Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on November 4, 2021 Updated on July 1, 2024
Fast Facts
Investment range
$28,900 - $66,800
Revenue potential
$525,000 - $785,000 p.a.
Time to build
3 - 6 months
Profit potential
$215,000 - $330,000 p.a.
Industry trend
Growing
Commitment
Full-time
Here are the most important things to know about when you are starting a barbershop:
Location — Find a location with a lot of foot traffic, such as shopping malls and main streets. Also, consider an area with plenty of parking space to make it easier for people to visit and return.
Licenses — Some regions require the barbershop itself to be licensed. This may involve health and safety inspections and adherence to specific regulations concerning the physical layout and equipment. Each barber working in your shop will need to have a professional barber’s license, which requires completing a certified barbering program and passing a state board examination.
Niche — Stand out with a niche, such as luxury or high-end services, eco-friendly or sustainable practices, children’s and family-oriented shops, etc.
Equipment — Invest in durable, high-quality barbershop equipment, such as chairs, stations, tools, and products.
Insurance — Protect your business from potential financial losses due to accidents, damages, lawsuits, and other unforeseen events with the right insurance.
Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
Scheduling app or system — Develop a scheduling app or system to manage your business more easily.
Online presence — Take your business online by creating a dedicated website and social media channels and getting listed on Google Business and Yelp to improve local search.
Interactive Checklist at your fingertips—begin your barbershop today!
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.
Where do barbers make the most money?
According to Zippia, the best states for barbers are Illinois, West Virginia and Minnesota.
How do I run a barbershop successfully?
To run a barbershop successfully, prioritize quality service, create a welcoming atmosphere, and focus on efficient operations. Hire skilled barbers, provide excellent customer experiences, maintain a clean and organized space, implement effective marketing and branding strategies, and prioritize client retention through loyalty programs and follow-up communication.
How can I create a unique and inviting atmosphere in my barbershop?
To create a unique and inviting atmosphere in your barbershop, pay attention to design and decor that reflects your brand and target audience. Consider factors like comfortable seating, attractive lighting, and personalized touches. Play music that suits the ambiance, and encourage client engagement through friendly interactions and a sense of community.
How do barbers get clients?
Word-of-mouth referrals from satisfied customers are powerful, so prioritize delivering exceptional service to encourage recommendations. Utilize social media platforms to showcase your work, engage with potential clients, and share updates or promotions. Collaborate with local businesses or organizations to expand your reach.
Step 1: Decide if the Business Is Right for You
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
Barbershop Industry Trends
Barbershops are introducing additional products and services to potentially increase revenue further.
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.
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
Startup Costs
Ballpark Range
Average
Setting up a business name and corporation
$200–$200
$200
Business licenses and permits
$200–$300
$250
Insurance
$100–$500
$300
Business cards and brochures
$200–$300
$250
Website setup
$1,000–$3,000
$2,000
Initial marketing budget
$200–$500
$350
Barber school
$5,000–$10,000
$7,500
Space rental deposit or down payment
$2,000–$12,000
$7,000
Scissors, trimmers, other supplies
$2,000–$4,000
$3,000
Inventory of shampoos, skin care products, shaving cream
$1,000–$3,000
$2,000
Furniture, other shop preparation, cash register
$15,000–$30,000
$22,500
Scheduling software
$2,000–$3,000
$2,500
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% to 70% of that. Monthly expenses include rent, insurance, utilities, marketing, and supplies, and usually come to $2,500–$5,000.
If your shop has six chairs, each of which sees 10 haircuts per day, each costing $28, six days a week, your annual revenue is $525,000. You have barbers who take half of every haircut payment and $4,000 per month in expenses, so your net profit is about $215,000. 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 $5,000, you will be making over $785,000 in annual revenue and more than $330,000 in profit.
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
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Step by Step Business values real-life experience above all. Through our Entrepreneur Spotlight Series, we interview business leaders from diverse industries, providing readers with firsthand insights.
Read our interview with Set Lopez to uncover the keys to his success at Virtus Barber and Co., from selecting the perfect location in Dallas to customer relationship strategies.
Step 2: Hone Your Idea
Now that you know what’s involved in starting a barbershop, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
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 Barbering and Grooming 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 to $100 with an average price 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.
Once you know your costs, you can use our profit margin calculator to determine your markup and final price points. Remember, the prices you use at launch should be subject to change if warranted by 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 Barbershop Location
Selecting the right location for your barbershop is essential for its success. Look for a spot in a densely populated area with a high demand for men’s haircuts and grooming, such as near residential neighborhoods or business districts. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
Aim for a location with easy accessibility, ample parking, and good visibility to attract walk-in clients. Additionally, consider the presence of complementary businesses like beauty salons or men’s clothing stores that can help drive additional foot traffic to your barbershop.
By strategically choosing a location that meets these criteria, you can position your barbershop for success and build a loyal customer base in the local community.
