How to Start a Barber Shop

Start a barber shop by following these 10 steps:

1. Plan your Barber Shop
2. Form your Barber Shop into a Legal Entity
3. Register your Barber Shop for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Barber Shop
6. Get the Necessary Permits & Licenses for your Barber Shop
7. Get Barber Shop Insurance
8. Define your Barber Shop Brand
9. Create your Barber Shop Website
10. Set up your Business Phone System

We have put together this simple guide to starting your barber shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Barber Shop Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a barber shop?

Experienced barbershop owners suggest a minimum capital investment of $150,000 to $200,000. This includes the following items:

• Attending barber school - $6,500 to $10,000
• Office space - cost varies, based on location
• Construction costs - your space must be up to current electric and plumbing standards
• Permits and licenses
• Insurance - speak with a licensed agent to determine what policies you need $2,400.
• Marketing materials - $3,000
• Shop equipment - cash register, business management software, signage - $14,000
• Shop inventory - chairs, child seats, clippers, scissors, trimmers, razors, brushes, mirrors, shaving powder, hair cream, after shave, cleaning supplies, etc. - $20,000
• Furniture and miscellaneous necessities - $5,000
• Website - $1,500 to $3,500

Should you decide to invest in one of many franchise opportunities, budget another $25,000 for franchising fees.

What are the ongoing expenses for a barber shop?

There are a number of items you should budget for to properly run a barbershop:

• Rent, phone, Internet, and utilities
• Marketing materials and campaigns
• Insurance
• Replenishing of both professional and retail supplies
• Regular cleaning and maintenance of shop and barber equipment
• Payroll and taxes - To reduce this expense, consider hiring barbers as independent contractors. They will compensate you for use of your chair by either paying rent or a percentage of their income. Commissions range from 30-70% of the barber’s profits.

Who is the target market?

Your customers will primarily be adult males. From time to time, you will have a younger boy customer in need of a haircut. Your client base will be comprised of individuals who appreciate the artistry of a quality barber and enjoy the camaraderie and social atmosphere that a barbershop offers.

How does a barber shop make money?

A barbershop makes money by charging a fee for services provided.

How much can you charge customers?

Pricing varies, depending upon the services you offer, your location, and experience. Neck clean up prices average $10, while haircuts can range anywhere from $20-$90.

How much profit can a barber shop make?

The average annual profit for a barber shop owner is $35,000. Many have reported profits of $70,000 and higher, depending upon location and the number of barbers they employ.

How can you make your business more profitable?

Barbershop owners suggest the following strategies to increase annual profits:

• Offer additional services, such as facials, hair coloring, and custom design haircuts.
• Have a retail section that includes products such as hair gel, razors, and brushes.
• Offer a mobile barber service

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your barber shop is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, it is necessary to obtain a barber’s license. Certain state permits and licenses may be needed to operate a barber shop business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

 For more information about local licenses and permits:

• Check with your town, city or county clerk’s office
• Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.

Certificate of Occupancy

 A barber shop business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a barber shop business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

• If you plan to purchase or build a location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your barber shop business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Those who are dedicated to working hard and delivering outstanding customer service will find success in this industry.

What happens during a typical day at a barber shop?

There are a number of items that will require your attention from day to day:

• Scheduling client appointments
• Consulting with customers regarding the cut and/or shave they would like
• Cutting and/or shaving clients
• Interacting with customers throughout the day
• Providing information regarding proper aftercare, when necessary
• Cleaning and maintaining all equipment
• Keeping shop clean
• Reordering supplies
• Networking and marketing
• Administrative tasks

What are some skills and experiences that will help you build a successful barber shop?

Before getting started, you will need to attend barber school and obtain the necessary certification. Additionally, many states require barbers to log a certain number of training hours, ranging anywhere from 800-2,000 hours.

This is a highly social profession, so you must be able to connect with clients from all backgrounds. The ability to listen is just as important as conversing.

As the owner, strong business acumen would also prove beneficial. If you fall short in this area, consider taking a basic business course or hiring a consultant.

What is the growth potential for a barber shop?

Deeply entrenched in history, barbershops are considered one of the most lucrative businesses in the world. Entrepreneurs who are willing to invest time and resources have the potential to expand their venture well beyond their primary location.