Starting a barbershop is a rewarding venture, blending artistry and precision with sharp business savvy. The market is a multi-billion dollar industry, fueled by a steady demand for haircuts and shaves from young professionals, families, and students alike.
This guide will take you through the practical steps of securing funding, obtaining the right licenses, selecting a location, and acquiring equipment to help you launch a successful barbershop in the U.S.
Step 1: Create your business plan and validate the concept
First, understand your local market. Spend a day in your target neighborhoods to observe foot traffic. You can also use the U.S. Census Bureau's free Census Business Builder to pull demographic data, like local age and income levels for specific zip codes.
Analyze the competition
Once you have a feel for the area, identify every barbershop within a two-mile radius on Google Maps. You might want to visit at least three as a customer to discreetly assess their service quality, pricing, and atmosphere. Also, check their online presence on platforms like Booksy or Yelp.
Estimate your startup costs
With this information, you can build a realistic budget. A common misstep is to underestimate initial inventory needs. Running out of a popular pomade in your first few weeks can damage your reputation before you get established. A solid budget helps avoid this scenario.
Expect startup costs to range from $15,000 to over $40,000. Key expenses include your lease deposit ($2,000-$8,000), equipment like chairs and stations ($10,000-$25,000), licenses ($500-$2,000), and initial product inventory ($2,000-$5,000).
Here are 3 immediate steps to take:
- Use the Census Business Builder to analyze your target zip code’s demographics.
- Secret shop three local competitors to document their pricing and customer experience.
- Create a detailed budget spreadsheet that lists all potential startup costs.
Step 2: Set up your legal structure and get licensed
Most new shop owners form a Limited Liability Company (LLC). This structure protects your personal assets if the business faces debt or lawsuits. Profits pass through to your personal tax return, which simplifies tax filing. You can file for an LLC online through your state's Secretary of State website.
Expect to pay between $50 and $500 in state filing fees. After you register your business, you will need an Employer Identification Number (EIN) from the IRS. You can apply for this number online for free. It is your business's federal tax ID.
Navigate state and local requirements
Your primary regulatory body is the state Board of Barbering and Cosmetology. They issue the two main licenses you need: a Barbershop License for your establishment and a personal Barber License for any practicing barber. Check their website for specific application forms and requirements.
A Barbershop License typically costs $100-$300 and can take 4-8 weeks to process. You will also need a Certificate of Occupancy from your local building department. If you plan to sell products, get a seller's permit from your state's tax agency.
Many new owners get delayed by health department inspections. Your state board will not issue a shop license until the local health inspector approves your setup, from sink placement to sanitation. Factor an extra 2-4 weeks into your timeline for this step alone.
Here are 4 immediate steps to take:
- File for an LLC with your state's Secretary of State.
- Apply for a free Employer Identification Number (EIN) on the IRS website.
- Download the barbershop license application from your state's Board of Barbering website.
- Contact your local health department to understand their inspection checklist.
Step 3: Secure your insurance and manage risk
You will need a few types of insurance. A Business Owner's Policy (BOP) is a good start, as it bundles General Liability for accidents like slips and falls with Commercial Property insurance for your equipment and space.
Understand your coverage needs
Many new owners assume general liability covers everything. It does not cover claims from your services. For that, you need Professional Liability insurance, which protects you if a client claims a nick, cut, or allergic reaction resulted from your work.
A BOP with $1 million in liability coverage can cost between $50 and $125 per month. If you hire even one employee, you must also get Workers' Compensation insurance. This is a separate policy mandated by your state.
When you look for providers, consider specialists in small business insurance like Hiscox, Next Insurance, or The Hartford. They understand the specific risks of a barbershop and can help you get the right coverage without overpaying.
Here are 3 immediate steps to take:
- Request quotes for a Business Owner's Policy (BOP) from three different insurers.
- Confirm your professional liability policy explicitly covers claims from nicks, cuts, and chemical services.
- Research your state's requirements for Workers' Compensation if you plan to hire staff.
Step 4: Find a location and buy equipment
Look for a space between 600 and 1,000 square feet. This size accommodates two or three stations and a small waiting area. Before you sign a lease, confirm the property has the correct commercial zoning with your local planning department.
