The barbering services market size was valued at $29.9 billion in 2021, an increase of 8.1% from 2020, according to IBISWorld data. As the demand for men’s grooming and styling options continues to grow, there is ample room for barbershops to capture expanding consumer interest and spending.

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This article will provide aspiring entrepreneurs with advice on how to open a barbershop. Topics include licensing guidance, market research for a barber shop business plan blueprint, and marketing. With the tools and frameworks outlined here, both first-time founders and seasoned shop owners can position their operations for profitability and longevity.

1. Conduct Barber Shop Market Research

Market research is essential to opening a barbershop business. Every successful business needs a solid business plan and market strategy to get moving, and market research does just this. It offers insight into your target audience, local competitors, pricing models, and trends in services and products.

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Some information you’ll learn through thorough barber shop market research includes:

• The men’s grooming industry has experienced steady growth over the last decade.
• Old stereotypes of barber shops as masculine spaces exclusively for retired men are fading.
• Younger generations are embracing barbering for its revival of classic techniques like straight razor shaves.
• Men aged 18 to 64 are spending more on personal care treatments each year as attitudes toward male grooming evolve.
• The growth potential does vary by region.
• By studying area demographics using census data tools, you can determine if there is room in the local marketplace for another shop.
• Ideal target markets exhibit higher percentages of working professionals and college-educated residents.
• Using mapping software, you can also gauge what existing shops you would be competing with directly.
• Aim for commercial districts that currently lack barbering services despite having the customer base to support one.

Thorough market research empowers entrepreneurs to make smart, calculated decisions when launching a barbershop. Use these data-driven insights to inform your strategy and financial projections right from the start.

2. Analyze the Competition

Doing a competitive analysis should be a priority for any business owner before launching your barber shop. Start by identifying direct competitors that offer similar services targeting the same demographic within a 3 to 5-mile radius.

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Some ways to learn about barber shops’ business competitors include:

• Investigate at least 3 to 5 establishments through anonymous visits or consultations as a mystery shopper.
• Take note of their pricing menus, loyalty programs, staffing, ambiance, and booking policies.
• Assess the overall customer experience including wait times, checkout process, additional retail products for sale, and their social media presence.
• Search for their listings on directories like Yelp, their Google My Business profile, and any custom shop websites.
• Track metrics like their star rating, number of reviews, website visitors, and search ranking for relevant industry terms.
• Identify the strengths and weaknesses of each competitor to find gaps or opportunities worth prioritizing for your barbershop.

Whether focusing on speedier services, expanding booking options, implementing loyalty perks, or specializing in fades and modern cuts, the competitor analysis should directly inform your business plan.

Luckily, barbershops are plentiful no matter where you look so you’ll have an easier time analyzing the competition compared to other businesses in the Beauty industry, such as wig businesses.

3. Costs to Start a Barber Shop Business

Launching a barber shop demands extensive upfront investment. Business expenses quickly tally across licensing, equipping your retail space, hiring staff, and implementing foundational marketing. Expect to invest $25,000 to $45,000 in year one expenses for a single-chair shop.

Start-up Costs

Based on SBA data and industry expert guidance, common startup costs for your own barbershop business might include:

• Licensing & Legal Formation: Barber licensing and exam fees range from $75 to $235 per owner and operator. Securing state or county business licenses runs from $50 to $100.
• Shop Setup & Equipment: Leasing 1,200 square feet of retail space means paying a deposit of $3,000 to $5,000 or more. Simply constructing the reception area, stations, and break room costs over $15,000.
• Inventory & Products: Stocking haircare products for retail sale demand around $1,500. Displaying inventory on back bar product displays runs $500. Initially ordering essential supplies like barricades, neck strips, and clipper oil increments was $750.
• Hiring & Training: Advertising open barber positions average $250+. Onboarding 1-2 additional barbers incurs $5,000+ in initial salary outlays. Investing in ongoing staff education and training programs allows your team to develop their skills, for $1,500.
• Marketing & Promotion: Hosting a large grand opening event costs around $2,000+. Printing branded signage and collateral for in-store display adds $1,500+. Securing general liability insurance follows industry standards at $800+ per year.

