If you want to open a barbershop, the numbers are certainly in your favor. The industry is expected to reach total revenues of $910 million in 2020. 44% of men say they prefer going to a barber, 71% stay with a specific barber for up to seven years, and the men's grooming industry as a whole could reach an estimated $26 billion by 2020.
Unlike many industries, barbershops aren't under threat by e-commerce. Sources say 81% of men's grooming product sales are through physical stores, making barbers welcome tenants for commercial property owners.
There are legal, tax, insurance, branding, and supply considerations. One will need to take an honest look at finances and create a long term growth strategy. It all starts with refining your barbershop business idea.
How to Start a Barbershop:
If you are interested in starting your own barbershop, follow our detailed guide below.
Refine your idea.
Research existing barbershops.
Find out as much as you can about how the big franchises conduct business, what services they offer, and in which ways they are doing things differently. Likewise, research smaller, successful, independent shops, and learn about the approach they take to offering their services, marketing their brands, and innovating in the space. Pay attention to business models, supply chains, and quality of service.
Decide how you will compete.
These days men are seeking more than just a haircut. They are looking for a barbershop experience that is more upscale, includes skincare and hair care services, and a place to socialize, relax, and network.
There are opportunities for creating hybrids. Some barbershops have coffeeshop-style waiting areas and sell clothes or hair care products. At the same time, there is also a need for in-and-out, quick-service offerings without any frills. Depending on your research into the industry, and what it is you want to achieve, seek a unique approach to what you will be offering the market.
Decide on a business model.
There are three main business models in the barbershop industry: booth rental, commission, and full-time employment.
Booth rental barbershops ask barbers to pay a monthly fee. Essentially, the barbers are independent contractors who rent space in your barbershop.
The commission model is a partnership between the owner and individual barber where a percentage of each cut is paid as commission to the barber giving the cut.
Finally, there's the full-time employment model, wherein you employ a barber, pay them a salary, and possibly offer them other benefits.
Franchising is an option.
Franchises, in some ways, make the process of starting a barbershop easier. They've done the thinking and planning for you. The concept, branding and business model are already in place, all you need is a location and funding.
Choose your role in the shop.
Will you be playing a management role, focusing entirely on running and growing your business, or will you also be cutting hair part time?
Create a barbershop business plan.
Write an executive summary.
Describe what your business will do, write out your mission statement, and explain what makes your business unique.
Describe your ideal or current location.
If you do not have a location yet, describe the ideal location you would like for your business. Refer to your market research to show why you would like to work in a particular area.
Describe your launch.
State when you would like to launch, and if you will be hosting a launch party and if you are offering opening specials.
List your sources of revenue.
Let investors know how you will be earning money. Your main form of income will be from grooming services, but you could also sell hair and beard products.
List your essential staff.
List the job titles of roles you will need to be filled when you launch the business.
Staff members you may need include:
- A receptionist.
- Cleaning staff.
- A barista (if you offer coffee).
Describe your marketing strategy.
Explain how you will market your business using social media, flyers, or paid advertisements on Google.
This section should also include a description of your target market, and a summary of your SWOT (strengths, weaknesses, opportunities, and threats) analysis.
Name and describe your competition.
List at least three barbershops that you have identified as your competition. Describe how they are similar to your business, as well as how your business differs.
Describe your finances.
List your startup expenses, calculate your break-even point, and include your revenue projections.
Download our free barbershop business plan template to find an in-depth guide to writing about your finances.
Describe your future plans.
Discuss how you plan to grow your business. This may include opening another location, selling more products, and/or hiring more staff.
Form your barbershop company.
Create a legal entity.
Forming a business entity protects you from liability and can save you money on taxes. You have four possible legal structures to choose from for your barbershop: sole proprietorship, partnership, limited liability company, or a corporation.
Most barbershop owners choose LLC. This structure protects you from personal liability. LLC's are more flexible when it comes to taxes, but can be difficult to set up.
Choose a name.
Create name ideas with a business name generator and narrow down your choices by asking potential customers for feedback.
Once you have chosen a name, take it one step further and protect your business's name and logo with a trademark.
