How To Open a Barber Shop: Costs, Licenses, Venue, and More

Marketing 19 minute read 13th September 2023

Grooming and personal care won’t go out of style anytime soon. People will always visit barber shops as long as they can get out looking fresh and transformed. Therefore, how to open a barber shop is a heated question on countless minds.

It goes without saying that starting a barber shop requires considerable hard work. The reason why most barber shops fail is improper planning and execution.

If you’re worried about that, let this article guide you. It will help you understand how to open a barber shop, attain licenses, and register it the right way.

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Invest Before the Rest: How Much Does It Cost To Open a Barber Shop?

Starting any business requires money. How will you cut people’s hair without scissors? What about chairs, mirrors, shaving machines, blow dryers, etc.? You can’t buy all this equipment without money, not to mention the ongoing costs like utility bills and rent.

Having established that ignoring money isn’t an option, let’s see how much does it cost to open a barber shop.

The exact amount varies depending on the size and the country you reside in. But your bank account will have to sacrifice an initial investment of $50,000. Now, let’s break this cost down into separate requirements.

Firstly, you’ll have to decide on building space to open a barber shop. Constructing a shop costs $20 to $50 per square foot. So multiply your space with this, and you’ll get the cost of starting from scratch.

However, if you’re just starting, renting would be more feasible, with $10 to $25 per square foot.

Next, we have the supplies such as scissors, clippers, combs, brushes, aftershave, etc. These will take around $5000 to $15000 from your pocket. Moreover, the electronics items will cost you $100 to $5000. Then, you will need to bear license costs that can range from $40 to $4000.

Additionally, if you buy insurance for your barber shop, consider $200 to $400 for it. And lastly, you’ll have to spend on marketing and promotion to let people know you’re in the game. For example, barbers offer guest WiFi to make the experience more pleasant.

Hunt for Funds: How To Open a Barber Shop With No Money?

How to open a barber shop with no money is one of the most popular business FAQs. But as mentioned earlier, you can’t expect to earn money without initially spending some.

This doesn’t mean the investment money has to come out of your own pocket necessarily. There are various ways to secure funding for any business. Let’s take our discussion about how to open a barber shop further with them.

Firstly, many countries require you to attend barber school before giving you the required licenses. But where will the tuition fee come from? Well, you can always get a helping hand from student loans or a Pell Grant.

Secondly, you can partner with someone who can fund your startup. This can be a family member, friend, or anyone you can impress with your idea.

Thirdly, you can go for the traditional option: bank loans. The application process for these loans is fairly simple. It typically requires you to submit a business plan, credit scores, and legal and financial documents.

However, banks don’t hesitate to reject applications with low credit history. For a new barber shop, this can be a hindrance in getting a loan.

In that case, there’s always the option of crowdfunding. This method involves encouraging your target audience to fund your barber shop through a campaign. In return, you can give them discounts, VIP treatments, or equity in your business. And if they’re generous enough to donate, it’s cherry on top.

However, your campaign must have a story behind it to resonate with the audience and spark their generous souls.

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Opening a Barber Shop With 7 Actionable Steps To Start on the Right Foot

After learning how much you need to invest and how to secure funding, let’s get down to business. The harsh truth is that 75% of barbers confirm that opening a barber shop is very hard.

Yet the barber industry has become the fastest-growing one since 2018. So, how did those businesses crack the code? Well, they didn’t.

They just followed the right steps to open a barber shop, and the following sections will reveal them to you.

Step #1 To Open a Barber Shop: Research, Plan, Repeat!

The first step for how to open a barber shop comes down to research and planning. The barber industry is extremely competitive, and you can’t attract your ideal client without standing out.

Therefore, you must research existing barbershops and see what they’re doing. Look how they are attracting customers and what you can do to zag. Analyze their pricing, customer service, marketing strategy, and all aspects where you can stand out.

Once you’ve done that, you’ll have painted a clear picture of your unique selling point. Use this to create a catchy name for your business.

For example, during research, you found that none of your competitors is giving refreshments. Use this to your advantage and create a name that reflects this trait of yours. “Hair n Treats” and “Relaxber” would be some cool options.

After choosing the name, research your target audience. Who do you want to serve? Define your customer profile. Conducting this research will help you see the bigger picture and create the perfect business plan for your needs.

Step #2 To Open a Barber Shop: Choose a Location Before Creation

Once you have the research and plan in hand, it’s time to decide on the placement. People often ignore the location, but your success depends on it. If your barbershop exists in close proximity to others, you will find yourself fighting to get customers. You might even end up lowering prices to the point where it is no longer profitable.

Therefore, choose a location that doesn’t have too many barber shops around. But don’t ignore your customers and footfall. Conduct surveys and find out where your ideal client exists so they can easily find you. Not only will you gain a competitive edge with those clients, your shop will be more profitable.

