How to Price Your Salon Services in 7 Steps
When it’s time to open a new salon it can be an exciting time in your entrepreneur journey. But before you can open your doors to the public, you need to figure out how to price your salon services.
Minerva Beauty is already your go-to supplier for salon equipment and furniture but we are also a great resource for salon owners - both new and experienced. We have put together a list of considerations to help you understand how to calculate your salon service prices. By the end of this guide, you’ll know how to make a price list for your salon that should set you up for success. Then you’ll be ready to open your doors and start serving customers in your area.expenses associated with paying your staff’s wages and yourself. Keep in mind that as a salon owner, your workload will likely include administrative work as well and not just salon services with customers. So make sure to include all of your time when making these calculations.
1. Determine Your Salon Costs
One of the most important things to know before you can calculate your salon service prices is what all of your costs are. For a salon, costs can be broken down into a few high-level categories:
Your product costs should include any physical thing you’ll need when performing your salon services. Examples of this would be shampoo, conditioner, hair coloring, and more. You’ll also need to factor in the frequency you anticipate going through these products and how often you’ll need to reorder more as this will be an ongoing cost that will stay with you as long as you are in business.
Labor costs are pretty straightforward to calculate. This would include all the expenses associated with paying your staff’s wages and yourself. Keep in mind that as a salon owner, your workload will likely include administrative work as well and not just salon services with customers. So make sure to include all of your time when making these calculations.
Make sure you give yourself some extra time when determining your overhead costs because there are a lot of overhead costs that you may not think of immediately. There are some obvious overhead costs like rent, utilities, insurance, and equipment like styling stations. But there may be other hidden costs that fall into the category of overhead costs that you won’t want to forget. For example, costs associated with your website or subscription services for salon POS equipment. This is why we often recommend hiring a salon business consultant who has experience determining overhead costs you should expect.
2. Factor in Desired Profit Margin
We all open salons because we are passionate about hair services. But we are also trying to better our lives while chasing that dream! So you’ll need to know what kind of profit margin you are aiming for with your salon. Industry standard is typically 2-3x your product costs. In some cases you can get away with charging more than that industry standard for things like specialty or luxury services. Even though you are a new salon, make sure you don’t undervalue your time and expertise.
3. Research Competitor Prices in Your Area
When opening a new salon, it’s important that you do it your way. But potential customers in your area will still have to make the choice over which salon they want to give their business to. Factoring in the average prices for salon services in your area can be very helpful. To figure out salon prices in your area you can look on their websites, call and ask, or pay them a visit in person. Doing a visit to their salon is also a great way to know what the salon experience is like, so it serves as competitive research beyond pricing - which is an added bonus! You’ll want to adjust your pricing so that you are competitive. Keep in mind that you don’t have to beat every salon’s prices, you only need to aim to be in the general area if your services are comparable. If you are confident in your services and you know that you can provide a better experience for customers, you could easily consider charging more than them.
4. Calculate Your Minimum Price Per Service
In order to know your minimum price per service you’ll need to make sure you’ve done all the other steps leading up to this point. Add up your product, labor, and overhead costs and multiply that total by your desired profit margin. That should give you an idea of what your prices should be but you may need to adjust based on the information you gathered when researching competitor prices in your area.
5. Adjust Your Salon Prices for Different Staff Levels
It is common practice for salons to charge more for salon services being done by more experienced stylists. The other side of that is that it is common to charge less for newer stylists who may be fresh out of cosmetology school and are more of an entry level stylist. When you are starting a new salon business, you’ll probably have a small staff but it is good to have stylists at different experience levels so that you can offer lower priced salon services to more price conscious clients.
6. Create a Price List For Your Salon
Organize all of your salon services into categories. Examples of service categories could include:
List all of your services by service type, staff member, and price. Format your price list so that it is professional, easy to read and understand. Then do a high resolution printout for signage in your salon. Also consider adding a similar price list on your salon’s website.
You’ll want to re-evaluate your salon pricing once or twice a year to make sure the prices you are charging are still enough to cover your costs, bring in your desired profit margin, and are in line with the current state of the industry and the economy at large. Adjust your prices accordingly whenever it is necessary to assure you are covering your costs and profits.
7. Offer Package Deals and Discounts
Customers are inevitably going to be shopping for a deal for salon services. One of the ways you can bring costs down for certain customers is to offer flexible prices for a specific set of circumstances. Some examples of scenarios that you may want to consider offering discount pricing include:
- First-time customer specials
- Seasonal promotions
- Bundles for frequent clients or loyalty programs
Pricing is an important part of running any business and it is especially true for anybody running a successful hair, nail, or beauty business. If you take the time to accurately calculate your costs, research your competition, and create an organized price list, you’ll have the confidence knowing that you are charging fair rates based on your experience and expertise. When you find that right balance of salon services and prices, your business can thrive and reach all of your profit goals.
Don’t forget to visit Minerva Beauty’s Idea Center for design inspiration and more great business tips!