Can A Barber Shop Owner Make Passive Income?







I've grown up getting haircuts at many barbershops in my life, and I have always wondered how much barbershop owners make. I would hear how much the actual barber makes, but I often never saw the owner and wondered where his profit came in? Is the income passive? I thought it must be easy and cool to own a barbershop. A barbershop can be the cornerstone of a community. A place where people want to socialize, network, and of course, get a fresh cut. With so many people circulating in and out daily, there's got to be plenty of income opportunities.

In short, a barbershop owner can make passive income. According to Cyclops Brand, a barbershop owner can make anywhere from $86,000-150,000 annually before taxes. The amount of income your barbershop produces is based on your effort. Providing excellent customer services, professionalism, and different ways of creating the almighty dollar circulating in your shop vice going elsewhere is how you provide more profit. Your revenue just doesn't come from cutting hair. It's much bigger and passive than that.

How the barbershop owner makes his or her money?

⁃ Products

Selling products provides an all-around service that keeps your customers' dollars circulating in your shop vice having them spend their money elsewhere. Remember, the more convenient you make your shop, the more revenue you can produce. Providing hair products for your clients earns their trust. Not only do you care about the haircut, but you also care about the maintenance and health of your customers' hair. This provides a professional experience that your customers will not forget and will increase client retention.

⁃ Barbers pay "chair fee."

Renting out your space to other barbers or charging a "chair fee" can range anywhere between $200-$600 a month depending on the barbershop's location and appeal for other barbers and clientele. If you have on average 6-8 barbers and are charging a $400 a month chair fee, that's $2400-$3200 a month. According to Men's Hairstyles Today, an average barber can make $400 in 3-4 days.

Let's say you're rent for your shop is $1200 a month, which includes utilities. You are still at this point able to have a $1200-$2000 monthly gap. Keep in mind you will be paying marketing costs to get your shop the attention it needs


⁃ Partial commission per haircut

You could also allow the barber to get 70% of the haircut cut cost, and you get 30% as the owner. That means if you charge $30 for men's haircuts ( prices vary based on haircut style), the barber gets $21, and you as the owner get $9. Let's say the rent is still $1200 a month, with the operating hours of 7 am to 6 pm (11 hours) 11 hours a day for six days out of the week for six barbers is 396 hours a week. Every barber is not cutting heads every thirty minutes. To be honest, some barbers are a hot commodity, and others are not. So instead of saying calculating what a barber would make cutting head every 30 minutes, let's say an hour.

$30 haircut an hour times 396 hours is $11,880 in revenue a month. 30% of that goes towards you, which would be $3,564. That is $14,256 a month. Each barber is making $1386 a week, which is $66,528 a year for your barbers. It looks like everyone is winning in this situation, and I think this compensation plan for the barber and barbershop owner is my favorite. If the flat rate chair fee works for your business model, then do it. Still, if you know you'll bring in heavy traffic to your barbershop, mathematically, it would seem the partial commission per haircut method has the highest earning potential.

⁃ Vending machines

While people wait for your barbers to cut their hair, people use vending machines to get a beverage or snack—something to keep them or their kids busy. Even though you could purchase a used vending machine for $300-900 on Craigslist or Facebook marketplace, I would recommend buying a brand new vending machine ($3-5k) not to worry about unforeseen repairs that will affect your cash flow. A credit card-used vending machine is your best option to ensure you receive more convenient sales. We recommend you purchase the Multi-product Combo Vending Machine w/Credit Card Reader. More people have their credit and debit cards available than they do cash.

According to https://brandongaille.com/23-intriguing-vending-machine-sales-statistics/ the average person spends $27 a year on vending machines. If you have your 396 people per week from the previous average I gave you, that's over $513,000 annual revenue your one vending machine could make. Let's cut that in half because you do have recurring customers that probably come every two weeks. Even at $256,500 annually, Paying $3,000-5,000 for a vending machine is worth the investment.


ATMs In Your Barbershop

ATMs are convenient and an ideal place for barbershops. With your average price of haircuts ranging from $25-30, most clients will pull out $40 to pay for their service and are more likely to pay a tip due to having so much cash left over. Below are the reasons why you should have an ATM in your barbershop:

- You get paid three times

Not only do you get paid for your services, but you are also most likely to get a tip, and you get paid for the service charge from the customer using the ATM. I like how this sounds already.

Previously, banks charged a fee to users who did not account for them and used one from their ATMs fleet. Now, ATM deployers can earn the total transaction fee where they comfortably process transactions through their network. It has not only boosted investors but also helped the consumer market.

- Keeping your customers from being sent away

You want to keep your customers in your shop as long as possible. The last thing you want to do is send them outside of your shop into the blazing heat or cold along with an inconvenient walk.

- No excuses to not pay

The ATM provides no excuses as to why your customer cannot pay for their haircut. I have plenty of times forgotten to bring cash to the barber. It was worked out in the barber's favor that there was an available ATM.

- Alternative to credit and debit cards

Even though it is convenient for your customers to use credit and debit cards for your services, you still have to pay a percentage per swipe. Using cash from the ATM will decrease your debit or credit card processing fees. We have an awesome article called, What A Beginner Needs For An ATM Business that provides more knowledge on owning an ATM.

It is now feasible for an investor to buy one or more ATMs. The ATM business runs by sharing the transaction fees with the location or site paid a share per trade. Now they a fixed rental amount is not paid. In exchange for their share of the transaction fees, the sites provide space for installing the ATMs. They also offer first-line maintenance for changing receipts or resets. ATM sellers are now refilling the machines. Also, in other instances, remote management aids in software upgrades. You can install visible 'ATM HERE' stickers or flags. It will aid potential customers to locate the ATM, increasing transaction levels.

Appointments only

Making your barbershop "appointments only" allows you to have an organized flow in your place of business. What really can set you and your barbers' revenue back are customers who aren't committed to coming to the time they said they would. Do you know what would make your customers come to their appointment? Charge a $10 fee if they miss their appointment. Their 30-minute time slot made your shop miss out on $25-30 so charging $10 allows you not to be wholly compensated, but it's better than nothing. Appointments only also save your clients time. I don't particularly appreciate waiting for an hour to 2 hours for my turn to get a haircut. I could've knocked out a few errands in the meantime.

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