Barbers work hard, real hard! When barbers retire they want to retire happy and comfortably with personal and financial piece of mind. Fact is, though, the quality of life that a Barber wants in the future depends on what he/she contribute in the present. Therefore to truly enjoy and be able to reap the benefits of retirement you have to start saving into a retirement plan immediately – like when you serve your first customer. Read more.
- Create a business description for your barbershop’s business plan. Provide the name and location of your barbershop, and follow this information with the names and contact information of each of the shop’s owners. Identify the legal business description of the barbershop, such as a sole proprietorship or partnership. Include a brief review of the barbershop industry, its economic trends and forecasts.
- Identify the location of your barbershop and list whether you will own, rent or lease the location. Discuss the location’s overhead costs and requirements, such as the costs of utilities, taxes and permits. Include a list of equipment and inventory that you will need for the shop, such as cutting chairs, trimmers and mirrors, and include the costs for each.
- Determine the number of staff members that your barbershop will require for efficient operations. Identify if those staff members will be employees or contractors and ascertain if these members will work full or part time hours. Provide a brief review of each staff member’s function. Identify and list the cost of employing each staff member, including any applicable benefits or training that your business will cover for the staff members.
- Develop a marketing plan for your barbershop business. Identify the products and services that your barbershop will provide, including the haircuts, specialty services and supporting hair products. Identify the target market of your business and explain the methods that your barbershop will use to attract and retain its clientele. Identify your barbershop’s competition and ascertain how your business stands out against that competition. Identify your shop’s strengths and weaknesses, and explain the steps your business will take to counteract its faults and build on its opportunities.
- Complete the financial portion of your barbershop business plan. Include a personal financial statement, balance sheet, income statement and cash flow statement. Complete a personal financial statement for each owner of the barbershop. Provide accurate information and figures when completing these statements and include supporting documents to verify the information, such as tax statements, receipts and bank statements.
- Complete a two- to three-page executive summary for your business plan. Use the executive summary to introduce your business and the information within the plan. Provide a brief overview of the business’ owners, target market and competition. Highlight some important aspects of your business. Include the amount of your loan request, if you are seeking financing. Place the executive summary at the beginning of your business plan.
- End your business plan with any supporting documents that you have to verify the information within the plan. Create an appendix. List the documents in order, as they would appear in the business. Label each document clearly for easy reference. Along with supporting financial information, include documents, such as zoning approval documents, leases, tax statements and compliance letters.
Women are not the only ones who want professional hair care services — men want to look good, too. There thus is a demand for barber shops that focus on male clientele. It can be difficult to make a profit in these shops if you do not approach both the financial and operational segments of the business with seriousness and proper planning.
Cleanliness and Guidelines
Because barbers can provide services that pose potential hazards to customers, such as dying hair with chemicals and using sharp razors, you must follow the same basic sanitation and legal guidelines as other cosmetologists. This might not seem like it ties into your profits, but customers who see a dirty shop aren’t as likely to come back. Even if people haven’t set foot in your shop before, if they’ve heard negative things about the way you operate, they may think twice before stepping through the door. You also can get fined or even lose your permits and licenses for not complying with cosmetology regulations, so keep your shop immaculate and take extra steps like attending extra seminars to make sure you are in compliance. Posting awards and certificates related to these events can show customers you’re head-and-shoulders above competitors.
Understanding the Market
Small barber shops, similar to any other business, have to have a sense of their market before they can hope to implement marketing strategies that bring in paying customers. Research what other competitors are doing and what the demographics in the community are like. For example, if your client base is people mainly 40 years old and under, services such as dying beards aren’t likely to be much in demand in your shop. Create your business strategy based on the results of your market research, fighting the traditional “gramps” or “old-style” concept of barber shops if necessary. Always ask clients how they heard of you, and adjust your marketing strategy if the needs or demographics of the community change significantly. Take the average income level of the area into consideration when you set your prices.
Organizing your barber shop is a profit must-do. This refers to your supplies as well as to your paperwork and records. When you organize your supplies, it is much easier to grab what you need quickly to continue business. That means people aren’t waiting around, so you can serve more clients. It also means the clients you do serve see you as efficient, which contributes to a positive service experience. When you organize your paperwork, it is easier to pay bills and see where the shop’s money is tied up. It is much less likely that you’ll miss important deadlines that might mean paying more. Check your books and do so often to catch errors that could cost you, and to find areas where more efficiency is necessary.
As a barber, you inevitably will need various supplies such as scissors, trimmers, protective drapes, and hair care products. Getting these supplies in bulk can save you big bucks, but you have to have the room to store them, and you often have to have enough money to pay for the goods up front. Developing good vendor relations can lead to accounts with vendors that allow you to purchase items on short-term credit, and also can result in commissions if you sell the vendors’ products.
Just because you are a small barber shop doesn’t mean you shouldn’t think ahead for your business. Set some of your profits aside and invest them. The amount you invest and exactly where you put your funds is a matter of personal preference, but the idea is that investing some of your funds can make profit yield more profit. When you need additional funds, you can tap the investment earnings to cover the expenses you have. That way, you won’t have to get into debt to keep the shop afloat in rough periods.
Employees can make or break a barber shop. Employing only barbers who are working through recognized apprenticeship programs or who are fully licensed is always the best bet from the legal standpoint. It’s also important to pick people who have vibrant personalities, as clients generally want to chat up their barbers and other cosmetology workers. Being clear with the employees about your guidelines and keeping them accountable can keep the shop operating smoothly. Don’t be afraid to demand their best work.
