When barbers decide to take the leap and become shop owners themselves, a common fear is knowing how to successfully run a business, manage daily operations, and establish a strong, professional brand image.
However, with the right plan, this is all possible.
If you’re a professional barber looking to take the first steps in opening a barbershop, you’re in the right place. This guide will introduce you to the most important things you need to know to plan out, set up, and confidently execute a barbershop business plan that’s optimized for success.
Creating a Business Plan
If you’re ready to open your own barbershop, you’re likely already familiar with the two primary business models these establishments frequently use. Before starting your shop, you’ll need to choose between a booth rental vs commission-based structure:
- Chair Rental – This system allows barbers to pay the barbershop owner a weekly or monthly fee in exchange for the right to provide services out of the shop using a particular chair. Once the barbers working in your establishment have made enough money to pay off their chair fee, they keep any additional money earned through their services for the remaining rental period.
- Commission – In commission-based barbershops, employees are paid a percentage of what they earn from their services. These agreements usually fall somewhere between a 70-30 and a 40-60 split, with the barber who provided the actual service keeping the majority of the total funds earned and the barbershop owner taking home the rest.
Both business plans come with their own strengths and drawbacks. Carefully consider which system will work best for both you and the barbers who’ll work out of your establishment.
Funding Your Business
Unless you have a hefty sum of cash set aside with which you can self-fund your new barbershop, you’ll need to explore alternative financing options.
When getting their small business off the ground, many entrepreneurs choose to apply for loans or credit. As small business owners, there are resources like the U.S. Small Business Administration to help you get started. Here’s what you can generally expect from each financial option:
- Loans – You’ll gain access to funds from your chosen lender in one lump sum. Then, you’ll be required to pay off your debt, plus interest, over time.
- Lines of credit – You’ll be granted continuous access to a certain amount of funding. You’ll be subject to a set credit limit, but you can pay off this preset borrowing amount before using it again and repeating the cycle.
Other options include securing investors, crowdfunding, or procuring capital from friends and family.
Finding a Location
Of course, finding a shop that’s close by and easy for you to commute to is always nice, but there are a few additional considerations to keep in mind before signing a lease. Make sure to research:
- The type of local clientele available in an area
- If a location has an oversaturation of barbershops
- The cost of renting and maintaining a building
- How easy your shop will be to spot/find
By looking into these elements before committing to a home base for your barbershop, you can strike a profitable balance between the popularity of an area vs. how much it will cost you to operate a business there.
Building Your Brand
To build a powerful and memorable brand, ask yourself these questions:
- What should the look and feel of my shop be?
- Who is my target audience and what kind of barbershop experience will I provide for them?
- How will I set my barbershop apart from competitors?
In addition to these creative questions, you’ll also want to nail down logistical categories such as what your pricing structure will look like, what your barbershop marketing outreach and branding strategy will consist of, and if you need to trademark your business name.
Ensuring You Follow Regulations
One of the most crucial elements of any long-lasting business is strict adherence to industry rules and requirements. When it comes to barbershops in particular, keep in mind that professional regulation varies from state to state. For example, some states don’t allow chair rentals (such as New Jersey and Pennsylvania).
While all states require barbers to be licensed, other factors that may vary include:
- Specific professional licensing requirements
- The monetary cost of procuring a barber license
- The formal examination required to earn an official license
It’s best not to take any guesses when it comes to finding out whether your business will align with local regulations. Before opening a new barbershop, be sure to conduct extensive research into the specific requirements of the area where you wish to provide barber services.
Lastly, don’t forget to take advantage of the following resources to keep your business on the up-and-up:
- Business insurance coverage – General liability insurance, professional liability insurance, and workers’ Compensation are important for protecting yourself and your shop.
- Tax benefits – Running a barbershop typically includes a large amount of wholesale product purchasing. If you secure a reseller license, you can gain exemption from paying sales tax on these transactions.
Hiring the Right People
The universal truth of running a business is that your team can make or break you. So, when hiring barbers to work at your shop, you’ll want to consider key factors such as:
- Experience – Are you open to hiring entry-level barbers who can grow with your business but will require more management? Do you want to prioritize premium-level professionals only? Decide what’s most important to you, and hire accordingly.
- Personality – Being a barber is about so much more than hair. You need hires who are friendly, committed to providing superior customer service, and skilled at listening to client requests.
Taking Advantage of Barbershop Management Technology
Just because you’re setting up a brick-and-mortar business doesn’t mean you can’t benefit tremendously from the use of tech-based tools.
SQUIRE is the premiere barbershop management platform that empowers you to run your business efficiently and effectively. This is because SQUIRE gives new barbershop owners all the resources they need to succeed, keep staff and clientele happy, and stay in compliance. These features include:
- Consistency in data and reporting
- Seamless scheduling and payouts
- Membership and loyalty programs
For true efficiency and success, you need a system that goes beyond just booking. With SQUIRE, you can accomplish the work of multiple employees and countless hours of labor with just one platform.
Set Your Barbershop Up For Success with SQUIRE
Opening your very own barbershop is an exciting career move—but in order to be successful, you need a comprehensive barbershop business plan that implements smart management tools, like SQUIRE. Checking all the boxes in this article will put you on the right path to building a business that becomes a legacy.
Want to try this all-in-one barbershop management platform to experience firsthand why so many successful barbershops run on SQUIRE? Request a demo today!
