I have my barber license… now what? How to Set Up Your Business
Pass the barber exam. Check. Get a job. Check. Get a business license. Um… how do I do that part?
Learn By Doing will always be part of my core learning philosophy (thanks, Cal Poly). In my opinion, barbering is a perfect expression for this motto. How do you cut hair? Learn by doing. How do you use a straight razor? Learn by doing. How do you start a business? Learn by doing.
In this blog post, I will share one of my most shared Learn by Doing barber stories in hopes to help you launch your legal business.
listen to podcast episode
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listen to podcast episode _
When I got my barber license, I got hired at a booth rental barbershop. The shop owner told me 2 things: (1) go get a business license (2) open a business checking account. My Communications Degree did not prepare me for this moment, I was a deer in headlights. The shop owner directed me to the city’s office to apply for a business license and then to the bank to open the business checking account. I figured this would only take me a few hours in total. Spoiler alert: I was very wrong.
So the next day, I went to the city office and applied for a sole proprietor business license. It cost $347 in total. This price was a little more than usual since the barbershop was in the downtown district. Next stop, I went to the bank to open that business checking account. The banker asked me a question I wasn’t prepared for: “Where is your DBA?” The only DBA I had heard of was the Double-Barrel Ale from Firestone. The banker rejected my application because I didn’t have a ‘Doing Business As’ (DBA).
My next stop was to go to the county’s office to apply for my DBA. It cost me $57. I thought this would be my last stop, but turns out, I had another one. I had to go to the local newspaper office to run an ad that announced my business to the public. The ad had to run for 2 weeks for my DBA to be verified. This cost me an additional $59.
After the DBA verification, I could finally show my face at the bank. I had my Business License, my DBA and my Barber License. To my surprise, they actually didn’t care about my Barber License at all. I found this extremely ironic, but that’s for another post.
I confidently walked into the bank, only to be met by another question I didn’t know the answer to. The banker asked if I wanted to create my account under my Social Security number or my EIN. Here we go again, what is an EIN? “Employer Identification Number is a unique nine-digit number that identifies your business for tax purposes.” My patience was running out so I decided to just file under my SSN to save time. I was tired and just wanted my legit Business Debit Card with Barber Doza on it so I could tell my wife I made it. I eventually learned that creating an EIN was very quick and easy. You can establish an EIN for free, online, in under 10 minutes.
A week later, I checked the mail and boom! My business debit card with my business name on it arrived in the mail. I was now a business owner with an official business bank account. As I went to sleep that night, I remember thinking to myself. “Why didn’t anyone tell me this stuff in barber school?”
Learn from my mistakes
Now that you have your barber license, it’s time to set up your legal business. I am not a CPA or CFP but you can check out this Earn Your Leisure’s podcast episode to learn more about why I started a legal business. If you are already convinced that you should open a legal business, here are some questions for you to think about before you start.
1. What will you name your business?
This decision will make the entire process much easier. You’ll use your business name when applying for a business license, trademark, ‘Doing Business As’ and EIN. If you end up changing your Business Name, you’ll most likely have to pay fees to change the name. My advice is to not rush the process of coming up with a business name. Once you have made your decision, it will also help when designing a website and establishing your social media presence. Check out this blog post for how to design a website.
2. How long will the process take?
From start to finish, it took me 4-6 weeks. Day 1 was applying for my business license and the last day was receiving my Business Debit Card in the mail. In between I received my Business License, DBA and EIN.
3. Do your research before you go
I was not efficient. I’m writing this post in hopes that your process is more efficient than mine. Please, learn from my mistakes. Do your research. Go to your city’s website and read about the business license laws. Go to your county’s website and read about the DBA application process. Call your bank and ask them what documents you will need in order to open the business checking account. Go to irs.gov and read about EIN.
At the end of the day, it’s all about ownership. I’ll share additional reasons in Part 2. In the meantime, go listen to that Earn Your Leisure Podcast Episode I mentioned. You won’t regret it.
Written by Matthew Mendoza
Matthew Mendoza is a licensed barber, educator and consultant. He hosts the podcast Beyond Barber School which provides emerging barbers with the critical guidance needed to start their business. In addition, he writes a newsletter called theGuideline about the latest trends in the barber industry.
