Barber Shop Business Plan Template
If you want to start a barber shop or expand your current barber shop, you need a business plan.
The following barber shop business plan template gives you the key elements to include in a winning barber shop business plan.
Barber Shop Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is dedicated to providing affordably priced, unparalleled hair styling and grooming services that are tailored to every client and their lifestyle in a distinctively unique atmosphere. As customers are our number one priority, we value every client and their individual needs.
Products and Services
[Company Name] will provide relationship-oriented haircutting services for men of all ages. [Company Name] will focus on building long-term rapport with their clients and strive to deliver personalized results for each individual.
The company will offer a wide variety of treatments including haircut, shaving, coloring, and styling for special occasions.
In addition to providing these services, [Company name] will also be a retailer of exclusive hair care products. Customers will find products at [Company name] that they won’t find in big box retail stores.
Customer Focus
[Company Name] will serve the residents of [company location] and the immediate surrounding areas as well as those who work in [company location].
The area we serve is populated mostly by the middle class; as a result, they have the means to pay for higher quality service, and are looking for hair and beauty services somewhere between the deep discounters and the top-end luxury brands.
Management Team
[Company Name] is led by [Founder’s Name] who has been in the barber shop business for 20 years. He has worked extensively at major barber shops for the past 20 years. He began his career in [19xx] when he received a certification from [Barber Shop School] and began work at [major chain], where he worked for X years.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The Company will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
- The management team has a track record of success in the barber shop business.
- The upscale barber shop business is a proven business and has succeeded in communities throughout the United States.
- Local competitors leave a large gap in the haircut market—there are low-cost providers ($10-$20), and an ultra-luxury salon ($120+), but nothing in between.
Financial Highlights
[Company Name] is seeking total funding of $260,000 of debt capital to launch its barber shop. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $140,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive
Topline projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,980,125 | $2,832,031 | $3,409,160 | $3,783,447 | $4,100,713 |
| Total Expenses | $1,375,530 | $1,561,763 | $1,866,977 | $2,027,436 | $2,107,349 |
| EBITDA | $604,595 | $1,270,268 | $152,183 | $1,756,011 | $1,993,364 |
| Depreciation | $372,760 | $372,760 | $372,760 | $372,760 | $372,760 |
| EBIT | $231,835 | $897,508 | $1,169,423 | $1,383,251 | $1,620,604 |
| Interest | $164,782 | $144,184 | $123,586 | $102,988 | $82,391 |
| PreTax Income | $67,054 | $753,324 | $1,045,837 | $1,280,263 | $1,538,213 |
| Income Tax Expense | $23,469 | $263,663 | $366,043 | $448,092 | $538,375 |
| Net Income | $43,585 | $489,661 | $679,794 | $832,171 | $999,839 |
II. Company Overview
Who is [Company Name]?
[Company Name] is dedicated to providing affordably priced, unparalleled hair styling and grooming services that are tailored to every client and their lifestyle in a distinctively unique atmosphere. As customers are our number one priority, we value every client and their individual needs.
[Company Name] offers both a style and community experience. We provide our customers with an opportunity to relax and enjoy their surroundings while experiencing a customized level of service. Our barbers and stylists pair modern day cutting edge grooming techniques with timeless traditional services.
[Company Name]’s History
In [Month] of [Year], [Founders’ Name] opened their first Barber Shop on the corner of [Address]. With an idea based on bringing back the old fashioned barber shop experience and combining it with modern techniques and technology, [Company Name] was in business.
Today, with [Number] of locations in [Area Name], over [Number] Barbers and cutting the hair of over [Number] customers a month, the company has proven that men enjoy the unique experience of a traditional-modern barbershop.
[Company Name]’s Products/Services
[Company Name] provides a variety of services:
- Cut and Wash
- Scalp Treatment
- Make-over
- Shave
- Beard Trim
- Moustache Trim
- Scalp Massage
- Face Massage
- Shoeshine Service
Along with the excellent service, [Company Name] offers the following products:
- Pomade
- Clay Wax
- Shaving cream
- Hair comb and brush
- Gift Cards
III. Industry Analysis
Last year, according to IBISworld.com, Barber Shops brought in revenues of $4.8 billion and employed 150,000 people in the United States.