Ongoing Costs

Common recurring expenses include commercial rent and utilities, payroll for staff barbers, restocking retail/back bar inventory, bookkeeping subscriptions, advertising, and more. Expect to spend $7,500 per month on general overhead for a lean single-chair operation.

Properly funding your barber venture upfront ensures you can license your business, acquire the necessary equipment, hire talented staff, and market to attract an initial customer base. Earmark $55,000 to $95,000 when budgeting for a one-person shop’s launch.

With careful planning and controlled spending, your spot can operate sustainably on $7,500 in monthly carrying costs.

These costs are similar to some other business options in the Beauty industry, including hair braiding and hair extension businesses which means the barrier to entry is fairly low but the business itself can be highly profitable, especially when compared to, for example, a tanning salon that requires a much higher upfront cost due to having to buy tanning beds, a larger business area, and more.

4. Form a Legal Business Entity

When establishing a barber shop, the legal structure you operate under matters for liability protection and expansion plans. Weighing the pros and cons of sole proprietorships, partnerships, corporations, and limited liability companies (LLCs) enables selecting the best fit.

Sole Proprietorship

A sole proprietorship constitutes the simplest route, requiring no formal registration. You can instantly start conducting business after securing the necessary barber licenses. This exposes your assets to risk if the shop faces lawsuits or debt. Sole proprietors are also limited in raising investment capital for growth.

Partnership

Forming a general partnership allows sharing ownership between two or more individuals. You distribute managerial duties, skills, and investment costs across partners through collaboration. But partnerships offer zero protection for personal assets either.

If one partner commits negligence or racks up debts/liabilities for the shop, the other partners share responsibility. This uncertainty makes partnerships ill-suited for barbershops despite the appeal of co-ownership.

Corporation

Incorporating as a C or S corporation better shields your wealth from business-related problems. Corporations have an independent legal identity from owners. Shareholders aren’t typically personally liable for debts or legal issues. This appeals to larger shops with plans for outside investment or eventual franchise locations.

Incorporating costs more upfront and involves stricter record-keeping. Formal shareholders meetings, company bylaws, and corporate taxes also demand financial savvy. For small shops, maintenance costs may undermine the benefits of the corporate structure initially.

Limited Liability Company (LLC)

Forming a limited liability company (LLC) garners key advantages that 80% of small businesses choose this route according to IRS data. Like corporations, LLCs limit personal financial and legal liability for the business. Profits pass directly to members without corporate taxation too.

LLC maintenance costs less through more flexible ownership and management options. Co-owners formalize rights and responsibilities through an operating agreement detailing each member’s equity. For barber shops seeking capital for more locations eventually, an LLC allows partial ownership opportunities for investors down the road.

5. Register Your Business For Taxes

Operating a barber shop legally requires obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The EIN functions like a social security number for your business for tax reporting and hiring employees. Acquiring this ID number only takes a few minutes through the IRS website.

Navigating to the EIN Assistant tool, you must first establish whether you want the application on behalf of a sole proprietor using their Social Security Number, an existing LLC, corporation, or partnership using their reference numbers, or a newly formed business entity without current identifiers.

Next, you provide basic information including the legal name/address for your shop, county/state, industry classification (hair/beauty/nail salon categorization), expectation for hiring employees within the next 12 months, and contact details.

The EIN paperwork concludes online in mere minutes. You can then use this unique identifier while registering for state and local licenses, establishing business bank accounts, and submitting tax returns for your shop.

Barber shops in nearly all states must collect retail sales tax from customers on services/products and remit to their department of revenue based on revenue.

Navigate your Secretary of State website to complete sales tax registration, which indexes your EIN too. Note that EIN applications and sales tax compliance always remain free for business owners.

