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How to Open a Barber Shop

Updated on January 2, 2013
Barber shop open for business.
Barber shop open for business. | Source

Open a barber shop or beauty salon

Opening your own business can be an exciting way to get a career you always wanted. But opening a barber shop or beauty salon is a big job. It requires a knowledge now just of cutting and styling hair, but also business acumen. This guide is designed to get you started so you don't end up with a financial haircut.

Know Your Industry

I tell people all the time, if you want to open a restaurant, work in a restaurant. If you want to own a beauty salon or barber shop work in one. Why? Running a successful business means doing the small things well. Whether it is managing an inventory or keeping the bathrooms clean, seeing someone else run their business will give you great ideas on how to run yours (or how not to run yours!). Working in the industry will also give you insight into hidden costs, that one might not otherwise factor into your plan.

Write a Business Plan

It is likely that any bank or investor would make you write a plan before giving you a loan, but there are alternative means of acquiring start-up capital that don't require a plan. Make one anyway. A basic business plan will make you investigate your competition, costs, and potential income. If it is done well, it can be a sobering look into how long it will be before your costs are covered and you turn a profit. If done badly, or not done at all, you walk into a business with no idea of when or how you will start making money.

Know the Law

All states have laws that regulate barber shops. You should know these laws to make sure that you are always up to code in the way that you operate your barber shop or salon. Not only do you not want to risk the fines that the state health department might levy on you, the bad press can hurt your business. Imagine the headline: "New barber shop violates health code." Few people will want you touching their heads after that.

In addition to laws specific to barber shops, there are state laws that all businesses must follow. For example, all businesses must file with the state's Secretary of State to be on record as a business. Businesses must also file with the IRS to get a EIN. This is like the Social Security number for your business. You need one to open a bank account and pay taxes.

Finding a location

Location can be the difference between success and failure in small business. Think about when your customers will come to your barber shop or salon. Will you rely mostly on walk-ins or appointments? Know what you want before you start looking. Keep in mind that your rent will likely be your biggest cost. Keeping your rent low can help you generate a profit. Also keep in mind that people are not likely to go out of their way to get a haircut. Strike the right balance to get customers.

Equip your barber shop

Equipment will likely be the largest start up cost you have. The chairs, sinks, and mirrors add up fast. Save money by seeking out gently used equipment. Search online, bid on ebay. It is worth taking the time to save money. The money you save now can be spent on promoting your business later.

Hire a Staff

You may have always planned on being the only barber or stylist in your shop. Bad idea. Think about it. If you are the only stylist, your hours are limited. Say you want to work from 10am-6pm. That's a 40 hour work week before you ever work on the other aspects of your business. Plus, you are missing out on customers that might want a haircut at 7pm or 9am. Hiring two additional barbers is the best way to earn an extra profit and defray overhead. Some shops "rent" chairs to barbers. Some pay an hourly wage plus tips. It's your business, so see what makes sense for you. Keep in mind that your employees are the face of your business. If they stumble in hung over or are rude to your customers, your business takes the hit. It is worth hiring good people and treating them well.

Promote, promote, promote

It is hard to win people away from their old habits. In the barber shop business, you are asking people to leave their old barber or stylist behind. You might have to make it worth their while, but price is not likely to matter much. A haircut is low price cost for most people. Sure there are some expensive haircuts out there. Didn't John Edwards spend $500 on one? For most people, the average haircut runs $20 or less, so a 10% matters little but cuts your profits deeply. Rather than competing on price, compete on service. Offer your customers some coffee or water. Remember their names. Hand out samples of products you use in your salon or shop. These perks cost you less than a discount, but are much more memorable than saving a $2 on a haircut.

It is cliche to say that word of mouth is the best advertising, but it is also important to note that it is the cheapest advertising. These days it doesn't matter if you are an old school barber shop with a striped pole out front or if you are a high-end salon, social media matters. Have a website. Have a facebook page. Have a customer email list, and promote through these tools. If you do not exist online, you do not exist.

Products to Sell at Your Beauty Salon or Barber Shop

Every salon sells high-end hair products at the front, but salons can also sell face creams, cosmetics, and jewelry. When someone is getting a haircut they are spending money on themselves. They are in the mood to be luxurious. Think chocolate, scrubs, and masks.

When men are getting a haircut at the barber shop, they might pick up some shave oil, high-quality razors or shaving cream brushes. Every barber shop should give away or at least sell combs and brushes. They cost pennies and people will pay dollars for them. That's a good margin.

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