The Barber Shop industry is traditionally a very stable industry, rarely affected significantly by macroeconomic events. Over the past five years, industry profit has remained relatively stable and over the next five years, the Barber Shops industry is expected to continue to grow, with revenue forecast to increase at an annualized rate of 1.2%.
The Barber Shops industry exhibits a low level of market share concentration. No individual business is expected to hold a market share greater than 5.0%. Non Employing businesses in the industry represent an estimated 95.7% of establishments and generate an estimated 95.7% of industry revenue.
The key industry drivers include:
- Number of adults aged 20 to 64-The industry’s core market is adults between the age of 20 and 64 years old. Changes in this demographic affect the industry through the size of its customer base.
- Number of households-Given the essential nature of the industry, revenue growth is strongly tied to its customer base. As the number of households increases, the customer base for industry services also increases.
- Per capita disposable income-Per capita disposable income measures an individual’s ability to purchase goods or services. As per capita disposable income increases, industry customers may be inclined to spend more money on specialized services.
- Prime rate-The prime rate refers to the interest rate charged by banks to their most creditworthy customers. As the interest rate increases, businesses may slow expansion plans, while entrepreneurs may wait to open a new barber shop.
- Business sentiment index- The business sentiment index measures the overall health of the business environment in the United States. High or rising sentiment may compel barbershops to expand or new operators to enter the industry.
IV. Customer Analysis
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].
The area we serve is populated mostly by the middle class; as a result, they have the means to pay for higher quality service, and are looking for hair and beauty services somewhere between the deep discounters and the top-end luxury brands.
The Company will primarily target the following three customer segments:
- Families/Parents: The town has a large population of families. Families seek hair cutting services for the men in their family (fathers and sons) on a regular basis. Winning the loyalty of a family often includes winning the business for all their children and husband as well. Parents are well connected to each other and as such are a prime source of referral business. [Company name] expects to regularly acquire new customers from referrals.
- Professionals: [Company name] is located along a well-traveled commute route. By offering convenient location and exceptional service to the customer, [Company name] will draw in working men who need to look professional for work.
- Students: There are multiple high schools and middle schools located in the surrounding area. These students still live on their parents’ income and can therefore afford to pay for higher-quality services than discounters provide. In particular, [Company name] can expect to generate significant seasonal business based on the beauty needs of the local youth culture.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 2 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
First Choice Hair
Starting out as a single salon in London, Ontario, First Choice Haircutters has rapidly grown to over 400 locations across North America. First Choice Haircutters is owned by Regis Corporation, the world’s largest and most profitable hair care company. Regis operates more than 12,000 salons around the world and boasts system-wide sales of over 2.4 billion dollars. First Choice Haircutters has service hours from 9 am to 9 pm, Monday through Friday; 9 am to 5 pm on Saturdays; and 11 am to 4 pm on Sundays.
Sterling Silver Barber
Founded in 2012, Sterling Silver Barber Company is a mobile salon and barbershop serving [location] professional men and women from a 3-station salon inside a fully customized Airstream.
Hair Matrix
Hair MATRIX Design Team & Day Spa offers a wide variety of services ranging from Colors & Cuts to Facials & Manicures. Hair Matrix has hours of operation from 9 am to 5 pm on Mondays; 9 am to 7 pm Tuesday through Thursday; 9 am to 6 pm on Fridays, and 8:30 am to 3 pm on Saturdays.
Competitive Pricing
Here is the pricing of our key competitors:
| Type of service | Cut | Color | Highlights |
|---|---|---|---|
| First Choice | $35 | $40 | $45 |
| Sterling | 55 | 50 | 65 |
| Hair Matrix | 85 | 90 | 100 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, giving us access to commuters going and leaving the train station, local office workers, and passersby going to local shops. We also offer adequate parking making it easy for customers to patronize us.
