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Do you want to start barbershop business plan?
Do you want to start a barbershop? Well, it might be an excellent idea if you are looking for a business that is simple but profitable. The biggest advantage of a barbershop is that it doesn’t require any official training or technical know-how. You can start your business at any time with ease.
Even though this is a relatively simple business, you will still need to look at business plans for barber shops to make one of your own. If you want to learn how to make a business plan for a barber shop, you can either hire business plan writing services or learn from the format below. We will take you through everything you should include in your barber shop business plan step-by-step. So you can use this to even write soap manufacturer business plan.
Executive Summary
2.1 The Business
Hank’s Barber Care will be a barbershop startup owned by Hank Peterson. The business will work to provide haircutting and salon services throughout Morristown. It will offer several services ranging from cutting, trimming, waxing, shaving, and hair color.
2.2 Management of the Barbershop
To ensure that your startup is well-managed, you need to have a solid business plan strategy. And, to make that strategy, you need to be well versed in barbershop business plans.
You can go about writing a barber shop start up business plan in two ways. Either learn how to write a business plan for a barber shop or go through a beauty supply store business plan or maybe a barber shop business plan example, like the one we are showing here.
2.3 Customers of Barbershop
Our customers will belong to almost every class of people, irrespective of their jobs or ethnicities. However, our potential and recurring customers are as follows:
- Residential Community
- Businessmen
- Work Facilities
- Job Hunters
2.4 Business Target
The main target of our business is to make sure that we provide satisfactory and reliable services to all of our customers whenever they need to freshen up their look.
Our financial targets to meet for the first three years of our start are shown below:
Company Summary
3.1 Company Owner
Hank Peterson will be the owner of Hank’s Barber Care. Hank completed his Bachelor’s a few years back. After his academic career, he worked at a managerial post for two years in a startup business firm. However, he left his job to fulfill his dream of opening a barbershop.
3.2 Why the barbershop is being started
Hank noticed a pattern of decline in traditional barber services around New Jersey. He observed that most places were focused more on looks than the comfort of customers. And so, he wanted to change the narrative by starting a stable barbershop with a good environment.
3.3 How the barbershop will be started
Step1: Plan Everything
Before you figure out anything else, you need a business plan for a start up barber shop or a hair salon business plan. If you ask barber shop business plan experts, they will tell you that you require a business plan even if you just want to know how to start your own barbershop.
So, now that you know that a barber shop business plan is a must, you need to learn how to do a business plan for a barber shop. For reference, you can take a look at the barber shop business plan template that we have presented here.
Step2: Define the Brand
Now that you have a basic plan, you need to highlight the value you provide to your customers. It is the time to brand your unique services to customers.
Step3: Establish Your Corporate Office
Hank decided to rent out a corner shop in Morristown to set up his barbershop. He will now buy all the tools and products needed, and he will also hold interviews to hire some barbers.
Step4: Establish a Web Presence
We live in an age where the internet is the best way to reach people. Hank decided to set up social media profiles for his business. He has also decided to have a website made where customers can book their appointments. It will give him an edge over other barbershops as people can easily schedule their trips and won’t need to wait in long lines.
Step5: Promote and Market
The last step is to make a marketing plan and promote your business.
| Start-up Expenses | |
| Legal | $146,000 |
| Consultants | $0 |
| Insurance | $23,000 |
| Rent | $33,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $56,000 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $271,400 |
| Start-up Assets | $266,000 |
| Cash Required | $369,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $240,000 |
| Long-term Assets | $287,000 |
| TOTAL ASSETS | $1,201,000 |
| Total Requirements | $1,472,400 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $271,400 |
| Start-up Assets to Fund | $1,201,000 |
| TOTAL FUNDING REQUIRED | $1,472,400 |
| Assets | |
| Non-cash Assets from Start-up | $1,506,000 |
| Cash Requirements from Start-up | $285,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,876,000 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $48,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $66,000 |
| Capital | |
| Planned Investment | $1,472,400 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,472,400 |
| Loss at Start-up (Start-up Expenses) | $337,600 |
| TOTAL CAPITAL | $1,810,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,876,000 |
| Total Funding | $1,472,400 |
Services
Before you start learning how to start a barber business, you need to figure out the services you will be providing to your clients. Only then can you start a barbershop business plan.
The business plan for a barbing salon will differ from the usual business plans. So, it’s a good idea to look at some samples of a barbershop business plan pdf. It is also good to go through other examples, such as cosmetics manufacturing business plan.
As Hank’s idea was to provide as many essential services as possible in a single space, the barber shop business plan for his shop can be used as a reference for other businesses. You can also look at a barber shop business plan pdf online for a better idea. Some services to be provided by Hank’s Barber Care include:
- Male Haircuts
Hank’s Barber Care will specialize in all types of male haircuts and hairstyles. Our customers can use whatever hairstyle they want, and our barbers will fulfill their requests.
