How to Start a Barbershop: A Detailed Guide

by Jay Kang | Updated on April 6th, 2023
barbershop pole

Do you have a passion for cutting hair and a dream of owning your barbershop? If so, you’ve come to the right place.


This blog post will cover everything you need to know about starting your barbershop from start to finish. From finding the perfect location to stocking up on supplies, we’ve got you covered. Let’s get started!

Starting a career as a barber may be the best decision for you if you have a good sense of style, care about men’s grooming, and love working with people. But how can one open a barbershop and guarantee its success?

The good news is that barbers are doing well right now. Since 2013, the male grooming market has been gradually expanding; by 2023, it is predicted to be worth $4.6 billion.

Barbers, hairstylists, and cosmetologists are expected to expand 11 percent between 2021 and 2031, substantially faster than the average for all occupations.

Source

In light of this, if you’ve thought of starting a barbershop, this might be a great time to do it.

Independent vs. Franchise Barber Shop

You might want to consider opening an independent store or partnering with a franchise as you decide how to set up your barbershop. If you run independently, you may avoid paying franchise fees and create your distinctive brand.

On the other side, franchising gives you the legitimacy of working under a well-known national brand. The franchisor can assist you, including training you and your staff, building partnerships with equipment and product suppliers and obtaining your company’s necessary licenses and permissions.

How to Open a Barbershop

So, while creating a barbershop from scratch, you must consider key elements. Let’s go through them now.

Step 1: Draft a business strategy for your barbershop

Every successful enterprise starts with a plan. Spend time outlining how you will build and operate your business before you start looking into sites or honing your skills. To put it briefly, the first step in opening a barbershop is to write a business strategy.

This doesn’t need to be a lengthy, official document unless you intend to obtain a loan or recruit investors. But writing anything down is helpful, even if it’s only for your records. You’ll be able to arrange yourself and see what has to be done clearly if you have a concrete strategy.

What should your business plan include? Some of the issues you need to resolve to include the following:

Market study

You must be well informed about your market and industry as an entrepreneur. Who are the other participants in this setting? Where is the sector headed? Here are just a few of the queries you must respond to.

Make national and local studies regarding the barbershop sector. Look at the margins and average sales for barbers in your neighborhood. Investigating the competitors might also be beneficial. 

Look into the best barbershops in your area to learn more about how they work. Following your investigation, you ought to be crystal clear on the following:

  • Average barbershop profits (national and local)
  • The typical profit margins
  • Normal size (size of the team, the location, etc.)
  • Price points
  • Goods and services

Marketing and sales

Your company plan’s following part is entirely devoted to sales and marketing. This section ought to include the following:

Services and products

What particular services would you provide in your shop? Normally, this department would provide products like:

  • Haircuts
  • Hair washing
  • Hair styling
  • Facial shaving
  • Mustache and beard grooming
  • Line ups

Make sure to list any services or goods your barbershop will provide in this part if you intend to specialize in them.

Price

Here, you should discuss your pricing plan. Several variables will be involved in this situation. Costs and margins are the main factors, but you should consider positioning (such as budget vs. premium rates), location, and competition.

A section on marketing and promotion should be included in your business plan. How do you intend to spread the word? Talk about your general approach and provide specific methods, like:

  • Paid promotions
  • SEO
  • Social media marketing
  • Conventional advertising
  • Word-of-mouth promotion
  • Promotional events
  • Loyalty initiatives
  • In-store promos
  • Email advertising

Finances

Your business strategy should also cover how you’ll manage the funds in your barbershop. You must be specific about whether you want to finance the company yourself or with outside capital.

Your predicted cash flow, sales, costs, and profit should be calculated. Try to forecast your income for at least the first year of your firm.

Operations 

The operation of your firm should be covered in this section. You must deal with issues like:

  • Facilities
  • Location
  • Management
  • Employees
  • Equipment
Barber's pole on a barbershop wall in the evening on a street of Barcelona, Spain.

The next step after having a strategy is to determine the legal framework for your barbershop. You must pick the appropriate structure for your case since this will impact how you handle your finances, submit your taxes, and fund your business.

