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How to Start a Barbershop

Updated on January 19, 2022

How to Start a Barbershop

How to Start a Barbershop

Remember the old-style barbershops with the swirling pole of red, white, and blue? These days, some barbershops are still a place to chat with neighbors while you wait for your trim, while updated versions offer services that turn a men’s haircut into a spa experience. If you’re a friendly hair-cutting expert, you could open a barbershop that echoes your personal style and vision.

Starting any kind of business, however, takes a lot of work. The key is to gain the necessary knowledge and move patiently through the business development and launch process. By taking it step by step, as detailed below, you’ll avoid many of the more common mistakes. 

Fast Facts

Investment range

$28,900 - $66,800

Time to build

3-6 months

Industry trend

growing

Profit potential

$214,080 - $333,120 p.a.

Commitment

Full-time

Step 1: Decide if the Business Is Right for You

message on the red card with text pros and cons, in hand of businessman, concept

Starting a barbershop, like starting any kind of business, requires considerable time and effort. It’s a good idea to learn all you can before deciding whether a barbershop is right for you. You will be taking a significant risk, so educating yourself is critical before jumping in.

Pros and Cons

Every business has advantages and disadvantages you should weigh before moving forward. Here are some basic pros and cons of starting and running a barbershop.

Pros

  • Networking – You will get to know a lot of people
  • Customer retention – People tend to go to one place for their haircuts
  • Steady income – Once you’re established, income should be fairly predictable
  • Simplicity – Until the whole world goes bald, cutting hair is a reliable business model

Cons

  • Competition – Most neighborhoods already have a barbershop or two.
  • Startup Costs – Marketing is necessary to build a customer base
  • Patience – Building name recognition takes time

Industry trends

Market researcher IBISWorld estimates the US barbershop market is worth $4.5 billion in 2021, with annual revenue growth at 1.5%.[1]https://www.ibisworld.com/united-states/market-research-reports/barber-shops-industry/ The industry trend is toward bespoke, spa-like shops with costlier cuts and additional products and services like head massages and hair tonics, potentially increasing revenue further.

Some fancy new barbershops even offer alcoholic beverages, selling the haircut as a social event. Mobile barbers, like a doctor that makes house calls, but with scissors instead of a stethoscope, are another emerging trend.[2]https://www.mobilesalon.com/blog/entry/1547783150-what-is-a-mobile-barber

How much does it cost to start a barbershop?

Barbershop startup costs range from $28,900 to $66,800, according to Step By Step Research, with the average cost around $45,000. This total includes the cost of barber school, so if you’re already a trained barber the total will be lower.

Start-up CostsBallpark RangeAverage
Setting up a business name and corportation$200 - $200$200
Licenses and permits$200 - $300$250
Insurance$100 - $500$300
Business cards and brochures$200 - $300$250
Website setup$1000 - $3000$2000
Initial marketing budget$200 - $500$350
Barber school$5000 - $10000$7500
Space rental deposit or down payment$2000 - $12000$7000
Scissors, trimmers, other supplies$2000 - $4000$3000
Inventory of shampoos, skin care products, shaving cream$1000 - $3000$2000
Furniture, other shop preparation, cash register$15000 - $30000$22500
Scheduling software$2000 - $3000$2500
Total$28,900 - $66,800$47,850

How much can you earn from a barbershop?

Profits will vary depending on the number and type of customers you’re able to attract, and your expenses, particularly employee expenses.

The Professional Beauty Association estimates that, in the US, a men’s haircut costs an average of $28, with the barber getting anywhere from 30-70% of that. Monthly expenses include rent, insurance, utilities, marketing, and supplies, and usually come to $2500-$5000.

If your shop has six chairs, each of which sees 10 $28 haircuts per day, six days a week, your annual revenue is $524,160. But you have barbers who take half of every haircut payment and $4000 per month in expenses, so your net profit is $214,080. Not a bad year.

As you gain recognition and referrals, you could see 15 daily haircuts per chair (at 40 minutes each, that would be 10 hours). Even if your monthly expenses increase to $5000, you will be making $786,240 in annual revenue and $333,120 in profit.

What barriers to entry are there?

There are very few barriers to entry for a barbershop. Your biggest challenges will be:

  • Standing out from the competition, likely via branding and expertise
  • Time and money required to market your business at launch
  • Barber training, cost of finding and hiring experienced barbers

Step 2: Hone Your Idea

Now that you know what is involved in starting a barbershop, you’ll want to hone your idea in order to be ready to enter a tough, competitive market.