6. Setup Your Accounting

Proper financial record-keeping constitutes a crucial pillar for administering your barber shop successfully long-term. Implementing organizational processes and accounting tools early on helps manage cash flow, expenses, tax liabilities, and more as the operational scale increases.

Accounting Software

Foremost, utilize small business accounting software like QuickBooks for automated tracking. The platform syncs with business bank/credit card statements to log real-time revenue and purchases. This allows the exporting of detailed reports on sales, profits, account reconciliations, and losses across specific date ranges on demand.

Hire an Accountant

Come tax season, an accountant can compile documentation needed for deductions, depreciations, income schedules, employment taxes, and other filing considerations unique to barber shops. This tax preparation assistance commonly costs $500 but ensures IRS compliance and maximum returns. Having an accountant also provides a lifeline if ever audited down the road.

Open a Business Bank Account

Barber shop owners should establish a dedicated business checking account upon obtaining an EIN during company formation. Commingling personal and commercial finances risks misreporting income, problematic during audits. With a separate account, all deposits stem from shop operations. The paired debit card pays for inventory, tools, rent, and other overhead.

Apply for a Business Credit Card

Seeking a business credit card also proves useful for conspicuous expenditure tracking. Banks determine approval and limits based on your shop’s incorporated history and projected earnings, unlike personal plastic. Applications require basic business identifiers like your EIN and formation documents.

7. Obtain Licenses and Permits

Before welcoming your first clients, secure all required barber shop permissions to avoid violations resulting in fines or closure. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

All principal owners and staff providing client services need current barber licensing through your State Board of Barbering Examiners. Eligibility requires being at least 16 years old and completing an accredited barbering program ranging from 900 to 1800 training hours.

Separate from personal barber licenses, those with 20%+ company ownership must register the physical store with the state barber board too. This necessitates facility inspections checking for proper sinks, surfaces, ventilation, lighting, separate restrooms, and equipment disinfection gear.

Nearly all states mandate acquiring a general business license after registering your barbering LLC or corporation locally. State departments award these certificates after paying $50 to $100 in fees proving you formalized a company with an EIN through the IRS and meet all industry-specific requirements.

Local zoning boards dictate what kinds of businesses operate within designated areas. Seek commercial zoning clearance for establishing your barbershop’s physical retail location, submitting details like store layouts, parking availability, and entrance accessibility.

For constructing a new retail space or remodeling an existing one, obtain proper building permits first. Alteration approvals are similarly mandatory when adding electrical work, plumbing, interior walls, or structural changes.

Both health departments and fire marshals must perform final on-site inspections before allowing barbershops to open per county/city ordinances. Health visits confirm properly sterilizing tools, waste disposal, and sanitation plus employee cleanliness certification.

8. Get Business Insurance

Even with an LLC or corporation shielding your assets, securing business insurance still proves vital for barber shops. Policies offset costs for liability claims or losses from accidents, natural disasters, and other risks that could otherwise bankrupt independently owned stores.

For example, imagine:

• A clumsy barber mistakenly nicks a client’s ear with their straight razor requiring stitches and hospital fees.
• A color chemical treatment service causes a damaging allergic reaction.
• Slip-and-fall injuries on a wet floor or fire breaking out from faulty building wiring present other liability scenarios.

If sued by customers, vendor accounts remain unsettled after catastrophe, or serious property damage unfolds, most small shops cannot absorb five- or six-figure losses out-of-pocket.

Comprehensive policies bundle and customize protections for your situation. Common components recommended include:

• General liability – Covers 3rd party bodily injury/property damage
• Professional liability – Shields against claims of services causing harm
• Product liability – For damages caused by products sold
• Commercial property – Repair/replacement for owned equipment
• BOP (business owners policy) – Bundles liability, property, loss of income
• Workers compensation – Pays for employee injuries

Independent agents skilled at assessing barber shop needs can quote available plans after submitting basic details like your location, square footage, payroll amounts, etc.