Contact your state’s cosmetology board or licensing department to learn the requirements and fees for obtaining a barber shop permit. For example, in the state of Texas, a barber shop must have at least one sink, wash basin, or hand sanitizer for every three chairs or stations. Obtain your business license and sales tax permit.
Contact the American Barber Association (ABA) to get assistance in developing a business plan. The ABA has the most experience in starting and expanding barbershops that any organization in the United States. The ABA has details on operating costs, start-up costs, advertising costs, staff requirements, anticipated clientele and how you intend to compete. Create a competitive pricing list to determine what type of profits you can expect and how much you can afford to spend on your rent. Generally, your rent should not exceed 10 percent of your projected gross revenues.
Scout out potential locations for your business. Moving into a location that has already been zoned for barbering will significantly reduce your workload and eliminate the need for building permits or zoning approval. Busy barber shops may have a waiting period between clients. Look for a location in a shopping center or near other businesses that your clientele frequent. Contact a commercial broker to show you vacancies. Be sure to thoroughly research your broker and ensure that he understands your business needs. Again, the ABA can assist you in this part of the process
Hire an attorney to review the details of the lease agreement, such as the landlord’s responsibility with repairs, expansion potential, early lease termination clauses and what happens if an adjacent business moves out. Hire an accountant to learn the tax requirements for hiring an independent contractor or an employee.
Get your shop inspection ready. Purchase salon insurance (the ABA can assist you with this). Equip your facility with adequate equipment, supplies and cleaning products. Address all public safety, licensing and sanitation regulations. Then contact your health department to set up an inspection.
Hire well-groomed, licensed barbers. If your barbers are members of the ABA or have ABA certifications that would be great to. If hiring contractors, ensure that they have liability insurance coverage. Develop a dress code policy for your employees.
To build up business, offer discounts to your existing clientele for customer referrals. Host a grand opening. Submit press releases. Get your barbershop listed in local directories. Start a website for your shop. Compete by creating a friendly and inviting atmosphere. Offer complimentary coffee. If your clientele is mostly male, install a high-definition television and tune it to ESPN or the latest game.
Items you will need
- Business plan
- Hair care supplies
- Shop license
- Business license
- Sales tax permit
- Register your new business before you search for a loan. You must have a legal business in place before you apply for loan funds, even though your business won’t start up until later. It’s possible to apply for a personal loan for business purposes, but registering a business and creating a business plan can give you an advantage when working with potential lenders.
- Research a number of lenders before contacting one or more for a loan. Don’t rely on a loan officer at a single institution to provide you with the range of objective information you need to make a decision. Look into a number of banks, credit unions, online lenders or other institutions and make a list of the loan types and terms offered by each lender. The SBA can also help you locate banks with which it does business.
- Contact the lending institution of your choice, request a meeting to discuss a small business loan application and ask for a list of information you’ll need to bring to the meeting. You’ll definitely need to bring your business plan and be ready to explain any section, point or figure in detail. You may also need to bring in personal financial information such as bank and credit account statements, since your business lacks an established borrowing history.
- Contact your local Secretary of State office to find out whether barber shops require specialized licensing in your state. Texas, for example, requires you to obtain a barber shop permit from the Texas Department of Licensing and Regulation, while other states do not.
- Purchase or lease a storefront suitable for running a barber shop once you’ve received your loan funds. Look for a storefront in a high-traffic area frequented by your target market. Try not to locate your shop too close to other hair salons, unless they clearly serve a different target market. If you’re opening a discount family barber shop, for example, don’t be afraid to open near a full-service luxury salon, because you’re not likely to compete for customers very often.
- Set up your shop with the range of equipment and fixtures required to perform hair services. Install enough barber chairs, electrical outlets, mirrors and shelf space to allow for a number of stylists to work at once, even if you plan to run the shop on your own at first. Set up a small waiting area with comfortable chairs, a television and other diversions for waiting customers. Install a cash register and point-of-sale software system to ring up customers and accept cash and credit cards.
Elite Barber James Williams of Barber in North Chicago Illinois says that “All Barbers want to cut hair but the best barbers want to build trust as well.” Mr. Williams may be on to something. A recent study shows that, in general, people trust their barber just as much, if not more, than they trust policeman and doctors. Indeed, according to Maya Hammouri, Director of Member Relations at the American Barber Association, “most of the complaints received by the ABA really boils down to a breakdown in trust.” According to Hammouri, “Barbers must fully understand their clients expectations…so more communication is needed on the front end.”
Hammouri recommend five things that Barbers must do to build trust with clients:
- Communicate: Barbers must listen to clients, assuring the client that he/she fully understands the clients needs and expectations.
- Understand Expectations: Barbers must fully understand the clients expectations. Often better understanding comes with repetition but early on fully understanding a client’s expectations could be a little dicey.
- Be Honest: Barbers must be honest with clients – clients appreciate honesty.
- Consistency: Barbers must be consistent in the style of cut, primarily because clients often return seeking such consistency.
- Be Fair: Customers like to pay for value. If the cut isn’t exactly right or didn’t meet expectations, perhaps an adjustment in price is warranted – and the client may return.
The American Barber Association is the industry leader in providing information, education, recognition and advocacy for barbers and barbershops in America.