, such as some beauty treatments, then you may need particular kinds of licences depending on the treatments you offer.
This will differ from state to state, so make sure you do your research and fill out important licence applications before you start serving customers.
How Does Liability Work?
Liability is the legal responsibility a hairdresser has towards their clients. As a business owner, your liabilities can also extend to your employees.
Generally speaking, liability is assessed by determining whether or not you have taken reasonable steps to provide a duty of care for those you are responsible for.
| Example Hannah owns and operates her own hairdressing salon. After her first client of the day left, Hannah mopped the floors before her second client. Failing to place a sign or give any warning to her next client about the wet floors, Hannah’s client slipped and injured their ankle. Hannah is considered liable for their injuries as she did not take precautions by providing them ample warning about the slippery surface |
Am I Liable For A Customer’s Injury At My Salon?
You can be considered liable if customers are injured at your salon, however, you can use your contracts to limit the extent of this liability.
Exclusion of liability clauses in contracts can free you from any liability. For example, if a customer doesn’t disclose that they are allergic to a particular chemical that is used in hair dye and have a reaction at your salon, an exclusion of liability clause can protect you.
However, this needs to be within reason and your actions cannot be in breach of any laws, such as the Australian Consumer Law, for exclusion of liability clauses to come into effect.
A limitation of liability clause, on the other hand, places a cap on the amount of damages that can be paid by a business if they are found to be liable for something. So, rather than excluding liability entirely, it only limits it to a certain extent.
For example, your limitation of liability may be capped at $150,000. Therefore, in the event an incident happens and your business is liable, the clause can prevent you from going bankrupt after one liability claim.
What Other Documents Might I Need For My Hairdressing Business?
There are a number of legal documents necessary for starting a business. We’ve listed some of the key ones below, however, the documents you will be needing will depend heavily on the nature of your business activities and your specific needs.
Reach out to our team of legal experts if you’d like to know more about what kind of documents you should be looking into getting for your hairdressing business.
Do I Need An Employment Agreement For My Hairdressing Business?
If you’re thinking of hiring more hairdressers or employees (i.e cleaners, receptionists or beauticians), then you will need to have an Employment Contract with them.
It’s always better to get the terms of your staff’s employment in writing to ensure any disputes or confusion can be resolved quickly.
A typical Employment Contract will usually include:
- Pay/rates for the employee
- Hours/days they are required to work
- Leave entitlements
- Termination of the contract
- Employee duties and responsibilities
- Employer obligations
Legal Disclaimers
As we discussed above, legal disclaimers can aid in limiting your liability when something goes wrong as well as letting customers know beforehand what you can and cannot be considered responsible for.
Disclaimers can come in the form of limitations of liability clauses, warranties or exceptions in Service Agreements or Terms and Conditions.
Do I Need Terms And Conditions Or A Service Agreement?
If your business has a website, then you will likely need Terms and Conditions as well as a Service Agreement.
Terms and conditions usually limit your liability as they determine how your site can be used. It also sets out details around payment methods and online booking processes, so it’s worth looking into getting one.
A Service Agreement is the contract between you and your customers which outlines the scope of your services to them. This is important as it details in writing what they can expect as well as your duties towards one another in relation to the service.
Do I Need Insurance?
Apart from workers’ compensation insurance, you are not required by law to have insurance. However, it’s always wise to look into getting covered.
Much like taxes, the type of insurance coverage you are eligible for is subjective. So, it’s best to contact a professional to inquire about your options.
What Qualifications Do I Need?
In NSW, hairdressers need to complete a Certificate III in hairdressing from a reputable institution (such as TAFE) in order to legally practice as a hairdresser.
In addition to this, any apprentices or trainees that are currently undergoing their studies must be under the supervision of a fully qualified hairdresser when they’re working.
Making sure you have these qualifications is extremely important, as penalties can be imposed on businesses owners who operate without attaining the proper qualifications.
What Is A Rent-A-Chair Agreement?
A Rent-A-Chair Agreement is essentially a hairdresser that is a contractor as opposed to an internal employee of the salon.
A hairdresser that works at a salon under a Rent-A-Chair Agreement either pays rent for their space to operate in the salon or commission from their earnings. This can be a good way to get additional staff on board without hiring an internal employee.
However, there are two main things to be wary of:
- Make sure that rent-a-chair employees are given the autonomy of a contractor and are free from the typical obligations of an internal employee
- The agreement between your rent-a chair-employee and you needs to explicitly state they are being hired as a contractor and not an internal employee
- If you’re renting your business premises, you may need to check your Lease Agreement or attain permission from your landlord
How Can I Promote My Hairdressing Business?
Once you start your own hairdressing business, you may not see customers flooding through the doors immediately – but that’s okay! It can take time, and an important part of running any business is setting aside time and funds.
Social media is a free and effective tool to get your business out there. With the permission of your clients, you can take photos of your work to post there, connect with others and put out any special promotions or offers.
You can use other more traditional ways such as flyers and paid ads. However, it’s important to make sure your advertisements are being delivered to the right demographic- make sure you do research before committing funds.
The best way to approach this is to understand your market, location and customer base and find the best way to reach them. Word of mouth is also still a very powerful tool to pull customers in, so make sure the customers you do get to serve leave your business feeling happy and satisfied!
How To Deal With Negative Reviews
Having an online presence allows customers to contact and interact with your business much more conveniently. There’s also the option for customers to leave online reviews, either on your page or via a third party website such as Google Reviews.
Reviews are often read by other potential customers when they’re considering which service to go with,, so it can play a significant role in swaying customers to choose your business over others.
However, sometimes things don’t go as we’d hoped and a customer leaves a negative review about your business. When this happens and you feel the review was unwarranted, there are a couple of paths you can take:
- Respond to the customer directly to sort the issue out
- If the review is on a third party website, report it so it can be taken down (this not is promised to work out)
- If the reviews are particularly damaging and causing your business to lose customers, it may be time to look into taking legal action
- Have all the right legal documents in place such as employee agreements and all the relevant online ones
- For rent-a-chair employees, make sure it’s allowed in accordance with your lease. The relationship and agreement between you and a rent-a-chair employee should also reflect their position as an external employee
Lastly, it’s important to keep in mind that posting fake positive reviews about your business is a form of misleading and deceptive conduct. Therefore, refrain from taking any action that leads customers into believing false information.
Key Takeaways
Starting a hairdressing business requires some well thought-out moves in order to give your business a healthy start but with the right team behind you, the process can be made much simpler.
To summarise what we’ve discussed:
- To start a hairdressing business, it’s important to decide where you will operate from whether it be a home salon, mobile salon or a salon in a commercial location
- Register you business, get a registered business name and open up a bank account for your salon
- Make sure you and any hairdressers you hire have the right qualifications
- Address you liabilities and research possibly getting insurance
- Register for taxes
- Be prepared for things to go wrong, such as negative reviews
- Promote your business!
If you would like a consultation about starting a hairdressing business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
We'll get back to you within 1 business day.
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