Coverage costs vary drastically based on levels selected for reconstructing, income loss support, and other benefit maximums. Typically expect to budget $500 or more annually for adequate protections with higher deductibles keeping rates affordable.

9. Create an Office Space

While barbering centers around the chairs and retail floor space, securing an administrative room proves prudent too. An office lets owners handle bookkeeping, manage inventory orders, interview job candidates, conduct confidential calls, and more privacy. Working from home risks distractions. Weigh options like:

Home Office

Converting a spare bedroom or basement corner into a basic desk workspace costs a little upfront. But household noise and activities readily sabotage productive work. Lacking professional surroundings also detracts from holding employee meetings or interviews in a residential area. Still, around $500 furnishes a simple home office nicely to start.

Coworking Space

Renting a semi-private desk within a WeWork or competitor coworking complex allows access to office equipment and professional settings convenient for business meetings. However, the open layout leaves little privacy for calls or concentration. Expect to budget $300 per desk monthly with flexible terms.

Retail Office

If square footage allows, section off a backroom or small nook within your existing barber shop for administrative needs. This centralizes operations under one roof. Just beware of plumbing noise or customer foot traffic distracting staff. $2,000+ builds out a basic retail office space.

10. Source Your Equipment

Outfitting your barber shop with the necessary tools and furnishings carries a sizable upfront investment. From high-end chairs to essential supplies, assess options for buying new/used plus rental sources balancing budget limitations with quality concerns.

Buying New

Welcoming that “just unboxed” feeling allows handpicking items in preferred styles and colors when buying everything brand new. Barber supply retailers like SalonCentric offer comprehensive inventories online and in-store. But higher prices accompany sticking to strictly current-year options.

Buying Used

Scouring Facebook Marketplace Craigslist, and consignment listings allow snagging quality supplies at 40 to 60% discounts. But limited selection means settling around conditions or mismatched aesthetics potentially.

Renting

Some specialty dealers like 123BarberSupplies facilitate short-term rentals on certain equipment as needed for around 10% of retail prices monthly. This temporary access lets you test items or handle overflow crowds without long-term commitments. However, availability restrictions persist on rentable inventory.

Leasing

Some establishments lease out entire supplies and tool bundles with flexible 1-5-year contracts covering costs over time minus initial outlays. However, these frequent payments accumulate, with ownership rights persisting only after completing full agreement terms.

11. Establish Your Brand Assets

Cultivating a distinctive brand identity attracts loyal clientele crucial for barber shop prosperity. From logos to website design, unifying visual elements project professionalism while speaking to your values.

Getting a Business Phone Number

Acquiring a dedicated business line using RingCentral upgrades client communication from the start. Call forwarding to cell phones and vanity numbers with custom greetings improves first impressions and accessibility compared to personal cell phones. Expect basic plans from $30 monthly supporting extensions as staff expands down the road.

Creating a Logo and Brand Assets

A logo crystallizes branding for recognition. Barber ventures could consider classic seals using traditional fonts and razors/scissors imagery or modern wordmarks and color pops suiting a trendier vibe. Looka’s AI logo maker provides countless fast mockups to choose from for $20+.

Then reuse new logo files for business cards, website themes, merchandise, and interior signage so branding elements synchronize visually. This consistency drives retention as customers encounter your logo repeatedly.

Printing Business Cards and Signage

Business cards are exchanged easily during conferences, community networking events, and client visits. Invest in 500 professional-grade cards from Vistaprint for under $40. Highlight credentials like master barber certifications or specialty services alongside expected contact channels.

Likewise, quality window/door signage and decals ensure passersby recognize your shop. Vistaprint’s custom options work here as well.

Purchasing a Domain Name

Secure a .com domain using your shop name or branded keywords through domain sellers like Namecheap for less than $20 yearly. Opt for succinct memorable phrases over cramming in location names or categories.

