The Cutting Edge - Page 3 of 4

The Cutting Edge

when it opened in Sin City two years ago. Replicating a basketball arena, the innovative design comes complete with Wi-Fi connectivity, DirectTV, and a 16-speaker surround sound audio system. It’s not uncommon to see teenagers and adults shooting hoops or watching one of four plasma televisions as they wait their turn.

“I wanted to re-create the exciting atmosphere of a basketball game,” says Hudson, who spent $150,000 in startup costs (initial estimates were $80,000) to cover construction materials and labor, as well as purchase barbering equipment and entertainment systems.

Hudson saved $75,000, and when the budget climbed to $150,000, he borrowed the difference from family members.

Hudson gives his barbers, who sign annual contracts, an option to choose between a rental or a commission system. He says he either charges more than $250 per week for a chair (compared to average rates of $160) or retains about 20% of their profits. In 2007, Classic Cuts
generated $200,000 in revenues.

“If you’re on commission, the more heads you cut, the more money you make,” says Hudson, whose creativity in the front and back of the office has helped him clinch a solid victory.

Setting Up Shop
“If you can do it yourself, do it,” says Craig “Mr. Taper” Logan with Barbers Only Magazine. Logan says prospective barbershop owners should be prepared to secure their own funds if necessary. “Banks don’t usually give loans to barbershop owners,” he says. Instead of relying on financial institutions, Logan recommends using personal savings and private loans from family and friends. Of course, building clientele and generating revenue is a gradual process, which is why Logan cautions shop owners to take their time developing their business to avoid careless mistakes or misappropriations. While launching your own barbershop is ideal, purchasing a franchise is another option.

“Buying a franchise can make it easier to set up, and some of the big supply companies such as Koken, Belvedere, and Takara Belmont can design and build your whole store,” says consultant Joe Grondin. “But, if you are starting from the ground up, you need $100,000 to $160,000 for equipment and leasehold improvements.” And what’s the plan to recoup your investment? “My rule is, if the rent at a location is $20 per square foot annually, I’ll charge a minimum of $20 per haircut,” Grondin says. “And the retail made from selling products to clients should result in about 15% of gross revenues.” Overall, business models may differ, but Grondin suggests that employee compensation (either rental or commission) be no more than 50% of gross revenues to ensure growth, adding: “It isn’t a walk in the park, it’s like every other business.”

Doing Your Homework
“Small business owners tend to have the technical knowledge of their trade but not the business side of it,” says Janis Stevenson with the NSBDC. To avoid surprises, she suggests that barbers learn everything they can about scouting out the perfect location; hiring talented barbers; acquiring reasonably priced, quality equipment and products; and implementing effective advertising tactics.


  • Small Business Development Centers (
  • Barber and Beauty Supplies