How to Start a Hair Salon in Indiana (2026)

Last updated: February 25, 2026

Opening a hair salon in Indiana requires a cosmetology license through the Indiana Professional Licensing Agency (PLA) and its State Board of Cosmetology and Barber Examiners. You need 1,500 hours of approved cosmetology training, must pass both a written and practical PSI exam, and obtain a separate salon/shop license before opening your doors.

This guide covers every requirement, cost, and step to legally open and operate a hair salon in Indiana – from cosmetology school to your salon license, insurance, and local permits. Whether you’re opening a single-chair studio in a small town or a multi-station salon in Indianapolis, Fort Wayne, or Bloomington, here’s everything you need.

Hair Salon Requirements in Indiana at a Glance

Requirement	Agency	Cost	Timeline
Cosmetologist License (individual)	Indiana PLA / State Board of Cosmetology and Barber Examiners	$99 (exam $59 + application $40)	After 1,500 hours training
Salon/Shop License	Indiana PLA / State Board of Cosmetology and Barber Examiners	$40	After facility inspection
LLC Formation	Indiana Secretary of State (INBiz)	$95	3-7 business days
Federal EIN	IRS	Free	Immediate (online)
Workers’ Compensation Insurance	Private insurer	~$792/year	Same day
General Liability Insurance	Private insurer	~$420/year	Same day
Professional Liability Insurance	Private insurer	~$596/year	Same day

How to Start a Hair Salon in Indiana (Step by Step)

Step 1: Get Your Indiana Cosmetology License

Before you can open a salon in Indiana, you (or your supervising cosmetologist) must hold a valid Indiana cosmetology license from the Indiana Professional Licensing Agency (PLA) and its State Board of Cosmetology and Barber Examiners.

Education Requirements

1,500 hours of PLA-approved cosmetology training at a licensed school
Must have completed at least the 10th grade
Must be at least 18 years old
Tuition typically ranges from $15,000 to $25,000 depending on the school

Mandatory Training Hours (included in 1,500)

Indiana requires the following specific topics within your 1,500-hour curriculum:

State License Law – 2 hours
OSHA Standards – 2 hours
Communicable Disease – 2 hours
Sanitation and Disinfection – 2 hours

PSI Examination

After completing your training, you must pass a two-part licensing exam administered by PSI:

Written exam: 110 questions, 90 minutes, must score 75% or higher to pass
Practical exam: Hands-on demonstration of cosmetology skills
Exam fee: ~$59
Testing locations: 14 PSI testing centers across Indiana
Register and apply through the Indiana myLicense portal

License Application

Individual cosmetologist license application: $40
Renewal: Every 4 years at $40
Reinstatement (lapsed license): $80
No continuing education required – Indiana repealed CE requirements under Article 6 of 820 IAC

Step 2: Form Your Business Entity

Register an LLC with the Indiana Secretary of State through the INBiz portal for $95. Indiana requires a biennial business entity report to keep your LLC in good standing.

After forming your LLC, get a free EIN from the IRS. You’ll need this for opening a business bank account, hiring employees, and filing taxes.

Step 3: Secure Your Salon Location

Your salon facility must meet Indiana PLA and Board of Cosmetology requirements before you can obtain a salon/shop license:

Building permit from your city or county
Certificate of occupancy from your local building department
Signage: Must display the salon name and license type visibly
Sanitation: EPA-registered hospital-grade disinfectant on site, all tools disinfected between clients
Waste disposal: At least 1 covered waste receptacle per 4 workstations
Hot and cold running water with proper plumbing and drainage
Zoning: Confirm the location is zoned for commercial/retail use with your city or county

Residential salons: Indiana allows home-based salons but requires a floor-to-ceiling partition separating the salon area from living quarters and a separate entry for clients.

Step 4: Get Your Salon/Shop License

Apply for a salon/shop license from the Indiana PLA:

Item	Cost
New salon/shop license application	$40
Salon/shop license renewal (every 4 years)	$40
Reinstatement (lapsed salon license)	$80

Your salon must operate under the personal supervision of a licensed cosmetologist who has at least 6 months of experience. This supervisor must be on-site whenever the salon is open and serving clients.

Booth Rental

Indiana allows booth rental arrangements. Key rules:

Each booth renter must hold their own valid Indiana cosmetology license
The salon still needs its own salon/shop license regardless of the rental model
Booth renters should pay a flat weekly or monthly rent – not a percentage of sales
True independent contractors set their own schedules, prices, and client policies

Step 5: Get Business Insurance and Workers’ Comp

Workers’ Compensation

Indiana mandates workers’ compensation insurance for businesses with 1 or more employees. This includes part-time stylists on your payroll (but not true independent contractor booth renters).

