Business ideas
8 min read

How to Start a Profitable Barber Shop Business [11 Steps]

Learn how to start a profitable barber shop business in 11+ steps. From location to marketing, we cover everything you need to know. Start your business today! #barbershop #business #entrepreneurship
Nick

By Nick Cotter
Updated Feb 05, 2024

image of a barber shop business
This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
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1. Perform market analysis.

Before starting a barber shop business, conducting a thorough market analysis is critical. This step will ensure you understand the demand for barber services in your area, the competition you will face, and the preferences of your potential clientele. Here's how to perform a meticulous market analysis:

  • Research local demographics: Study the age, gender, income levels, and lifestyle habits of the population in your target location to tailor your services accordingly.
  • Analyze competitors: Identify existing barber shops in the vicinity, noting their services, pricing, strengths, and weaknesses to find a competitive edge.
  • Understand industry trends: Keep abreast of the latest trends in barbering, such as popular hairstyles, organic products, or technological advancements in booking systems and equipment.
  • Assess demand: Survey the area to gauge the potential demand for your services. This could involve direct surveys, focus groups, or analyzing foot traffic in potential shop locations.
  • Examine regulatory environment: Ensure compliance with local laws and regulations regarding health and safety, licensing, and operations for barber shops.
image of a barber shop business

Are barber shop businesses profitable?

Yes, barber shop businesses can be profitable if they are well managed and marketed correctly. Factors such as location, pricing, customer service, and marketing strategies will all play a role in the success or failure of a barber shop business.

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2. Draft a barber shop business plan.

Starting a barber shop requires careful planning and a solid business strategy. A well-crafted business plan serves as a roadmap, outlining your vision, goals, and the steps needed to achieve them. Here's a guide to help you draft your barber shop business plan:

  • Executive Summary: Summarize your business concept, the services offered, target market, and financial highlights.
  • Company Description: Detail the specifics of your barber shop, including location, ownership, and what sets it apart from competitors.
  • Market Analysis: Research the local market, including demographics, customer needs, and competition to identify market opportunities.
  • Organization and Management: Outline your business structure, the team, and their roles and responsibilities.
  • Services Offered: Describe the range of services you'll provide, pricing strategies, and how they meet customer demands.
  • Marketing Plan: Explain how you'll attract and retain customers, your advertising strategies, and your brand's unique selling proposition.
  • Operational Plan: Discuss the day-to-day operations, the equipment needed, suppliers, and the management of inventory.
  • Financial Plan: Present detailed financial projections, including start-up costs, revenue forecasts, profit and loss estimates, and break-even analysis.

How does a barber shop business make money?

Barber shops are able to make money by providing their customers with services such as haircuts, beard trims, and more. A target audience for a barber shop business could include men of all ages, as well as women who prefer more classic and traditional styles. Those who seek out a barber for personalised services will likely be willing to pay a higher price than those at a traditional hair salon. To maximise profits, barbers can also offer products such as beard oils and styling products to the customers they serve.

3. Develop a barber shop brand.

Developing a brand for your barber shop is crucial, as it differentiates your business from competitors and creates a lasting impression on your customers. A strong brand will reflect the unique personality of your shop and resonate with your target audience. Here's how to craft a compelling brand for your barber shop:

  • Define Your Brand Personality: Choose a brand personality that aligns with your values and the experience you want to offer. Whether it's traditional, modern, edgy, or luxurious, ensure it's consistent in all your communications.
  • Choose a Memorable Name and Logo: Your shop's name and logo are often the first elements people will notice. Make sure they are easy to remember, and that they encapsulate the essence of your brand.
  • Create a Color Scheme and Aesthetic: Select colors and a design aesthetic that will be used throughout your shop's interior and marketing materials. This visual consistency helps to reinforce your brand identity.
  • Develop a Unique Selling Proposition (USP): Identify what makes your barber shop stand out. Whether it's a signature cut, exceptional service, or a unique atmosphere, your USP should be central to your branding strategy.
  • Build an Online Presence: Establish a professional website and active social media profiles that reflect your brand's style and voice. Engaging online content can help to build brand awareness and loyalty.
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How to come up with a name for your barber shop business?

When it comes to coming up with the perfect name for a barber shop business, there is no one-size-fits-all solution. It's important to consider your target audience and the culture of your local area when deciding on a name. Brainstorming can be a great way to generate potential names. Think of words, phrases or catchphrases that evoke a feeling of professionalism and style. Additionally, it's good to consider how the name will look on signage, business cards, and other marketing materials. With creativity and thoughtfulness, you can come up with the perfect name for your barber shop business.

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4. Formalize your business registration.