Why? Identify an opportunity

Since you have no track record in the business, you’ll have to find another way to stand out from the competition.

Research barbershops in your area and see which type of shops, services and products are the most popular. Examine the concepts of the shops, their brand sensibilities, and consider how you might make your barbershop unique. You may want to avoid choosing a concept similar to the successful barbershop just down the street. Or maybe you think you can do it better.

What? Determine your products or services

After you settle on a concept, choose the services that fit best within that brand, and create a service menu. Along with men’s haircuts, you could potentially offer:

  • Children’s haircuts
  • Shaves and beard sculpting
  • Facials of various types
  • Scalp massage and conditioning
  • Hair color and grey coverup

How much should you charge for services?

Whether you’re planning a no-frills shop or a high-end, spa-like experience, you could offer discount prices at launch in order to draw customers and build your reputation. Either way, it’s a good idea to research barbershops in your area to familiarize yourself with local pricing.

Men’s haircut prices range from $10 – $100 with an average price in the United States of $28. The price you charge should be in line with your concept. If you are offering a high-end haircut experience, you should be able to charge a higher price. You still need to be aware, however, of the competition so that you don’t price yourself out of the market.

Who? Identify your target market

Your target market will depend on your concept. A bespoke shop will probably attract a younger, hipper clientele, while an old-fashioned concept is likely to pull in an older crowd. From there you can choose the best places to reach these demographics with your marketing.

Once you’re up and running, word-of-mouth referrals and repeat clients will be your main source of business.

Where? Choose your business premises

The location of your barbershop is critical, and should relate to your concept. For example, you probably wouldn’t want to put your high-end shop next to a senior citizens’ residence. Choosing an area with steady foot traffic is also a good idea. You can find commercial space to rent in your area on Loopnet and Crexi.

When choosing an office space, you may want to follow these four rules of thumb:

  • Central location accessible via public transport
  • Spacious, well-lit space in a high foot-traffic area
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
Should You Start a Barber Shop

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some suggestions for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better
  • The name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords in the name, such as “barber” or “hair”, boosts SEO
  • Choose a name that allows for expansion: “Jim’s Bakery” rather than “Jim’s Cookies”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step business name generator

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names at a web cataloging site such as NameChk. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. And if you’ve exhausted all your creative juices but still don’t have a business name, don’t stress! Instead, check out our business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Step 4: Create a Business Plan

Every business needs a plan, a rough outline that helps guide a startup through the launch process while maintaining focus on key goals. A business plan is also crucial for helping potential partners and investors understand your company and vision:

  • Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your shop’s services in detail.
  • Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
  • Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
  • Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
  • Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
  • Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • Appendix: Include any additional financial or business-related documents

Step 5: Register Your Business

Registering your business is an absolutely crucial step — a prerequisite to paying taxes, raising capital, opening a business bank account, and other guideposts on the road to getting a business up and running. More importantly, registration is exciting because it makes the entire process official! Once it’s done, you have your own business.

Choose where to register your company

Your business location is an important decision because it can affect your taxes, legal requirements, and revenue. Most people will register a business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as several states offer real advantages when it comes to being a barber.

If you’re willing to move, you could really maximize your business!

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your barbershop will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the four main options:

  • Sole proprietorship – The most common structure for small businesses makes no legal distinction between company and owner: you get to keep all the profits, but you’re personally liable for all debts.
  • Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses.
  • Corporation – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.

We recommend that most new business owners form an LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can quickly and cheaply form an LLC using ZenBusiness’s online LLC formation service (it can take as little as 5 minutes). They will check that your business name is available before filing, submit your Articles of Organization and be on hand to answer any questions you have about the company formation process.

Business structure comparison infographic

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate on a calendar year (January–December), or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online. It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund an entrepreneur’s vision.
  • Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.

Step 8: Apply for Licenses/Permits

Starting a barbershop requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses and permits associated with starting a barbershop include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.

You may also need state-level licenses, a business license, and local county or city-based health licenses and permits. If you plan to serve alcohol, as some barbershops are doing these days, you will need to obtain a liquor license as well.

Additional permits may be required by your state, such as a general business permit or license. The license requirements and how to obtain them vary from state to state, so check your state government’s website or contact the appropriate person to inquire about licenses and permits needed to run a catering business. You could also use the SBA’s guide to identify the required licenses and permits for your industry and your state.

Your city, town, or county may also have additional requirements for a barbershop, such as signage and zoning permits. You may want to speak to representatives of your local governments about licensing requirements.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties. If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

For peace of mind and to save time, we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state, and provide them to you to make sure you’re fully compliant.

