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Competition is tough. That's not the only thing you need to be afraid of when pricing your services. Customers too are looking for value for their hard-earned money. As you can see, you can't just whip up a price list from your imagination. It has to be practical-to you and your clients.
Competition is tough. That's not the only thing you need to be afraid of when pricing your services. Customers too are looking for value for their hard-earned money. As you can see, you can't just whip up a price list from your imagination. It has to be practical to you and your clients.
What to learn how to price appropriately without chipping on your profits? This blueprint is for you. Let's boogie, then.
Here are a few tips to follow:
Your biggest threat is your competitors. Salons, like grocery stores, are many. If your prices are through the roof, you face the risk of closing down. To charge fairly, visit salons in your area and see what they charge for various products and services.
And there's this; for every salon you visit, do a SWOT analysis of them to understand their strengths, weaknesses, opportunities, and threats. This level of due research will give the best competitive edge.
There are certainly some unique attributes that make your salon a top choice. These factors have affected pricing. For instance, is there ample parking space near your salon? Are your staff well-trained? Do you offer services that many salons can't? Is your shop open for many hours?
Besides being used as a basis for pricing, your unique attributes can be used in marketing to show customers why you should be their top choice.
Do you track your expenses? Because if you don't, how do you know if you're in the red or green? Track your expenses from rent, products used, staff salary, electricity, water, and other bills. Once you know what you spend monthly, price your goods and services accordingly.
Recommended Read: Discover essential salon forms and contracts
You see, it's easy to tell a customer, "Hey, we used two bottles or three bowls, and each cost x$." However, when a bowl or bottle is finished and the client needs just a small amount to complete the process, it's easy to say "It was just a tiny amount. No need to charge."
What you don't know is, if you keep avoiding charging for those tiny additions, they total to a bigger amount and you will lose some bucks. It's very much okay to charge per gram basis for those minimal product additions.
Separating labor charges and product costs can help you understand if your inventory is bringing in returns or not. Plus, it's easier to explain to a customer why the figure totals to what they've been charged. Invest in salon business management software and let it streamline a chunk of the work for you
There are tattoo artists that charge insanely high rates because they are the real deal. If your salon booking system shows you are booked most of the time, it's very okay to charge steep rates.
However, if you are somewhere in the middle, you may want to consider a lot of factors before pushing your prices up.
When the rent goes up, the energy bill is scary to look at, and the price of food and other household items have shot through the roof, it's fine to increase your charges. Regardless of that, you can use a salon POS software to manage multiple aspects of your business settling payments.
Beware of issuing discounts once you have set up your pricing and profit margins. You don't want to attract bargain hunters who won't purchase until you announce a promotion. Instead, discover effective strategies for salon loyalty programs.
You know your financial goals. You know what you want to see in the bank come the end of the year.
If your salon booking system shows you are always fully booked, it's understandable to want to push your prices up a little. If not, you might consider bringing them down a little.
By the way, you don't have to feel bad about raising your prices, especially when inflation pangs itch too much or when it's been over a year without making changes to your price list. All having been said, best of luck.
You will have to calculate your total budget, working hours, product costs, expenses, and even factor in inflation to really hit the right pricing spot.
A good profit margin for salons averages at roughly 8.2%, which towers above general business at 7.7%. With proper management, a salon can yield profit margins of up to 10%.
Overheads in a salon can include payroll (if you have staff), electricity, water, heat, inventory, taxes, software/POS systems, insurance, marketing expenses, legal, and training.
Are you ready to take the next step in growing your business? Well, let’s take a look at some simple and effective methods of attracting and retaining customers at your salon.
Employee management is one of the most taxing duties of running a salon. You need to draw up work contracts, accurately track commissions for each of your workers, communicate expected standards, direction, and more.
Like other industries, salon business, and the beauty industry, in general, is experiencing a boom. Colorful nails, glass skin, nail art, and other bold choices are on the rise.
One of the more prudent business decisions while running a salon, is to have some sort of customer retention plan offering special beauty tutorials or simply bettering your customer service.