Once you've developed your business plan and secured funding, the next crucial step is to formalize your barbershop's presence by registering your business. This legal step is essential for operating within the law, opening a bank account under your business name, and paying taxes. Follow these general guidelines to ensure your registration is completed properly.

  • Choose a Business Structure: Decide whether your barbershop will be a sole proprietorship, partnership, LLC, or corporation. Each structure has different legal and tax implications.
  • Register Your Business Name: Pick a unique name for your barbershop and register it with the appropriate state agency, ensuring it's not already in use.
  • Obtain an Employer Identification Number (EIN): Apply for an EIN with the IRS for tax purposes, especially if you plan on hiring employees.
  • Register for State and Local Taxes: Register with your state to obtain a tax identification number, workers' compensation, unemployment, and disability insurance.
  • Obtain Necessary Permits and Licenses: Check with your local government to see what specific permits and licenses are required to operate a barbershop in your area.

Resources to help get you started:

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5. Acquire necessary licenses and permits for barber shop.

Acquiring the right licenses and permits is essential for legally operating a barber shop. This ensures compliance with local health and safety regulations, enhancing customer trust and business credibility. Key steps include:

  • Business License: Apply for a general business license through your city or county government.
  • Barbering License: Ensure all barbers are licensed by the state's cosmetology board, which may require passing an exam.
  • Health and Safety Permits: Obtain health department permits to ensure compliance with sanitation standards.

What licenses and permits are needed to run a barber shop business?

The exact licenses and permits required to run a barber shop business will vary depending on the state and city you are operating in. Generally, you may need a general business license, sales tax permit, resale permit, health permit, sign permit, and employment tax permits. Additionally, the rules for barbershops tend to be stricter in some states than others; you may need to obtain additional licenses or certifications from your state’s barber board if it requires barbers to have special credentials.

6. Open a business bank account and secure funding as needed.

Opening a business bank account and securing funding are crucial steps in establishing the financial foundation for your barber shop. A dedicated business account keeps your personal and business finances separate, simplifying accounting and tax reporting. When it comes to funding, there are various options to consider depending on your needs and eligibility. Here are some steps to guide you through these processes:

  • Research banks and credit unions that offer business banking services and compare their fees, services, and customer reviews to choose the right fit for your barber shop.
  • Prepare the necessary documents to open a business bank account, typically including your business license, EIN (Employer Identification Number), and ownership agreements.
  • Explore different funding options such as small business loans, lines of credit, SBA loans, grants, or crowdfunding platforms.
  • Prepare a solid business plan to present to potential lenders or investors, highlighting the viability and profitability of your barber shop.
  • Consider reaching out to local small business development centers or financial advisors for guidance on finding and applying for funding.
  • Keep in mind that some suppliers and equipment vendors offer financing options, which can be a convenient way to secure necessary items for your barber shop.

7. Set pricing for barber shop services.

Setting the right prices for your barber shop services is crucial for attracting customers while ensuring profitability. It's important to consider the cost of your supplies, the expertise of your barbers, and the pricing of competitors. Here are some guidelines to help you determine the appropriate pricing strategy:

  • Calculate your costs: Add up the expenses for rent, utilities, salaries, and supplies to understand your break-even point.
  • Analyze the market: Research local barber shops to gauge the going rates for similar services, ensuring your prices are competitive yet fair.
  • Consider your clientele: Tailor your prices to the demographic you are targeting, whether it's high-end clients or budget-conscious customers.
  • Value your services: Price your services according to the skill and experience of your barbers, and ensure that you're offering value that justifies the cost.
  • Offer tiered pricing: Introduce a range of services from basic to premium, allowing customers to choose depending on their needs and budget.
  • Implement loyalty programs: Encourage repeat business by offering discounts or special rates to loyal customers.
  • Adjust as needed: Be prepared to modify your pricing based on customer feedback and changing costs to maintain a competitive edge.

What does it cost to start a barber shop business?

Initiating a barber shop business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $17500 for launching such an business. Please note, not all of these costs may be necessary to start up your barber shop business.

8. Acquire barber shop equipment and supplies.

Starting a barber shop requires careful selection of equipment and supplies to ensure you can provide excellent service to your clients. From comfortable barber chairs to quality grooming tools, each item plays a pivotal role in setting up your shop for success. Here's a guide to help you acquire the essentials:

  • Barber Chairs: Invest in durable and comfortable chairs that can accommodate clients of all sizes and have adjustable features.
  • Styling Tools: Purchase professional-grade clippers, trimmers, scissors, and razors to deliver precise cuts and styles.
  • Sanitation Supplies: Stock up on barbicide, disinfectants, and sterilizers to keep tools clean and comply with health regulations.
  • Shaving Supplies: Include shaving creams, gels, aftershave, and straight razors for customers looking for a clean shave.
  • Hair Care Products: Offer a range of shampoos, conditioners, hair sprays, and pomades for different hair types and styling preferences.
  • Combs and Brushes: Have a variety of combs and brushes for different hair textures and styles.
  • Reception Area Furniture: Provide comfortable seating and entertainment like magazines or a television to create a welcoming waiting area.
  • Point of Sale System: Choose an efficient POS system for scheduling, transactions, and inventory management.