Read our article on how to trademark a name for an in-depth guide on this process.
Register your company.
File a DBA (doing business as), or file LLC paperwork with the State, or register a trademark.
Get an Employer Identification Number (EIN).
An EIN, or Federal Tax Identification Number, is assigned by the IRS to businesses. If you employ staff members, you are required to have an EIN.
Set up legal and financial basics.
Opening a business bank account that is separate from your personal accounts protects you from liability and gains you access to business banking services.
Apply for a business credit card.
Having a business credit card is a good way to track business expenses, earn rewards, and have more purchasing power.
Buy business insurance.
To protect your business from losses caused by lawsuits, fire, flood, theft etc. you need business insurance.
Put an accounting system in place.
Track your business's finances (expenses, debt, credit, tax etc.) with accounting software to keep an updated record. This makes tax processes easier as everything will be dated and organized.
Put an inventory system in place.
An inventory system allows you to keep track of your stock more accurately and helps you to understand buyer trends.
Have contracts written up.
Your barbershop will need a set of basic contracts. An employment contract is essential. Have a lawyer put one together or find one online.
Research funding options.
To get set up and have the products and equipment you need to run your barbershop for the first few months, you'll need a substantial sum of money, which can come from a financial backer.
There are two main types of financing models available to small business owners. Debt financing is what banks, government programs, and money lenders offer. The business owner will have a certain amount of time to repay the loan with interest.
Equity financing is what investors offer. It is money they pay into the business for a stake in the business.
Approach banks for a loan.
A small business loan is the most common way to finance a new business, so you should approach several banks to find out about their loan programs.
Apply for a business credit card.
A business credit card can help to cover day-to-day costs that can easily be repaid.
Research small business grants.
There are a number of grants available for small businesses. Research grants for the personal grooming industry or general small business grants offered by the government or private organizations.
Find a location.
Think about your target market and needs.
There is a lot to consider when deciding on a location for your barbershop. Depending on your budget, and the nature of your barbershop, you will be looking for certain characteristics that boost brand identity, attract your target market, and elevate chances of growth and success.
Meet industry requirements.
There are state cosmetology and barbering board requirements when it comes to setting up your barbershop, and it is important you make sure to comply with them.
Barbershop facility requirements:
- Hot and cold running water.
- Public bathrooms.
- Drinking water.
- Containers for trash and soiled items.
- Cabinets that close properly.
- 35 square ft. at least around each barber chair.
Find suppliers that are affordable and reliable.
A barbershop requires a lot of equipment, some of which need to be replaced constantly. Find a supplier for razors, clippers, styling gels, cleaners, sterilizers, etc., one that is affordable, timely, and has high-quality supplies.
You can buy supplies online, where there is generally a greater selection and lower prices. Or, buy supplies from your local retailer, who might be able to deliver faster.
Attend industry conventions to meet vendors.
You can find new vendors at barbershop conventions and learn about new products on the market to bring into your store.
Build your team.
Decide which roles you need to fill.
There are a few employees that a barbershop needs:
- Cleaning staff.
Post vacancy advertisements.
Post your vacancies online or in newspapers. Your advertisement should list the skills and experience that candidates need, and describe the day-to-day functions of the role.
Prepare industry and role-relevant questions for the potential candidates.
Hire qualified stylists.
A good team will make your shop a success. Whether you employ full-time barbers, strike a commission-based deal, or charge booth rent, you should still aim to have only the best barbers you can find working in your barbershop. Each of them must have a barber's license.
Market your barbershop.
Register a domain name.
Before creating a website, register a domain name for your barbershop with a domain name registrar like GoDaddy or Namecheap.
Create a website.
A must-have for every modern business is a website. Your website should be user-friendly, informative, and perfectly aligned with your brand. There are many website builders to choose from. Most of them have free versions and are packed with templates to help you get started.
Make online booking available.
Make it easy for your customers to book appointments with online booking, a must-have these days.
Use social media.
Never overlook the power of social media. Facebook and Instagram lend themselves nicely to barbershops. Just remember that the point of social media is to actively participate in it: be accessible to your customers, share relevant pictures, videos and memes regularly and freely.
