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The Barbershop: A Thought

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On a recent visit to a neighborhood barbershop -- one of those places that don't accept credit cards because they don't want to create records that'll make things too easy for the tax authorities -- I learned that the price of a haircut had gone up from $15 to $16.

That fact has no impact for me as a consumer. And I suspect many of the other patrons will find the news similarly un-newsworthy. After all, I simply sat for the cut as usual, and handed the barber a $20 bill, telling him to keep the change. That is exactly what I would have done if the price of the service has still been $15. 

At $15, I feel a bit generous giving him a $5 tip, but that is balanced by the fact that I would feel like a tightwad asking for any change back.

At $16, I don't feel generous, but $4 is still a perfectly good tip, 25% of the listed value of the service. 

So: generalizing from my own case to the customer base in general, I doubt the total revenue rises much with this change in the listing. 

The point, then, must be to change where the revenue goes. The barbers keep less of the revenue stream for themselves than they used to, they put more into the ongoing enterprise -- the rent or mortgage for the location, utilities, purchase of supplies, etc.      

I don't know off hand if the shop has any employees who are NOT barbers. I have never seen anyone in there sweeping up, and it is possible the barbers themselves do such things at the start or end of their day or when business gets slow. But maybe now, with that extra $1 per haircut going into the enterprise, they can hire a janitor? 

I think about things like this rather than actually engaging in inane conversation whilst my hair is getting cut....  
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