Barbershops offer haircuts, shaves, and other grooming services to men and boys. They are little businesses that specialize in shaving the neck and face of males and cutting their hair.
Barbershops have been a renowned location to socialize since the period of ancient Rome, roughly 296 BC. It used to be a place where men could network with other men in their community, exchange views, and learn the latest gossip (yes, men gossip as well).
Now, barbershops are less about socializing and more about pampering, as men begin to indulge more in the art of grooming. This makes barber shops very lucrative businesses, but only if you are committed to making this business work from the start. To help you get started properly, we asked experienced barbers 4 financial-related questions about opening a barbershop, and their answers are below.
1. What Are The Costs Associated With Opening A Barbershop?
To open a barbershop, you need permits, a license, a location, and barber equipment. While it may not sound like much compared to other businesses, barbershop owners point out that opening a barber salon is not as inexpensive as you may initially think.
While costs for shop space may vary depending on your area, other costs are not as easy to control. Permits and licenses cost a few thousand dollars, shop equipment can easily set you back $10,000, and furniture plus inventory adds another $15,000 to your expenses list. Last but not least, insurance, which costs another few thousand dollars each year. You can check for the best prices on websites such as Insuranks, which gathers and compares policies from various insurance providers.
2. What About The Ongoing Expenses?
In addition to initial expenses, experienced barbers point out that running a barbershop comes with some significant monthly expenses that you need to be aware of. These include rent, utilities, internet, marketing campaigns, professional and retail supplies, regular shop maintenance, payroll, and taxes.
If you want to cut down on payroll expenses, you can hire barbers as independent contractors. They will pay a set rent for using the chair or give you a fixed percentage of their profits as a commission (around 30-50%).
3. How Much Profit Does A Barbershop Make?
Profit varies greatly based on the services you provide, the prices you charge, your location, and your experience. When it comes to prices, men’s haircuts cost, on average, around $30 nation-wise, beard trims cost around $10, whereas wet shaves cost around $20.
Annual profits for barbershops sit around $35,000, but if you do your job well, you can expect these numbers to double. If you are looking to make more profits, you can include all sorts of additional grooming services, as well as a retail section where you can sell grooming products for your clients.
4. How Can I Finance My Barbershop?
Because starting a barbershop is expensive, some people choose additional financing methods. These methods include business loans, which are offered by financial companies such as banks, startup loans, which are either government-backed or offered by lending companies, or third-party loans, which can come from investors, friends and family, or other lending programs.