Hair Salon & Barbershop Business Plan

Startup costs generally range from $40,000 to $250,000 depending on the size, location, and whether you are retrofitting an existing space or building from scratch. Major expenses include salon-specific equipment, specialized plumbing for wash stations, and initial retail inventory. Your business plan must itemize these costs to secure accurate funding from lenders.

A commission model gives you more control over the branding, customer experience, and retail sales, which is ideal for building a cohesive brand. Booth rental offers steadier, predictable monthly income from rent but leaves client acquisition and quality control entirely to the individual stylists. Your business plan should model both scenarios to see which fits your financial goals and management style.

Calculate your fixed monthly expenses, such as rent, utilities, insurance, and booking software, then add your variable costs per service, like color products and stylist commissions. Divide these total costs by your average ticket price per client to find the exact number of appointments your shop needs to host each month to cover expenses. Including this number in your plan shows investors that you understand your operational capacity.

You must list your state cosmetology or barber board establishment license, local business license, and health department permits. If you plan to sell retail products or serve complimentary beverages, you will also need a sales tax permit and potentially a liquor license. Outlining these regulatory requirements proves to lenders that you are prepared for legal compliance.