List of software, tools and supplies needed to start a barber shop business:

  • Barber chairs: $500 - $5000 each
  • Barber station: $300 - $1800 each
  • Cash register: $200 - $1500
  • Scissors and Clipper Blades: $10 - $100 per set
  • Razors, blades, sanitizer, and disinfectant: $50 - $200
  • Mirrors: $100 - $600 each
  • Caps, gowns, and barber aprons: $25 - $400 each
  • Towels and Cloth Strips:$10 -$50 per pack
  • Accounting Software: Free to around $200/month
  • Employee Scheduling Software (optional): Free to around 100/month

9. Obtain business insurance for barber shop, if required.

When starting a barber shop, it's crucial to protect your business, employees, and customers with the appropriate insurance. Different types of insurance cover various risks, from property damage to liability claims. Consider the following steps to obtain the necessary insurance for your barber shop:

  • Research local regulations and insurance requirements for barber shops in your area to ensure compliance with state and municipal laws.
  • Contact a licensed insurance agent or broker who specializes in small businesses or specifically in beauty and personal care industry insurance to discuss your specific needs.
  • Evaluate different types of insurance policies, such as General Liability Insurance, Professional Liability Insurance, Business Owner's Policy (BOP), Workers' Compensation Insurance, and Commercial Property Insurance.
  • Request quotes from several insurance providers to compare coverage options and costs. Make sure to inquire about any business-specific endorsements or riders that might be beneficial for your barber shop.
  • Review the terms, conditions, and exclusions of each policy carefully before making a decision to ensure you have comprehensive protection.
  • Once you've selected a policy, complete the application process, submit any necessary documentation, and make your initial premium payment to initiate coverage.
  • Keep your insurance documents safely stored and make note of renewal dates to maintain continuous coverage.

10. Begin marketing your barber shop services.

Marketing your barber shop is crucial to attract new clients and grow your business. An effective marketing strategy will help you establish your brand, showcase your services, and highlight what sets you apart from the competition. Here are some ways to begin marketing your barber shop services:

  • Develop a Strong Brand Identity: Create a memorable logo, choose a color scheme, and develop a brand voice that reflects your barber shop's ethos and appeals to your target audience.
  • Launch a Professional Website: Ensure your website is user-friendly, mobile-responsive, and includes essential information such as services offered, pricing, location, and contact details.
  • Leverage Social Media: Use platforms like Instagram and Facebook to showcase your work, share customer testimonials, and engage with your community.
  • Implement a Referral Program: Encourage your satisfied customers to refer friends and family by offering them discounts or free services.
  • Partner with Local Businesses: Build relationships with nearby businesses to cross-promote services and tap into their customer base.
  • Engage in Community Events: Participate in local events or sponsor community activities to increase visibility and network with potential clients.
  • Utilize Online Reviews: Encourage happy customers to leave positive reviews on platforms like Google My Business and Yelp to build trust with prospects.

What licenses and permits are needed to run a barber shop business?

  • Barber chairs: $500 - $5000 each
  • Barber station: $300 - $1800 each
  • Cash register: $200 - $1500
  • Scissors and Clipper Blades: $10 - $100 per set
  • Razors, blades, sanitizer, and disinfectant: $50 - $200
  • Mirrors: $100 - $600 each
  • Caps, gowns, and barber aprons: $25 - $400 each
  • Towels and Cloth Strips:$10 -$50 per pack
  • Accounting Software: Free to around $200/month
  • Employee Scheduling Software (optional): Free to around 100/month

11. Expand your barber shop business.

Once your barber shop has established a solid customer base and a strong reputation for quality service, it's time to consider expansion. Whether you're looking to open a new location, offer new services, or hire additional staff, here are some strategies to help grow your business:

  • Conduct market research to identify potential new locations with high foot traffic and a demand for barber services.
  • Explore franchising opportunities to leverage your shop's brand and business model for expansion.
  • Diversify your services to include additional offerings such as spa treatments, hair care products, or grooming accessories.
  • Invest in marketing and advertising to raise awareness of your brand in new markets or to attract a broader clientele.
  • Partner with local businesses or events to increase visibility and network with potential customers.
  • Implement a referral program to encourage your existing customers to recommend your barber shop to friends and family.
  • Utilize social media and online booking systems to streamline operations and make it easier for new customers to find and use your services.