How to Open a Barbershop in Illinois

Opening a barbershop in Illinois requires more than just barbering skills. You need a valid barber license, a registered business structure, and compliance with state and local regulations. Illinois has over 6,800 solo barber businesses operating today, but the licensing and registration process can be confusing for first-time owners. This guide walks you through each step, from getting your barber license to opening your doors.

Step 1: Obtain Your Illinois Barber License

Anyone who cuts hair in your barbershop, including you, must hold an active Illinois barber license (or a cosmetology license) issued by the Department of Financial and Professional Regulation (IDFPR). The shop itself needs its own certificate of registration, covered in Step 3.

License requirements:

• Graduate from a licensed barber or cosmetology school after completing 1,500 hours in the study of barbering over at least 9 months. Starting January 1, 2027, a 3,000-hour barber apprenticeship program will also qualify.
• Pass the Illinois barber exam, which tests theoretical knowledge and practical skills.
• Submit your application to IDFPR with proof of training hours, exam results, and identification.
• Renew your license periodically. Illinois requires barbers to renew their licenses on a set schedule and maintain continuing education credits (confirm renewal timelines and costs with IDFPR).

Start by contacting the IDFPR Division of Professional Regulation for current fee schedules, training requirements, and exam dates. Their website will have the complete application checklist and approved schools in Illinois.

Step 2: Choose Your Business Structure

Decide whether to operate as a sole proprietorship, LLC, or corporation. Most small barbershop owners choose one of these two structures:

Sole Proprietorship is the simplest option. You operate under your own name or file an assumed business name (DBA). You do not file any formation documents with the Secretary of State. All business income flows directly to your personal tax return, and you pay self-employment tax on net income. This is the quickest and least expensive route, but you have unlimited personal liability for business debts and lawsuits.

Limited Liability Company (LLC) provides liability protection and some tax advantages. You file Articles of Organization with the Illinois Secretary of State, pay a filing fee of $150 for standard 10 business day processing (or $250 for 24-hour expedited service), and maintain a registered agent in Illinois. A multi-member LLC is taxed as a partnership by default and pays the 1.5 percent personal property replacement tax on net income but no Illinois corporate income tax; a single-member LLC is taxed like a sole proprietorship by default. You must file a $75 annual report every year before the first day of your anniversary month. If you miss it, the LLC falls out of good standing, and a $100 penalty applies if the default is not cured before the first day of the second month after the anniversary month. The liability protection and potential tax savings often outweigh the ongoing compliance costs, especially if you hire employees.

If you are uncertain which structure fits your situation best, consult a qualified accountant or attorney. They can evaluate your personal liability concerns, tax position, and long-term business goals.

Step 3: Register Your Barbershop with IDFPR

Once you have your barber license, you must register your barbershop location with the IDFPR. This is a separate application from your personal barber license. The IDFPR maintains a salon/shop registration system that tracks all licensed barbershop locations in the state.

Your barbershop registration will require:

• A valid street address (not a P.O. Box). Confirm the exact address requirements with IDFPR.
• Ownership structure, owner contact details and FEIN.
• The license number of any owner, managing partner or CEO who holds an Illinois license under the Act.
• Copies of your Articles of Organization or Incorporation, and any assumed name certificate.
• The $40 registration fee. Every registration expires November 30 of even-numbered years.

Important Chicago note: Chicago's municipal code excludes barbers from home occupation licensing. This means you cannot legally operate a barbershop from a home office or home-based location within Chicago city limits. You must lease or own a commercial space. Verify current Chicago zoning and home occupation regulations to confirm this restriction has not changed.

Step 4: File an Assumed Business Name (If Needed)

If you plan to operate under a name other than your legal name, you must file an assumed business name certificate. Illinois calls this an "Assumed Name" filing.

For LLCs: File Form LLC-1.20 with the Illinois Secretary of State. The fee is prorated based on when your filing cycle ends: $150 for years ending in 0 or 5, $120 for 1 or 6, $90 for 2 or 7, $60 for 3 or 8, and $30 for 4 or 9. Renewals cost $150 for five years.

For sole proprietorships: File an assumed business name certificate with the County Clerk of every county where you operate (if operating in multiple locations). The Secretary of State does not handle assumed names for unincorporated businesses. You must also publish a legal notice in a newspaper of general circulation once a week for three consecutive weeks. The county clerk charges a $5 statutory indexing and filing fee, but counties add additional recording and publication costs. Total costs vary by county.

You can search the Secretary of State business entity database at https://apps.ilsos.gov/businessentitysearch/ to check if your proposed barbershop name is available.

Step 5: Register with the Illinois Department of Revenue

A barbershop that sells products (hair care items, beard oil) or has employees must register with the Illinois Department of Revenue. This is free and quick.

Register online at https://tax.illinois.gov/businesses/registration.html using Form REG-1. Online registration typically processes in one to two business days. You will receive a Certificate of Registration, which must be displayed at your business location if you sell retail products.

During registration, you will provide your business structure (sole proprietorship or LLC name), business address, type of business (barbering services), and estimated annual revenue. This registration makes you liable for collecting Illinois sales tax (6.25 percent state rate) on retail product sales. Barber services themselves are generally not subject to Illinois sales tax; confirm with the Department of Revenue.

Step 6: Secure Your Location and Equipment

Your barbershop location must meet IDFPR health and safety standards. These include adequate space, proper ventilation, clean equipment, and compliance with local health codes. IDFPR can inspect registered shops.

