Barbershops provide grooming services to men and boys, such as haircuts and shaves. They are tiny establishments that specialise in men’s hair cutting and shaving of the neck and face. Since the time of ancient Rome, about 296 BC, the barbershop has been renowned as a social gathering place in the area. It is a gathering place for guys to network and engage with other men in the neighbourhood.
Table of Contents
Follow these ten steps to open a barbershop:
Make a plan for your barbershop.
Make your barbershop a legal entity.
Register your barbershop for tax purposes.
Create a Business Bank Account and a Credit Card
Create an accounting system for your barbershop.
Obtain the Required Permits and Licenses for Your Barber Shop
Purchase Barber Shop Insurance
Create a Barber Shop Brand
Make a website for your barbershop.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. This basic guide to opening a barbershop has been put together by us. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of operating a barbershop?
A minimum initial expenditure of $150,000 to $200,000 is recommended by experienced barbershop operators. The following things are included:
Attending barber school costs between $6,500 and $10,000.
Office space costs vary depending on location.
Costs of construction – your facility must meet modern electrical and plumbing regulations.
Licenses and permits
Insurance – consult with a certified agent to establish which coverage you need. $2,400.
$3,000 for marketing materials
$14,000 for shop equipment such as a cash register, company management software, and signs.
Chairs, kid seats, clippers, scissors, trimmers, razors, brushes, mirrors, shaving powder, hair cream, after shave, cleaning supplies, and so on – $20,000
$5,000 for furniture and additional requirements
$1,500 to $3,500 for a website
If you decide to invest in one of the numerous franchise options available, spend an additional $25,000 for franchising expenses.
What are the continuing costs of running a barbershop?
To successfully manage a barbershop, you need budget for the following items:
Rent, phone, Internet, and utilities are all included.
Campaigns and marketing materials
Insurance
Professional and retail supplies must be replenished.
Shop and barber equipment should be cleaned and maintained on a regular basis.
Payroll and taxes – Consider employing barbers as independent contractors to save these costs. They will pay you rent or a part of their salary in exchange for using your chair. Commissions often vary from 30 to 70 percent of the barber’s revenues.
Who is the intended audience?
Adult guys will be the majority of your clientele. You will sometimes get a younger male client who needs a haircut. Your clientele will be made up of people who value the artistry of a good barber as well as the companionship and social ambiance that a barbershop provides.
What is the business model of a barbershop?
A barbershop generates revenue by charging a charge for services rendered.
How much money may you charge your customers?
Pricing varies according on the services you provide, your location, and your level of expertise. Neck cleaning costs about $10, while haircuts may cost anything from $20 to $90.
What kind of profit can a barbershop make?
A barber shop owner’s average yearly profit is $35,000 Profits of $70,000 and greater have been recorded by many, depending on region and the number of barbers employed.
How can you increase the profitability of your company?
Barbershop operators recommend the following methods for increasing yearly profits:
Provide extra services such as facials, hair colouring, and custom-designed haircuts.
Have a store area with items like hair gel, razors, and brushes.
Provide a mobile barber service.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your barbershop is sued, becoming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
A barber’s licence is required in the majority of states. Certain state permissions and licences may be required to run a barbershop. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
For additional information on local licences and permissions, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.For information on local licences and permissions, visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
Occupancy Certificate
A barber shop is often operated from a storefront. A Certificate of Occupancy is often required for businesses that operate from a physical site (CO). A certificate of occupancy certifies that all building rules, zoning laws, and government requirements have been satisfied.
If you intend to rent a space:
In most cases, it is the landlord’s obligation to get a CO.
Before leasing, ensure that your landlord has or can get a valid CO for a barbershop company.
A new CO is often required after a big remodelling. If your location will be refurbished before opening, incorporate wording in your leasing agreement saying that lease payments would not begin until a valid CO is given.
If you intend to buy or create a location:
It is your responsibility to secure a valid CO from a local government entity.
Examine all building regulations and zoning restrictions for your business’s location to guarantee that your barber shop is in compliance and may receive a CO.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Market and Promote a Barbershop
Consider holding a grand opening event to introduce yourself to the community. Distribute fliers to local businesses and residences. Community newspapers, local television stations, and radio stations are also excellent marketing tools. Advertise the event ahead of time and provide offers to anyone who mention your flyer.
Your marketing approach should include a basic website and a social media presence. Investigate blogs that your target audience could read and advertise on such websites. Barbershop practitioners may promote themselves via the National Association of Barbers. They are also an excellent resource for staying current on industry trends.
How to Keep Customers Returning
In the service business, word of mouth is often the most effective marketing method. Strive to provide each client with great customer service. Offer a referral incentive to encourage customers to suggest their friends. Many barbershops have also been effective in retaining clients by providing a membership or discount days for regulars.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.