Learn how to open your own salon in Illinois. Step-by-step guide covering licensing, permits, location, financing, and business planning for Chicago and Illinois beauty entrepreneurs.
Opening your own salon in Illinois is the dream of many beauty professionals. Whether you envision a chic boutique salon in downtown Chicago, a full-service spa in Naperville, or a neighborhood barbershop in Rockford, salon ownership offers creative freedom, financial independence, and the opportunity to build something uniquely yours.
But transitioning from working behind the chair to owning the business requires more than exceptional cosmetology skills. You need to understand Illinois business regulations, secure financing, find the perfect location, and build a team—all while maintaining the passion that drew you to the beauty industry in the first place.
This comprehensive guide will walk you through every step of opening a salon in Illinois, from initial planning to your grand opening day. Whether you’re a recent graduate from Cosmetology and Spa Academy or a seasoned professional ready to take the leap, this roadmap will help you turn your salon ownership dreams into reality.
Why Illinois is a Great Place to Own a Beauty Business
Before diving into the how-to, let’s look at why Illinois offers excellent opportunities for salon owners:
Strong Beauty Industry in Illinois
- Chicago is a beauty hub: The third-largest city in the U.S. has a thriving beauty scene with constant demand for services
- Diverse population: Illinois’s multicultural communities create opportunities for specialized services (natural hair, ethnic skincare, etc.)
- Suburban markets: Cities like Naperville, Aurora, Joliet, and Schaumburg have affluent populations willing to invest in beauty services
- Growing industry: The beauty and personal care industry in Illinois generates over $2 billion annually
Business-Friendly Infrastructure
- Multiple resources for small business owners through the Illinois Small Business Development Center
- Access to financing through Illinois lending programs
- Strong salon and spa supplier network in the Chicago area
- Active beauty professional associations and networking groups
Many successful salon owners started exactly where you are now—as students learning the fundamentals. If you’re still in the early stages of your career, check out our guide on how to become a cosmetologist in Illinois to ensure you have the proper licensing foundation.
Step 1: Clarify Your Vision and Salon Concept
Before you sign a lease or buy equipment, you need crystal clarity on what kind of salon you want to create.
Define Your Salon Type
Full-Service Salon
- Hair, nails, skincare, and sometimes massage
- Requires larger space and diverse staff
- Higher startup costs but multiple revenue streams
- Best for: Chicago suburbs like Naperville, Oak Park, Evanston
Hair Salon/Barbershop
- Focus exclusively on hair services
- Smaller space requirements
- Can specialize (color specialists, natural hair, men’s grooming)
- Best for: Urban Chicago neighborhoods, college towns
Spa/Esthetics Studio
- Skincare, facials, waxing, body treatments
- Requires specific equipment (facial beds, steamers)
- Can incorporate medical aesthetics with proper licensing
- Best for: Affluent areas, wellness-focused communities
Suite Rental/Salon Suites
- You own the building/space, rent suites to independent stylists
- Lower management burden
- Steady rental income
- Best for: Established locations with high stylist demand
Mobile Salon
- Lower overhead, no physical location
- Travel to clients’ homes or events
- Limited service offerings
- Best for: Starting out with minimal capital
Identify Your Niche
Illinois’s competitive beauty market rewards specialization. Consider niching down to:
- Demographic: Bridal services, men’s grooming, children’s cuts
- Service: Color specialists, natural hair experts, extensions
- Technique: Balayage studio, precision cutting, keratin treatments
- Lifestyle: Eco-friendly salon, luxury spa, quick-service blow dry bar
Example: Instead of “hair salon in Chicago,” become “Chicago’s natural curl specialists” or “Lincoln Park’s premier bridal hair destination.”
Define Your Target Client
Create a detailed profile of your ideal client:
- Age range
- Income level
- Location in Illinois
- Lifestyle and values
- Price sensitivity
- Service preferences
This clarity will guide every decision from location to pricing to marketing.
