Chartered Financial Analyst and business consultant specializing in personal service and retail businesses.
How many haircuts or services do you need to perform to be profitable? Enter any three variables—Monthly Fixed Costs, Avg. Price per Service, Avg. Variable Cost per Service, or Breakeven Services—to solve for the fourth.
Barber Shop Breakeven Calculator
Barber Shop Breakeven Formula
The breakeven formula for a barber shop finds the total number of services (Q) you must perform each month for your total revenue to cover all your fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Service Price (P):
P = (F / Q) + V
Solve for Avg. Variable Cost (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your recurring overhead. This includes the shop’s rent, utilities, insurance, fixed salaries, and permanent equipment financing.
- Avg. Price per Service (P): The average amount collected per service (e.g., haircut, beard trim, shave), accounting for different prices and tips, if necessary.
- Avg. Variable Cost per Service (V): The costs tied directly to one service. This includes direct commissions paid to barbers, specialized supplies (shampoo, styling gel, blades) used per customer, and payment processing fees.
- Breakeven Services (Q): The total number of services you must perform per month to reach $0 in profit.
Related Calculators
- Salon Breakeven Calculator
- Gym Breakeven Calculator
- Retail Breakeven Calculator
- Cleaning Service Breakeven Calculator
What is a Barber Shop’s Breakeven Point?
A **Barber Shop’s Breakeven Point** is the exact number of services (Q) you need to perform each month to cover all your business expenses. It’s the critical threshold where your total revenue equals your total costs.
**Fixed Costs (F)** are the costs that do not change regardless of how many customers you serve. In a barber shop, this includes rent for the space, business insurance, utilities (base rate), marketing subscriptions, and any non-commissioned staff salaries (like a receptionist).
**Variable Costs (V)** are costs incurred *only* when you perform a service. This is mainly the cost of supplies (shampoo, styling product, disposable blades), towels, and any commissions paid directly to the barber based on the price of the service.
The **Contribution Margin** (P – V) is the revenue left over from a single service after covering its direct variable costs. This margin is what contributes toward paying down your total fixed costs. The calculator uses this to determine how many services (Q) are needed to cover your fixed costs (F).
How to Calculate Barber Shop Breakeven (Example)
Let’s calculate the breakeven point for a barber shop.
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Identify Monthly Fixed Costs (F):
Your monthly rent is $3,000. Insurance and utilities are $500. Equipment financing is $500. Total (F) = $4,000.
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Identify Avg. Price per Service (P):
Your average price across all services is $35.
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Identify Avg. Variable Cost per Service (V):
For each service, you pay $1 in supplies and $2 in commissions/fees. Your total (V) = $3.00.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin: $35 (P) – $3 (V) = $32.
Next, divide the fixed costs by this margin:
Q = $4,000 / $32 = 125 -
Conclusion:
You must perform 125 services just to cover your monthly business overhead. Every service after the 125th contributes directly to your profit.
Frequently Asked Questions (FAQ)
Separate them. The fixed hourly wage for a manager or receptionist goes into (F). Any commission or bonus paid directly per service goes into (V). This provides the most accurate breakeven calculation.
Product sales have a different profit margin (P-V). To keep this calculator simple, use your average *service* price (P) and *service* variable cost (V). You should perform a separate breakeven analysis for your retail inventory.
Absolutely. By plugging in the anticipated Fixed Costs (F) of the new location (rent, higher utility estimates), you can quickly solve for (Q) to see if that location requires a realistic number of services to be profitable.
If you offer services priced at $20, $30, and $50, track how many of each you sell over a month. Divide your Total Service Revenue by your Total Number of Services to find your true average (P).