If you are planning to write the barber shop business plan on your own, then this sample barber shop business plan can be great for guidance. However, if you are looking for a professional business plan writer for a business loan, SBA loan or to find out the possibility of success for your new business then let’s talk!
Executive Summary
Overview: Dapper Fellas Barber Shop is a well-established company. From the beginning, we decided to hire only competent and licensed barbers and hairstylists for our barbershop’s numerous jobs. We are well-versed in the norms and regulations that regulate the barbering and cosmetology industries, so we chose only the most experienced and competent personnel to serve as the organization’s core team. We aim to use their knowledge and experience to help us develop a company brand that will be well-received across California and the United States.
Mission: Customers will be able to relax both their mind and body via various services at Dapper Fellas Barber Shop, which will give a cozy, but exciting old-world gentleman’s club environment.
Vision: Dapper Fellas Barbershop will develop itself as a world-class service provider where customers may escape the strains of everyday life, revitalize their energy, and enjoy the companionship of their coworkers and friends.
Industry Overview: Barber Shops are predicted to increase by 2.9 percent yearly to $4.5 billion in sales during the next five years. Revenues are expected to increase by 1.5 percent in 2021 alone. As more high-end barbershops operate, income for industry owners has increased. Furthermore, as the population of the United States grows, so does the number of barbershop customers. Again, during the last five years, per capita disposable income has increased, allowing clients to spend more money on specialist services. Despite the widespread closure of barbershops in the first half of 2020, these developments helped sustain demand for industry services during the COVID-19 (coronavirus) pandemic.
Financial Overview
Financials is one of the most important sections of a barber shop business plan. You can get an idea of your projected revenue, required investment amount, is the business sustainable without additional funding, etc.
Financial Highlights
| Liquidity | 2020A | 2021A | 2022F | 2023F | 2024F |
| Current ratio | 6 | 12 | 23 | 32 | 42 |
| Quick ratio | 6 | 11 | 22 | 31 | 40 |
| DSO | 8 | 8 | 8 | 8 | 8 |
| Solvency | |||||
| Interest coverage ratio | 8.2 | 11.1 | 14.2 | ||
| Debt to asset ratio | 0.01 | 0.01 | 0.2 | 0.18 | 0.16 |
| Profitability | |||||
| Gross profit margin | 51% | 51% | 53% | 53% | 53% |
| EBITDA margin | 12% | 14% | 21% | 22% | 22% |
| Return on asset | 5% | 6% | 13% | 14% | 14% |
| Return on equity | 5% | 6% | 16% | 17% | 17% |
Fund Usage
Industry Analysis
The industry analysis section of the barber shop business plan will help you get better insights into competitors, market growth, and overall industry prospects. You can order a custom market research report for your barber shop business.
Men are now treated to the luxury of high-end services. Many barbershops directly provide personal grooming services, such as shaves, beard trims, and massages. You may accomplish this task while enjoying a free brew or coffee and watching a football game on the big screen. The average national employment growth rate is 7.4%. Thus the haircutting profession is expected to increase faster than that. Even in tough economic times, there is employment stability in this field. Accept technological advancements. There is now inexpensive automation software available to manage the administrative tasks involved in running a barbershop. Without employing a receptionist, you may save money by using low-cost software that enables consumers to make appointments online, issue reminders, and receive payments.
There would be a substantial competitive advantage if you could provide good service at a reasonable price. Customers would not come back to your store if you charged exorbitant pricing. If you establish low pricing, more people will become repeat customers. As a result, building long-term consumer relationships is critical. A barbershop is a gathering place for many guys, one of the most significant aspects. There are folks in your neighborhood that you will not be able to locate. You will, however, get the opportunity to meet them at a barbershop.
Barbershops in the United States employ over 150,000 people and are a $5 billion business. In the last three years, the barbershop sector in the United States has grown by 5.9% annually, bringing in $1.1 billion in revenue. In the United States, there are roughly 131,077 barbershops. People still need haircuts, regardless of the market or the state of the economy. 44% of American males went to a barber in the previous year. Future generations will inherit this personal upkeep behavior. Barbershops accounted for $21,395 in federal spending in 2020 and have given three contracts totaling $7,132 to three different businesses.
