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2013, The Baftas, The Oscars, and the male stars of Hollywood step out onto the red carpet heavily bearded and spark a whole new trend. The beard was back and it was cool. Over the next few years, nearly half of the men in the UK would ditch their razors and embrace their inner caveman. To tame this face fuzz a whole generation of entrepreneurs have revitalised the previously basic and boring barbershop into quirky, unique and profitable ventures.
You have landed here because of your expressed interest in learning more about the barbershop business. Please enjoy the blog below and learn more about this ever more popular sector.
The figure below shows some of the key industry stats. Market value, customer frequency and the number of new sites have all grown at an incredible rate over the past 5 years. The success of the industry and the active customer base has led to a number of fresh entrepreneurs to enter the fray each adopting and adapting subtly different business plans to carve out their own unique offering.
The UK barbershop sector is part of the larger hair and beauty treatment industry. They are the fastest growing shops on the UK high street with 813 new sites opening up in 2018 following on from an already impressive 624 in 2017. The explosion in the sector is largely down to the trend for male grooming, and specifically, beard grooming. The obsession with social media is also playing its part, as image-conscious men visit barbers, on average, once every 3 weeks, to ensure they are “Instagram-ready”.
There are few barriers to entry and start-up costs can be relatively low compared to other similar service-based businesses. This makes a barbershop an attractive option to both seasoned professionals and newly qualified barbers alike.
The average size for a barbershop is 550 square feet. This amount of space allows for 3 chairs to operate comfortably with additional space for tills, product display and staff areas.
Each barbershop has its own blend and specialisation of hair and beard-cutting services. The graphic below indicates the uptake of the most popular offerings. The combination and/or specialism of one or more of these services and equipment is what allows each barbershop to differentiate itself from others in the market.
As you would expect haircutting services are the mainstay of any barbershop. Traditional services like cut throat shaves are in high demand and as such 81% of outfits offer it to customers. Further offerings such as facials and massages are also starting to become commonplace in barbershops that position themselves as a place for gentlemen to receive the same level of treatment as you might expect from a specialist beauty salon.
Average Spend at a Barbershop
The average spend at a barbershop is currently £22.50 and as enterprises add further services to their offering it is expected this value will continue to trend upwards. This number only represents spend on haircutting services and doesn’t reflect the additional revenue stream potential from add on sales via haircare products and equipment.
How Do Barbershops Get Financed?
It is possible to found a barbershop on a budget of around £5,000 by utilising second-hand equipment and quieter locations. A premium will come with any site that has a high level of
The most popular method of funding a barbershop business is via personal funds as the graphic below shows. However, given the strength of the sector, the high level of cash transactions and profitability, a two-chair outfit can easily turnover six figures barbershops present decent business proposals for a range of debt finance options.
Lenny, the owner of ‘Handlebars’ started his business with a government-backed Startup Loan. By having a solid business plan that clearly presented the business as a community hub, not just a place to get your haircut the company was able to secure funding of £12,500 which was added to with an additional £3,000 from personal savings.
Not only did the business plan help secure that vital finance but now also acts as the sound voice of reason for any future business based decisions making.
The table below shows the main sources of business finance and their associated percentage. In some cases, for larger projects, businesses may need to obtain finance from more than one source.
The layperson may be misled into thinking a fully written business plan would only be a requirement if looking for outside finance. Whilst it is true a solid business plan would be a pre-requisite for any form of form debt or equity finance the value of having a quality business plan cannot be underestimated. Even for those self-funding, a viable and robust business plan is a sure way to keep focused and accountable which will ultimately lead to better business decision making.
Importance of a business plan
The right location is critical to the long term success of any barbershop business. Understanding what number of customers is required to hit breakeven is key to establishing a quality and viable barbershop business.
A surprisingly moderate number of barbershop owners have a professional business plan in place. Any newcomer to the sector will be able to gain a strategic advantage over the competition by ensuring they have a robust and viable business plan in place.
So what can we say about starting your own barbershop?
- The industry is booming
- Lots of up-sell and side-sell opportunities
- Can be run from a small space
- Certain models don’t require salaried staff
- Competitive market place
- Location is critical to be near right footfall
How you can succeed
The best way to get ahead of the competition and eliminate the biggest unknowns and risks when starting your own barbershop business is to invest in a high-quality business plan. The investment is invaluable. We at MyBizPlan provide the highest quality and yet lowest cost business plan in the UK, for a minimal outlay you can obtain a high-quality, visually stunning, financially robust business plan. It will give you a greater chance of seeking that vital finance and in the long run, could save you thousands.
If owning and running a barbershop sounds like the kind of business for you, get started with a Barber Shop Business Plan from MyBizPlan. See which of our solutions is right for you by having a go at our – Do You Really Need a Business Plan Questionnaire?