- Head Massages and Conditioning Treatments
Our customers can also avail themselves of our massaging and conditioning services. These services can help customers relax and leave their stress behind. It can also help with blood flow and hair growth.
- Razor and Wet Shaving Service
Straight razors are considered to be something of a specialty when it comes to barbers. And our customers can rest assured that they will find the same level of skill in our barbershop. They can expect hot lather, irritation-free shave with the sharpest stylings.
- Beard Styling
No matter what the shape or texture of your beard is, our barbers can take it and turn it into a work of art with just a few masterful strokes of the razor.
Marketing Analysis of a Barbershop
Note
Opening up a barbershop requires much more work than it might seem. And one of the most important steps to opening a barber shop is market analysis. It allows you to find and understand your customer base.
Your analysis should include both past and present trends in the market. It should also analyze cost requirements such as how much to open barber shop or what are the most critical considerations when starting a barbershop business. You can find more help in related plans such as eyelash extension business plan.
Business plan for investors
If you don’t understand market analysis and its components, you can refer to this barber shop business plan doc for help. In this document, we have researched and analyzed our business’s various market trends and target customer bases.
5.1 Market Trends
According to the Bureau of Labor Statistics, the Barber Shops Industry Group employed 738k people in 2019. It is also estimated that the job growth will increase by 5.55% in the next ten years. According to Forbes, barbering is also one of the fastest-growing professions in the US.
The market share of the barber shop industry is currently 5 billion, and according to IBISWorld, the industry’s revenue is also expected to rise by 1.5%.
5.2 Marketing Segmentation
The potential customers of Pro Cleaning Services are divided into the following groups:
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5.2.1 Residential Community
Our main client base will be the nearby residents of Morristown. They are expected to avail of our services regularly. And they are also expected to utilize our more specialized services at least a few times a month. The presence of suburbs and family communities will help maintain a fresh flow of customers throughout each month.
5.2.2 Business Folk
Another vital part of our customer base will be people who don’t necessarily live in Morristown but are involved in businesses around the area. They are anticipated to use our specialized services more often as compared to the regular ones.
5.2.3 Work Facilities
Our third group of customers will be from the work facilities in and around Morristown. Workplaces are expected to use both our regular and special services, but their frequency of use is expected to be much less.
5.2.4 Job Hunters
Due to the fantastic job opportunities present around Morristown, we are also likely to get a steady flow of job hunter clientele. With our quick, neat, and affordable services, they will be able to look their best on their important days.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Residential Community | 32% | 33,000 | 35,000 | 37,000 | 39,000 | 41,000 | 10.00% |
| Business Folk | 25% | 30,000 | 31,000 | 34,000 | 35,000 | 37,000 | 10.00% |
| Work Facilities | 23% | 24,000 | 26,000 | 29,000 | 30,000 | 32,000 | 10.00% |
| Job Hunters | 20% | 16,000 | 18,000 | 20,000 | 21,000 | 23,000 | 11.00% |
| Total | 100% | 103,000 | 110,000 | 120,000 | 125,000 | 133,000 | 10% |
5.3 Business Target
- To be the most popular barber service throughout Morristown and nearby towns.
- To steadily expand our services and add more salon-related specialties as time goes on.
- To have a profit margin of around $30-35k per month by the end of the fourth year.
- To acquire and maintain a customer satisfaction score above 95%.
5.4 Product Pricing
Our price range will be moderate and relatively less than those of our competitors. We aim to offer better customer service to our client base in an affordable price range.
Marketing Strategy
To gain traction in a competitive market, you will need a good barber shop marketing plan. Furthermore, you will also need to find enough competitive aspects to put you over the other barbershops in the area.
You can do this through a free business plan for barber shop. And if you want to know how to open a barbershop, then this barber shop business plan is an excellent place for you to learn. We are describing all the necessary details you need to look for in your business. And we are also looking at some crucial factors that help increase the value of the shop, such as Competitive Analysis and Sales Strategy.
6.1 Competitive Analysis
- We have ways to ensure maximum customer satisfaction. We will ask them for feedback and regularly improve upon services to ensure that the customers are cared for.
- Our clients will be able to book their appointments beforehand through our website. This way they won’t have to wait in long queues.
- Our customers can also contact us at any time through the website or our social media platforms, and we will provide a prompt response.
- We’ll implement environmentally friendly services by using eco-friendly, non-toxic, and biodegradable products.
6.2 Sales Strategy
- Our leading platforms for advertisements and branding will be Google ads and Social Media ads.
- In the initial months of our shop, we will provide refreshing discounts.