Optimize for local searches.
These days people most often find businesses by asking their phone about it. If you want to appear when someone asks "where is the nearest barbershop?" Be sure to register for Google My Business. Also, consider setting up a Yelp! page and asking happy customers to rate your business there.
Pay-per-click advertising and optimizing your website for search can also have huge payoffs, but you'll either need to research these topics or hire a local agency to help you.
Host a grand opening.
Your barbershop is ready to open its doors. A grand opening is a good opportunity to introduce your shop to the community and to attract attention. Be sure to advertise your grand opening in the local paper and on social media. You could also start handing out flyers a week or so in advance. You want as many people there as possible.
Barbershop Metrics: Profit Per Cut
One of the most important barbershop metrics is Profit Per Cut. Essentially, profit per cut tells you how much the shop makes from every cut after expenses. To find this number, take the total number of sales, subtract the percentage you pay your barbers and other monthly expenses, and then divide the result by the number of cuts done in that month.
Let’s assume you charge $25 a cut and manage as a team to do 2,400 cuts a month. And, having a 70/30 split between barbers and shop, you pay barbers 70% of earnings. Lastly, let’s put your monthly expenses (rent, supplies, utilities, etc.) at $4,000. Now we have the figures we need to calculate our profit per cut.
Step 1: Calculate the total sales. Multiply the number of cuts done by the price of each cut.
2,400 x $25 = $60,000.
Step 2: Calculate the total barbers’ pay.
$60,000 x 0.7 = $42,000.
Step 3: Subtract barbers’ pay from total sales.
$60,000 - $42,000 = $18,000.
Step 4: Subtract monthly expenses.
$18,000 - $4,000 = $14,000.
Step 5: Divide this total profit by the number of cuts done that month.
$14,000 / 2,400 = $5.83.
As you can see, $5.83 is your profit per $25-cut.
What equipment does a barbershop need?
After shave lotions
Styling gels, wax, and pomades
Hair care products
How much does it cost to start a barbershop?
Starting a barbershop costs roughly between $120,000 and $150,000. The cost depends on your business model, rent, government registration fees, and licenses and permits. Don't forget to factor in the cost of barbershop supplies.
How much money can you make owning a barbershop?
Estimates run from as low as $30,000 up to as high as $180,000 per year. It all depends on the location, expenses, whether you charge booth rent or pay commission and salaries, and whether or not you are going to be cutting hair as well as managing the shop.
Do you need a license to own a barber shop?
This depends on your state's license requirements. Generally, you don't have to be a licensed barber to own a barbershop.
How do I start a successful barber shop?
- Refine your idea.
- Create a business plan.
- Legally form your barbershop company.
- Find funding.
- Find a location.
- Set up your barbershop.
- Secure suppliers.
- Build your team.
- Market your barbershop.
- Host a grand opening.
How much do barbers pay for booth rent?
The average booth rental costs between $250.00 and $1,200.00 per month based on the shop and location.
Do barbers make a lot of money?
On average, barbers get paid $12 an hour. More experienced barbers may ask as high as $22 an hour.
How do barbers do taxes?
It depends on the business structure of your business. Most barbershop owners choose an LLC business structure. This choice protects business owners from personal liability and it's more flexible when it comes to taxes.
How far apart should barber chairs be?
Barber chairs should be spaced 4.5 to 5 feet apart to provide ample room for each barber.
Is a barber shop a profitable business?
Yes. The barbershop industry is estimated to reach total revenues of $910 million in 2020.
What is the average barber salary?
A barber earns an average salary of $19,000 to $72,000 per year, depending on expertise, experience, state, and employer.
How much does it cost to rent a chair at a barber shop?
It costs between $250.00 and $1,200.00 per month, according to our research. However, the cost will depend on the employer, and the barber's skills and experience.
What are the types of barbershop businesses?
- Mobile barbershops.
- Throwback barbershops.
- Brand cafes.
- Mancave salons.
- Airport barbershop booths.
- Crowdsourced barbershop apps.
What licenses and permits do I need to start a barbershop?
- Business operating license.
- Certificate of Occupancy.
- Building permit.
- Fire department permit.
