How to Start a Barbershop:
If you are interested in starting your own barbershop, follow our detailed guide below.
Refine your idea.
Research existing barbershops.
Find out as much as you can about how the big franchises conduct business, what services they offer, and in which ways they are doing things differently.
Likewise, research smaller, successful, independent shops, and learn about the approach they take to offering their services, marketing their brands, and innovating in the space. Pay attention to business models, supply chains, and quality of service.
Decide how you will compete.
These days men are seeking more than just a haircut. They are looking for a barbershop experience that is more upscale, includes skincare and hair care services, and a place to socialize, relax, and network.
There are opportunities for creating hybrids. Some barbershops have coffee shop-style waiting areas and sell clothes or hair care products. There is also a need for quick-service offerings without any frills. Depending on your research into the industry, and what it is you want to achieve, seek a unique approach to what you will offer the market.
Decide on a business model.
There are three main business models in the barbershop industry: booth rental, commission, and full-time employment.
Booth rental barbershops ask barbers to pay a monthly fee. Essentially, the barbers are independent contractors who rent space in your barbershop.
The commission model is a partnership between the owner and individual barber where a percentage of each cut is paid as commission to the barber giving the cut.
Finally, there's the full-time employment model, wherein you employ a barber, pay them a salary, and possibly offer them other benefits.
Consider franchising.
Franchises, in some ways, make the process of starting a barbershop easier. They've done the thinking and planning for you. The concept, branding, and business model are already in place, all you need is a location and funding.
Choose your role in the shop.
Will you be playing a management role, focusing entirely on running and growing your business, or will you also be cutting hair part time?
Create a barbershop business plan.
Write an executive summary.
Describe what your business will do, write out your mission statement, and explain what makes your business unique.
Describe your ideal or current location.
If you do not have a location yet, describe the ideal location you would like for your business. Refer to your market research to show why you would like to work in a particular area.
Describe your launch.
State when you would like to launch, if you will be hosting a launch party, and if you are offering opening specials.
List your sources of revenue.
Let investors know how you will be earning money. Your main form of income will be from grooming services, but you could also sell hair and beard products.
List your essential staff.
List the job titles of roles you will need to be filled when you launch the business.
Staff members you may need include:
- Barbers.
- A receptionist.
- Cleaning staff.
- A barista (if you offer coffee).
Describe your marketing strategy.
Explain how you will market your business using social media, flyers, or paid advertisements on Google.
This section should also include a description of your target market and a summary of your SWOT (strengths, weaknesses, opportunities, and threats) analysis.
Name and describe your competition.
List at least three barbershops that you have identified as your competition. Describe how they are similar to your business, as well as how your business differs.
Describe your finances.
List your startup expenses, calculate your break-even point, and include your revenue projections.
Download our free barbershop business plan template to find an in-depth guide on writing about your finances. You'll find the template toward the bottom of this page.
Describe your future plans.
Discuss how you plan to grow your business. This may include opening another location, selling more products, and/or hiring more staff.
Form your barbershop company.
Create a legal entity.
Forming a business entity protects you from liability and can save you money on taxes. You have four possible legal structures to choose from for your barbershop: sole proprietorship, partnership, limited liability company, or a corporation.
Most barbershop owners choose LLC. This structure protects you from personal liability. LLC's are more flexible when it comes to taxes, but can be difficult to set up.
Choose a name.
Create name ideas with a business name generator and narrow down your choices by asking potential customers for feedback.
Once you have chosen a name, take it one step further and protect your business's name and logo with a trademark.
Register your company.
File a DBA (doing business as), or file LLC paperwork with the State, and register a trademark, if necessary.
Get an Employer Identification Number (EIN).
An EIN, or Federal Tax Identification Number, is assigned by the IRS to businesses. If you employ staff members, you are required to have an EIN.
Set up legal and financial basics.
Opening a business bank account that is separate from your personal accounts protects you from liability and gives you access to business banking services. You should also consider buying business insurance to protect your business from losses caused by lawsuits, fire, flood, theft, etc.
Find funding.
Research funding options.
To get set up and have the products and equipment you need to run your barbershop for the first few months, you'll need a substantial sum of money, which can come from a financial backer.
There are two main types of financing models available to small business owners. Debt financing is what banks, government programs, and money lenders offer. The business owner will have a certain amount of time to repay the loan with interest.
Equity financing is what investors offer. It is money they pay into the business for a stake in the business.
Approach banks for a loan.
A small business loan is the most common way to finance a new business, so you should approach several banks to find out about their loan programs.
Apply for a business credit card.
A business credit card can help to cover day-to-day costs that can easily be repaid.
Research small business grants.
There are a number of grants available for small businesses. Research grants for the personal grooming industry or general small business grants offered by the government or private organizations.
Find a location.
Think about your target market and needs.
There is a lot to consider when deciding on a location for your barbershop. Depending on your budget and the nature of your barbershop, you will be looking for certain characteristics that boost brand identity, attract your target market, and elevate chances of growth and success.
Check that your location meets requirements.
There are state cosmetology and barbering board requirements when it comes to setting up your barbershop, and it is important you make sure to comply with them.
Barbershop facility requirements:
- Hot and cold running water.
- Public bathrooms.
- Drinking water.
- Containers for trash and soiled items.