When you negotiate your lease, ask for a Tenant Improvement (TI) allowance. Landlords may contribute funds to help you build out the space, especially for plumbing. You might also negotiate one or two months of free rent to ease financial pressure before opening.
Outfit your shop
Your equipment budget requires careful planning. A new barber chair can run from $500 to over $2,000. A backwash unit costs between $700 and $2,500. You can find quality used equipment, but inspect it for wear and tear before you buy.
You can source equipment from industry suppliers like Minerva Beauty or Keller International. A mistake some new owners make is buying the cheapest chairs, only to replace them within a year. A durable chair is a better long-term investment for your business.
Here are 4 immediate steps to take:
- Research commercial properties between 600-1,000 sq. ft. in your target area.
- Ask potential landlords about Tenant Improvement (TI) allowances during tours.
- Price out new barber chairs and stations from at least two different suppliers.
- Explore local marketplaces for high-quality used equipment.
Step 5: Set up your payment processing
Most clients expect to pay with credit, debit, or digital wallets. While cash is still an option, a reliable card payment system is necessary. You might also consider requiring a small deposit for online bookings to reduce no-shows, a common issue that affects revenue.
When you review payment solutions, look past the advertised rates. Some providers add monthly fees, hardware costs, or hold your funds for several business days. These details can directly impact your cash flow, so read the fine print before you commit.
For a simple approach, especially for payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and the sale is done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is a strong option for independent barbers renting a chair or selling products at local events. Other providers often charge between 2.5% and 3.5% per transaction plus monthly fees.
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done, with no waiting for bank transfers.
Here are 3 immediate steps to take:
- Compare transaction fees and fund transfer times for two or three payment solutions.
- Download the JIM app to see how it works on your phone.
- Decide on a policy for appointment deposits to protect your time and revenue.
Step 6: Secure funding and manage your finances
With your business plan ready, you can pursue funding. The Small Business Administration (SBA) is a strong starting point. Its Microloan program provides up to $50,000, which is ideal for equipment and initial inventory. Interest rates typically fall between 8% and 13%.
For larger needs, an SBA 7(a) loan is an option. You will need a credit score above 680 and a detailed business plan. Many new owners get rejected because their financial projections are not solid, so make sure your plan is polished before you apply.
Plan for your first six months
You will need working capital to cover costs before your client base is established. Budget for at least $10,000 to $20,000. This amount covers rent, utilities, payroll, and marketing for the first six months. It is your financial cushion while you build revenue.
In addition to the SBA, look into community lenders like Accion Opportunity Fund. They often have more flexible qualification requirements than traditional banks and specialize in helping new small businesses get started. Their focus is on your business's potential, not just your credit history.
Here are 4 immediate steps to take:
- Review the SBA Microloan program requirements on their website.
- Contact a community lender like Accion Opportunity Fund to discuss loan options.
- Calculate your working capital needs for the first six months.
- Finalize the financial projections in your business plan before you apply for loans.
Step 7: Hire your team and set up operations
Build your staff and business model
Your first hires will be licensed barbers. Compensation is often a 50/50 or 60/40 commission split, or you can offer an hourly wage of $15-$25 plus tips. A mistake some new owners make is hiring unlicensed barbers, which can result in heavy fines from the state board.
At the same time, decide on your business model. You can hire barbers as W-2 employees or rent chairs to them as 1099 independent contractors. Misclassifying staff can lead to tax penalties, so it is a good idea to consult an accountant to make the right choice.
Select your shop software
Modern shops run on scheduling software. Platforms like Booksy, Squire, and Fresha manage appointments, reduce no-shows with automated reminders, and process payments. Most charge a monthly fee or a small percentage per booking, streamlining your daily operations from the start.
As a financial benchmark, aim to keep total payroll costs between 30% and 35% of your gross revenue. This ratio helps ensure profitability as you grow. A single busy barber can generate between $50,000 and $100,000 in annual revenue, which helps with forecasting.
Here are 4 immediate steps to take:
- Draft job descriptions for licensed barbers with clear commission or hourly rates.
- Decide whether you will hire W-2 employees or rent chairs to independent contractors.
- Compare the features and pricing of scheduling software like Booksy and Squire.
