How to Start a Barbershop: Costs, Licenses and Pricing
How to start a barbershop: licenses, startup costs, booth rent vs commission, pricing a haircut menu, a worked monthly budget and how to bill and track income.
Starting a barbershop comes down to four things done in order: getting licensed (you, your staff and the shop itself), finding a space that can be built out without blowing the budget, choosing between booth rental and commission, and setting prices that cover rent with room to spare. Get those right and the rest is filling chairs. This guide covers each step with real cost ranges, a sample service menu, and a worked monthly budget so you can see whether the numbers work before you sign a lease.
Barbering is a stable trade. The US Bureau of Labor Statistics projects 5% employment growth for barbers, hairstylists and cosmetologists from 2024 to 2034, faster than the average for all occupations, and reports a median hourly wage of $18.73 for barbers in May 2024 (see the BLS Occupational Outlook Handbook). Shop owners earn differently from employees: their income is chair rent or commission margin minus overhead, which is why planning matters.
Step by step: how to start a barbershop
- Check licensing. Confirm your state board's rules for individual barber licenses, shop (establishment) licenses, manager requirements and inspections.
- Write a simple plan. Decide on chairs, model (rent or commission), target customer and price point. Our guide on how to start a small business covers the plan basics.
- Form the business. Most owners use an LLC for liability separation. See how to start an LLC, then get an EIN.
- Find and lease a space. Prioritize visibility, parking and existing plumbing.
- Build out and equip. Chairs, stations, mirrors, sinks, sterilization, lighting and point-of-sale.
- Get insured. General liability, professional liability and property coverage; landlords usually require proof.
- Pass inspection and display your shop license.
- Recruit barbers and sign written booth rental or employment agreements.
- Launch marketing. Google Business Profile, booking link and opening offers.
Barbershop licenses and permits
Every state licenses barbers. Training requirements vary widely: many states require roughly 1,000 to 1,500 hours of barber school, and some allow an apprenticeship route instead. Most states also license the shop itself, and some require a licensed barber to manage it. Because the rules differ so much, read your own state board's requirements rather than relying on a summary.
| License or permit | Who needs it | Typical notes |
|---|---|---|
| Individual barber license | Every person cutting hair | School hours or apprenticeship, written and practical exams, renewal and continuing education in some states |
| Barbershop / establishment license | The shop location | Inspection of sanitation, sinks and layout before opening |
| Business license | The business entity | City or county; some cities also require a separate occupational or zoning permit |
| Seller's permit | Shops selling retail products | Needed to collect sales tax on pomade, oils and tools |
| Certificate of occupancy / signage permit | The premises | Often handled during build-out with your landlord |
| EIN | LLCs and any shop with employees | Free from the IRS |
How much does it cost to start a barbershop?
Costs swing on one question: is the space already plumbed for hair? A second-generation salon with sinks and drains in place might need only cosmetic work, while a raw retail unit can need tens of thousands in plumbing, electrical and permits. The ranges below are illustrative for a three- to four-chair shop in a mid-sized US market. For a fuller template, use our startup costs guide.
| Item | Low (existing salon space) | High (raw space) |
|---|---|---|
| Lease deposit and first month | $5,000 | $15,000 |
| Build-out, plumbing, electrical | $5,000 | $60,000 |
| Barber chairs (4) | $2,400 | $8,000 |
| Stations, mirrors, shampoo bowls | $3,000 | $12,000 |
| Tools, sterilization, towels, supplies | $1,500 | $4,000 |
| Signage and decor | $1,500 | $10,000 |
| Licenses, permits, legal and insurance | $1,500 | $5,000 |
| POS, booking software, computer | $500 | $3,000 |
| Opening inventory (retail) | $1,000 | $4,000 |
| Working capital (3 months) | $15,000 | $30,000 |
| Total | $36,400 | $151,000 |
Do not skip the working capital line. New shops rarely fill chairs in month one, and rent is due regardless. Building a reserve is covered in our guide to a business emergency fund.
