Alright, so you sat through nail school, chewed your nails up from the anxiety of taking the state board exam, passed your nail exam, and now you have your nail license on hand, wondering… How do I set up shop and start getting paid?
What are the legalities of doing business as a nail tech?
Do I need a business license?
How about a business bank account?
Today I’ll be showing you what you need to legitimately start doing business as an independent nail technician.
So recently, I received an email from a viewer asking how to go “legit” Yes, she used the word legit, so I’m sticking to it.
At first, I didn’t quite understand what she meant because she had mentioned she already had her license… and so in my head, that sounded pretty legit.
But, after reading a bit more, I was like… ah! I know what you mean, like how to be legit, legit. Ok enough. She meant how to set up the back-end of the nail business so that you are an operating business now as a licensed professional.
This viewer expressed that there aren’t very many resources (and that is true) that tell a nail tech how to properly set up to do business independently in nails.
For example, do you need a separate business bank account, or can you use your personal account?
Do you need a business license?
How do you report and keep track of your income?
How do you even take payments from your client, etc., etc. …
and then I was like, AH! I get ya; yeah, there isn’t much out there, is there?
So today, I will be showing you seven things you need to have to start operating a nail business.
I am specifically talking to those interested in becoming or starting to do business as independent stylists, not as an employee in someone else’s salon. Not that there’s anything wrong with working for someone else.
And just briefly, note that there are a few ways to operate as an independent stylist.
You can rent a space within a full-service salon, lease a salon suite, or do session work for runways and celebrities.
If you were thinking of doing mobile or house calls, check with your state and county before you start to see if it’s permitted.
So within this list are modern ways of doing business that, if you don’t adapt, you could leave a lot of money on the table. That is why I include them as a must on this list.
So here are the seven things you must start setting up to get started doing business as an independent nail tech:
#1 Nail Tech License
You need to find a licensed establishment to start doing business as a nail tech. But suppose you will be in a building, a suite, or just space in a beauty salon. In that case, you’ll have talks to the salon owner, technically your landlord, about lease or rental agreements.
#2 Sign up to a merchant processor to start collecting payments from clients.
A merchant processor is a company that will collect your card payments. You can choose cash-only, but I think you leave a lot of money on the table this way, as I find customers to be more generous tippers when they can use their card.
In the salon, I liked using Square. I used it most of the time of doing nails in the salon. When I started my business, I checked out a few merchant processors (who no longer are in business). I kept returning to Square because they were that much better.
Also, do you, but I would refrain from using instant cash apps like Venmo, as apparently, it can be somewhat common for customers to cancel a payment.
#3 Establish a booking system.
Logging your clients and appointments via pen & paper is ok, but going virtual allows you to send appointment reminders. The clients can request appointment changes, and you can email them within the software. Having an online booking system is detrimental for any independent stylist.; consider it your front desk.
It takes much of the small to-do’s off your hands and keeps you focused and engaged on clients. And while on this topic, you’ll notice that I will not mention having a website as a prerequisite for starting a business.
Instead, I want you to invest your time and energy in designing your menu so that you can start sharing your booking link ASAP.
Now, if you use Square as your merchant processor, they also have a booking system. By the way, now it is offered for free!! Yes, and it is the best merchant processor and booking system. In my opinion, it is super streamlined and easy to use. Their booking system used to be $30 per month, and even then, it was worth it.
#4 Immediately start tracking expenses.
The easiest way to do this is by having a separate debit or credit card. Now, this may beg the question, do I need to open a business account, even though I am not bringing in the big bucks yet?
The answer to this question is Yes if you are doing business using a name other than your own and/or you are a corporation or LLC.
The same question: No, if you are doing business in your legal name.
Take me as an example… I did business in the salon under my legal name, Paola Ponce Nails. Which meant I didn’t have to open a separate business account. I happened to have two checking accounts then, so I just dedicated one to business as soon as possible.
I applied for one of my bank’s credit cards to start earning points or cash on purchases and, most importantly, to log all of my business expenses. So essentially, my credit card was where all my expenses went, and my checking was where all my income went.
Now, to properly categorize your expenses, because this is something the government wants to know come tax season. I would highly recommend you sign up for Quickbooks, and all you need is just the self-employed version.
Quickbooks is a small business accounting software program that helps you manage your business’s income and expenses and prepares your books for tax season. And just like your booking software, Quickbooks is like having your assistant for your books. It is currently super affordable; I checked before making this video, and it is currently only $7.50/month.
Once you’ve got a separate account or credit card for your business, you must link those accounts to Quickbooks. It nicely pulls all your transactions, which you can start categorizing for tax purposes.
You can track expenses the old way by keeping a book log and saving all of your receipts. However, I find it much more convenient when I can use my designated credit or debit business card w/o having to worry about missing an expense.
Remember that as of 2019, the IRS does not need you to hold onto receipts lower than $75; you can simply log your purchase without keeping the receipt. For any expense $75 or greater, keep the receipt and make sure the purchase is also logged.