Choosing a legal structure for your company is important since it affects things like which income tax return form you must submit and pay taxes on. Because various options are available, you must select a legal structure depending on your vision for your barbershop.

Choose a sole proprietorship if you want to manage the barbershop entirely alone, without help from other people. A company is the best option if you want it to exist independently of you.

Do you have relatives or friends willing to help you open a barbershop? A partnership is the best choice in that case. General partnerships and restricted partnerships are the two categories.

Lastly, a limited liability business might operate as your barbershop (LLC). It enables owners, partners, or shareholders to reduce their responsibilities while using a partnership’s tax advantages and flexibility.

Visit the IRS website for a more in-depth and comprehensive source of information on this subject. Additionally, we strongly advise that you speak with a lawyer who will consider things like geography and other variables.

Step 3: Finance your enterprise

Let’s go on to discuss how your business will be funded. You’ll need to find enough cash to cover the start-up costs if you want to open a barbershop

You should also ensure adequate cash flow for the first six or perhaps a full year of operations. Always strive to be “pessimistic” while creating your financial estimates as a general guideline. Plan a “safety net” to be prepared for unforeseen costs.

There are several ways you may finance your barbershop. They consist of the following:

Use your savings or other financial resources

If you have a sizable amount of savings, you might be able to use that cash to finance your company. You can avoid debt and lessen your financial burden by using your funds.

You might be able to utilize the money from a retirement plan, such as a 401(k), to finance your company. Consult with a company and tax specialist before doing this, as it involves several legal requirements.

Take out a loan

You may also submit a loan application to your bank or credit union for a business loan. Just remember that being authorized can require a good credit score and collateral.

Check to see if you may get an SBA loan if your bank or credit union cannot provide you with a loan. SBA loans, which the U.S. Small Business Administration supports, allow you to take out loans for a range of business-related costs, such as working capital, buying equipment and supplies, purchasing real estate, and more. 

SBA loans provide affordable interest rates and don’t demand large down payments. However, remember that the application procedure may take longer than traditional loans.

Utilize a credit line

Businesses in need of capital may be able to get lines of credit from financial institutions, lenders, or even payment processors like PayPal. Similar to getting a loan, getting a line of credit entails filling out an application and evaluating your creditworthiness by the lender. If everything checks up, you might receive approval for a credit line in a few days.

Obtain funding from family and friends

Consider asking your family and friends for a loan or investment. This is a typical practice, especially for business owners who can’t get a loan or credit line.

Just be careful when you decide with your friends and family. Create a legal contract outlining the conditions of your arrangement and a schedule for how and when you will repay them.

Whatever financing option you select, it’s critical to have the appropriate paperwork. Prepare your bank statements, credit report, and any other asset documentation you may have. Applying for a loan or line of credit will be a lot simpler if you do this. Even if you’re using your own money, having your documents in order will help you better manage the financial aspects of your company.

Vintage Neon Barber Shop Sign in Rainy Window

Step 4: Acquire the required permissions, licenses, and certificates to open a barbershop

Depending on the jurisdiction, several regulatory criteria for barbershops must be met. Consult your local authorities to find out what licenses, permissions, and certificates you need, as the requirements will differ by state, county, and city.

However, you must first hold a valid barber license to open a barbershop. Either finishing an apprenticeship or completing an approved school program is required to obtain a barber’s license. In some cases, you may need to do both.

Any business you establish must have a license. The same is true of barbershops. To find out the prerequisites for licensure, get in touch with your neighborhood’s governing body for barbers.

You must normally be a legal adult with at least a high school diploma. However, the specifics of these criteria differ. Additionally, you will need the bare minimum of the following licenses:

  • Business registration and licensing: The state, city, or municipality where your business will operate will need you to register it.
  • Employer Identification Number: The Internal Revenue Service will provide an Employer Identification Number if your barbershop business is a partnership or corporation.
  • Resale Certificate: A resale certificate is required if you intend to sell retail goods. By giving your wholesalers a copy of the certificate, you can avoid paying sales tax on your merchandise.
  • Inspections: According to state and municipal rules, the building and health agencies may be required to examine your place of business.