Average cost: ~$66/month (~$792/year)
Purchase from any licensed private insurer in Indiana

General Liability Insurance

Average cost: ~$35/month (~$420/year)
Covers: Customer bodily injury, property damage, product liability

Professional Liability Insurance

Average cost: ~$50/month (~$596/year)
Covers: Lawsuits from dissatisfied clients, allergic reactions, chemical burns, service errors

Business Owner’s Policy (BOP)

Bundles general liability + commercial property insurance at a discount:

Average cost: ~$79/month (~$948/year)
Recommended for salon owners leasing space who need property and equipment coverage

Full insurance bundle (GL + professional liability + workers’ comp + BOP): approximately $1,951/year.

Step 6: Get Local Permits and Open

Building permit: From your city or county building department
Certificate of occupancy: Required before opening to the public
Sign permit: From your city or township
Fire department inspection: Required in most jurisdictions
Registered retail merchant certificate: From the Indiana DOR through INBiz if selling retail hair products
State tax registration: Register for Indiana sales tax (7%) and withholding tax if hiring employees

Contact the Board directly with licensing questions: Phone 317-234-3031 or email pla12@pla.IN.gov.

Cost to Start a Hair Salon in Indiana

Item	Cost	Notes
Cosmetology school (1,500 hours)	$15,000-$25,000	Varies by school
PSI exam fee	~$59	Written + practical
Individual cosmetologist license	$40	Renews every 4 years at $40
Salon/shop license	$40	Renews every 4 years at $40
Indiana LLC formation	$95	Filed through INBiz
Federal EIN	Free	Apply online at IRS.gov
Lease deposit + first/last month rent	$3,000-$10,000	Varies by location
Build-out and renovation	$20,000-$75,000	Plumbing, electrical, flooring, walls
Styling stations (4-8)	$10,000-$25,000	Chairs, mirrors, stations
Shampoo stations	$5,000-$15,000	Plumbing included
Reception area	$3,000-$8,000	Furniture, decor
Equipment (dryers, tools)	$5,000-$12,000	Hair dryers, styling tools
Initial product inventory	$2,000-$5,000	Professional and retail products
POS system and software	$1,000-$3,000	Scheduling + payment processing
General liability insurance	~$420/year	~$35/month
Professional liability insurance	~$596/year	~$50/month
Workers’ comp (if employees)	~$792/year	Mandatory at 1+ employees
Business owner’s policy (BOP)	~$948/year	~$79/month

Estimated total startup cost: $55,000-$150,000+ depending on salon size, location, and build-out scope

Related Indiana Business Guides

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Frequently Asked Questions

How many hours of training do I need to open a salon in Indiana?

You need 1,500 hours of PLA-approved cosmetology training at a licensed school, plus you must pass the PSI written exam (110 questions, 75% to pass) and practical exam. Your 1,500 hours must include mandatory training in State License Law, OSHA, Communicable Disease, and Sanitation/Disinfection (2 hours each).

How much does a salon license cost in Indiana?

A salon/shop license costs $40 from the Indiana PLA. It renews every 4 years for $40. This is separate from your individual cosmetologist license, which also costs $40 to apply and $40 to renew. If a license lapses, reinstatement is $80. The PSI exam fee is approximately $59.

Does Indiana require continuing education for cosmetologists?

No. Indiana repealed its continuing education requirements for cosmetologists under Article 6 of 820 IAC. You do not need to complete any CE hours to renew your license. Simply pay the $40 renewal fee every 4 years to maintain your license in good standing.

Can I rent booth space to independent contractors in my Indiana salon?

Yes. Indiana allows booth rental arrangements, but each booth renter must hold their own valid Indiana cosmetology license. Your salon still needs its own salon/shop license regardless of the rental structure. Use a flat weekly or monthly rent – not a percentage of sales – to maintain contractor status with the IRS.

Do I need workers’ comp for a hair salon in Indiana?

Yes, if you have 1 or more employees. Indiana mandates workers’ compensation insurance for all employers. Purchase coverage from any licensed private insurer. Average cost for a salon is approximately $792/year. True independent contractor booth renters are not counted as employees for this requirement.

Can I run a hair salon from my home in Indiana?

Yes, Indiana allows residential salons, but you must meet specific requirements: a floor-to-ceiling partition separating the salon workspace from your living area, and a separate entry for clients. You still need a salon/shop license from the PLA, and your facility must meet all the same sanitation standards as a commercial salon, including EPA-registered hospital-grade disinfectant and proper waste receptacles.

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About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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