This article was written by our expert who is surveying the industry and constantly updating the business plan for a barbershop.
Understanding the monthly expenses of a barbershop is crucial for any entrepreneur looking to enter this profitable service industry. Running a successful barbershop requires careful financial planning and a clear understanding of all recurring costs that will impact your monthly cash flow and overall profitability.
From rent and payroll to product inventory and equipment maintenance, barbershop owners must account for numerous expense categories that can significantly vary based on location, shop size, and business model. This comprehensive breakdown will help you create realistic budgets and make informed decisions about your barbershop investment.
If you want to dig deeper and learn more, you can download our business plan for a barbershop. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our barbershop financial forecast.
A typical barbershop faces monthly expenses ranging from $6,000 to $25,000, with rent and payroll representing the largest cost categories. Location, shop size, and staffing levels are the primary factors that determine where your barbershop will fall within these expense ranges.
The following table breaks down the essential monthly expense categories that every barbershop owner must budget for to maintain profitable operations.
| Expense Category | Typical Monthly Range (USD) | Key Factors Affecting Cost |
|---|---|---|
| Rent/Lease | $1,500 – $5,000 | Location desirability, city size, shop square footage, prime vs. secondary locations |
| Payroll (Salaries & Benefits) | $3,000 – $12,000 | Number of barbers, experience level, commission structure, support staff needs |
| Utilities | $300 – $1,300 | Shop size, operating hours, energy efficiency, seasonal variations |
| Product Inventory | $500 – $2,000 | Product quality level, retail sales volume, supplier relationships, bulk purchasing |
| Digital Tools & Software | $60 – $500 | Software sophistication, number of licenses, add-on features, integration needs |
| Marketing & Advertising | $200 – $800 | Local competition, target market, digital vs. traditional marketing mix |
| Insurance & Licenses | $91 – $334 | Coverage levels, state requirements, business entity type, claims history |
What are the typical monthly expenses of a barbershop, with a full breakdown and average budget ranges in USD?
A typical barbershop's monthly expenses range from $6,000 to $25,000, depending on location, size, and business model.
The largest expense categories for most barbershops are rent (typically $1,500-$5,000 monthly) and payroll ($3,000-$12,000 monthly), which together often represent 60-70% of total operating costs. These two categories alone can determine whether your barbershop operates profitably or struggles financially.
Beyond these major expenses, barbershop owners must budget for utilities ($300-$1,300), product inventory ($500-$2,000), digital tools and software ($60-$500), and various other operational costs. The total monthly expense load heavily depends on whether you're operating a single-chair shop in a smaller city or a multi-chair operation in a prime urban location.
Smart barbershop owners typically allocate an additional 10-15% buffer for unexpected expenses and seasonal fluctuations. This comprehensive expense planning ensures your barbershop maintains positive cash flow throughout different business cycles and market conditions.
What is the average monthly rent or lease cost for a barbershop location, depending on city size?
Barbershop rent costs vary dramatically by location, ranging from $1,500 monthly in smaller cities to $5,000+ in prime urban markets.
In major metropolitan areas like New York, Los Angeles, or Chicago, prime barbershop locations typically cost $20-$50 per square foot monthly, translating to $3,000-$5,000 for a standard 150-200 square foot space. Mid-sized cities generally offer more affordable options at $15-$30 per square foot, while smaller towns and suburban areas often provide suitable barbershop spaces for $10-$20 per square foot.
Location quality significantly impacts pricing within any city size. Street-level spaces with high foot traffic, visible signage opportunities, and convenient parking command premium rents. Secondary locations, upper floors, or spots with limited visibility typically cost 20-40% less but may require increased marketing efforts to attract customers.
You'll find detailed market insights in our barbershop business plan, updated every quarter.
Lease terms also affect monthly costs, with longer commitments often securing better rates and shorter terms providing flexibility at higher monthly costs. Most barbershop leases include base rent plus additional fees for common area maintenance, utilities, and property taxes.
How much does a barbershop typically spend per month on utilities such as electricity, water, and internet?
Barbershop utility costs typically range from $300 to $1,300 monthly, with electricity representing the largest portion of this expense.
Electricity costs for barbershops range from $150 to $900 monthly, depending on shop size, operating hours, and equipment usage. Hair clippers, blow dryers, lighting, and climate control systems are the primary electricity consumers. Shops operating 10-12 hours daily with multiple workstations naturally incur higher electricity costs than smaller operations with limited hours.
Water expenses typically fall between $45 and $400 monthly, directly correlating with the number of hair washes performed and general cleaning frequency. Barbershops focusing primarily on cuts without wash services maintain lower water costs, while full-service establishments offering shampoo services see significantly higher usage.
