Are Barbershops Profitable? Unveiling the Financial Potential

Are barbershops profitable? Absolutely! It’s all about how much effort you’re willing to put in.

The haircare services industry has been growing at a steady rate. This includes many successful barbershops. Recent statistics show that the barbering business keeps growing, with a 2,7% boost in 2024 alone.

But here’s the deal: to make your barbershop profitable, you’ve got to keep things well-organized and efficient. The key is having a solid plan.

So, if you’re thinking about opening your very own barbershop, let’s take a look at key elements that make barbershops profitable, from understanding the financials to exploring proven strategies that can set you up for long-term success.

Is Owning a Barbershop Profitable? How Much Does a Barbershop Owner Make?

The first question you’re probably asking is: How much profit do barbershop owners make on average? Well, the answer isn’t always straightforward because many barbershop owners use different business models that are difficult to analyze. For example, barbershops often don’t employ barbers on salary. Instead, they may rent booths or equipment to independent contractors, which complicates profit assessments. This all can make it challenging to give the precise answer to the question are barbershops profitable.

The US Bureau of Labor Statistics calculates the median wage for barbers at $36,150 per year. But realistically, barbers can make between $26,770 to $61,090 yearly. For barbershop owners, the average annual profit can vary even more, as it depends on factors like the business model, number of employees, and location.

On the bright side, the barbershop industry holds much potential for aspiring entrepreneurs. The IBIS Industry Research Report predicts that the annual revenue for barber shops will continue to grow at a rate of 0.6%. By the end of this year, the barber industry should reach a value of $5.8 billion. These statistics are very promising to anyone interested in entering the industry. With a positive trajectory for growth within the industry, there is a lot of potential for starting a profitable barbershop business.

Barbershop Expenses That Impact Profitability

A business makes money when it brings in more cash than it spends. Now, for a barbershop, this means your earnings have to be higher than what it costs to run the place. So, to figure out if barbershops make money, you need to know all the costs first. Easy, right?

Here are some of the principal costs involved with running successful barbershops.

Rent/lease

Rent or lease is a significant cost when running a barbershop. You’ve got to pay for the space where your barbershop operates, and that cost can take a substantial chunk out of your earnings. The barbershop’s environment, location, and size can impact how much you pay for the lease or rent. A prime location in a high-traffic area will likely come with a higher price tag, but it can also bring in more customers.

Utilities

Utilities are another important cost to consider when running a barbershop. These include expenses like electricity, water, heating, and possibly internet and phone services. While they may seem like small costs individually, they can add up quickly and eat into your profits, so it’s essential to account for them when looking to answer the question – is owning a barbershop profitable?

Supply and equipment costs

Supply and equipment costs are significant expenses in a barbershop. You’ll need to purchase supplies like grooming products, razors, scissors, and other tools, as well as maintain and replace equipment like barber chairs and hairdryers over time. These costs can impact your profitability, so it’s crucial to manage them effectively and include them in your financial calculations when determining how profitable a barbershop is.

Staff salaries and benefits

Paying wages and benefits for your staff also impacts the overall profitability of your barbershop. It’s only natural you want to hire the best possible barbers available on the market. However, keep in mind that they typically charge more per hour than those who are at the beginning of their career.

Marketing and advertising

Advertising and marketing campaigns can make a huge difference in how many potential customers you attract to your salon. This, in turn, can help increase your revenue. Social media accounts are a great way to attract new clientele. However, they all come at some cost, and even though it may seem insignificant, keep in mind that it can add up quickly. 

Unexpected circumstances

There are a lot of unforeseen circumstances that can hit barbershops out of the blue. To minimize the impact these have on your productivity, it is wise to have good insurance coverage. The cost of insurance varies depending on the location of your barbershop and the amount of coverage you want.

Maintenance and repairs

To efficiently run your barbershop business, you must keep your equipment and shop in good repair. Keeping your shop working well helps minimize business expenses in the long run. This way you don’t have to pay for expensive repairs or replacements.

While it can be a pain to track all your business costs, both regular and irregular expenses, it’s essential if you want to answer the question – are barbershops profitable? Costs for maintenance can vary by location, season, and the age of your equipment. By staying on top of repairs and keeping your expenses in check, you can ensure that your barbershop remains a profitable business.

Potential Income and Revenue Streams

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A barbershop can make money in many ways. Here are some examples of the different revenue options you as a barbershop owner can take advantage of:

Haircuts and styling

Haircuts and styling are where barbershops make most of their money. You can offer all sorts of services, from basic trims to fancy styles, for both men and women. In fact, it’s a primary way to earn cash. But, how much you make from these services depends on what you charge and how many customers you can serve in a day, you and your team together.

Shaving and beard trims

Many barbershops also offer shaving and beard-trimming services. These are especially popular with men. Beard trims involve shaping facial hair, and shaving can be done with a straight razor or an electric one. These services bring in extra money for the barbershop, especially because facial hair styles keep changing. They require skill and attention to detail, making them a good way for your barbershop to make more money.

