The hair care industry is thriving, but you don’t have to be a barber to cash in on haircuts. Learn how to start a barbershop and what to consider before you begin.
Find Your Tribe
The world keeps spinning, and hair keeps growing, making the hair care industry a recession-proof business opportunity for entrepreneurs looking to get a piece of the cut. The global haircare market is forecast to reach $211.1 billion by 2025, with evolving trends and increasing focus on self-care making it a viable and expanding arena. The global male grooming market alone is estimated to reach about $81.2 billion in the next three years.
Because hair care is such a broad market, you should focus on a particular demographic to help boost your potential and make a lasting impression. Remember: Not all barbershops are created equal. By studying local trends and preferences in the area you are planning to start your business, you can get a sense of whether you’ll succeed with one establishment style over another. Check the market for oversaturation and find out where your services are lacking or in demand.
Name Your Barbershop & Ownership Structure
Have fun and take your time choosing the right name for your shop. If you are opening an independent barbershop with a unique name, you will want to file a “doing business as” (DBA) permit with your state, which will keep any other business from using your name. If you are buying into a franchise, the name has already been chosen for you and comes with its history and recognition. Few barbershop names sound as badass as Scissors & Scotch, but we may be a bit biased.
Likewise, your ownership structure will depend on whether you are operating as an independent barbershop or a franchise partner. If you decide to invest in a franchise, know that a lot of the legwork has already been done for you.
Make a Plan
Your business plan will act as a kind of road map for your barbershop. This should include answers to questions like: What kind of shop do you want to run? Who are your competitors, and what makes you stand apart? What resources will your shop require, and how will you turn a profit?
These questions (and your answers to them) will help you narrow your focus on a chosen market, consider the potential of your overall plan, and address any challenges you may not have previously considered. A well-thought-out business plan can set you up for success.
You want to accentuate the positive while acknowledging any challenges your business may encounter and how you will address them along the way. A huge benefit of owning your business as a franchisee is having a team of experts who can support you in starting a barbershop from the minute you begin.
The franchise disclosure document (FDD) provided by the franchisor will offer you a lot of crucial information to help you complete your plan, including the brand’s background, description of the target market, competitive advantages, marketing plans, and a layout of your startup and ongoing costs.
Essentials to always include:
Company Description. When working with a franchise, a lot of helpful information for this portion can be found in Item 1 of the company’s FDD. Here is where you provide a general overview of your business’ backstory and outlook, including the products or services you intend to offer.
Market Analysis. This is where you can assure your investors or lenders that you have done your homework and have chosen a concept that will be a smashing success. If buying a franchise, you may refer to Item 12 in the franchisor’s FDD to inform the territory description of your local target market. Address the size and potential of your market to forecast how your business will fit into the mix. Include information like experts’ forecasts, demographic factors, and statistics on the prospective competition.
Managerial Structure. Address how your business will run on a day-to-day basis. Including you, as the owner—who will be responsible for making things happen? Detail all levels of operations and include all prior relevant business experience to imbue lenders with confidence in your future success.
Marketing Plan. This is the section where you reveal your plan for attracting and maintaining customers. Item 11 of your franchisor’s FDD will give you an overview of their marketing and advertising system — another massive advantage to investing in an established brand.
Funding and Future Financials. Time to talk money, get really honest about what you need, provide a larger picture of your financial situation, and provide realistic projections about returns on investments and loan repayments. Your franchisor can provide a great deal of help here, through Items 5 and 19 of the FDD, as well as general counsel through the startup process. While many franchisors can’t provide you with precise projections of future earnings, you can get a strong sense of what to expect for your business.
Obtain a Tax Identification Number for Your Babershop
This is like a social security number for your barbershop, allowing the IRS to track your business for federal tax purposes. This ID number is important for managing employees, and especially if you intend on establishing your business as a corporation or partnership.
Register for State & Local Taxes
In addition to paying federal business taxes, most U.S. states require some form of income and employment taxes. Some states have additional fiscal requirements, including workers’ compensation and unemployment insurance. Qualifications, requirements, and regulations vary widely from state to state, so be sure to look into the laws specific to where you plan on starting your barbershop.
Find the Perfect Place to Hang Your Shingle
A few factors matter greatly when choosing the spot where you will open your barbershop: real estate costs, foot traffic, and parking accessibility. Ideally, you want to find an affordable space with excellent visibility to attract customers.
If you have an idea of where you would like to set up shop, scout out similar or complementary businesses in the area to see how they are succeeding, what they may lack, and how your business may fit in the mix.
Most franchisors are well equipped to help direct you in your location search since finding the right spot for your barbershop will boost the brand’s visibility as a whole. Scissors & Scotch has strategically partnered with real estate professionals to provide franchisees with invaluable information about landlords, co-tenants, traffic patterns, and other factors tied to location potential.
Assemble Your Crew
Unless you’re planning on running a one-person show, one of the most important keys to success is the backing of a dedicated, dependable team. Suppose you have no prior experience in the industry. In that case, you want to put together a crew of trained professionals who share your vision and are committed to making the business a success.
Ensure that every new employee knows your barbershop’s mission and is on the same page with you and the rest of the team. Remember that you are in the business of making people look and feel good. A happy staff translates to satisfied customers, and they are indeed the heart and soul of a kick-ass establishment.
Time to Train
One of the many benefits of opening a barbershop franchise is that regardless of your own prior hair care experience, the brand training follows a proven, time-tested formula. The right training builds brand consistency, employee engagement and retention, and increased efficiency.
Through collaboration and team building, Scissors & Scotch’s industry-leading training program fosters some of the business’s best stylists, receptionists, managers, and bartenders. It’s no wonder our employee turnover rate is 50 percent lower than the industry average.
Stir Up Excitement
Now that you’ve done all the hard work to get your business up and running, you need to make sure you get butts in seats. You want to engage with your community and promote your business through as many means as possible.
Traditional and in-store marketing techniques remain robust, but additional platforms will help promote and drive your business success. Digital and online marketing strategies are constantly evolving and require new ideas and clever, customer-engaging campaigns. Some of these methods cost money, while others (like social media) simply require a little creativity and determination to make an impression on your current and prospective customer base.
Scissors & Scotch’s goal is to help you reach capacity as soon as possible. Backed by a team of experts, we provide all of the branded content and strategy necessary to help you optimize your marketing powers so you can focus on your business.
Raise a Glass with Scissors & Scotch
Launched back in 2015 by a small group of midwestern dreamers, Scissors & Scotch has successfully expanded to multiple states with no signs of slowing down. By featuring traditional barbering plus modern spa services in a laid-back environment with speakeasy vibes, we provide our customers a unique experience while offering prospective franchisees the opportunity to become a part of our growing brand.
Scissors & Scotch is proud to be an exciting, emergent barbershop franchise in the broader haircare landscape. If you know you want to own a barbershop but are unsure of where to begin, we implore you to give us a holler.
To learn more about franchising with Scissors & Scotch, visit us.