Internet and phone services generally cost $50-$150 monthly for most barbershops. Reliable internet supports booking systems, payment processing, social media marketing, and customer entertainment options. Many barbershops invest in higher-speed packages to ensure smooth operations during peak business hours.
What is the average monthly payroll cost, including salaries, benefits, and commissions for barbers and support staff?
Barbershop payroll expenses typically range from $3,000 to $12,000 monthly, representing the largest variable cost for most operations.
| Staff Type | Monthly Salary Range | Compensation Structure Details |
|---|---|---|
| Entry-level Barber | $2,000 – $3,000 | Hourly wage ($12-$18/hour) or 40-50% commission on services performed |
| Experienced Barber | $3,000 – $4,500 | Higher commission rates (50-60%) or hourly rates ($18-$25/hour) plus tips |
| Master Barber/Stylist | $4,000 – $6,000 | 60-70% commission or $25-$35/hour, often with client following and premium services |
| Shop Manager | $2,500 – $4,000 | Salary plus performance bonuses, responsible for operations and staff coordination |
| Receptionist/Support | $1,200 – $2,000 | Hourly wage ($10-$16/hour), handles appointments, payments, and customer service |
| Part-time Staff | $500 – $1,500 | Weekend or evening coverage, typically hourly compensation |
| Benefits & Taxes | 15-25% of base wages | Social Security, unemployment insurance, workers' compensation, health benefits (if offered) |
What are the monthly costs associated with booking software, POS systems, and other digital tools?
Digital tools and software for barbershops typically cost between $60 and $500 monthly, depending on the sophistication and number of features required.
Basic booking software like Vagaro or Square Appointments costs $25-$100 monthly and handles appointment scheduling, customer communications, and basic reporting. More advanced platforms like Boulevard or Fresha charge $195-$425 monthly but offer comprehensive features including inventory management, staff scheduling, advanced analytics, and marketing automation.
Point-of-sale systems represent another significant digital expense, ranging from $30-$70 monthly for basic systems to $150+ for advanced platforms with integrated accounting, inventory tracking, and customer relationship management. Many barbershops choose all-in-one solutions that combine booking and POS functionality to reduce costs and streamline operations.
Additional digital tools may include social media management platforms ($20-$50 monthly), accounting software ($15-$50 monthly), and specialized barbershop apps for loyalty programs or tip processing. This is one of the strategies explained in our barbershop business plan.
How much is typically spent per month on hair and grooming product inventory, including restocking?
Barbershop product inventory costs typically range from $500 to $2,000 monthly, depending on service offerings and retail sales volume.
Professional hair products for service use (shampoos, conditioners, styling products, aftershaves) generally cost $300-$800 monthly for most barbershops. High-volume shops or those offering premium services may spend $1,000+ monthly on professional products to maintain service quality and meet customer expectations.
Retail inventory represents an additional expense but also a revenue opportunity, with many barbershops allocating $200-$1,200 monthly for products sold directly to customers. Popular retail items include pomades, beard oils, grooming tools, and branded merchandise that can generate 50-100% markup over wholesale costs.
Disposable supplies like towels, capes, razor blades, and sanitizing products typically cost $100-$300 monthly. Bulk purchasing often reduces per-unit costs but requires larger upfront investments and adequate storage space.
What are the ongoing cleaning and sanitation supply costs on a monthly basis?
Cleaning and sanitation supplies for barbershops typically cost between $50 and $300 monthly, with regulatory compliance driving minimum spending levels.
Basic sanitation supplies including disinfectants, barbicide, cleaning agents, and disposable items generally cost $25-$100 monthly for smaller shops. State health regulations require specific sanitization protocols that mandate certain products and replacement frequencies, making this a non-negotiable expense category.
Professional cleaning services, when utilized, add $100-$200 monthly but ensure consistent cleanliness standards and free up staff time for revenue-generating activities. Many barbershops combine professional deep cleaning with daily maintenance cleaning performed by staff.
Laundry costs for towels, capes, and other fabric items typically range from $50-$150 monthly, depending on service volume and whether washing is done in-house or outsourced to commercial laundry services.
What are the recurring costs for licenses, permits, and insurance on a monthly basis?
Licenses, permits, and insurance costs for barbershops typically range from $91 to $334 monthly when annualized expenses are distributed evenly.
Business licenses and permits generally cost $100-$500 annually ($8-$42 monthly), varying significantly by state and local requirements. Some jurisdictions require separate licenses for each barber, while others issue shop-wide permits. Renewal fees and periodic inspections add to ongoing compliance costs.
Business insurance represents the largest portion of this expense category, typically costing $1,000-$3,500 annually ($83-$292 monthly). General liability insurance protects against customer injuries, while property insurance covers equipment and inventory. Professional liability insurance may be required in some states for barbering services.
