What running costs should I review before buying a barbershop?
Review barber pay or commission, rent and common costs, supplies and laundry, card and booking-software fees, equipment upkeep and the owner’s own unpaid hours. For each line, compare the books with the bank statements and the contracts, and ask what changes once you are the owner.
A barbershop looks cheap to run: a few chairs, clippers and a lease. Much of the cost sits in people’s time and in small recurring bills, so go through it slowly. Go line by line through the expense side of the books and test each one against something outside the books.
People
Barber pay is likely the largest line, so start there. Ask how each barber is paid, whether by wage, commission or chair rent, and match it to the agreements and payroll records. Then ask what the owner takes. Check whether the books reflect a market wage for the owner’s own hours. You may need to pay someone to do that work.
Premises
Read the lease for rent, shared costs and any increases coming up. A new lease or an assignment may change the terms, so ask the landlord what they would offer a new owner. Also look at utilities, insurance and anything the shop pays for the building that the lease does not mention.
Supplies, fees and upkeep
- Towels, laundry, cleaning and consumables, and who handles them
- Card-terminal and booking-software fees, and whether the contracts transfer
- Chair, clipper and equipment repairs, and what is due soon
- Licences and any dues the shop pays to keep operating
A similar exercise for another small shop is in running costs to review before buying an ice cream shop. For the wider list, see what to check before buying a barbershop.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are financial statements?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernment13 terms you need to understand before signing your commercial real estate lease
- 04Business Development Bank of CanadaGovernmentWhat is Cash Flow
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