Essential equipment and supplies:

• Barber chairs
• Mirrors and proper lighting
• Barbering tools: clippers, shears, razors, sterilization equipment
• Waiting area seating
• Hot and cold running water
• Soap, towels, and sanitation supplies
• First aid kit
• Sharps disposal container for safety

Budget for commercial rent, utilities, and insurance. Barbershop rent varies widely depending on location and square footage. Factor in higher costs in urban areas like Chicago.

Step 7: Obtain Business Licenses and Insurance

Local business license: Many Illinois municipalities and counties require their own local business license or permit in addition to state registration. Check with your city or village clerk to determine if a local license is required and what it costs. Chicago, for example, issues business licenses through its Department of Business Affairs and Consumer Protection.

Insurance: Obtain barber liability insurance, also called professional liability or malpractice insurance. This protects you if a customer is injured or claims injury due to your services. A typical policy covers bodily injury and property damage. If you hire employees, you must also carry workers' compensation insurance, priced on your payroll. Shop around with multiple insurers to get competitive quotes.

Sales tax permit: Your Department of Revenue registration serves as your sales tax permit. You are now legally required to collect and remit sales tax on applicable retail sales. Keep detailed records and file sales tax returns with the state according to the schedule provided (typically monthly or quarterly).

Step 8: Set Up Your Business Operations

Before opening day, you need systems in place to run your barbershop:

• Accounting: Open a separate business bank account. Keep all business income and expenses separate from personal funds. Consider using accounting software or hiring a bookkeeper to track income, expenses, and sales tax.
• Scheduling: Choose a scheduling system (online or paper) to manage appointments and avoid double-booking.
• Signage: Display your IDFPR shop registration and state licensing certificates visibly in your business location, as required by law.
• Employee agreements: If hiring barbers, have written agreements that clarify compensation, hours, policies, and independent contractor vs. employee status. Consult an attorney to ensure compliance with Illinois employment law.
• Health and safety protocols: Establish procedures for sterilizing tools, handling sharps, and maintaining cleanliness to comply with IDFPR health standards.

Tips for Success

Know your local market: Research the barbershop density in your area, customer demographics, and pricing. Some neighborhoods are oversaturated with shops; others have few options. Choose a location that fills an actual demand.

Build your brand early: Decide on your barbershop's style and brand identity before opening. Are you a high-end men's grooming salon, a budget-friendly neighborhood shop, or a specialty shop? This affects your pricing, location, equipment, and marketing.

Hire licensed barbers only: Every barber working in your shop must hold a current Illinois barber license. Verify licenses through the IDFPR website. Hiring unlicensed workers exposes you to significant fines and legal liability.

Keep licenses current: Renew your personal barber license and shop registration on schedule. Late renewals can result in fines or temporary closure orders.

Maintain detailed records: Keep receipts, payroll records, sales tax filings, and license renewal documentation. The IDFPR and Department of Revenue may audit your records.

Common Mistakes to Avoid

Operating without proper registration: Do not attempt to cut hair without a valid barber license and shop registration. Penalties include fines up to several thousand dollars and criminal charges.

Neglecting sales tax: Failing to collect or remit sales tax is a serious violation. The Department of Revenue can assess back taxes, penalties, and interest. Stay organized and file on time.

Hiring unlicensed barbers: This is illegal and exposes you to liability. Always verify that employees hold current licenses.

Skipping insurance: Operating without liability insurance is risky. A single customer injury claim could bankrupt your business.

Ignoring local regulations: Chicago and other municipalities have specific zoning, licensing, and home occupation rules. Verify requirements for your jurisdiction before leasing a location.

Not renewing registrations: Let licenses lapse and your shop will be forced to close. Set calendar reminders well in advance of renewal deadlines.

Expected Timeline and Costs

If you already hold a barber license, you can open a barbershop relatively quickly. Confirm current shop registration processing time with IDFPR once you have a location. If you need to obtain your barber license first, add several months for training and exam preparation.

Startup cost estimate (solo proprietor, first year):

• Barber license renewal: varies (confirm with IDFPR)
• Shop registration with IDFPR: $40
• Business registration with Department of Revenue: free
• Assumed name filing (if applicable): $30 to $150 depending on your filing year
• Barber equipment (chairs, mirrors, tools, sterilization): varies
• First month rent and utilities: varies by location
• Liability insurance (annual): get quotes
• Local business license (if required): set by your city or village

Ongoing annual costs include rent, utilities, supplies, insurance, and business registration renewal ($75 for LLC annual reports). Your exact costs depend on location, shop size, and business structure.

Legal Disclaimer

This article provides informational guidance and should not be construed as legal or tax advice. Barbering regulations and business licensing requirements in Illinois can change. For current fees, exact requirements, and guidance specific to your situation, consult:

• Illinois Department of Financial and Professional Regulation: https://idfpr.illinois.gov/
• Illinois Secretary of State, Department of Business Services: https://www.ilsos.gov/departments/business-services.html
• Illinois Department of Revenue: https://tax.illinois.gov/
• A qualified accountant or business attorney licensed in Illinois

Final Thoughts

Opening a barbershop in Illinois is achievable with the right preparation. You need a barber license, a registered business location, proper insurance, and a commitment to following state and local regulations. The path is straightforward once you understand the requirements. Start by contacting the IDFPR to confirm current licensing fees and timelines, then work through the steps in order. Thousands of barbershop owners have successfully opened businesses in Illinois; with planning and attention to detail, you can too.