Hair products and merchandise

Selling hair products and merchandise is another way you can boost your income. Start by offering a range of haircare products like shampoos, conditioners, and styling gels for clients to purchase. Any products for beard growth and maintenance can also be a part of your offerings.

Additionally, you can cross-sell merchandise like branded clothing or grooming accessories. These sales add extra revenue to the shop’s earnings and provide clients with convenient options to maintain their haircare routines at home or buy branded items as souvenirs.

Collaborations and partnerships

Collaborating with other local businesses or professionals can be an excellent way to boost your barbershop’s visibility and revenue. Strategic partnerships can help you tap into new customer bases and increase foot traffic, making it easier to distinguish your business from competitors. 

Additionally, teaming up with beauty influencers, hairstylists, or other professionals in the grooming industry can help elevate your barbershop’s credibility and attract new clients.

Membership or subscription programs

Barbershops can also make more money by offering membership or subscription programs. These programs typically involve clients paying a monthly or yearly fee in exchange for benefits like discounted services, priority booking, or access to exclusive deals. It’s a way to secure a steady income stream and build a solid customer base. Clients get perks, and you get a reliable source of revenue, making it a win-win situation.

Special events and promotions

You can increase your earnings by hosting special events and running promotions. These events might include themed haircut days, holiday specials, or discounts for specific occasions. Promotions can attract new customers and encourage existing ones to return, boosting overall revenue. By creating a buzz around your shop and offering attractive deals, you can tap into additional income opportunities during specific times of the year.

Workshops and skill classes

Offering workshops or skill classes at your barbershop can be a highly profitable venture. This can be a beard grooming class, hairstyling workshop, or even basic grooming tips. Not only will this unlock new revenue streams, but it will also showcase your expertise.

Clients who attend these workshops are likely to develop a stronger connection to your brand, increasing customer loyalty and repeat business. Moreover, hosting workshops can position your barbershop as an authority in the industry, making it more attractive to new customers who value education and quality.

How Can You Make Your Barbershop Profitable?

When looking to turn your barbershop into a profitable business, you need to focus on more than just offering great haircuts. It’s about running a well-organized operation and targeting the right market. On top of that, diversifying your services is a must for meeting the evolving needs of your clients. 

Identify your market

To make your barbershop profitable, the first step is to identify your target market. Understand who your potential customers are, including their age, gender, preferences, and grooming needs. Are you catering primarily to men, women, or both? Are there specific demographics in your area that you can tailor your services to?

Some successful barbers offer services tailored to a specific target market. Some offer beard-dying services to draw in older customers. Barbershops targeting businessmen try to stay up-to-date on the latest trends and styles. Other barbers tailor their approach to attract clients from a certain income bracket.

Identifying your market helps you tailor your offerings and marketing efforts effectively.

Diversify your services

Offering a wide range of services will attract a wide range of customers. Traditionally, barbershops provide essential services like cutting hair and beard trims. Now there is a wide range of additional services barber shops can offer. Eyebrow cutting, facial treatments, and shaved hair designs are just the tip of the iceberg. These special services can go a long way toward making barbershops profitable.

Consider the location

The location of your barbershop plays a crucial role in its profitability. A successful barbershop is strategically placed to serve its target market. For example, if you’re catering to families, setting up near schools or residential areas could draw in more customers. 

On the other hand, a barbershop aimed at professionals or businessmen might benefit from being located in a busy downtown or business district. Choosing the right location ensures that your shop is easily accessible to the clients you want to attract, driving foot traffic and boosting your bottom line.

Offering chair rentals

Besides the basic income you make off your shop and services, you can make extra income by offering booth rentals to other barbers. This way, they have a shop to work in, and you get a little extra income to increase your revenue.

The physical condition of the shop and equipment

The physical appearance, design, and condition of a shop are important for making a positive impression on customers. A clean, well-maintained space signals professionalism, while a run-down shop can turn potential clients away.

From the decor to the quality of your equipment, everything contributes to the overall experience. Be sure to keep your shop in top shape to evoke the desired impression in your clients. 

Selling products

While a barbershop is primarily a service-based business, offering retail products can be a lucrative additional revenue stream. Many clients appreciate the convenience of purchasing high-quality grooming products like shampoos, conditioners, hair gels, and beard oils directly from your shop. So, upselling and cross-selling can help your business immensely when it comes to profitability.

Special deals and packages

Offering limited–time deals and promotions is a great way to keep the interest of your clients and keep them coming back for more. For example, offering a bundle deal on multiple services or discounts on appointments booked during specific hours act as incentives. These kinds of deals prompt customers to visit more often to take advantage of limited-time offers.

Referral programs

You can also implement an incentive program to reward customers for referrals. These incentives might include free services or discounts for the new customer and the referrer. Word of mouth is a great source of free advertising and goes a long way toward expanding your client base.

How Technology Helps Barbershops Become More Profitable?

The right technology can be key to making barber shops profitable. It streamlines operations, improves customer experiences, and expands marketing reach.