While working on the industry analysis section of the barber shop business plan make sure that you add significant number of stats to support your claims and use proper referencing so that your lender can validate the data.
The worldwide barber supply industry is expected to grow by over $20 billion. Shampoo, hair gel, and conditioners are part of this large business. From 2012 to 2017, the sector had a yearly growth of 1.9 percent. The industry is expected to grow at a rate of 3% each year between 2017 and 2022. There are 4,377 barbershops in 4,845 locations in the barbershop business. Employees are on average 39.5 years old. This implies a diverse group of barber professionals, including young, elderly, and middle-aged men and women. The average yearly salary per employee in California is $23,590. In the United States, the average annual salary is USD 30,414. Shops in low-income areas may only be able to charge $7–10 for a haircut. Think about what kind of barbershop you want to run and who you want to serve. The barbershop sector in the United States has grown at a rate of 6% per year over the last three years, reaching a revenue of $1 billion.
According to the Bureau of Labor Statistics, barbershops employed 738k workers in 2019. According to ACS statistics, the number of persons employed in the Barbershops Industry Group has decreased by 5.2 percent, from 83.3k in 2018 to 79k in 2019. Barbers hold the most barbershop jobs (89.9%), followed by hairdressers, hairstylists, and cosmetologists (3.73%), and supervisors of personal care and service employees (3.22%).
There would be a substantial competitive advantage if you could provide good service at a reasonable price. Customers would not come back to your store if you charged exorbitant pricing. If you establish low pricing, more people will become repeat customers. As a result, building long-term consumer relationships is critical. A barbershop is a gathering place for many guys, one of the most significant aspects. There are folks in your neighborhood that you will not be able to locate. You will, however, get the opportunity to meet them at a barbershop.
The sector is likely to benefit from the use of social media platforms. This increase will aid the business in attracting specialized service consumers. Barbers may utilize social media to sell their services and demonstrate their abilities to a large audience. Barbers will be sought out by customers who frequently read their web material as they develop a reputation for providing excellent services. As demand for specialized barbers grows, they will be able to boost service prices as surplus demand from customers outnumbers the barbershop’s capacity. As a result of increased premium product costs, industry demand for industrial goods is likely to increase.
Marketing Plan
A key part of the marketing plan in a barber shop business plan is the marketing budget. The growth in the number of customers is proportional to the budget and dependent on the CAC.
Content Marketing: Create a blog on the website with material catering to prospective customers of Dapper Fellas Barber Shop.
Discounts: Provide multiple rewards or incentives where Dapper Fellas Barber Shop members get a deal if they successfully recommend someone.
Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your space and events.
SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer. It creates trust with potential members seeking what your place offers.
Email Marketing: Sending automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email as really important, they are more likely to forward it or share it with others, so include social media share buttons in every email.
Organogram
Financial Plan
This section of the barber shop business plan helps your lender figure out whether you will be able to pay off the loan, whether the business is sustainable, what are the growth prospects, etc.