- Set a preliminary payroll budget based on 30-35% of your revenue forecast.
Step 8: Market your shop and get customers
Build your online presence
Your first marketing move is to claim your free Google Business Profile. Fill out every section with your address, hours, and services. Upload high-quality photos of your interior and some of your best cuts. This is how new clients will find you through local search.
Many new owners underestimate the power of reviews. Actively ask your first happy customers to leave a review on Google. A strong rating can be the deciding factor for someone choosing between you and a competitor. An empty profile is a red flag for potential clients.
Also, set up an Instagram account. This platform is perfect to showcase your work. Post before-and-after photos, introduce your barbers, and use local hashtags like #[YourCity]Barber to attract a nearby audience. Consistency is more important than frequency.
Create local buzz
For direct outreach, consider a grand opening event. Offer a 20% discount for the first week to get people in the door. You can also partner with a nearby coffee shop or boutique for a cross-promotion, where you offer each other's customers a small discount.
As you market, track your Customer Acquisition Cost (CAC). If you spend $100 on Instagram ads and get five new clients, your CAC is $20. This simple metric helps you decide which marketing efforts give you the best return on your investment.
Here are 4 immediate steps to take:
- Claim and complete your Google Business Profile with photos and services.
- Set up an Instagram account and post your first five before-and-after photos.
- Plan a grand opening promotion to attract your first wave of clients.
- Contact one local business to discuss a cross-promotional partnership.
Step 9: Set your prices and build your menu
Establish your service pricing
Start by researching what other shops in your area charge. Look up at least five competitors on Google Maps or Booksy to see their service menus. Your goal is to find a price that reflects your skill and shop atmosphere without alienating your target clients.
You can price services a-la-carte, like a $40 haircut and a $20 beard trim. Or, you can bundle them into a package, such as "The Works" for $55. You might also consider tiered pricing where a Master Barber charges more than a Junior Barber.
A mistake many new owners make is to set prices too low just to attract customers. This strategy can devalue your brand and makes it difficult to raise prices later. It is better to compete on service quality and experience, not just on price.
Price your retail products
Retail sales are a great way to increase revenue. The industry standard for product markup is 100%, also known as keystone pricing. If you buy a pomade from a supplier for $12, you should sell it to customers for $24.
This simple formula gives you a 50% gross profit margin on every product sold. It is a straightforward way to boost your shop's bottom line. Make sure you display products clearly and have your barbers recommend them to clients after a service.
Here are 4 immediate steps to take:
- Research the service menus of five local competitors on Google or Booksy.
- Create your initial service menu with a-la-carte and bundled prices.
- Set your retail product markup, aiming for a 100% increase over your cost.
- Calculate the profit margin for your top three services to ensure profitability.
Step 10: Maintain quality and scale your business
Set your quality standards
Your reputation depends on consistency. Track your client retention rate, aiming for 70% or higher. You should also monitor your rebooking rate and online review scores. A rating above 4.5 stars on Google or Booksy is a strong indicator of customer satisfaction.
Many owners focus only on the haircut and neglect the overall client experience. A simple post-service text asking for feedback can provide valuable insight. This small step shows you care and helps you catch issues before they become negative reviews.
Know when to grow
Once your quality is consistent, you can plan for growth. When a barber is booked 80% or more of their available time for three straight months, it is time to hire another. This prevents burnout and keeps you from turning away new clients.
Before you consider a second location, your first shop should operate at 85% capacity with positive cash flow for at least one year. This financial stability ensures you have the resources to manage an expansion without stretching your business too thin.
Here are 4 immediate steps to take:
- Track your client retention rate for the next 90 days.
- Set a goal to keep your Google review score above 4.5 stars.
- Calculate your current barbers' booking capacity to identify hiring needs.
- Review your cash flow statements from the last six months to assess expansion readiness.
You now have the steps to launch your barbershop. Remember, a sharp cut gets a client in the chair, but the experience you create keeps them coming back. Trust your vision and your skills. You are ready to start.
As you get set up, make payments easy. JIM turns your phone into a card reader for a flat 1.99% fee, with no extra hardware. This lets you accept payments anywhere, from day one. Download JIM to get started.