Moreover, you must have ample space around for your visitors to park their cars. Having chosen the location, you’re ready to register and launch your business. Nonetheless, all businesses come with a risk. But we’re talking in the context of how to open a barber shop, so let’s focus on that.

Barber shops are all about scissors and dangerous tools. What if someone gets an injury? Or if a natural disaster hits your shop? Hence, you have to take precautions to mitigate these risks. Workers’ compensation, medical, and property insurance are good places to start. Additionally, think about equipment breakdown coverage for the costs of replacement parts.

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Step #3 To Open a Barber Shop: Legalize and Register To Attract Visitors

Operating a business without deciding its legal structure is irrational. The same is true for barbershops. So, the third step in how to open a barber shop is legalizing and registering your business.

For this process, you have four basic options:

  • Sole Proprietorship: You are the only business owner, and if something happens, only you are liable to bear the costs.
  • Partnership: You and anyone who invested in your barbershop are the owners. In this case, all partners are liable and responsible for taxes.
  • Limited Liability Company (LLC): This is similar to sole proprietorship, with the exception that your assets are safe if anything happens.
  • Corporation: Many people can be shareholders in a corporation with their rights. Small businesses go for this option to attract investors.

Choose one and look into your country’s guidelines to register your barbershop with the name you thought of earlier.

Step #4 To Open a Barber Shop: Make Preparations To Give and Receive Money

What’s the point of struggling to discover how to open a barber shop if you can’t send and receive money? Also, your business and personal finances must be separate from each other since it makes tax filing easier.

For these reasons, you must open a dedicated business bank account and acquire business credit cards. Moreover, a bank account is necessary if you apply for loans. Once you have secured a bank account, it’s time to manage the finances.

While you may not have scores of accounts at the beginning, you’ll eventually have to separate the processes.

Therefore, you must initiate corporate accounting. It refers to tracking, recording, and managing your shop’s financial transactions. But how do you put this in motion? Select an accounting method, invest in tools and software, hire the right person, and create charts for recording.

Step #5 To Open a Barber Shop: Get All the Licenses To Avoid Nuisances

If you believe registering your barbershop is enough for legal matters, things won’t turn out as expected.

What happens when you drive a car without a license? The police can fine you, confiscate your vehicle, suspend your license, or even put you in jail! These are consequences you don’t want to bear when opening a barbershop.

Therefore, obtaining the necessary licenses is inevitable. Let’s look closer into the specific licenses you need:

  • Business license: All businesses need this license; your barbershop is no exception.
  • Barber’s License: If you’re planning to open a barber shop that you’ll work in yourself, you might need a barber’s license.
  • Building Permits: If you build your barber shop from scratch, you’ll need building permits for renovation, remodeling, etc. Or even if you rent the space, you’ll need commercial real estate leases.
  • Employer Identification Number: Again, this license is necessary for all businesses to file any employer paperwork.
  • Certificate of Occupancy: Would you like a badge that tells the world you’re meeting all regulations? This is the one because the building and fire inspectors check your venue to award you with it.

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Step #6 To Open a Barber Shop: Spend the Investment To Buy the Equipment

Till now, you’ll probably have spent half of your savings or the funding you secured. Now, it’s time to spend some more on equipment and hiring.

When you proceed to open a barber shop, you’ll have to invest in furniture first. The most crucial are chairs, a reception desk, lighting, mirrors, and racks. Then you’ll need supplies, which include scissors, clippers, wax, shaving creams, combs, spray bottles, etc.

However, you’ll have a variety of clients. What if someone wants a fancy hairstyle? For that, you’ll need electrical equipment such as blow dryers, hair trimmers, towel warmers, etc.

Now, let’s talk about hiring. Some of your funding will go into this, but spend wisely. To put this simply, don’t hire more than you need.

Moreover, choose people with a professional personality and hospitable attitude. And lastly, don’t forget to invest some cash in software to improve your operations or marketing campaigns.

Step #7 To Open a Barber Shop: Brand Your Shop and Start Promoting It

Let’s end our discussion of how to open a barber shop with branding and promotion. How will people know about your new business if you don’t tell them?

Therefore, you must invest in a logo, business card, and advertising. There are many ways to draw attention to your barbershop.

Firstly, create grand opening posters and invite people to visit. Humans crave connections, and if they come with freebies, you’ll likely have a loyal customer for your business.

Hence, consider giving free haircuts, discounts, and early bird perks to people who visit on your opening day. You can also start a loyalty program to tie those visitors to your business.

Moreover, use WiFi marketing solutions to promote your services better and learn about your customers.

And while digital marketing attracts the youth, you’ll also have the older generation as customers who trust traditional marketing more. So, use a mix of both and incorporate automated emails for personalized promotions.

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Is Opening a Barber Shop Even Worth It?

If done right, a barbershop can be very profitable. However, you must follow the right steps to open a barber shop and make this happen.

Remember, research is your friend, so never ignore it. Plus, good customer service will be a promotion on its own, so give it priority.

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