Step 2: Understand Illinois Salon Licensing and Legal Requirements
Opening a salon in Illinois requires navigating specific state and local regulations. Here’s what you need:
Personal Cosmetology License
Before you can own a salon in Illinois, you must hold a valid Illinois cosmetology, esthetics, or barber license. Requirements include:
- Completion of 1,500 hours of training at an accredited school (like Cosmetology and Spa Academy)
- Passing the Illinois licensure exam
- Being at least 16 years old
If you’re licensed in another state, Illinois accepts licenses by endorsement. Learn more about transferring your esthetician license to Illinois.
Step 3: Create a Comprehensive Business Plan
A solid business plan is essential for securing financing and guiding your decisions. Here’s what to include:
Executive Summary
A 1-2 page overview covering:
- Your salon concept and vision
- Target market in Illinois
- Unique value proposition
- Financial projections summary
- Funding requirements
Market Analysis
Research the Illinois beauty market:
Competitive Analysis:
- Identify 5-10 competitors in your area
- Analyze their services, pricing, and positioning
- Find gaps you can fill
Target Market Demographics:
- Population density in your chosen Illinois area
- Income levels
- Age distribution
- Beauty spending habits
Example: If opening in Naperville, note that the median household income is $130,000+, suggesting clients who can afford premium services.
Services and Pricing
Detail your service menu with Illinois-competitive pricing:
Research Illinois Pricing:
- Chicago Loop: $80-150 for women’s cut and style
- Chicago Neighborhoods: $50-100
- Suburbs: $60-120
- Smaller Illinois cities: $40-80
Price based on:
- Your experience and expertise
- Location and overhead costs
- Target market willingness to pay
- Competitor pricing
Consider offering tiered pricing:
- Junior stylist rates
- Senior stylist rates
- Master stylist rates
Marketing Strategy
How will you attract Illinois clients?
- Social Media: Instagram, TikTok focused on local Illinois hashtags
- Local SEO: Optimize for “salon near me” searches in your Illinois city
- Partnerships: Collaborate with bridal shops, photographers, event venues
- Grand Opening: Host an event with local influencers and community members
- Referral Program: Incentivize existing clients to refer friends
Financial Projections
Include 3-year projections:
Startup Costs (Illinois averages):
- Lease deposits: $3,000-10,000
- Build-out/renovation: $10,000-50,000
- Equipment: $15,000-40,000
- Initial inventory: $3,000-8,000
- Licenses and permits: $1,000-3,000
- Insurance: $2,000-5,000
- Marketing: $2,000-5,000
- Working capital (3-6 months): $15,000-40,000
Total: $51,000-161,000 depending on size and location
Monthly Operating Expenses:
- Rent: $2,000-8,000 (higher in downtown Chicago)
- Utilities: $300-800
- Insurance: $200-400
- Products and supplies: $1,000-3,000
- Staff wages: $5,000-20,000
- Marketing: $500-2,000
- Loan payments: Variable
- Miscellaneous: $500-1,000
Revenue Projections: Calculate based on:
- Number of service providers (chairs)
- Average services per day
- Average ticket price
- Working days per month
- Retail product sales (typically 15-30% of service revenue)
Break-Even Analysis: Determine how many services you need monthly to cover expenses.
Step 4: Secure Financing for Your Illinois Salon
Most salon owners need external funding. Here are options for Illinois entrepreneurs:
Small Business Loans
SBA Loans: The Small Business Administration partners with Illinois banks to offer favorable terms:
- SBA 7(a) Loan: Up to $5 million, general business use
- SBA Microloan: Up to $50,000, good for smaller salons
- SBA 504 Loan: For purchasing real estate/equipment
Interest rates: 6-9% (as of 2026) Requirements: Good credit (680+), business plan, collateral
Illinois Banks Offering SBA Loans:
- BMO Harris Bank
- Chase Bank
- First Midwest Bank
- Byline Bank
Apply through: Your local Illinois Small Business Development Center can help with the application process.
Traditional Bank Loans
Local Illinois banks and credit unions may offer business loans:
- Typically require 10-20% down payment
- Interest rates: 7-12%
- Require strong credit and business plan
Alternative Financing
Equipment Financing: Finance salon equipment specifically:
- Chairs, shampoo bowls, dryers, etc.
- Equipment serves as collateral
- Easier to qualify than traditional loans
Business Credit Cards:
- Good for initial purchases
- Rewards and cash back
- Higher interest rates (use carefully)
Personal Savings: Many salon owners use personal savings for part of startup costs, then finance the rest.
