Alright, so you sat through nail school, you chewed your nails up from the anxiety of taking the state board exam, you passed your nail exam, and so 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?
In today’s video I’ll be showing you what you need to legitimately start doing business as an independent nail technician.
Greetings and welcome back. If you are new here, I am Paola. Welcome! I am a licensed nail technician and certified instructor for Japanese gel nail systems.
So recently I received an email from a viewer asking how to actually go “legit”, yes she legit, used the word legit, so I’m sticking to it.
And at first I didn’t quite understand what she meant by that because she had mentioned she already had her license… and so in my head that sounded pretty legit.
But surely after reading a bit more, I was like… ah! I know what you mean, like how to be legit, legit. Ok enough. What she meant was, how to set up the back-end of your nail business so that you are indeed a business now that you are a licensed professional.
And so what this viewer expressed to me was that there aren’t very many resources (and that is true) that tell a nail tech how to properly set herself up to do business independently in nails.
For example, things like do you need a separate business bank account or can you use your personal one?
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 really isn’t much out there, is there?
So in today’s video I will be showing you 7 things you need to have to start operating as a nail business.
And I am more specifically talking to those interested in becoming or starting to do business as an independent stylist, 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, you can lease out a salon suite, or you can do session work like for runways and celebrities.
If you were thinking of doing mobile or house-calls do check with your state and county before you start, to see if it’s permitted.
So within this list there are modern ways of doing business that if you don’t adapt to, you could be leaving a lot of money on the table, and that is why I am including them as a must in this list.
So here are the 7 things you must start setting up to get started doing business as an independent nail tech:
#1 Nail tech License
Technically to start doing business as a nail tech all you need to do is find a licensed establishment. But obviously, if you are going to be in this building, whether a suite or just space within a beauty salon, you will have had talks to the salon owner, who is now 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 just the company that will be collecting your card payments. You can choose to be 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 and used it for the majority part of doing nails in the salon. When I first started my business I checked out a few other merchant processors, who are actually no longer in business, and then kept returning back to Square because they were just that much better. Also, you 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 require to change their appointments, and you can typically email them within the software. Having an online booking system is detrimental for any independent stylist, consider it your own personal front desk. It literally takes so much of the small to-do’s off of your hands, and keeps you focused and engaged on clients while working on them.
And while on this topic, you’ll notice that in this list, I will not be mentioning having a website as a prerequisite for starting business. I much rather you invest your time and energy on designing your menu, so that you can start sharing your booking link, ASAP.
Now if you would use Square as your merchant processor they actually also have a booking system. Which 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 streamline and easy to use. Their booking system used to be $30 per month and even then it was totally 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 then need to open a business account, even though I am not really bringing in the big bucks yet?
The answer to this question is Yes, if you are doing business in any other name other than your own and/or you are a corporation or LLC.
The answer to this same question is No, if you are doing business in your legal name.
So take me as an example… I did business in the salon under my own legal name, Paola Ponce Nails. Which meant I didn’t have to open a separate business account. Now at that time I happen to have two checking accounts, and so I just dedicated one to business, and as soon as I could… I applied for one of my bank’s credit cards, I did that, so that I could 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 of my expenses went, and my checking was where all of my income went into.
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.
All Quickbooks is, is a small business accounting software program that helps you manage your business’s income and expenses and really prepares your books come tax season. And just like your booking software, Quickbooks is like having your own personal assistant for your books, and it is currently super affordable, by the way, I checked prior to making this video, and it is currently only $7.50/month.
Once you’ve got a separate account or credit card for your business, all you have to do is link those accounts to Quickbooks and it very nicely pulls all of your transactions which you can then start categorizing for tax purposes.
Now you can track expenses the old way, by keeping a book log, and saving all of your receipts, but I find it much more convenient when I could use my designated credit or debit business card w/o having to worry if I’ve missed logging an expense.
Keep in mind that as of 2019, the IRS does not need you to hold unto 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.
Now this ‘must’ of tracking your income and expenses is so necessary for so many reasons, but also don’t you want to know at the end of each year, whether or not your business is ACTUALLY making money??
By keeping track of my business as I have shown you thus far, I was able to realize that the 1st 2 years of me doing nails independently, I really barely was breaking even. So by year 3 I really had to reconsider if this was going to work out for me as a real income or just remain at the hobby stage.
Thankfully things took a turn for the better and after finding my niche I soon after became a top earning manicurist. Check out the free training in the description box below, after you’re done watching this video to learn a bit more about my story and how to reach 6 figure success as an independent nail stylist.
Now as a sole proprietor, that is what you are if you’re going into nails independently and without becoming an LLC, you do need to make estimated tax payments of your income, as nothing is being withheld from your income, like an employer will withhold from your paycheck.
It is an estimation, but usually about 25% of your income for that quarter you should estimate and pay out to the government. I know, it sucks, our income is not really our income, but If you overpay you will get a refund at the end of the year. However, if you underpay you can incur a small penalty fee, unless your margin of error is within $1000.
Ugh! Sorry this one was a long-one, but I think personally to me, as a business, it is the most important one.
Alright! Unto the next thing to set up to start doing business as a nail tech…
#5 Mileage Log
Although your miles most likely will not come from visiting clients, and 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.
Now, I used to really 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 literally 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 of 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 is now able to sync to your Quickbooks self-employed software for super easy and streamline accounting.
If you don’t do too many trips to justify a mile-logging app. You can totally do it via pen and paper.
And if you wonder what information you need to log, mileage logs require total miles to and fro, date, place, and business purpose.
So I hope you are learning thus far that as an independent stylist the more apps (and hopefully you are taking up on recommendations) the easier it is for you to focus on just being the nail artist. Again, you don’t want to be pretending you are a “boss babe”, when in reality you are just being your own front desk. Likewise you don’t want to be blindly doing business, not knowing truly what your take-home is. That is simply not smart 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 on my first 2 years, I would have been making minimum wage, and that sometimes… wearing 5 different hats, burning myself out, just to have the privilege to call myself “the boss”. Yeah, it was a true wake up call.
Ok, the next thing on our list of ‘musts’ to start doing legitimate business as a nail technician is,
#6 Liability Insurance
And I don’t want you to freak out about this one! It sounds more liable and expensive then it really 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 their own insurance that may protect some aspect of your space, but 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 down in the description box below.
The next thing on your list is,
#7 Business Cards
Now 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 totally start adding branding like logos and slogans if you’re there.
And you’re probably wondering, Paola. Do I really need a business card in 2020, here you are having me go all virtual and now you want me to pay to printing??
Alright, hear me out.
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 incentivise both, your client and the referral, with either a small discount or free nail art of your choosing.
I doubled my bookings as a newbie nail tech simply by adding a “referred by” space behind my business cards.
So I have given you the 7 ‘must-dos’ to start your business as an independent nail tech.
Do not make things complicated, this is a super slim list to get you up and running legitimately if you’re going solo as a nail tech.
You can definitely make things a bit more challenging, by leasing or renting more space then you need, filing for EIN’S or LLC’s when it’s just you, or when 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, then 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.
I want you to remember that the beauty of going solo doing nails, especially in the beginning, is that you get to work on yourself for yourself and enjoy all the little things of being self-employed.
If you bite more than you can chew, you will rob yourself of all of the fun of creating your own business, the type of nail art or services you want to specialize in, and the clients you really want to attract.
So keep it nice and streamline, follow the list in this video.
And if this video cleared up some things for you, and you would like to see more of this type of content, comment below… and for bonus points why not pass this blog over to friend!
Have a merry start to your week. I’ll see you in the next one.