This ‘must’ of tracking your income and expenses is necessary. Also, don’t you want to know whether or not your business is making money each year??
By keeping track of my business, as I have shown you thus far, I realized that I barely was breaking even during the 1st two years of doing nails independently. So by year 3, I had to reconsider if this would work out for me as a real income or just remain at the hobby stage.
Thankfully things took a turn for the better. After finding my niche, I soon became a top-earning manicurist. Check out the free training HERE after you’re done with this reading to learn more about my story and how to reach 6 figure success as an independent nail stylist.
As a sole proprietor, that is what you are if you’re going into nails independently and without becoming an LLC. You need to make estimated tax payments of your income, as nothing is being withheld like an employer will withhold from your paycheck.
It is an estimation, but you should usually estimate about 25% of your quarterly income and payout to the government.
I know, it sucks. Our income is not our income, but If you overpay, you will get a refund at the end of the year. However, you can incur a small penalty fee if you underpay unless your margin of error is within $1000.
Ugh! Sorry this was a long one, but I think, as a business, it is the most important one.
#5 Mileage Log
Although your miles will likely not come from visiting clients, you cannot deduct your commute miles… there is one subtle trip purpose nail techs fail to log… And that is your trips to buy supplies or attend business-related events.
I used to like going out to buy supplies or shenanigans to update my nail space, and I did SO frequently that I started using an app called MILE IQ. It would log all of my car trips, and every so often, I would jump on the app and categorize my work-related trips as such. Then… come time to file my taxes, I simply printed my log with all my totals and handed that and my QuickBooks yearly summary to my tax preparer.
It was super convenient.
By the way, I believe that this MILE IQ app can now sync to your Quickbooks self-employed software for super easy and streamlined accounting.
Suppose you don’t make too many trips to justify a mile-logging app. You can do it via pen and paper.
The information you need to log, mileage logs require total miles to and from, date, place, and business purpose.
As an independent stylist, the more apps (and hopefully you are taking up on recommendations,) the easier for you to focus on just being the nail artist. You don’t want to pretend you are a “boss babe” when you are just your front desk. Likewise, you don’t want to be blindly doing business, not knowing indeed what your take-home is. That is simply not an intelligent business. Knowing my numbers via everything I have shown you thus far gave me the confidence to raise my prices.
At the rate I was going my first two years, I would have been making minimum wage, wearing five different hats, and burning myself out, just to call myself “the boss.” Yeah, it was a true wake-up call.
#6 Liability Insurance
I don’t want you to freak out about this one! It sounds more liable and expensive than it is…
Our industry has liability insurance for us nail techs for as little as less than $150 per year!
Yup, for $150 or less, can you afford not to have it?? I don’t think so.
Your building or salon owner will probably have insurance that may protect some aspects of your space. Still, they are not responsible for any personal blame from a customer incident towards you. This is why you SHOULD opt in for this liability insurance. And to make things super easy for you, I’ll link you to a trusted industry source in the description box below.
#7 Business Cards
This is where the fun begins. Sorry, I had to put you through the boring stuff first but believe me, it’s super necessary.
Now all you need for a business card is your name, the form of contact you prefer (email, text, or call), and your booking website if you have one.
You can start adding branding like logos and slogans if you’re there.
You might be wondering, Paola. Do I need a business card in 2020? Here you are having me go all virtual, and now you want me to pay for printing? Alright, hear me out.
Referred By System
The biggest tip I can give you as beginner tech is to leave a “referred by” blank space on the back of your card. Give 5 to 10 cards to every single client that sits on your chair, and before you hand them out to her, right her name on the back of them, that way, when her referral books with you, you know who sent her your way.
For this referral program to work, I want you to incentivize your client and the referral with either a small discount or free nail art.
I doubled my bookings as a newbie nail tech simply by adding a “referred by” space behind my business cards.
I have given you the 7′ must-do’s to start your business as an independent nail tech.
Do not make things complicated. This is a slim list to get you up and running legitimately if you’re going solo as a nail tech. You can make things more challenging by leasing or renting more space than you need, filing for EIN or LLCs when it’s just you, or running your business by not using your name.
This last one isn’t necessarily a big deal. So if you don’t want to do business using your name, maybe you have a fun name for your business that you would much rather brand and promote. If so, you will have to file a “DBA” document. DBA stands for “Doing Business As,” and you will file this with your state or county’s office.
So now you have a list to get you up and running as a professional and legal business.
Take it step by step. You got this!
Please remember that the beauty of going solo doing nails, especially in the beginning, is that you get to work on yourself for yourself. Enjoy all the little things of being self-employed.
If you bite more than you can chew, you will rob yourself of the fun of creating your own business, the type of nail art or services you want to specialize in, and the clients you want to attract.
So keep it nice and streamline. Follow the list I went through here and if this post cleared up some things for you, comment below… For bonus points, why not pass this blog over to a friend?
Have a merry rest of your week. I’ll see you at the next one.
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