Friends and Family: Formalize any personal loans with written agreements to avoid complications.
Step 5: Find the Perfect Location in Illinois
Location can make or break your salon. Here’s how to choose wisely:
Illinois Location Considerations
Chicago Neighborhoods: High-potential areas include:
- Lincoln Park: Affluent, young professionals, high foot traffic
- Wicker Park/Bucktown: Trendy, artistic, supports independent businesses
- River North: High-end clients, corporate workers
- Lakeview: Diverse demographics, strong neighborhood loyalty
- West Loop: Growing, affluent, lots of new construction
Chicago Suburbs:
- Naperville: Wealthy, family-oriented, low competition compared to city
- Oak Park: Artsy, progressive, values local businesses
- Evanston: College town, diverse, steady demand
- Schaumburg: Large population, shopping districts
- Arlington Heights: Established, middle to upper-income
Other Illinois Cities:
- Rockford: Lower costs, less competition, growing downtown
- Peoria: College town, medical community, stable market
- Bloomington-Normal: University presence, young demographics
- Aurora: Fast-growing, diverse population
Evaluating Potential Locations
Demographics:
- Is your target market present in this area?
- What’s the median household income?
- Population density and growth trends?
Competition:
- How many salons are within 1 mile?
- What services do they offer?
- What’s their pricing?
- Is there room for your concept?
Visibility and Access:
- Ground floor with windows (ideal)
- Ample parking (crucial in suburbs, less critical in urban Chicago)
- Public transportation access (important in Chicago)
- Easy to find/good signage opportunities
Space Requirements:
- Small salon (2-4 chairs): 800-1,200 sq ft
- Medium salon (5-8 chairs): 1,200-2,000 sq ft
- Large salon (9+ chairs): 2,000+ sq ft
Utilities and Build-Out:
- Adequate electrical capacity (multiple dryers, styling tools)
- Plumbing for shampoo bowls
- Ventilation (especially important for chemical services)
- Condition of space (move-in ready vs. needs renovation?)
Illinois Commercial Lease Negotiations
Understanding Lease Types:
Gross Lease:
- You pay fixed rent, landlord covers property expenses
- Easier budgeting
- Common in Chicago
Net Lease:
- You pay rent plus some/all property expenses (taxes, insurance, maintenance)
- More variable costs
- Common in suburban Illinois
Key Lease Terms to Negotiate:
- Rent Amount: Research comparable spaces in the area
- Lease Length: 3-5 years with renewal options (gives stability)
- Rent Increases: Cap annual increases (3-5% maximum)
- Tenant Improvement Allowance: Landlord contribution to build-out ($10-30/sq ft)
- Free Rent: Ask for 1-3 months free rent during build-out
- Early Termination Clause: Allows exit if business struggles
- Subleasing Rights: In case you want to exit or expand
- Hours of Operation: Ensure you can operate evening/weekend hours
Red Flags:
- Landlord unwilling to negotiate
- Very short lease (less than 2 years)
- Hidden fees or ambiguous terms
- Poor building maintenance
- History of business failures in the space
Get Everything in Writing: Verbal promises from landlords aren’t enforceable. Have a lawyer review your lease before signing.
Step 6: Design and Build Out Your Illinois Salon
Your salon’s physical space impacts client experience and staff efficiency.
Illinois Building Codes and Compliance
Before starting renovation:
- Submit plans to local building department
- Obtain necessary building permits
- Ensure ADA compliance (ramps, accessible restrooms, etc.)
- Install proper ventilation (Illinois health codes require specific air exchange rates)
- Meet fire code requirements (exits, fire extinguishers, sprinklers if required)
Step 7: Hire and Build Your Team
Your staff makes or breaks your salon’s success.