Step 3: Brainstorm a Barbershop Name
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: “The Modern Gentleman’s Shop” rather than “The Military Cut Barbershop”
A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion
Discover over 300 unique barbershop name ideas here. If you want your business name to include specific keywords, you can also use our barbershop name generator. Just type in a few keywords, hit Generate, and you’ll have dozens of suggestions at your fingertips.
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 using our Domain Name Search tool. 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. Your business name is one of the key differentiators that set your business apart. However, once you start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Executive summary — A brief overview of your barbershop business, highlighting key aspects and objectives
Business overview — Detailed information about your barbershop, including its mission, vision, and values
Product and services — Clear description of the specific hair-cutting and grooming services offered, along with any additional products for sale
Market analysis — Examination of the local barbering industry, target market demographics, and potential customer needs
Competitive analysis — Evaluation of other barbershops in the area, identifying strengths, weaknesses, opportunities, and threats
Sales and marketing — Strategies for promoting your barbershop, attracting customers, and driving sales
Management team — Introduction to key individuals running the barbershop, highlighting their roles and expertise
Operations plan — Details on the day-to-day operations, including location, equipment, hours of operation, and staffing
Financial plan — Projections and budgets outlining the financial aspects of your barbershop business, including startup costs, revenue forecasts, and profitability estimates
Appendix — Supplementary materials, such as resumes of key personnel, additional financial data, or any other supporting documents
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose Where to Register Your Company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to barbershops.
If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state.
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 main options:
Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
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.
C 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. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corporation — This refers to the tax classification of the business but is not a business entity. An S Corp can be either a corporation or an LLC, which just needs to elect this structure for tax status. In an S Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
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/fax. Visit the IRS website to learn more. Keep in mind that, 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 a strong credit history.
SBA-guaranteed loans — The Small Business Administration can act as a 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.
Friends and family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding — Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal — Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a barbershop. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits 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 and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Barbers are regulated and licensed in all 50 states. To become licensed, individuals must complete a formal education or apprenticeship program. After completing these programs, candidates must pass a state license examination. They also must meet certain age and educational prerequisites and may need to undergo a criminal background check and a medical physical. Finally, licensed barbers are required to renew their licenses periodically, with some states mandating continuing education for renewal.
You could also check this SBA guide for your state’s requirements, but 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 ensure you’re fully compliant.
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.
Before you start making money, you’ll need a place to keep it, 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 barbershop as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
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 business.
Here are some 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.
As opening day nears, prepare for launch by reviewing and improving some key elements of 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.
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 of filing incorrect tax documents can be harsh, so accuracy is crucial.
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 website builders. 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 designer or developer to create a custom website for your business.
However, people are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Marketing
Here are some powerful marketing strategies for your future business:
Website and online presence — Ensure your website is optimized for search engines to improve visibility and use compelling calls to action to increase bookings.
Local SEO — Register and maintain your business on platforms like Google My Business and Yelp to enhance local visibility and credibility through customer reviews.
Social media engagement — Utilize Facebook for targeted ads, and explore different audience engagements on Instagram.
Barber vlogs & blogging — Share vlogs that provide a behind-the-scenes look at barbershop life and maintain a blog discussing grooming tips and style trends.
Customer transformations & testimonials — Highlight before-and-after photos and share customer testimonials on your platforms to demonstrate the quality of your services.
Infographics — Develop and distribute infographics that provide styling tips and barbershop information, enhancing content engagement.
Grooming workshops & in-person sales — Conduct grooming workshops and offer services at local markets and pop-up events to directly engage with the community.
Street barber battles — Organize barber competitions to showcase your barbers’ skills and attract a large audience.
Local partnerships — Collaborate with fashion stores, gyms, and local artists for cross-promotions and use your space for community art displays.
Loyalty programs & referrals — Implement a loyalty card system and provide incentives for customer referrals to boost repeat business and attract new clients.
Signage & flyering — Invest in vibrant signage for your shop and distribute flyers locally to increase brand awareness.
Social media ads & influencer marketing — Engage in targeted advertising on social platforms and collaborate with micro-influencers to reach specific demographics effectively.
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your barbershop meets their needs or 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.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your barbershop could be:
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
Networking
You may not like to network or use personal connections for business gain but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a barbershop, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in barbershops for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in hair care. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
Even prior to launch, you may need to recruit full-time employees for your shop, such as:
Barbers — providing haircuts and additional services
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Americans spend significant amounts of money on haircuts and facial skin care. That means there’ll always be a need for barber services. The challenge is differentiating yourself from the competition and retaining your customers while developing new leads. You can do that by keeping your barbershop up to date with the latest trends and providing additional services for a holistic personal care package.
Now that you know how to open a barbershop, you’re ready to start your entrepreneurial journey. With proper research and brilliant marketing strategies, your barbershop is well on its way to success!
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