We cover this exact topic in the barbershop business plan.
Workers' compensation insurance, when required, adds additional monthly costs based on payroll size and state requirements. Some barbershops also invest in business interruption insurance to protect against income loss during unexpected closures.
How much is allocated monthly for marketing, including local advertising, social media, and loyalty programs?
Barbershop marketing expenses typically range from $200 to $800 monthly, with successful shops investing 3-5% of gross revenue in marketing activities.
Digital marketing represents the most cost-effective approach for most barbershops, with social media advertising on platforms like Instagram and Facebook costing $100-$400 monthly. Local SEO, Google Ads, and review management tools typically add $50-$200 monthly but generate measurable customer acquisition results.
Traditional marketing methods like local print advertising, radio sponsorships, or community event participation generally cost $100-$300 monthly. While these methods may have lower conversion rates, they help establish local brand recognition and community presence.
Loyalty programs and customer retention initiatives typically cost $50-$200 monthly, including software fees, reward fulfillment, and promotional materials. These programs often generate 15-25% higher customer lifetime value, making them profitable investments for established barbershops.
What are the average credit card processing or transaction fees incurred each month?
Credit card processing fees for barbershops typically range from $100 to $500 monthly, representing 2.5-3.5% of card transaction volume.
Most payment processors charge 2.9-3.5% per transaction plus $0.10-$0.30 per swipe, with rates varying based on card type (debit vs. credit) and processing method (in-person vs. online). Barbershops processing $5,000 monthly in card payments typically pay $150-$200 in processing fees.
Contactless and mobile payment options (Apple Pay, Google Pay, tap-to-pay) often carry slightly higher processing rates but improve customer convenience and transaction speed. Many barbershops find that accepting diverse payment methods increases average transaction values and customer satisfaction.
Monthly terminal fees, PCI compliance costs, and statement fees add $20-$50 to processing expenses. Some processors offer flat-rate pricing that simplifies fee calculations but may cost more for high-volume barbershops.
How much does a barbershop typically spend on equipment maintenance, repairs, or replacement monthly?
Equipment maintenance, repairs, and replacement costs for barbershops typically range from $150 to $400 monthly when averaged over time.
Routine maintenance for barber chairs, clippers, and other equipment generally costs $50-$200 monthly, including blade sharpening, chair servicing, and preventive maintenance contracts. Regular maintenance extends equipment life and prevents costly emergency repairs during busy periods.
Repair costs vary significantly based on equipment age and usage intensity, but barbershops should budget $100-$300 monthly for unexpected repairs. Common repair needs include chair hydraulics, clipper motor issues, and fixture maintenance that can impact daily operations if not addressed promptly.
Equipment replacement costs, when averaged over time, typically require $200-$500 monthly allocation. Professional barber chairs last 5-10 years, quality clippers need replacement every 2-3 years, and other tools require periodic updating to maintain service quality and efficiency.
What are the estimated annual tax-related costs and how should they be accounted for monthly?
Annual tax-related costs for barbershops typically range from $2,000 to $10,000+, requiring monthly allocations of $167 to $834 for proper financial planning.
Business income taxes vary significantly based on business structure (sole proprietorship, LLC, corporation), profit levels, and state tax requirements. Successful barbershops generating $100,000-$300,000 annual revenue often face total tax liabilities of $15,000-$45,000, including federal, state, and local taxes.
Professional tax preparation and accounting services typically cost $1,000-$3,000 annually for barbershops, providing expert guidance on deductions, quarterly payments, and compliance requirements. Monthly bookkeeping services may add $200-$500 monthly but ensure accurate financial records and tax readiness.
It's a key part of what we outline in the barbershop business plan.
Quarterly tax payments, when required, help avoid penalties and large year-end tax bills. Barbershop owners should work with qualified accountants to establish appropriate monthly tax reserves based on their specific business circumstances and local tax requirements.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Understanding barbershop expenses is essential for building a profitable business in the competitive grooming industry. These detailed expense breakdowns provide the foundation for creating realistic budgets and making informed investment decisions.
Successful barbershop owners continuously monitor and optimize these expense categories to maintain healthy profit margins while delivering exceptional customer service. Regular expense reviews and strategic adjustments ensure long-term business sustainability and growth.
Sources
- Business Plan Templates - Barber Shop Running Costs
- Dojo Business - Barbershop Space Requirements
- FinModelsLab - Barber Shop Operating Costs
- Zolmi - Barber Shop Expenses
- Dojo Business - Barbershop Pricing Guide
- The Salon Business - Best Barbershop Software
- Hey Goldie - How Much Does It Cost to Run a Barbershop
- Upmetrics - Barber Shop Startup Costs
- eFinancial Models - Barber Shop Budget
- Business Plan Templates - Hair Salon Running Costs