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The Ultimate 7-Step Guide to Starting a Profitable Barber Shop Business

Posted by Phillip Griego on

the ultimate guide to starting a profitable barbershop barber shop business in the usa by bright barbers barber chairs

Everyone needs a haircut – regardless of race, religion or career. That makes starting a barber shop one of the most financially-rewarding entrepreneurial decisions you will ever make.


But like every other business, starting a barber shop requires a bit of planning if you want it to be a successful venture. As a matter of fact, lack of planning is the number one reason why small businesses fail.


In this 7-step guide, we will walk you through, what we would consider, a fool-proof process on how to launch your barber shop business. A process that is going to help ensure that you launch to a profitable start. Along the way, we will be providing tips on how to keep that momentum going and how to make sure you’re making money.



Step 1 – Determine Your Business Structure and Services Offered

First things first, you need to decide what kind of barber shop you want to operate and what types of services you want to provide to your customers.


While the services you offer can be determined by your competition and target audience demographics, your business operation depends entirely on you. When it comes to running a barber shop, there are two business structures to consider:

  • Service-provider manager: This means you will provide barbering services to your customers, while also running the management of the barbershop. If you are a barber, then this is probably an ideal choice.
  • Full-time manager: This is more of an entrepreneurial role where you will only handle the barbershop’s management and hire barbers to service your customers. Hiring barbers could mean paying them a salary or commissions. 

We find that most barbers will initially open their 1st barber shop as a service-providing manager structure. Then, as he or she expands into a 2nd and 3rd store, switch over to a full-time manager structure.


After choosing your business operation and structure, you will have to decide what services you want to offer. Going beyond the basic haircut and shave, you can decide to include neck massages, hair shampooing, manicures, pedicures and even facials. It all depends on your target audience. Also, your current access to funds will also help determine what services you’ll be offering when you initially open. Can you really afford that shampoo bowl now? In that case, it may be a wise decision to make goals and plans for what services that you’ll be offering in the future once you reach certain financial marks and criteria.


Pro Tip: You could also decide to bring in independent contractors who pay you a weekly or monthly rent. The advantage of this is that most independent contractors have a large clientele which means you will have a regular influx of customers. And this business model can work with either of business structures listed above.



Step 2 – Be Familiar with Barber Shop Operational Licenses in Your State

Once you have nailed down which business structure you want to operate with and outlined the services you want to provide, the next step would be to find out what licenses you will need to start your barber shop.


Keep in mind, however, that each state has its own barbershop business requirements and licensing criteria. This means you need to do thorough research about your state requirements. At the same time, try not to get the oh so common “paralysis by analysis


Nevertheless, listed below are licenses that you will require to have if you want to start a barber shop business. Just note that some states might require you have all, while some might only require you have some of them.

 

  • Barber License: Before opening a shop, barbers are required by every state to obtain a barber license. In order to get this license, barbers are expected to pass the state’s barber licensing exam. But in order to do this, they must first complete the educational syllabus at a state-licensed barber or cosmetology facility or school.
  • Business License: All new business owners, regardless of what type of business they are running, must obtain a business license to operate. After registering your business – either as a partnership (if you have a co-founder) or as a sole-proprietor (aka entrepreneur) – you should obtain a federal Employer Identification Number (EIN) or federal tax identification number from the United States Internal Revenue Service. This will enable you to file tax returns. *Don’t be a fool and end up paying for an EIN. You can easily apply for an EIN at Irs.gov for free!
  • Owner’s License: Contact your state’s Board of Cosmetology to find out the process of obtaining an owner’s license for your barber shop. This license certifies that your barber shop has met the state’s criteria for operating. Keep in mind, however, that before you are issued the license, you will need to pass a shop inspection, carried out by a representative of the state’s department of cosmetology.

Pro Tip: For more information on these licenses, visit your state government’s website. You will find more information on other operational requirements for your barber shop such as equipment, electricity and plumbing standards. Also, consider getting business insurance. Basic ones such as general business liability insurance or the business owner’s insurance policy are great if you want to protect your barber shop from unexpected damages or liability claims. You can also consider purchasing an already operating barber shop and/or one that has closed its doors. Therefore, you’re likely not going to have to worry about electricity, plumbing, etc.



Step 3 – Choose a Great Location for Your Barber Shop

The next step, obviously, would be to get an ideal location for your barber shop. Since customers are the lifeline of any business, you will need to have a regular inflow of them.


