You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your wig store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a wig store?
The startup expenses for a wig business are relatively minimal. The two largest expenses are for a storefront (either online or physical) and inventory.
Regardless of whether they’re opening an online or physical store, business owners have ways to keep their storefront costs low. Owners who are starting up online stores can find a user-friendly platform that lets them design the store themselves at a relatively low cost.
Owners who are opening a physical store can choose a location in a low-rent area. There aren’t a lot of wig stores, and customers who want wigs will usually seek out actual stores. For this reason it’s not necessary to be in a high-traffic and high-rent area.
A business’ inventory costs depend directly on how many wigs the business owner wants to carry. Online store owners can limit how many wigs they keep on hand by finding a supplier who offers quick shipping and who is willing to sell only a few items per order. With such a supplier, a business can keep just a few wigs on hand and order more as wigs sell.
Owners of physical stores can limit the number of wigs they have in the store by offering custom wigs. When offering custom-made wigs, businesses just need enough to show customers the different options that are available, and then the final product can be ordered once the customer has made his or her selection.
What are the ongoing expenses for a wig store?
The ongoing expenses for a wig store business include rent and utilities (for physical stores), website costs (for online stores), the price of additional inventory and any employee expenses.
Who is the target market?
A wig business’ ideal customer is someone who cares about their appearance, wants a different hairstyle and has discretionary income. Such as person not only is interested in wigs, but has money to either purchase one or more higher-quality products.
How does a wig store make money?
A wig store makes money by selling wigs to customers. Wigs are typically sold on a per-piece basis.
How much can you charge customers?
The price of wigs varies a lot. Trendy Hair Gallery, for example, charges around $40 for many of its fashion wigs. In contrast, medical wigs from Godiva’s Secret start at $149, and custom medical wigs from Celebrity Hair and Beauty run between $800 and $3,500.
How much profit can a wig store make?
A wig store business’ profits depend on the price point of the wigs the business sells and it’s volume. On the high end, businesses selling custom medical wigs can bring in over $10,000 per month in revenue. Businesses selling $40 fashion wigs likely won’t have enough sales to make this much each month, but they can have a steady revenue—and they often see a significant bump in sales around Halloween.
How can you make your business more profitable?
A wig business can increase its average sale by upselling hair accessories to use with the wigs it sells. Businesses that sell high-end medical wigs may also offer to wash wigs, for which businesses often charge around $20.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your wig store is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a wig store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A wig store business is generally run out of a wig store. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a wig store business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your wig store will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a wig store
Social media marketing (SMM) is one of the most effective ways to advertise and promote a wig business. SMM costs very little, lets store owners showcase their wigs (both on mannequins and real people) and gives stores owners a way to specifically target the demographic they cater to.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A wig business can differentiate itself from competitors by offering superior quality wigs. To do so, it’s important to find manufacturers that make realistic-looking wigs that will last for a long time.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start a Wig Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Anyone who is passionate about hairstyles and enjoys interacting with people may be well-suited for running a wig store. The work requires a knowledge of current hairstyles, and business owners often work directly with customers who want wigs.
Business owners can start a wig store business while working another job full-time. Running a physical retail store while keeping another job likely isn’t possible, but business owners can start up an online store or offer in-home consultations. Both of these models could be managed during evenings and weekends.
What happens during a typical day at a wig store?
A wig business owner spends much of their time directly assisting customers who are looking for wigs. This may include:
- answering questions about different types of wigs
- showing customers wigs that are available
- making sure wigs fit properly
- demonstrating how to properly care for wigs
When not serving customers directly, business owners spruce up displays (for physical stores), take product photos, order additional inventory, market their store and complete administrative tasks.
What are some skills and experiences that will help you build a successful wig store?
In addition to the standard skills required to run a business, including salesmanship, financial planning, time management, and strong interpersonal skills, wig business owners must be abreast of current fashion trends. Subscribing to fashion magazines that are targeted to a store’s main demographic is a good and affordable way to remain current on trends.
For example, the owner of a wig store that caters to young women might want to subscribe to Vogue, Harper’s Bazaar or InStyle. An owner of a business that sold wigs to women who were a little older may want to subscribe to O, the Oprah Magazine or More.
Business owners who want to keep their operating expenses as low as possible can periodically visit these sites rather than subscribe to the magazines. Having the magazines in a store, however, may help a business owner show customers the latest trends and how their wigs match those trends.
What is the growth potential for a wig store?
Most wig stores have a single location, with some being just part-time businesses run by one person. In theory, however, a wig store could become a franchise with locations throughout a region—or even the entire country.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a wig store?
In order to be successful, a wig store should find its niche within the industry. Typically, wig businesses sell either fashion or medical wigs. Fashion wigs are used to make fashion statements, while medical wigs are usually purchased by people undergoing chemotherapy to replace lost hair.
There are ways to further specialize within each niche. For instance, Allure & More specializes in offering different lace options to match different skin tones. (Lace wigs are used in the medical wig niche.) A fashion wig business might specialize in wigs from certain decades, like the 50s or 80s.
How and when to build a team
Many wig stores can be run by a single person. Business owners may, however, want to hire at least one additional employee to help with the day-to-day tasks of serving customers, so that the business owner can focus on growing the business. This employee can be hired once the business brings in enough revenue to pay them.