Earnings:
Break-Even Analysis
Income Statement
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| Total Cost of Revenue | 285,560 | 615,220 | 987,794 | 1,455,612 | 1,935,625 |
| as % of revenue | 595% | 204% | 112% | 71% | 50% |
| Gross Profit | -237,575 | -313,984 | -105,583 | 601,578 | 1,902,218 |
| SELLING & ADMIN EXPENSES | |||||
| Item 1 | 28,000 | 96,800 | 154,880 | 175,692 | 193,261 |
| Item 2 | 75,000 | 105,000 | 120,000 | 120,000 | 120,000 |
| Item 3 | 36,000 | 96,000 | 108,000 | 120,000 | 120,000 |
| Item 4 | 8,000 | 12,000 | 12,000 | 12,000 | 12,000 |
| Item 5 | 3,839 | 18,074 | 44,111 | 61,716 | 115,135 |
| Item 6 | 3,359 | 12,049 | 26,466 | 41,144 | 76,757 |
| Item 7 | 5,600 | 10,000 | 12,904 | 15,034 | 17,376 |
| Item 8 | 6,667 | 14,000 | 22,067 | 30,940 | 40,701 |
| Total selling & admin expenses | 166,464 | 363,924 | 500,428 | 576,525 | 695,230 |
| as % of revenue | 347% | 121% | 57% | 28% | 18% |
| Net profit | -404,039 | -677,907 | -606,011 | 25,052 | 1,206,987 |
| Accumulated net profit | -404,039 | -1,081,947 | -1,687,957 | -1,662,905 | -455,918 |
Cash Flow Statement
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| CASH FLOW from OPERATING ACTIVITIES | |||||
| Net profit before tax | -$404,039 | -$677,907 | -$606,011 | $25,052 | $1,206,987 |
| Depreciation | $44,267 | $85,333 | $120,504 | $158,127 | $199,512 |
| Payables | |||||
| Item 1 | $4,333 | $5,417 | $6,500 | $7,583 | $8,667 |
| Item 2 | $11,667 | $28,000 | $46,667 | $70,000 | $93,333 |
| Item 3 | $6,250 | $8,750 | $10,000 | $10,000 | $10,000 |
| Item 4 | $3,000 | $8,000 | $9,000 | $10,000 | $10,000 |
| Item 5 | $667 | $1,000 | $1,000 | $1,000 | $1,000 |
| Total payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| change in payables | $25,917 | $25,250 | $22,000 | $25,417 | $24,417 |
| Receivables | |||||
| Item 1 | $320 | $1,506 | $3,676 | $5,143 | $9,595 |
| Item 2 | $360 | $1,807 | $4,411 | $8,229 | $11,514 |
| Total receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| change in receivables | -$680 | -$2,634 | -$4,773 | -$5,285 | -$7,736 |
| Net cash flow from operating activities | -$334,536 | -$569,958 | -$468,280 | $203,311 | $1,423,180 |
| CASH FLOW from INVESTING ACTIVITIES | |||||
| Item 1 | $16,000 | $13,200 | $14,520 | $15,972 | $17,569 |
| Item 2 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Item 3 | $28,000 | $22,000 | $14,520 | $10,648 | $11,713 |
| Item 4 | $96,000 | $88,000 | $72,600 | $79,860 | $87,846 |
| Item 5 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Net cash flow/ (outflow) from investing activities | -$180,000 | -$167,200 | -$150,040 | -$159,720 | -$175,692 |
| CASH FLOW from FINANCING ACTIVITIES | |||||
| Equity | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net cash flow from financing activities | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net (decrease)/ increase in cash/ cash equivalents | -$114,536 | -$297,158 | -$134,320 | $575,991 | $1,833,128 |
| Cash and cash equivalents at the beginning of the year | – | -$114,536 | -$411,693 | -$546,014 | $29,978 |
| Cash & cash equivalents at the end of the year | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
Balance Sheet
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| NON-CURRENT ASSETS | |||||
| Item 1 | $16,000 | $29,200 | $43,720 | $59,692 | $77,261 |
| Item 2 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Item 3 | $28,000 | $50,000 | $64,520 | $75,168 | $86,881 |
| Item 4 | $96,000 | $184,000 | $256,600 | $336,460 | $424,306 |
| Item 5 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Total | $180,000 | $347,200 | $497,240 | $656,960 | $832,652 |
| Accumulated depreciation | $44,267 | $129,600 | $250,104 | $408,231 | $607,743 |
| Net non-current assets | $135,733 | $217,600 | $247,136 | $248,729 | $224,909 |
| CURRENT ASSETS | |||||
| Cash | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
| Accounts receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| Total current assets | -$113,856 | -$408,380 | -$537,927 | $43,349 | $1,884,214 |
| Total Assets | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
| LIABILITIES | |||||
| Account payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| Total liabilities | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| EQUITIES | |||||
| Owner’s equity | $400,000 | $840,000 | $1,324,000 | $1,856,400 | $2,442,040 |
| Accumulated net profit | -$404,039 | -$1,081,947 | -$1,687,957 | -$1,662,905 | -$455,918 |
| Total equities | -$4,039 | -$241,947 | -$363,957 | $193,495 | $1,986,122 |
| Total liabilities & equities | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
