In the barbering industry, people say cash is king. But for barbershop owners, letting cash rule your business–and trying to get by without accepting card payments or using a point-of-sale system–means you’re losing precious time from your week–and probably losing money.

Let’s take a look at the real impact a cash-is-king mentality can have on your shop’s day-to-day operations and revenue. 

Cash Is King—and the King is Dead

As entrepreneurs running small businesses, barbershop owners are always looking for ways to save money. It feels like every dollar spent cuts into profits and running a cash-only shop helps you avoid paying for a point-of-sale system and credit card processing fees. 

Point-of-sale systems help you properly calculate and track transactions happening in your business. With every transaction running through your POS system, you should have a clear picture of your business’ financial situation.

Still, many barbershop owners, especially those just starting out, may be hesitant about signing up for a POS system or accepting credit cards to keep costs down. But if your goal is to increase your revenue and grow your shop, you’re probably setting yourself up for failure. 

Let’s dig into some ways the cash-is-king mentality and lack of a POS system are impacting your business.

Your clients aren’t using cash

Sure, cash is great for you. But most of your customers probably don’t love paying with cash. Last year, research found that in the U.S. 41% of Americans said they never pay for anything with cash in a typical week. That’s up from 29% in 2018.  On top of that, 54% of US adults under 50 say they never have cash on hand. 

What does that mean? At least half of your clients probably have to make an out-of-the-way stop on their way to get a haircut, which can be frustrating to people short on time. Or, if you’ve got an ATM in the shop, you’re making them pay the withdrawal fees right before they pay you. Basically, you’re passing the fees you’re avoiding without a credit card processor on to your customer at the moment they’re paying. Which probably isn’t the best brand experience. 

So, the questions to ask yourself: How many customers are you losing without knowing it when they see that “Cash Only” sign in the window? How many customers feel a little salty every time they see that $3 withdrawal fee to get a few $20s? How much of that frustration is influencing your tips?

You’ll pay for a cash-only, no-POS approach with your time

Running a cash only shop without a point-of-sale system probably means a lot of your business is running on cash. Booth rent collection, commission payouts, tips, making deposits, making change–managing all of these things by hand is costing you minutes and hours every day that can add up quickly. Some shop owners spend up to 10 hours a week just calculating commission payments by hand.

What would you do with more time in your week to build your business if you could cut out the hours you spend dealing with cash?

On top of the logistics of managing cash, you’re probably making it harder to run your business. Whether it’s bookkeeping, inventory management, or getting insights into your barber’s performance, running a cash-only business without a POS system means you’re trying to figure out all that by hand–if you can figure it out at all.

All the things you can’t do now for your business

Some impacts of a cash-only system–especially if you don’t use a POS system–are not immediately obvious. There are things called “opportunity costs”--certain things that you can’t do in the future–when you make the choice to run your business without a POS system. 

The opportunity costs of being cash only can keep you from reaching that next level in your business and career. 

First, if you’re running a cash-only business and not properly tracking your sales with a POS system, paying your taxes, etc., you’re going to have a much harder time securing loans and lines of credit that rely on showing your businesses’ revenue. That means you may not have access to the money you need to make it through slow times or unexpected expenses. And, if you’re looking to expand and upgrade your business, you may be limited in how much you qualify for.

Plus, if your main source of personal income comes from your work as a barber or as from the business itself, an under-the-table approach can make it harder to get home loans, car loans, etc.

Since a cash-only, no POS approach makes it difficult to see how your business is performing in real-time, it can make it difficult to find problems or opportunities. There are a lot of questions barbershop owners should be asking themselves that are made more difficult to answer without a rock-solid POS tracking everything. Questions like…

Is one barber having trouble filling the schedule with appointments? Are certain retail products not selling and you need to cut back on ordering? Or, are certain retail products over-performing and you need to invest more in that product line? Are you losing or keeping clients? Are your barbers accurately reporting their work for calculating commission? 

With a cash-based, no-POS system approach, you’re left making a lot of decisions based on incomplete information and having to trust that your employees are keeping everything on the level. A lack of transparency into the performance of your business and your employees means there are opportunities for improvement you’re missing out on.

The Impact of a Good POS System

When you look at accepting credit cards and using a point-of-sale system just as a waste of money for your business, it is easy to see why so many barbers say “F%$& that!” For POS systems like Square that aren’t designed for barbershops and function mostly as a credit-card processing system, the question shop owners have to ask themselves is “How much will it cost me?”

For barbershops, a good point-of-sale system is about more than processing credit cards. With an all-in-one system like SQUIRE that’s designed for barbershops, the question shop owners have to ask themselves is, “How much is it costing me NOT to have it?”

With SQUIRE as your POS system, you’re going to solve the problems discussed above:

• The majority of customers who rely on cards to pay for things won’t have to think twice about showing up
• Eliminate customers’ withdrawal fee frustrations
• You’ll have access to in-depth reporting and useful features like Auto Payout for commissions and Rent Collect to save you hours each week
• Your business’ financial picture will be much more clear and help open up opportunities for improvement or even funding with less stress

And because SQUIRE is an all-in-one system, you’ve got everything in one place as a business owner–which makes your life easier every day.

Want to compare revenue and client retention rates for the last month? You’ve got the reports to do that in SQUIRE. Want to see which barbers or products are performing best? You’ve got that insight with the Leaderboards report. 

With SQUIRE, you have access to so much information about your business with a few clicks. For shops that run on cash or only use a POS system to process credit card payments, they’re going to struggle to ever get the same insights.

Adding a point-of-sale system and accepting credit card payments in your shop is a huge change, to be sure. If you’re considering these changes, be sure you’re not just focused on the costs but also considering the value that a POS system’s transparency, accuracy, and efficiency can provide for you as a business owner.

If you’re still stuck in the cash-is-king mentality, it’s time to check out how an all-in-one barbershop business management system can take your shop to the next level. Sign up for a demo today.