- Cabinets that close properly.
- At least 35 square feet around each barber chair.
Set up your barbershop.
Design the layout of your barbershop.
The design and layout of your barbershop and the furniture and decorations you choose are entirely up to you. If you want a minimalist feel, less is more. If you want to throw back to the 1950s, or even further, to the Wild West, antiques are a must.
Put essential software in place.
There are various types of software you can get to ensure the smooth running of your business.
- Accounting software tracks business finances (expenses, debt, credit, tax, etc.).
- Inventory software helps track everything a barbershop needs to run effectively.
- Salon management software will help schedule and manage appointments, process sales and payments, and manage client information.
- Point-of-sale (POS) software allows businesses to accept a variety of payments for services and products and tracks sales.
Secure suppliers.
A barbershop requires a lot of equipment, some of which need to be replaced constantly. Find a supplier for razors, clippers, styling gels, cleaners, sterilizers, etc., one that is affordable, timely, and has high-quality supplies.
You can buy supplies online, where there is generally a greater selection and lower prices. Alternatively, buy supplies from your local retailer, who might be able to deliver faster.
Build your team.
Recruit qualified barbers.
A good team will make your shop a success. Whether you employ full-time barbers, strike a commission-based deal, or charge booth rent, you should still aim to have only the best barbers you can find working in your barbershop. Each of them must have a barber's license.
Use social media, job boards, word-of-mouth, and staffing agencies to help you attract and hire the best applicants.
Draft basic employment contracts.
Your barbershop will need a set of basic contracts; an employment contract is essential. Have a lawyer put one together or find one online.
Market your barbershop.
Register a domain name and create a website.
Before creating a website, register a domain name for your barbershop with a domain name registrar. Next, create a user-friendly, informative website that is perfectly aligned with your brand.
There are many website builders to choose from. Most of them have free versions and are packed with templates to help you get started.
Make online booking available.
Make it easy for your customers to book appointments with online booking; a must-have these days.
Create social media pages.
Never overlook the power of social media. Facebook and Instagram lend themselves nicely to barbershops. Just remember that the point of social media is to actively participate in it: be accessible to your customers, and share relevant pictures, videos, and memes regularly and freely.
Use your space.
Consider using digital signage. You might want to have one or two screens put up in your shop, and instead of having them on a TV channel, use them to advertise, or display promotional deals or other information.
You can design your own digital signage with free digital signage software.
Use search engine marketing (SEM).
These days, people most often find businesses by asking their phone about it. If you want to appear when someone asks "Where is the nearest barbershop?" be sure to register for Google My Business. Also, consider setting up a Yelp! page and asking happy customers to rate your business there.
Pay-per-click advertising and optimizing your website for search can also have huge payoffs, but you'll either need to research these topics or hire a local agency to help you.
Host a grand opening.
A grand opening is a good opportunity to introduce your shop to the community and to attract attention. Be sure to advertise your grand opening in the local paper and on social media. You could also start handing out flyers a week or so in advance. You want as many people there as possible.
Be certain everything is where it needs to be and that there are enough tools and supplies for the day. You will also need to make sure your staff knows exactly what to do and how to act.
How to Start a Barbershop — Checklist
Download our free barbershop business checklist in PDF format.
Download NowBarbershop Business Plan — Free Template
Download our free barbershop business plan template in MS Word format.
Download NowBarbershop Metrics: Profit Per Cut
One of the most important barbershop metrics is Profit Per Cut. Essentially, profit per cut tells you how much the shop makes from every cut after expenses. To find this number, take the total number of sales, subtract the percentage you pay your barbers and other monthly expenses, and then divide the result by the number of cuts done in that month.
Let’s assume you charge $25 a cut and manage as a team to do 2,400 cuts a month. And, having a 70/30 split between barbers and shop, you pay barbers 70% of earnings. Lastly, let’s put your monthly expenses (rent, supplies, utilities, etc.) at $4,000. Now we have the figures we need to calculate our profit per cut.
Step 1: Calculate the total sales. Multiply the number of cuts done by the price of each cut.
2,400 x $25 = $60,000.
Step 2: Calculate the total barbers’ pay.
$60,000 x 0.7 = $42,000.
Step 3: Subtract barbers’ pay from total sales.
$60,000 - $42,000 = $18,000.
Step 4: Subtract monthly expenses.
$18,000 - $4,000 = $14,000.
Step 5: Divide this total profit by the number of cuts done that month.
$14,000 / 2,400 = $5.83.
As you can see, $5.83 is your profit per $25-cut.
What equipment does a barbershop need?
Item | Price range |
---|---|
Clippers | $30.00-$180.00 |
Shears | $10.00-$120.00 |
Combs | $1.00-$25.00 |
Hair dryers | $30.00-$250.00 |
Barber pole | $100.00-$1,000.00 |
After shave lotions | $7.00-$22.00 |
Styling gels, wax, and pomades | $3.00-$35.00 |
Hair care products | $9.00-$18.00 |
Skincare products | $5.00-$25.00 |
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 |
Mirrors | $1.00-$10.00 |
Lighting | $30.00-$140.00 |
Nose trimmers | $11.00-$16.00 |
Disinfectants | $12.00-$22.00 |
Sterilizer | $120.00-$300.00 |
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