Usually, a barber business works through either commission or rent. Beginner barber typically starts their career on a commission and once they have gathered experience and built up a base of steady clients then they rent a chair or booth. The commission percentage of a barber varies from shop to shop and it might be a 70-30 split to a 40-60 split. On the other hand, the rent of a chair or both also varies and can range from $100 – $250 weekly.
- The barber business works two ways: chair rental and commission
- Renting a chair is more of an independent barber business model because here you manage and operate your own business
- In the commission-based business model, the commission agreement range from a 70-30 split to a 40-60 split
- The commission-based barber business model will offer you more stable earnings than renting a chair
Barber Business: Chair Rental VS Commission
At the beginning of their career, many barbers find themselves in a dilemma of how they should start their profession. We know the barber business works two ways: chair rental and commission. So which type is best for a barber? Let’s check them out!
Renting A Chair
Chair renting also means renting a booth. If you rent a chair or booth then you have to pay a weekly or monthly fee to the owner of the barbershop. When you rent a chair or booth you can use it to see the clients and you will keep the rest of the money after paying the rent. Renting a chair is more of an independent business model because here you manage and operate your own barber business. This type of business model is best for you if you have years of experience and a huge client list. If you are new in this profession then chair rental won’t be the best option for you.
Pros Of Renting A Booth/Chair
1. More freedom
2. You are the boss of your business
3. You can make your own working schedule/hours
4. You can maintain your own client list
5. You will be able to maintain your own pricing
6. Offer your own promotions and advertising
7. Choose your own products and what you retail
8. You can potentially earn more than working on commission
Cons Of Renting A Booth/Chair
1. The risk is more compared to the commission business model
2. It can be stressful to maintain the business by yourself
3. You won’t have much new client experience
4. Managing your business is more complicated – taxes, bookkeeping, business license, advertising, insurance (including health insurance), etc.
5. You might have to put in long hours during busy times
6. You have to invest more money because you have to buy all your supplies
Working On Commission
If you are just starting your career as a barber then working on commission will be the best option for you. In this business model, you will get paid a percentage of the total amount that you earn working in a barbershop. Usually, the commission agreement range from a 70-30 split to a 40-60 split. For example, if you earn $100 in one day then the 70-30 split means you would keep $70 of your earnings and give $30 to the barbershop owner. Moreover, when you are working on a commission basis, you will be considered as an employee of the barbershop rather than a self-employed individual.
Pros Of Working On A Commission
1. You will have more stable earnings than renting a chair. For example, if you have a slow day you still earn something, compared to if you rented a booth or chair
2. It is less stressful and easier to transition to when you are fresh out of school
3. You will have the chance to meet lots of potential clients/new clients
4. This is a more simplified business model where you can work as a representative of the barbershop
5. You will less money to start your career because you don’t have to buy all of your own supplies
6. You typically don’t need to worry about booking appointments because others will do that for you
7. The barbershop owner will take care of all the advertising and marketing
8. Under this business model, you will have the chance to get health insurance, paid vacation, and other benefits through a barbershop
9. You don’t have to do your own business taxes and other paperwork
Cons Of Working On A Commission
1. A significant portion of your earnings will go to the owner or the manager
2. You will have less freedom in commission based work compared to renting a chair
3. You are not allowed to take your clients with you if you go to another shop or start your own barbershop.
Average Salary/Income Of Barbers
According to the U.S. Bureau of Labor Statistics, in 2019, the median wages of barbers were $14.50/hour. It means half of the barber earns more than $14.50/hour and a half earned less. Moreover, the statistics showed the highest-paid 10 percent earned more than $27.23/hour while the lowest 10 percent earned less than $9.76/hour. These statistics include all the barbers in the USA regardless of where they work, how much experience they have, what is the competition, etc. The top 10 highest paying states for professional barbers are:
1. New York: $47,000
2. Massachusetts: $46,800
3. Washington: $46,500
4. California: $42,500
5. New Jersey: $41,200
6. Oregon: $40,600
7. Colorado: $40,500
8. Texas: $38,200
9. Illinois: $37,800
10. Florida: $36,400
How Much Do Barbershop Owners Make?
The earnings of barbershop owners will differ depending on which parts of the country the shop is in. According to ZipRecruiter, on average a barbershop owner makes $54,000 per year. However, the annual earnings of a barbershop owner are $139,000 in Los Angeles, $142,000 in San Francisco, $145,000 in New York City, $125,000 in Las Vegas, $105,000 in Atlanta, $112,000 in Chicago, and $99,000 in Miami. So it is quite
Costs Of Opening A Barbershop
According to many experts, you might need a minimum capital investment of $150,000 to $200,000 to open a barbershop. The cost includes the following items:
1. Attending barber school – $6,500 to $10,000
2. Office space – the cost varies depending on the location
3. Construction costs – depends on the office space, current electric and plumbing cost, etc.
4. Permits and licenses fees
5. Insurance policy for the barbershop
6. Marketing materials – $3,000
7. Shop equipment – cash register, business management software, signage, etc. – $14,000
8. Shop inventory – chairs, child seats, clippers, scissors, trimmers, razors, brushes, mirrors, shaving powder, hair cream, aftershave, cleaning supplies, etc. – $20,000
9. Furniture and miscellaneous necessities – $5,000
10. Website – $1,500 to $3,500
FAQs About Barber Business
1. How Does A Barbershop Make Money?
Usually, a barbershop makes money by charging a fee for services they provide as well as by selling various hair and shaving products.
2. What Are The Expenses Of A Barbershop?
There are many expenses of a barbershop. They are:
1. Office rent
2. Phone, Internet, and utility bills
3. Marketing and advertising cost
4. Insurance fee
5. Retail supplies bills
6. Cleaning and maintenance cost
7. Payroll and taxes
3. What Are The Barbershop Business Models?
There are three barbershop business models available. They are:
Booth/Chair Rental: In this business model you have to pay a monthly fee to the barbershop owner for a booth or chair. Here, you are an independent contractor who rents a chair in a barbershop.
Commission: It’s a partnership model where the barber and the shop owner share the income. Here a percentage of each cut is paid as a commission to the shop owner.
Full-Time Employment: In this business model, a barbershop owner employs a barber, pays the salary, and offers other possible benefits.
4. Why Are Barbers Cash Only?
There are many reasons barbers are cash only. Among them, one of the important reasons might be the taxes. Because, when you deal with cash it is easy to avoid taxes.
5. Can A Barber Make 6 Figures?
Well, it is possible to make 6 figures as a barber and there are many barbers who earn 6 figures. You must have to be willing to work hard, dedicate yourself to what you love doing, and try to follow the latest trends.
6. How Much Does A Barber Make A Day?
The answer to this question depends on many things. If we consider the median wages of barbers which is $14.50/hour and if he/she works 10hours a day then the daily income will be $145.00.
7. How Many Haircuts Can A Barber Do In A Day?
The answer to this question depends on the skill of a barber. Usually, a skilled barber can do either 18 standard haircuts, 9 full-service haircuts, or can mix up and do 3 full-service & 12 standard haircuts within a day.
8. How Much Does A Barber Chair Cost?
The price of a barber chair depends on many things. A barber chair might cost you anywhere from $1,500 to $6,000.
9. What Can A Master Barber Do?
A master barber is a highly trained and skilled professional in the field of hair service. A master barber can do hair cutting, coloring, and styling, shaving or trimming beards and mustaches, etc.
References: 1 https://work.chron.com/average-income-owner-barbershop-28567.html
References: 2 https://howtostartanllc.com/business-ideas/barber-shop
Last Updated on October 27, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.