Choosing a location for your barbershop
Location decides how fast chairs fill. Walk-in traffic still matters for barbershops, so look for visible storefronts near gyms, grocery stores, offices, campuses or transit, with easy parking. Before you commit, check:
- Zoning and use. Confirm the space can be used for personal services and that your state board will approve the layout.
- Plumbing and electrical capacity. Shampoo bowls need hot water and drains; clippers, dryers and lighting need enough circuits.
- Lease terms. Ask for a rent-free build-out period, a tenant improvement allowance and an exclusive-use clause that stops the landlord leasing to a competing barbershop in the same center.
- Competition. A nearby budget chain is not always a problem if you position as a premium or specialty shop, but three independent shops on one block is a crowded market.
- Total occupancy cost. Add base rent, common area charges, property tax pass-throughs and utilities. As a rough guide, keep total occupancy cost well below a third of expected revenue.
Get the lease reviewed before signing. A personal guarantee on a five-year lease is a large commitment for a new business, so negotiate a shorter guarantee period where you can.
Booth rental vs commission: choosing your model
This choice shapes your income, your paperwork and your legal obligations more than anything else.
| Factor | Booth rental | Commission (employees) |
|---|---|---|
| Owner income | Fixed weekly or monthly rent per chair | Share of each service (often 40% to 50% to the shop) |
| Who sets prices and hours | Each barber | The shop |
| Payroll and payroll taxes | None; renters are independent businesses | Owner runs payroll, withholds and pays employer taxes |
| Slow-week risk | Renter carries it | Owner carries it |
| Brand consistency | Harder to control | Easier to control |
| Paperwork | Booth rental agreement and rent invoices | Employment records, W-2s, wage-and-hour compliance |
One caution: if you control a renter's schedule, prices and methods, they may legally be an employee no matter what the agreement says. If you choose booth rental, let renters run their own books, set their own prices and bill their own clients. Sending each renter a monthly invoice for chair rent keeps the relationship clearly business-to-business. Our salon invoice template works for chair rent as well as services.
How to price haircuts and services
Start with your market, then check the math. Look at five to ten nearby shops and note their prices for a standard cut, fade, beard trim and kids cut. Then work out what you need per chair hour. If a commission barber does two cuts an hour, the shop keeps half, and the chair costs you $25 an hour in overhead, a $30 cut leaves only $5 an hour of margin per chair. A $40 cut leaves $15.
A sample menu for a mid-market shop:
| Service | Time | Price (illustrative) |
|---|---|---|
| Classic haircut | 30 min | $35 |
| Skin fade | 45 min | $45 |
| Beard trim and line-up | 20 min | $20 |
| Hot towel shave | 40 min | $40 |
| Cut and beard combo | 50 min | $55 |
| Kids cut (12 and under) | 25 min | $25 |
Price by time, not by effort feel. Any service that takes longer than its price per minute suggests should cost more. Review prices each year; our guide on how to raise prices covers how to announce increases without losing regulars.
Worked example: a four-chair shop's monthly numbers
Marcus opens a four-chair shop. He cuts in one chair himself and rents the other three for $250 a week each. All figures are illustrative.
| Line | Monthly amount |
|---|---|
| Booth rent: 3 chairs x $250 x 52 weeks / 12 | $3,250 |
| Marcus's own cuts: 7 per day x 22 days x $38 average | $5,852 |
| Retail product sales (net of cost) | $400 |
| Total income | $9,502 |
| Rent and common area charges | ($3,600) |
| Utilities, internet, laundry | ($650) |
| Insurance | ($180) |
| Software, card fees, supplies | ($520) |
| Loan payment on build-out | ($900) |
| Profit before tax | $3,652 |
The booth rent covers most of the lease, which is the main advantage of the rental model: Marcus's own chair becomes mostly profit. If one renter leaves, income drops by about $1,083 a month, so he keeps a waiting list of barbers and a cash reserve. He sets aside roughly 25% to 30% of profit for federal and state taxes and pays quarterly estimated taxes.