Depending on your location, the licenses and other requirements may differ greatly. A local lawyer with experience in small-business concerns is a smart choice. If you have competent assistance, you are less likely to make mistakes.

You ought to do an in-depth study on your own. You may learn more about your state’s licensing requirements by checking the SBA’s reference to state licenses and permits.

Each state has its own set of rules for these needs. By contacting your local board, you may get the precise specifications for your area. When conducting inspections to ensure you comply with state requirements, the board frequently collaborates with your state’s public health department. 

The most common prerequisites include, for example:

  • Application for independent barbershop owner completed
  • Proof of a company address’s ownership or tenancy
  • Proof of a business license from the city or county
  • Authentication of your barber license
  • Facility specifications such as:
    • Running water that is both hot and chilly
    • Communal restrooms
    • Consuming water
    • There can be a minimum square footage requirement for each barber chair (such as 35 ft2 per chair)
    • Trash and dirty item containers
    • Cabinets for storing shaving supplies and fresh towels

Meeting these requirements may entail renovations, architect designs, plumbing and electrical inspections, use-and-occupancy license inspections, final health department inspections, as well as a separate inspection by a fire marshal, depending on your state’s requirements and the state of your newly-leased barbershop. 

This is not being said to discourage you but to entice you to research your area’s regulations and estimate their costs so you can understand your investment. As you create your initial business strategy, keep these items in mind.

Not to mention the additional monthly costs you’ll have to cover, such as power, cable TV, air conditioning, heating, and utilities. You should also set aside some cash for possible penalties and unforeseen costs.

Step 5: Search for the ideal area to open a barbershop

Rear view shot of handsome hairdresser cutting hair of male client. Hairstylist serving client at barber shop.

Choosing the ideal site when opening a barbershop is critical since it may make or destroy your company. Thanks to technology, it’s much simpler to identify suitable business premises for lease. Searches can be initiated on websites like Craigslist and LoopNet. 

You might contact a local real estate broker or agent to see what places are available. Finding the ideal barbershop site involves taking into account a variety of aspects, such as:

Your intended audience

You must have a clear understanding of who your target customers are. What is their age? Where do they go to work and live? What is their salary? These questions and answers will steer you in the proper route.

For instance, it makes sense to focus on high-end neighborhoods if you’re trying to attract young, single male professionals. Alternatively, opening a business in a trendy area may be a wise choice if you want to appeal to young, hip customers.

Establish a budget

When planning your lease payments, you should set aside between 3% and 10% of your total monthly sales. This implies that if your projected monthly sales are $25,000, your rent budget shouldn’t be more than $2,500.

Choose between renting and buying

When you’ve chosen the site and facilities that best meet your needs, a crucial decision must be made: Should you buy the facility or rent it? A cash flow analysis might be used to assist you in finding the answer to this query.

The amount of money you would need to set aside to pay the costs of each option, such as buying or renting, will be determined by analyzing your cash flow. You must consider the cost of capital, the projected usable life of the property, the federal and state tax rates, the lease periods, etc.

You can purchase or rent depending on your cash flow analysis, the amount of finance you have secured, and your preferences.

Identify foot traffic estimates

Look at the foot traffic and get a sense of how busy a place is. You might be able to receive some figures from your broker or the property management firm, depending on the area.

The caliber of the traffic is also crucial. When looking at potential rental locations, pay attention to the locals. You don’t want to open a barbershop in a place with a shortage of potential customers. Do they match your target clients’ demographics? If not, you might need to look elsewhere.

Get to know the neighborhood’s other businesses

Keep an eye on the stores in the area you are viewing. Will your anchor tenants be present at the same location? Are some places, like railway stations, retail malls, etc., that naturally attract more people?

Amenities

Keep an eye out for any moisture or mold on the property. Verify the presence of heating, ventilation, and air conditioning systems. You must keep a wonderful atmosphere since your consumers want a relaxed experience.

Step 6: Identify the systems and technologies you need

POS system

The next step is determining the equipment and technology your barbershop will require. It’s not a good idea to carry out every task by hand. Using a pen and paper to complete activities might take a long time and result in mistakes made by humans. 

