GROUP ONE

The Barber Shop Industry

Old School Barber Shoppe
Nichet Antoine, Clayton Cox and Tara Dozier
Troy University/Dr. Parham MBA 6611

This is an analysis of the barber shop industry and the Old School Barber Shoppe firm.
The purpose of this analysis is to inform the reader about the barber shop industry as a
whole and a

Introduction
The North American Industry Classification System Code (NAICS) for the barbershop
industry is 812111. The Standard Industrial Classification (SIC) code is 7241. The barbershop
industry includes all establishments known as barber shops or mens hair stylist shops primarily
engaged in cutting, trimming, and styling boys and the hair of men; and/or shaving and
trimming mens beards.
Old School Barber Shoppe is an upscale old-world gentlemens barbershop that offers
todays progressive man a place where he can sit back, relax and experience the traditional art of
grooming in a club like atmosphere. Old School provides traditional barbering services and a
unique retail department to include mens apparel and accessories, classic grooming, shaving and
styling products, along with gift and novelty items. Old School is selling an experience not just a
shave and a haircut.
The Old School Barber Shoppes mission is to reclaim the barbershops place in todays
fast-paced society through the pursuit of excellence in barbering skills and customer service.
Analysis
This industry generated 1,107 (M) in revenue last year which was down .5% from the
prior year. The industry is expected to grow a total of 11% between 2012 and 2022. The
barbershop industry in Columbus and Phenix City earned $2.5 (M0 in sales in 2013 and is
expected to stay the same in 2014.
There are 57 barbershops within a 25 mile radius of Columbus, GA. Some of these
barbershops compete on price while others attempt to differentiate themselves through the
services that they offer. For instance, Old School Barber Shoppe offers a straight razor facial

shave, manicures/pedicures, and facials. Between Columbus, GA and Phenix City, AL there are
almost 112,000 males this makes for a lot of potential customers the barbershops in the local area
have to compete for.
The local barber shops have an unlimited number of suppliers to purchase supplies from
using the internet. Old School Barber Shoppe does not produce their hair care or styling
products. Therefore, backward and forward integration are not prevalent at Old School Barber
Shoppe or the industry.
In order to open a barbershop in either Alabama or Georgia all of the barbers have to
have a barbering license that will cut hair in the shop. To obtain a license in Georgia the person
must complete 1,500 hours in a barber school or 3,000 hours as an apprentice under a master
barber. Once their training is completed they must pass a written and practical examination
through the state of Georgia. In Alabama, to get a license the individual must complete 1,000
hours in a barber school or 2,000 hours as an apprentice within 2 years. In addition, in Alabama
the person must take the exam within 120 days after completing their training. The start-up cost
requirement depends on several factors. Such as, the location of the shop this will determine the
lease or mortgage payment. The size of the location determines the amount of chairs, supplies
and the number of barbers needed. The average hourly wage for barbers in both Georgia and
Alabama is $ 13.25 and $ 10.59 respectively.
Capacity Utilization is high in this industry. Customers want to be able to get a haircut or
trim in a reasonable amount of time. Old School Barber Shoppe has

The rivalry among existing competitors is high. There are 57 barbershops in the
Columbus/Phenix City area, 27 cater to black males, 25 cater to white males, and 5 cater to a
mixed crowd. The threat of new entrants is low. The industry is only growing around 1.1%
annually for the next 10 years. This industry is in the mature stage. The competition of
substitutes is high. Some men choose to grow their hair. Also, now men are opting to shave their
heads or purchase clippers and cut their hair at home. The power of suppliers is low. As the
barbershops have many suppliers to purchase their products from. Last, the power of the
customer is high. The customer has can go to a unisex salon, purchase clippers to use
themselves, and customers have many barbershops to choose from in the Phenix City/Columbus
local area.
There are several driving forces in the barbershop industry. Hair style trends greatly
affect this industry. Locally a few barbershops have opened in the last few years that now
provide more than just the traditional haircut and beard trimming. They offer things like
massages and pedicures/manicures that differentiate them from the competition. In addition
certain jobs require a particular style cut such as the military they have guidelines for haircuts
that must be followed and in this local area there are a lot of soldiers because of Fort Benning.
Also, the ethnicity, income level, and job position held by the clients will affect the types of
services offered and fees charged. All of these driving forces have an impact on opening a shop
in a particular location.
The key success factors in this industry are location of the business, quality of service,
service differentiation, price and cleanliness. First step is location; the barbershop should be in a
high traffic area with the most visibility. For example a shopping center or near businesses that
the barbershop clients frequent. Second, the quality service is a must. A benefit of the barbershop

is that the wait time is generally shorter compared to a salon where the wait time is longer.
Customers that are satisfied are more likely to return to the barbershop. Third, differentiation of
service with barbershops could be their key to success as well. For example, Old School offers
pedicures/manicures and straight razor shave this is not offered at all barbershops in this local
area. They have differentiated themselves.