Deciding: Booth Rental vs. Employees
Booth Rental (Independent Contractors): Pros:
- Lower risk (contractors pay you, not vice versa)
- Less management responsibility
- No payroll taxes
- Contractors bring their own clients
Cons:
- Less control over their schedule/availability
- Can’t require specific products or protocols
- Can leave and take clients
- May not feel like a team
Typical Illinois Booth Rental Rates:
- Chicago: $250-500/week
- Suburbs: $200-400/week
- Smaller cities: $150-300/week
W-2 Employees: Pros:
- More control over schedule, services, standards
- Builds cohesive team culture
- Can train in your specific methods
- Stronger brand consistency
Cons:
- Higher risk (you pay them regardless of how busy they are)
- Payroll taxes and workers’ comp insurance
- More management responsibility
- Need to attract and retain talent
Typical Illinois Compensation:
- Commission: 40-60% of services (higher % = less benefits)
- Hourly + commission: $15-20/hour + 20-30% commission
- Salary (rare): $35,000-55,000 for experienced stylists in Chicago
Hybrid Model: Many Illinois salon owners start with booth rental, then transition top performers to employees as the business grows.
Where to Find Talent in Illinois
- Cosmetology schools: Partner with schools like Cosmetology and Spa Academy for new graduate placement
- Indeed and ZipRecruiter: Post job openings
- Instagram: Post hiring announcements, search local stylist hashtags
- Behind the Chair: Industry-specific job board
- Networking events: Illinois Association of Cosmetology Schools events, beauty shows
- Referrals: Ask your network for recommendations
Interviewing and Hiring
What to Look For:
- Valid Illinois license (always verify)
- Technical skills (request portfolio)
- Client service mentality
- Cultural fit with your salon
- Reliability and professionalism
- Social media presence (can they attract clients?)
Interview Questions:
- “Why are you interested in joining our salon specifically?”
- “Describe your ideal client experience from booking to checkout.”
- “How do you handle a client who’s unhappy with their service?”
- “What are your career goals in the beauty industry?”
- “Do you have an existing clientele? If so, how many clients?”
Working Interview: Before hiring, do a paid working interview:
- They perform services on 2-3 clients
- You observe technique, client interaction, professionalism
- They experience your salon environment
Illinois Employment Law Compliance
If hiring W-2 employees:
Required:
- Obtain Illinois Employer Identification Number
- Register with Illinois Department of Employment Security (unemployment insurance)
- Purchase workers’ compensation insurance
- Withhold and remit Illinois state income tax
- Follow Illinois minimum wage laws ($14/hour as of 2026)
- Provide required breaks (20-minute meal break for shifts over 7.5 hours)
Recommended:
- Employee handbook outlining policies
- Written job descriptions
- Employment agreements or contracts
- Clear commission structure documentation
Consult an Illinois Employment Attorney: Employment law is complex. One mistake can be costly.
Creating a Positive Team Culture
Even with independent contractors, culture matters:
- Regular team meetings: Monthly staff meetings for updates, training, bonding
- Continuing education: Bring in educators for classes, send staff to shows
- Recognition: Celebrate wins, highlight excellent work on social media
- Clear communication: Set expectations, address issues promptly
- Team events: Quarterly team dinners or activities outside work
A positive culture reduces turnover, which is critical in Illinois’s competitive talent market.
Your Salon Ownership Journey Starts Now
Opening a salon in Illinois is a significant undertaking, but with proper planning, dedication, and the right support, it’s absolutely achievable. Whether you’re just starting your beauty education at Cosmetology and Spa Academy or you’re a seasoned professional ready to take the leap, this guide provides the roadmap.
Remember:
- Start with clarity: Define your vision before signing leases or buying equipment
- Plan thoroughly: A solid business plan prevents costly mistakes
- Follow Illinois regulations: Compliance isn’t optional
- Build gradually: You don’t need everything perfect on day one
- Stay resilient: Challenges will arise—successful owners adapt and persevere
Many of Illinois’s most successful salon owners started exactly where you are now. With the skills you’ve learned (or will learn), strategic planning, and commitment to excellence, you can build a thriving beauty business in the Land of Lincoln.
Your journey from behind the chair to salon owner is just beginning. Take the first step today.
Related Articles:
- How to Become a Cosmetologist in Illinois: Complete 2025 Guide
- Top Paying Beauty Careers in Illinois
- How to Get a Barbering License in Illinois
- Benefits of Becoming a Cosmetologist
- Is Cosmetology School Worth It?
Ready to start your cosmetology journey in Illinois? Learn more about our programs at Cosmetology and Spa Academy where we train future salon owners with both technical excellence and business acumen.
