Setting Up Your Barber Business the Right Way in NC

You’ve got the skills, the passion, and maybe even a chair lined up. But before you fully dive into building your barber career in North Carolina, taking a few steps to set up your business legally is crucial. It protects you, helps with taxes, and builds a professional foundation. Here’s a breakdown of the key steps to get legit in NC:

1. Choose Your Business Structure

This is a foundational decision impacting liability and taxes.

• Sole Proprietorship: This is the default if you start working for yourself. It’s simple – you and the business are legally the same. Easy to start, but your personal assets (car, house) aren’t protected if the business faces debts or lawsuits. Your business income is taxed as personal income.
• Limited Liability Company (LLC): This is a very popular choice for barbers. An LLC creates a separate legal entity from you, the owner. This means your personal assets generally have protection from business liabilities. For tax purposes, a single-member LLC is usually treated like a sole proprietorship (“pass-through taxation”), avoiding the “double taxation” some corporations face. Setting up an LLC in NC involves filing specific paperwork and fees.

Why it matters: An LLC provides crucial personal asset protection that a sole proprietorship doesn’t.

2. Name Your Business & Check Availability

• Legal Name: If you operate as a sole proprietor under your own name (e.g., “John Smith”), you might not need to register the name itself. If you form an LLC, the LLC’s name is the legal name (e.g., “John Smith Cuts LLC”).
• Assumed Name (“Doing Business As” or DBA): If you’re a sole proprietor using a business name different from your own (e.g., “John’s Sharp Fades”) or an LLC operating under a different name than its official LLC name, you likely need to file an Assumed Business Name Certificate with the Register of Deeds in the county where you operate. There’s typically a small fee (around $26).
• Check Availability: Before registering an LLC name or filing for a DBA, search the NC Secretary of State’s business registry online to ensure the name isn’t already taken by another registered entity.

3. Register with the NC Secretary of State (for LLCs)

If you choose to form an LLC, you need to file Articles of Organization with the North Carolina Secretary of State.

• What’s Needed: You’ll provide the LLC name, the name and address of your Registered Agent (someone located in NC designated to receive official legal documents – this can be you if you have an NC street address), the principal office address, and the names of the organizers.
• Filing: This can usually be done online via the Secretary of State’s website.
• Fee: The current filing fee for Articles of Organization is $125.

4. Get Your Employer Identification Number (EIN)

An EIN is like a Social Security number for your business, issued by the IRS.

• Why You Need It: You’ll almost certainly need an EIN to open a business bank account. You also need one if you plan to hire employees or operate as a corporation or partnership. Even for single-member LLCs, getting an EIN is highly recommended for banking and establishing the business’s separate identity.
• How to Get It: Apply directly on the IRS website.
• Cost: It’s FREE. Beware of sites charging a fee for this service.

5. Register with the NC Department of Revenue (NCDOR)

Depending on your specific services, you might need to register with the NCDOR.

• Sales & Use Tax: If you plan to sell products (like pomade, shampoo, tools) to clients, you will likely need to register to collect and remit North Carolina Sales Tax. You can register online via the NCDOR website.
• Withholding Tax: If you plan to hire employees, you’ll need to register for withholding tax.

6. Obtain Necessary Licenses & Permits

• Barber License: This is paramount. Ensure your individual NC Barber License is active and displayed as required.
• Local Business License/Permit: Check with your city and county government (e.g., City of High Point, Guilford County). Some localities require a general business license or privilege license to operate, often based on your location or services.

7. Open a Dedicated Business Bank Account

• Crucial Step: Do not mix your personal and business finances, especially if you formed an LLC. Open a separate business checking account using your business name and EIN. Run all business income and expenses through this account.
• Why: It simplifies bookkeeping, makes tax time easier, and helps maintain the legal separation provided by an LLC.

8. Stay Compliant: Annual Reports

• LLCs: North Carolina LLCs must file an Annual Report with the Secretary of State each year by April 15th.
• Fee: The current filing fee is $200.
• Importance: Failing to file can lead to administrative dissolution of your LLC, meaning you lose the liability protection.

Getting Legit Takes Effort, But Pays Off

Taking these steps might seem like a hassle upfront, but establishing your barber business correctly protects you legally and financially. It sets a professional tone and builds a solid foundation for growth. Don’t hesitate to consult resources like D. Hill Style or relevant professionals (like a tax advisor) if you have specific questions along the way.