- We will also offer unique discounts for clients that want to avail a specialized service.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Male Haircut | 28,000 | 29,680 | 31,461 |
| Massages & Conditioning | 25,000 | 26,500 | 28,090 |
| Razor & Wet Shaving | 20,000 | 21,200 | 22,472 |
| Beard Styling | 12,000 | 12,720 | 13,483 |
| TOTAL UNIT SALES | 85,000 | 90,100 | 95,506 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Male Haircut | $10.00 | $11.60 | $13.46 |
| Massages & Conditioning | $12.00 | $13.92 | $16.15 |
| Razor & Wet Shaving | $12.50 | $14.50 | $16.82 |
| Beard Styling | $15.00 | $17.40 | $20.18 |
| Sales | |||
| Male Haircut | $280,000.00 | $344,288.00 | $423,336.52 |
| Massages & Conditioning | $300,000.00 | $368,880.00 | $453,574.85 |
| Razor & Wet Shaving | $250,000.00 | $307,400.00 | $377,979.04 |
| Beard Styling | $180,000.00 | $221,328.00 | $272,144.91 |
| TOTAL SALES | $1,010,000.00 | $1,241,896.00 | $1,527,035.32 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Male Haircut | $4.00 | $4.40 | $4.62 |
| Massages & Conditioning | $5.00 | $5.50 | $5.78 |
| Razor & Wet Shaving | $4.50 | $4.95 | $5.20 |
| Beard Styling | $4.00 | $4.40 | $4.62 |
| Direct Cost of Sales | |||
| Male Haircut | $112,000.00 | $130,592.00 | $145,348.90 |
| Massages & Conditioning | $125,000.00 | $145,750.00 | $162,219.75 |
| Razor & Wet Shaving | $90,000.00 | $104,940.00 | $116,798.22 |
| Beard Styling | $48,000.00 | $55,968.00 | $62,292.38 |
| Subtotal Direct Cost of Sales | $375,000.00 | $437,250.00 | $486,659.25 |
Personnel plan
The success of any business is greatly dependent on the mannerisms and capability of the workers. Hank knew that his business depended even more on a competent workforce. That’s why in both his barber shop business proposal and in his business plans for a barber shop, he included a list of employees that will form his business.
7.1 Company Staff
- A Co-Manager/Partner to help with the overall operation
- 4 Barbers for regular haircuts and services
- 3 Dedicated Barbers for specialized services
- 2 Full-time Cleaners
- 1 Web Developer to manage the website
- 1 Social Media Manager to handle the online presence
- 2 Sales Executives to organize and promote sales
- 1 Accountant
- 1 Receptionist
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Co Manager | $30,000 | $33,000 | $36,300 |
| Barbers | $92,000 | $101,200 | $111,320 |
| Specialized Barbers | $90,000 | $99,000 | $108,900 |
| Cleaners | $25,000 | $27,500 | $30,250 |
| Web Developer | $15,000 | $16,500 | $18,150 |
| Social Media Manager | $15,000 | $16,500 | $18,150 |
| Sales Executives | $30,000 | $33,000 | $36,300 |
| Accountant | $65,000 | $71,500 | $78,650 |
| Receptionist | $15,000 | $16,500 | $18,150 |
| Total Salaries | $377,000 | $414,700 | $456,170 |
Financial Plan
Profits do not measure the true success of a business. There are a lot of aspects that go into the whole conclusion. And one of the essential ingredients is financial analysis. It will include the start up costs of a barbershop and the running expenses.
You will observe that just like this plan, every barber shop business plan or even reiki business plan will contain identification and in-depth analysis of your monthly and yearly expenditures. This way, you can figure out ways to reduce them to a reasonable and sustainable level.
Here we’re providing the detailed financial plan made for Hank’s Barber Care Shop so that you can get an idea of the business finances.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $1,010,000 | $1,241,896 | $1,527,035 |
| Direct Cost of Sales | $375,000 | $437,250 | $486,659 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $375,000 | $437,250 | $486,659 |
| Gross Margin | $635,000 | $804,646 | $1,040,376 |
| Gross Margin % | 62.87% | 64.79% | 68.13% |
| Expenses | |||
| Payroll | $377,000 | $414,700 | $456,170 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $556,200 | $598,150 | $650,070 |
| Profit Before Interest and Taxes | $78,800 | $206,496 | $390,306 |
| EBITDA | $78,800 | $206,496 | $390,306 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $15,760 | $41,299 | $78,061 |
| Net Profit | $63,040 | $165,197 | $312,245 |
| Net Profit/Sales | 6.24% | 13.30% | 20.45% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ
- How do you write a business plan for a barbershop?
You can use the above mentioned business plan barber shop template to get a decent idea for what a business plan barbershop should contain.
- How much money does it take to start a barbershop?
The cost incurred while starting a barber shop business plan depends on a lot of factors such as location, number of services, and scale of your business. But relatively, a barbershop is one of the easier businesses to start.
- How do you attract customers to your barbershop?
The best way to attract customers is to give unique and quality services so that every customer leaves your shop satisfied.
- How do you start a barber shop?
The first step to starting any business is to plan. And you can do this through barber shop business plans. You can refer to the sample business plan for barber shop here.
Download Barber Shop Business Plan Sample in pdf
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