Building a Website

Well-designed websites quickly convey offerings plus bolster credibility and discoverability. Using Wix’s drag-and-drop website builder allows the launching of modern responsive pages at no charge simply by selecting layouts. Those less tech-savvy can also hire web developers on Fiverr for fully custom designs averaging $500.

12. Join Associations and Groups

Tapping into industry groups and associations ignites growth by connecting with fellow barbers locally and nationwide. Knowledge sharing proves invaluable alongside opportunities to network with prospective mentors, employees, and partners.

Local Associations

Joining regional collectives like the Master Barbers of America allows you to attend association meetings, training events, and more alongside hundreds of area barbers. Membership fees span $50-100 annually for most chapters. Scope out groups in your state through directories.

Alternatively, cross-industry groups like Chambers of Commerce facilitate networking and Barber Shop marketing to broader business audiences. Join leaders from across sectors for around $300 per year unlocking exposure opportunities.

Local Meetups

Keep tabs on relevant meetups and trade shows in your region through aggregators like Meetup. Follow groups like “Barbering Professionals Network” to mingle with dozens of fellow barbers for idea exchanges, technique workshops or simply socializing with those who understand the work intimately.

Facebook Groups

Thousands of barbers converge within various Facebook Groups facilitating mentorship at a national scale. Post questions and advice spanning operational challenges to honing craft mastery. Examples like Corporate Barbering Services and Barbershop Owners and Barbers in North America sharing news on upcoming events and product launches.

13. How to Market a Barber Shop Business

Implementing an ongoing marketing strategy expands your clientele and cements branding beyond just word-of-mouth referrals. Dedicate 15-25% of revenue to advertising initiatives mixing digital and traditional channels for maximizing exposure.

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Leverage Your Network

Initially, tap existing connections who know your skills firsthand for kickstarting appointments. Offer redeemable referral reward cards to happy customers to incentivize endorsements within their circles. For example, provide a $10 credit rebating their next cut for every new paying referral.

Digital Marketing Approaches

• Run Google and Facebook ads targeted locally by gender, age, and income demographics.
• Highlight service deals in these digital ads to drive phone and online bookings.
• Launch your Google Business profile to rank for local SEO searches like “Barber shop near me”.
• Start an Instagram account and post weekly showcases of stellar haircut outcomes, your talented staff, and an inviting shop atmosphere to boost organic reach.
• Distribute email collection flyers to gather subscriber leads for mass promotional mailings.
• Partner with review platforms like Yelp offering check-in rewards for customers to boost credibility.

Traditional Marketing Techniques

• Print bundles of business cards to exchange when networking around town.
• Negotiate local radio spot ads or podcast sponsorships to raise awareness broadly.
• Design bold window posters touting current specials on cuts, fades, and beard grooming packages with eye-catching contrast and minimal text.
• Rent billboard or bench ad space along highly trafficked roads with an easy-to-remember URL for mobile lookups.
• Host free quarterly clipping classes teaching do-it-yourself haircut methods while upselling professional services.
• Mix both digital and traditional channels to attract maximum customers within budget.
• Network referrals likely account for 80% of sales as excellence speaks through client experiences.
• Manage all other advertising accordingly to accelerate visibility and trial conversions.

14.  Focus on the Customer

Delivering exceptional customer service creates loyal clients who return routinely while referring friends or colleagues needing haircuts.

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In an industry driven primarily by word-of-mouth endorsements, ensuring every patron leaves satisfied with their experience proves fundamental to growth.

This requires staffing shops with barbers adept not only at their technical craft but also at forging genuine connections during appointments. Slowing down consultations to truly listen to desired outcomes before touching tools shows care for personal preferences.

Taking time after the last rinse to explain proper at-home product use for maintaining results also elevates guidance beyond the chair. Presenting a final mirror reveal with confidence and then sincerely asking for feedback makes customers feel deeply involved in the collaboration.

Mastering the human elements of barbering ensures visitors recommend your chop shop first when friends need their next touch-up. They’ll emphasize specifics like your team patiently answering all.