One significant way technology contributes to profitability is through online booking and scheduling systems. These platforms enable customers to easily book appointments, reducing the chances of no-shows and optimizing barber schedules for maximum efficiency. Additionally, appointment reminders sent through email or text messages help minimize missed appointments, ensuring that barbershops make the most of their available time slots.

And one such software solution that can help take your barbershop business to the next level is Trafft.

Are Barbershops a Good Investment?

Investing in a barbershop can be a smart move, but it’s not without its challenges. As you can see, the barbering industry has shown consistent growth in recent years, with a rise in demand for both traditional services and more specialized grooming options. However, whether a barbershop is a good investment depends on several key factors.

Barbershops can offer strong returns if they are located in a high-demand area, operate efficiently, and have a loyal customer base. With the right business model, barbershops can provide a steady stream of income through haircuts, beard grooming, and other related services. Additionally, offering premium services or retail products can further increase profitability.

Lastly, you need to be aware that success requires far more than opening a shop. As a barbershop owner, you also need to focus on operational management, marketing, and cost control. While the industry is growing, the barbershop market can also be competitive. Proper planning, a good understanding of your competitors, and solid customer service are essential for making this endeavor profitable. 

How Profitable Can a Barbershop Be?

So, is owning a barbershop profitable? It certainly has the potential to be. However, the overall success of each barbershop depends on a variety of factors.

The haircare industry is growing steadily, which is a good sign. But remember, how much profit you make depends on how hard you work and how well you plan things.

To boost your chances of making good money with a barbershop, just keep things organized, be efficient, and focus on giving your customers a great experience. With continuous effort and attention to detail, you can turn your barbershop into a money-making gig.

Remember- success is possible when you put in the work. 

FAQ on Barbershop Profitability

Is owning a barbershop profitable?

Definitely! Running a barbershop can be a profitable venture, no doubt. It’s all about the hustle. You’ve got to offer top-notch services, manage costs effectively, and market your business well.

The revenue comes not just from haircuts and shaves but also from selling grooming products. With the right strategies, you can make your barbershop the go-to place in town.

How can I increase the profits of my barbershop?

Start by nailing the basics: exceptional service, fair pricing, and a great atmosphere. Think beyond just haircuts. Offer a range of grooming services and sell quality products.

Streamline operations using technology like scheduling software and booking apps. And remember to market your business well. Engage with your community, both online and offline. Be the barber everyone loves to visit and talk about!

What are the potential revenue streams for a barbershop?

It’s not just about the cuts and shaves. There’s money to be made in selling grooming products – think pomades, shampoos, and aftershave. How about offering premium services or packages? Beard grooming, head massage, or even grooming classes. And don’t forget gift certificates – they can attract new clients and boost sales.

Be creative, and you’ll find there’s more to a barbershop than meets the eye.

How can I reduce costs and increase profitability?

Cost-cutting, the smart way, that’s the ticket. Keep an eye on your inventory, so you don’t overstock or run out of products. Streamline operations with software. Go for energy-efficient equipment. Negotiate with suppliers for better prices. But remember, don’t compromise on quality.

Happy customers are loyal customers. And loyal customers are the key to increased profitability.

How do I set prices to ensure profitability?

Pricing is an art. You want to cover costs and make a profit but also offer value to your clients. Consider your expenses, the quality of your services, and what competitors charge.

You might offer different pricing levels based on the experience of the barber or the complexity of the service. And remember, people are willing to pay for an experience, not just a haircut. Make visiting your barbershop a treat, and they’ll see the value.

How can software improve my barbershop’s profitability?

Software can be your secret weapon. It streamlines scheduling, reduces no-shows, handles payments, and manages inventory. On top of everything, it even helps with marketing. 

All this means you spend less time on admin and more on your clients. In return, happy clients spend more and come back more often. And that is the path to profitability and business growth.

Can expanding my barbershop increase profitability?

Growth can be good, but it needs to be planned. Expanding your barbershop – whether it’s adding chairs, offering new services, or even opening a new location – can boost profits. But remember to factor in the extra costs. Do your research, plan carefully, and make sure the demand is there. Then go for it!

How much can I expect to earn from a barbershop?

That’s the million-dollar question, right? Well, it varies. It depends on your location, the services you offer, your prices, and how well you run the business.

A well-run barbershop can make a healthy profit, especially if you keep costs in check and offer services and products that keep clients coming back. It’s a journey, but it can be a profitable one.

How do I measure my barbershop’s profitability?

Profitability isn’t just about cash in the register. You want to track metrics like profit margin, customer retention, and average spend per customer.

Compare your income to your expenses. Are you bringing in more than you’re spending? Are customers coming back? And are they spending more over time? These numbers tell the story of your business. Keep an eye on them, and they’ll guide you toward profitability.

How can I make my barbershop more attractive to customers?

Attracting customers is about more than just a great haircut. It’s about the experience. Create a welcoming atmosphere. Offer exceptional customer service. Use social media to engage with your community. Run promotions. Offer a loyalty program. Make booking easy with a good app.

Show your clients that you value them, and they’ll become your biggest advocates. Happy customers mean a thriving, profitable business.