Step 9: Open a Business Bank Account

Before you begin working those scissors you will need to have somewhere to keep the money you make, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your catering business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer business account options, just inquire at your preferred bank to learn about rates and features.

But it is a good idea to look at a few options, as banks vary in terms of offerings, and you want to find the plan that works best for you. Once you choose your bank, you just need to bring your EIN (or Social Security Number if you decide on a sole proprietorship) and your articles of incorporation or other legal documentation that proves your business is registered.

Step 10: Get Business Insurance

insurance risk crossed out green blackboard

Business insurance is an area that often gets overlooked but is vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your life and business.

Here are some of the different types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web developer to create a custom website for your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, a number of websites and digital tools can help you with many business tasks.

Sites like Boulevard and Uzeli offer comprehensive solutions for barbershops including scheduling. We have broken down some other tools into different categories below.

Marketing

Some of your business will come from walk-by customers and web surfers, but you should still spend time on marketing! Especially as a new business, getting the word out and increasing customer awareness is crucial.

Social media is a particularly good way of promoting your business because you can create engaging posts that advertise your products:

  • Facebook: Great platform for paid advertising, allows you to target specific demographics, like men over age 50 in the Cleveland area.
  • Instagram: Same benefits as Facebook but with different target audiences.
  • Website: Search engine optimization (SEO) will help your website appear closer to the top in relevant search results, a crucial element for increasing sales.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
  • If you are unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Equipment

You’ll need a handful of different items to successfully launch a barbershop. Here’s a list to get you started:

  • Barber chairs and additional seating for waiting customers
  • Scissors, trimmers, other hair-cutting and styling equipment
  • Cash register, cleaning supplies

Step 12: Build Your Team

Even prior to launch, you may need to recruit full-time employees for your shop, such as:

  • Barbers
  • Receptionist
  • Marketing Lead

Your business may at some point need to hire all of these positions, or just one or two of them, depending upon its size and needs. You might also hire multiple workers for a single role, or a single worker for multiple roles, again depending on your needs.

Free-of-charge methods to recruit employees include publishing a job post on platforms such as LinkedIn or Facebook, or using free classified sites like Jobs and AngelList. You might also use a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Finally, you could also hire a recruitment agency to help you find talent.

Step 13: Start Making Money!

Focus on USPs

Unique selling propositions, or USPs, are the unique characteristics of a product or service that sets it apart from the competition. Customers are inundated with buying options and need to be able to quickly grasp what’s novel about your catering business and how it fulfills their wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Potential USPs for your barbershop include:

  • Go against the grain and market yourself as a no-frills, value-based barbershop
  • Offer the spa experience, with special high-end services
  • Package your services, such as a haircut, shave, and facial purchased together
  • Stay open late to attract the party-going crowd
  • Exceptional service – do all you can to make customers feel at home
USP venn diagram

Kickstart Marketing

Your marketing will likely start on social media platforms, where you should seek to develop a strong following. Post regularly about your shop, highlighting special events, price discounts, and USPs. You could also make a video announcing your opening and detailing your services and advantages.

Your website will also be a critical part of your marketing. Once it’s up and running, make sure you link to your social media accounts and vice versa.

Here are some additional marketing tools:

  • Website and SEO – Optimize your website for search engines.
  • Social media marketing – Create a strong social media presence, especially on Facebook, Twitter and Instagram, by posting regularly.
  • Competitions and giveaways – Via email or social media, offer prizes to, say, the first customer on a Saturday!
  • Signage – Put up eye-catching signage outside your shop
  • Promotional Materials – Distribute brochures or flyers around your shop and at industry events and tradeshows.

Build Affiliate Relationships

Affiliate marketing is advertising in which you compensate third-party publishers, who are your affiliates, in order to generate traffic to your website. You develop long-term relationships with these affiliates, and generate traffic for each other on an ongoing basis.

Barbershop FAQs

How much does it cost to open a barbershop?

Startup costs for a barbershop range from $28,900 to $66,800. That includes the cost of barber school, so if you’re already a trained barber, your costs will be less.

How much does a barbershop owner make a year?

A successful barbershop can make up to $300,000 in annual profit, but it takes time, money, and a good concept to get to that level, not to mention hard work.

Is it hard to start a barbershop?

Every business has its challenges. But if you have capital, the right location, and a strong concept, you can make your barbershop stand out. Once you’re established, running the shop is a snap.