The numerous operations in your barbershop may be streamlined considerably more effectively by adopting tech-based solutions. Think about the following:

Scheduling software

The administration of appointments is a crucial factor to consider when opening a barbershop. You must be able to manage your calendar and keep track of reservations if you run a service-based firm.

Utilizing a platform for cloud-based scheduling is the most effective approach to achieving it. Several appointment schedulers on the market, like Genbook, provide many advantages, including robust calendar management tools so you and your team can keep track of all your reservations and ensure that customers are served promptly.

Another benefit of using an online booking tool is giving your clients more scheduling alternatives. Most systems include a booking gateway so that customers can schedule appointments on your website, Google, Instagram, and Facebook.

Point of sale system (POS)

Every barbershop needs a way to track sales and accept payments. Your point of sale system will be useful in this situation. A solid POS should streamline your checkout procedure to make it simpler for customers to pay for your services.

Accounting software

It’s crucial to be on top of your finances while opening a barbershop. Equip your company with an accounting system that can monitor sales and costs (preferably one that interfaces with your POS). 

Decent accounting software will give you the information you need to make the best financial decisions for your business and keep your financial house in order.

System for managing employees

If you’re going to recruit a team, this is a requirement. So that there is always someone to staff your barbershop, you need a system for monitoring your employees’ schedules.

Step 7: Find barbers and staff

Let’s discuss assembling your ideal team. Finding the perfect employees for your barbershop may be difficult, especially in the early stages of operation. You’ll need to track people with the necessary qualifications and mesh well with your brand.

Creating an online employer profile and posting job openings is the quickest approach to attracting applications. Begin by looking for trade organizations and periodicals for barbershops to see if they have a “Careers” section on their website.

You might also publish job advertisements on websites like Indeed and Monster.com to reach a wider audience. Tell us a little more about the project and your principles. Describe how you are seeking to assemble the ideal entourage as you prepare to open a barbershop.

Assembling a network of barbers might be beneficial. 

By expanding your network, you may find exceptional talent and receive references, so ask your barber friends for suggestions.

Step 8: Create a marketing strategy

The next step is to promote your barbershop. Start thinking about strategies to promote your business and increase sales. There are many strategies to think about when opening a barbershop (or any other type of company), but these are the most popular ones:

Utilize your current clientele 

If you’re a licensed barber, there’s a good possibility that you already have a clientele that wants to sit in your chair. Utilize this to your advantage by requesting recommendations from your current clientele.

Social media marketing

Social media plays a significant influence on consumers’ purchasing decisions. Therefore it’s crucial to build a solid online presence, especially on platforms like Facebook and Instagram. 

Always provide high-caliber material on these social networks, and don’t forget to provide visitors with the option to schedule an appointment directly from your social media sites.

Two black leather and iron barber chairs in an old style barber shop

Step 9: Express concerns about health and safety

You must work with various electrical instruments and chemicals in this line of business. You must take the necessary steps to safeguard your staff’s safety because they will be working to develop your brand’s reputation. Your clients will remain satisfied if your employees are content. 

When your clients are pleased, your business will quickly grow. So pay close attention to these issues. The following are some of the important health and safety concerns to consider:

Hygiene

Never overlook the importance of keeping your shop clean. Maintain a clean atmosphere so that clients have a great experience. Be careful to clean the tools you are using properly. A small error on your part might cause the client to become sick, damaging your brand’s reputation.

Chemical safety

You must operate with certain colors, gels, and chemicals. Make sure to research all the goods and avoid using dangerous ones carefully. Follow the Control of Substances Hazardous to Health regulations for appropriately handling and disposal of these goods.

Electrical safety

A small mistake when servicing electric tools and equipment might put you in difficult situations. Never ignore broken equipment, the persistent flickering of the lights, or other indications that might point to an electrical problem.

Step 10: Establish your accounts

You must have a business bank account and a credit card to manage your funds. If your barbershop is sued, using your account for business will put your assets (such as your house, vehicle, and other possessions) in danger.

