Start a barber shop by following these 10 steps:
- Plan your Barber Shop
- Form your Barber Shop into a Legal Entity
- Register your Barber Shop for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Barber Shop
- Get the Necessary Permits & Licenses for your Barber Shop
- Get Barber Shop Insurance
- Define your Barber Shop Brand
- Create your Barber Shop Website
- Set up your Business Phone System
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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
- 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
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
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your barber shop is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For 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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a barber shop
To introduce yourself to the neighborhood, consider having a grand opening event. Drop off flyers at businesses and homes in the surrounding area. Community newspapers, local TV stations, and radio stations are also great marketing resources. Advertise the event well in advance and offer specials for those who mention your flier.
A basic website and a social media presence should be part of your marketing strategy. Research blogs that your clientele might read and advertise on those websites. The National Association of Barbers offers marketing opportunities for barbershop professionals. They are also a great resource for keeping up with the latest in industry trends.
How to keep customers coming back
In the service industry, word of mouth often proves to be the strongest marketing tool. Strive to deliver exceptional customer service to each client. Encourage patrons to refer their friends by offering a referral discount. Many barbershops have also successfully retained customers by offering a membership or discount days for regulars.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Nextiva
Nextiva is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start A Barber Shop In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Those who are dedicated to working hard and delivering outstanding customer service will find success in this industry.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a barber shop?
Veteran barbershop owners offer the following tips:
- Before renting your space, research the areas to determine the necessity for your services. This will also help in deciding how much space you need and how many chairs you can rent to other barbers.
- Get experience in the industry before opening your own shop.
- When deciding on a location, make sure you set up in a high traffic area with ample parking.
- Start small, building as the business grows. Don’t initially invest in the most expensive equipment or too large of a space.
- Consider your clientele, when setting your hours of operation. For many, nights and weekends are preferred over weekdays.
- Try to design your shop with an old school feel with accents of trendy flair throughout.
How and when to build a team
While it’s recommended that you start small, you will need to hire additional barbers once the shop starts to gain recognition. Each barber should be licensed and well-groomed. He/she should be personable and dedicated to delivering quality customer service. Veteran shop owners caution against hiring perfectionists. Successful barbers are detail-oriented, but able to work swiftly.