Billing, receipts and record keeping
Most walk-in clients pay by card at the chair, so your point-of-sale system produces the receipt. You still need invoices for:
- Booth rent. Invoice each renter on the same day each week or month, with the period covered and the due date.
- Events and house calls. Weddings, film sets and corporate grooming days are booked in advance; take a deposit and invoice the balance. See our guide to deposit invoices.
- Retail sold to other businesses. Wholesale product orders need proper invoices showing sales tax or a resale certificate.
Keep tips separate in your records. Under the One Big Beautiful Bill Act, qualifying tips in listed occupations may be eligible for a new federal deduction through 2028; our explainer on no tax on tips for the self-employed explains how it applies to barbers.
Common mistakes new shop owners make
- Signing a lease before checking zoning and plumbing. A space that cannot take shampoo bowls is a very expensive surprise.
- Underpricing to compete. The cheapest shop on the block attracts price shoppers, not regulars.
- No written booth rental agreement. Disputes over hours, keys, product sales and notice periods are common.
- Treating renters like employees. Setting their schedules and prices can create misclassification risk.
- No reserve. One slow quarter or a renter leaving can sink a thin budget.
- Ignoring online reviews. Most new clients choose a barber on Google Maps. Our guide on how to get Google reviews shows how to build them by the rules.
What to do if the shop is slow in year one
Track cuts per chair per day weekly. If it stays under target for two months, act: add online booking with deposits for prime slots, run a referral offer for existing clients, partner with nearby gyms or offices, and offer group grooming bookings for weddings and events. If renters struggle to fill their chairs, a temporary rent reduction tied to a shared marketing push can be cheaper than an empty chair. If cash gets tight, a small line of credit can bridge seasonal dips, but fix the demand problem first.
Whether you are billing renters for chair rent or invoicing a wedding party for an on-site grooming package, you can create professional invoices in minutes with our free invoice generator - no sign-up required, and you can download each invoice as a PDF.
Frequently asked questions
Do I need a barber license to own a barbershop?
Not always. Many states let a non-barber own a shop as long as the shop holds its own establishment license and every person cutting hair holds a valid individual barber or cosmetology license. Some states also require a licensed manager on site. Owning without a license is legal in many places, but it means you depend entirely on your staff, so check your state board rules on ownership, managers and inspections before signing a lease.
How much does it cost to open a barbershop?
A small shop with three or four chairs often needs somewhere between about $40,000 and $150,000, depending on rent, build-out and whether the space was already a salon. Plumbing for shampoo bowls, electrical work and the security deposit on a commercial lease are usually the biggest items. Taking over an existing salon space with plumbing in place can cut the build-out cost dramatically.
Is booth rental or commission better for a barbershop owner?
Booth rental gives predictable income and less management, because renters run their own books and set their own prices. Commission gives you more control over pricing, scheduling and customer experience, plus a share of busy days, but you take on payroll, payroll taxes and the risk of slow weeks. Many owners start with booth rent to cover fixed costs and move to commission once they have a steady client base.
How much do barbers make?
The US Bureau of Labor Statistics reported a median hourly wage of $18.73 for barbers in May 2024, not counting all tips in every case. Owners and busy barbers with full books can earn far more, because pay depends on price per cut, cuts per day and how many chairs the shop fills. Income for owners also depends on rent collected or commission margin after overhead.
Do barbershops charge sales tax on haircuts?
In most states haircuts are not subject to sales tax, but a few states tax some personal services, and retail products such as pomade, beard oil and shampoo are usually taxable. You may need a seller's permit just for product sales. Check your state's rules, and keep services and retail on separate lines of your receipts so the tax is calculated only on what is taxable.
How should booth renters pay the shop owner?
Put the arrangement in a written booth rental agreement and send each renter a monthly or weekly invoice for chair rent, due on a fixed day. State what the rent covers, such as utilities, towels and booking software, and what late fees apply. Invoicing creates a clean record for both sides and supports the renter's status as an independent business rather than an employee.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
Try the invoice generator