“The three most important things in a man’s life are his barber, his butcher, and his lover.” — Ron Swanson
So why now? The Rise of the Barber-preneur
- Barbers and hairstylists are increasingly switching to a "booth rental" vs. commission-based model in which they pay a landlord rent for their chairs but do not need to give a commission (usually 50-60%) to the barbershop owner. Booth rental allows for much more autonomy (they can more easily set their own schedules) and much more money: talking to barbers, chair rentals in New York cost the equivalent of 1-2 days of revenue (20% to 40% of revenue). And unlike commission, booth rental is a fixed cost meaning that barbers who generate additional revenue can keep all of it.
- According to trade publication Beauty Store Business Magazine, currently just a little over 50% of barbers use the "booth rental" model. They expect this to grow to over 75% in the next 2 years.
- As a whole, the US hair care services industry (including beauty salons) has a combined annual revenue of over $20 billion. (US Bureau of Labor Statistics), with 663,000 barbers and hairdressers; expected to grow 13 percent by 2222 (by 83,300).
There's currently no clear market leader, and few if any businesses directly targeting barbers and low cost hairstylists:
- Styleseat: geared towards women; charge stylists to sign up; unfocused & overwhelming for dudes who just want a cut and a shave. Users can book appointments and review stylist portfolios. —Shortcut: premium only, starting at $75. They employ the stylists, who are able to come to your home or office on demand.
- Stylebee: Another on demand service that directly employs its own stylists; geared towards women and starting at $50.
- There are also some lightweight scheduling apps such as “Got You In” that are generic calendar/scheduling apps lightly re-skinned to appeal to barbers and hairstylists
Features and Benefits
Barbers Can Now Grow Their Businesses With Style
A Better Experience for the End-Consumer
Pricing and Revenue
Many future potential sources of revenue including
- Jay the Barber (who we interviewed) says booth renting barbers make more money than average
- Therefore it's fair to go with the 75th Percentile for annual walary (but for purposes of this we'll just go with the median to be conservative) http://www.bls.gov/oes/current/oes395011.htm
- Median Salary: $27,710
- Jay says barbers pay on average 20% of the income towards rent
- % to rent: 20%
- Pre-rent Income: $33,252
- We would take a 5% cut
- Our Revenue Per Barber: $1,663
- According to the US Department of Labor, there are approximately 52,000 barbers and over 600,000 other types of stylists. Using the 52,000 figure, our revenue cap could be $86,621,460 if we were to sweep 100% of the market (realize this is virtually impossible). Still, even if we were to capture 1% of the market, that would be $866,215; 10% would be $8.6M (and this is just from the 5% cut, ignoring any other services).