- Great service at an affordable price: The complete array of hair services offered by [Company Name] nearly equals the most premium positioned competitor, LUX CUTS. However, [Company Name] will offer these services at a much more affordable price.
- Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient location
- Familiar, regular technician
- Significant personal attention
- Moderate price point
- Comfortable, customer-focused environment
Promotions Strategy
[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [The Company’s] promotions strategy to reach these individuals includes:
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.
Major Publications
We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of xyz and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost effectiveness. These ads will include discount coupons so that response to the ads can be tracked.
Community Events/Organizations
[Company name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events.
Commute Advertising
We will drive attention toward [Company name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals with disposable income of our opening.
Customer Loyalty Programs
[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again. When not actively providing services to customers in the store, our professionals and other employees will make periodic, regular phone calls to customers. These phone calls will (a) ensure that customers are satisfied with their hair cut, and (b) remind customers after a certain period of time has passed that they might want a new hair cut. Long-term customers will have the opportunity to participate in the loyalty program, and referrals will be rewarded as well.
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to visit the salon.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products and more.
Pre-Opening Events
Before opening the store, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]’s pricing will be moderate so customers feel they receive great value when patronizing the barber shop. The anticipated price point for a standard haircut is $25, in exchange for which a customer can expect to receive personalized attention during and after their visit. The customer can expect to receive quality hair care from a familiar technician, for a more affordable price than what they pay at an ultra-premium barber shop.
VII. Operations Plan
Functional Roles
[Company name] will carry out its day-to-day operations primarily on an appointment basis. Walk-in clients will be served by the earliest available technicians, but priority will be given to clients who called ahead. In the meantime, waiting customers can divert themselves in the lounge, which features television and current popular magazines. The Company intends to employ [X] technicians and [A] assistants during peak hours and [Y] technician and [B] assistants during off-peak hours. [Company name] anticipates having [Z] customers on a weekly basis.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates using the services of X employees, divided into the following roles.
Service Functions
- Haircut
- Shave
- Massages
- Product sales
Administrative Functions
- General & administrative functions including marketing, bookkeeping, etc.
- Sourcing and storing products
- Hiring and training staff
- Receptionist
- Customer service/cash register functions
Miscellaneous
- Maintenance personnel
Milestones
[Company name]’s long term goal is to become the dominant provider of hair care and related services and products in the [city] area. We seek to the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] storefront |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name]’s store |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the barber shop business for 20 years.
While [Founder] has never run a barber shop himself, he has extensive at major barber shops for the past 20 years. He began his career in [19xx] when he received a certification from [Barber Shop School] and began work at [major chain], where he worked for X years.
[Founder] graduated from the University of ABC where he majored in Communications.
[Other person’s name] will serve as the customer service manager. He/she has extensive experience in the hospitality industry.
Hiring Plan
[Founder] will serve as the store manager. In order to launch our barber shop, we need to hire the following personnel:
- Barbers [Number]
As dictated by demand and operational maturity, [Founder] will consider hiring the following personnel:
- Barbers
- Receptionist [Number]
- Store Manager
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the services rendered and secondarily from the sale of hair care products.
As with most services, labor expenses are the key cost drivers for barber shops. Barbers are paid through a combination of salaries and commission, rewarding them for performance and making barbers an active part in business retention and development.
The major cost drivers for the company’s operation will consist of:
- Commission paid to barbers on a per service basis
- Salaries
- Lease
Moreover, ongoing marketing expenditures and cost of good sold expenses are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking total funding of $260,000 of debt capital to launch its barber shop. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $140,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model.
| Number of customers per day | Per location |
|---|---|
| Year 1 | 26 |
| Year 2 | 29 |
| Year 3 | 32 |
| Year 4 | 36 |
| Year 5 | 41 |
| Haircut | $35 |
| Hair Style | $60 |
| Color | $40 |
| Product Sales | $20 |
| Annual Rent | $90,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