One of the best ways to ensure that is to get a shop in a busy area. Some other things to consider when choosing a location for your barber shop business includes:

  • Visibility: Make sure that the location has enough visibility to those who are just passing by. There is no point being in a busy area if nobody knows your business exists, i.e. you’re hidden in an alley. So get a shop where you can set up a clearly visible signage and maybe even a barber’s pole if that suits your shop’s style.
  • Environment: Make sure that the location has several other businesses and service-providers nearby. Apart from your own marketing efforts to drive in foot traffic, you can piggy-back off the other businesses because their customers could patronize yours too.
  • Zoning: Make sure that the location is zoned for business. Better yet, find out if the location is zoned for barbing as this will significantly reduce your need to get zoning permits.

Pro Tip: Once you get a good location and you have successfully negotiated your lease, you should consider hiring an attorney to help you review the details of your lease agreement with your landlord. Basically, you will want to know who is responsible for making repairs and what the lease termination clauses are.



Step 4 – Develop a Business and Marketing Plan

This next step involves you to sit down and actually outline your business operations and customer acquisition strategy. Your business plan should act as a blueprint for your new barber shop business.


You need to know how much it will cost to start up your barber shop. A business plan will help you work out these numbers and will also include projections of expected earnings and growth strategy. A business plan will also come in handy if you want to obtain a loan for your barber shop business.


Your business plan will also include:

  • An overview of your target audience and targeted set-up location.
  • A budget that covers your startup costs, marketing costs, lease costs, employees cost and equipment costs.
  • A marketing strategy that clearly shows how you plan to capture your market segment.

Pro Tip: Don’t overlook your competition. If there are competitors in the location you’ve chosen, don’t let that discourage you. Look for a unique selling position that you will help you stand out to customers. An example is offering a free massage with every cut.



Step 5 – Hiring Staff and Buying Equipment for Your Barber Shop

Now that you have a business plan with a good idea of the costs of starting up your own barber shop, you can go ahead and start hiring employees and buying the equipment you need.


Let’s start with barber shop equipment. The various types of equipment you need to get started would normally include:

  • Shears, hair dryers, and clippers.
  • Workstations for each barber in your shop
  • Barber chairs and sofas for the waiting area
  • Containers for disinfectant, cabinets for supplies, receptacle for towels and floor mats
  • A Reception desk complete with a phone system and point of sale (POS) register.

Hire well-groomed, licensed, experienced and, let's be honest here, good looking barbers. You will want to hire barbers with a friendly personality as this will increase your customer lifetime cycle. 

Pro Tip: Consider developing a workplace dress-code to give your barber shop a professional brand.



Step 6 – Start a Pre-Launch Campaign for Your Barbershop

By now, you are ready to launch your barber shop business. But to do that with a big bang, you need to create awareness for it. This is why a pre-launch campaign is essential to your success.


Here are some great tips on getting started:

  • Build a website for your barber shop business 
  • Create social media pages for your barber shop and build a following
  • Create a discount offer on your website and drive traffic to the page through targeted social media ads
  • Depending on how big you want your barber shop to be, consider getting on local and TV radio stations
  • Distribute flyers with launch dates and referrals on it

Pro Tip: Connect with influencers within your target market who have a large following online and send them special invites. If they come, they will post about your barber shop and you will get a boost in both digital and foot-traffic.



Step 7 – Launch Your Barber Shop with a Bang.

All your hard work is about to pay off. It’s time to launch your barber shop and all your planning and marketing is about to yield positive results.


Some tips to ensure your launch goes well:

  • Get local media coverage on your barber shop launch by pulling a PR stunt or simply just by reaching out to local journalists. 
  • Ensure you are open and ready for business.
  • Offer discounts to first-time customers or for the first 100 customers or for the 1st month of upon opening.

Pro Tip: To ensure customers keep coming back, offer them excellent customer service. You can also create referral and loyalty programs to build a relationship with your clients. Instagramming, blogging, Snapchatting, or Facebooking are all very good ways to keep the momentum going and keep people informed about what’s going on.

This is the end :) Even though are a lot of steps involved with planning, opening, owning, running and maintaining a barber shop, it can be done. Take it 1 step at a time. Try not to get overwhelmed. Too rush too much but also don’t be too slow. We wish you the best of luck. Feel free to reach out to us at any time.

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