Start a barber shop by following these 9 steps:
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 long it will take you to break even?
- 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 very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your barber shop is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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?.
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
- 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: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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.
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.
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.
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 a great marketing resource. 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 Barbers Association 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.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
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.
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.
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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.
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.