A separate business credit card is beneficial since it helps establish your company’s credit, which might lead to future access to better investments.

Profit Per Cut

Profit Per Cut is one of the most important barbershop metrics. Profit per cut essentially indicates how much the store makes from each cut after expenditures. To calculate this amount, multiply the entire sales by the proportion you pay your barbers and other monthly expenditures, then divide the result by the total number of cuts performed during that month.

Assume you charge $25 for each cut and do 2,400 cuts per month as a team. Additionally, you pay barbers 70% of earnings under a 70/30 split between the shop and barbers. Let’s estimate your monthly costs at $4,000 (rent, supplies, utilities, etc.). Now that we have the data, we can determine our profit per cut.

  • Step 1: Determine the total sales in step one. Multiply the total number of cuts by the cost per cut.
    • 2,400 x $25 = $60,000.
  • Step 2: Determine the total salary for barbers.
    • $60,000 x 0.7 = $42,000.
  • Step 3: Subtract barber salary from total sales.
    • $60,000 – $42,000 = $18,000.
  • Step 4: Take away monthly costs.
    • $18,000 – $4,000 = $14,000.
  • Step 5: Multiply the overall earnings by the number of cuts made in that particular month.
    • $14,000 / 2,400 = $5.83.

As you can see, your profit on a $25 cut is $5.83.

What tools does a barbershop require?

Arrangement of barbershop tools
  • Combs $1.00–$25.00
  • Clippers $30.00–$180.00
  • Shears $10.00–$120.00
  • Hair dryers $30.00–$250.00
  • Barber pole $100.00–$1,000.00
  • Styling gels, wax, and pomades $3.00–$35.00
  • Hair care products $9.00–$18.00
  • After-shave lotions $7.00–$22.00
  • Straight razors $13.00–$30.00
  • Towels $4.00–$40.00
  • Capes $1.00–$30.00
  • Neck dusters $3.00–$19.00
  • Barber chairs $350.00–$900.00
  • Nose trimmers $11.00–$16.00
  • Disinfectants $12.00–$22.00
  • Sterilizer $120.00–$300.00
  • Mirrors $1.00–$10.00
  • Lighting $30.00–$140.00

FAQs

What is the starting price for a barbershop?

A new barbershop typically costs between $120,000 and $150,000 to open. Rent, government registration fees, company strategy, and licensing and permit costs to affect the price. Remember to account for the price of barbershop supplies.

How much money can a barbershop owner expect to make?

The range of estimates is between $30,000 and $180,000 annually. Everything depends on the location, costs, if you’ll charge booth rent or pay commission and salary, and whether you’ll also be doing the haircutting and operating the business.

What are the different types of barbershops?

  • Hybrid barbershops
  • Mobile barbershops
  • Brand cafes
  • Throwback barbershops
  • Pop-ups
  • Mancave barbershops
  • Airport barbershops

Where can I get the money to start a barbershop?

  • Take out a business loan.
  • Borrow money for your small business.
  • Bring in investors.
  • Consider invoice funding.
  • Consider equipment funding.
  • Take out loans for hard cash.
  • Utilize your credit card revenue to get a cash advance.

How are the instruments cleaned in barbershops?

All barbershop utensils, tools, and materials must be cleaned with soap and then disinfected with EPA-registered bactericidal, fungicidal, and virucidal disinfectants, or with isopropyl alcohol and ethyl alcohol, by health and safety regulations.

Conclusion

It might be hard to launch a barbershop business. It requires numerous steps to get up and running, as seen in this post. However, if you are really good and enthusiastic about what you do, the investment will be well worth it.

We hope the advice above clears things up for you and lets you open your barbershop’s doors. Good luck!

Last update on 2024-05-19 / Affiliate links / Images from Amazon Product Advertising API

Affiliate Disclosure: This post contains affiliate links, which means I may receive a small commission, at no extra cost to you, if you make a purchase using these links.

Jay Kang

Just because i'm asian does not mean I don't need shaving. I always wanted to grow a beard when I was young, now I need to shave because hair growth for me is a problem. I'm going through what every man will and has gone through before.