- State cosmetology or barbering license.
How can I open a barbershop with no money?
- Take out a commercial loan.
- Take out a small business loan.
- Attract investors.
- Consider invoice financing.
- Consider equipment financing.
- Take out hard money loans.
- Get a cash advance against credit card income.
Any tips for choosing a location for a barbershop?
- The location should be easy for others to find.
- There should be enough parking nearby.
- Your target demographic should live or work in the area.
- The space needs to fit your plans.
- The space should be in good condition.
- There should be constant foot traffic.
- The area should be clean and safe.
- The plumbing, electricity, and heating should be reliable.
How many parking spaces does a barbershop need?
There should be no fewer than three parking spaces nearby for every 1,000 square feet of space you have in your barbershop, according to our research. Keep in mind that there will most likely be local guidelines to follow.
How do I attract the right barbers?
- Advertise on your website and industry websites.
- Use social media.
- Advertise in hairdressing magazines and journals.
- Ask existing staff members to spread the word.
- Put up a sign in the window.
- Post to job sites using Betterteam.
Any ideas for a barbershop grand opening?
- Offer $5 cuts.
- Invite local celebrities for free cuts.
- Partner with a local charity.
- Have live music.
- Have a bold theme.
How much does it cost to become a barber?
A state-recognized barber program costs between $2,000 and $11,000 depending on the school.
Do you need a degree to be a barber?
No, you don't need a degree, only a license from an accredited school.
How much is insurance for a barbershop?
On average, barbershop owners pay $425 a year for general liability insurance and $455 a year for professional liability insurance.
What is the difference between barber school and cosmetology?
The difference is in what is taught. Both professions cut, style, and wash hair, but barbers generally focus on cutting men's hair, and they are licensed to shave with a straight razor.
How much does beard-trimming cost?
An average trim costs $15.
Do barbershops do eyebrows?
Yes, barbers will trim eyebrows with a clipper, but won't tint or do any delicate shaping.
How much does an apprentice barber earn?
On average, an apprentice barber can earn between $9.93 and $13.90 per hour.
What should I consider when starting a barbershop for men?
- Who is your ideal customer?
- What products and services will you provide?
- Is your pricing right for your target customer?
- What sort of customer experience are you going to offer?
- Is your location right for your goals?
How do barbershops clean their tools?
According to health and safety standards, all barbershop equipment, implements, tools, and materials need to scrubbed with soap and then disinfected with EPA-registered bactericidal, fungicidal, and virucidal disinfectants, or isopropyl alcohol, and ethyl alcohol.
How does a barbershop get barbers?
Barbershops can attract barbers by advertising on their website, industry magazines, local newspapers, and across social media platforms. Networking at industry and community events, and asking existing staff to spread the word are also effective ways to get new barbers. You could also post the position to job sites using Betterteam.
What are the ongoing expenses for a barber shop?
There are three areas that make up your running costs, or expenses. They are material costs, overall costs, and employee costs.
Material costs relate to the supplies you need for delivering your services, as well as to the products and items you sell.
Overall costs include rent, utilities, advertising, etc.
Employee costs constitute salaries, commissions, taxes, etc.
Can I still start a barbershop if I am not a barber?
Yes. You will need a business license, a location, and a team of licensed barbers.
Do startup barbershops usually last?
There aren't barbershop-specific failure rates available, but according to the U.S. Bureau of Labor Statistics data, roughly 20 percent of small businesses fail within their first year, and about 50 percent fail within 5 years.
Should I put full dividers between barber chairs?
Some states may require your business to put up full dividers because of social distancing rules. Check with your county to see what their protocols are.
What are the benefits of owning your own barbershop?
The major benefit of owning a barbershop is that you can make more money. As a barbershop owner, you can rent booths to barbers, or have a 70/30 split with the barbers, while at the same time cutting hair yourself. That's not to mention the greater sense of self-accomplishment that comes with starting and running a successful business.
How difficult is it to run a barbershop?
Starting and running a barbershop is a challenge. Most of the responsibility falls on your shoulders, from managing employee schedules and inventory to implementing marketing strategies and complying with tax regulations.