3 Common Mistakes Salon Owners and Stylists make when Increasing Their Prices
Whether you are a Salon Owner or a Stylist, you know that the cost of color, foil, gloves… groceries, gas… the costs for everything are at an all-time high. Unfortunately, the prices won’t stop going up.
Salon and suites will all have to increase their pricing in order to survive.
Pricing seems to be the constant challenge that stylists and salon owners are facing.
How do I increase my prices to survive? But are my price increases actually going to help me to survive? How come when I increase my prices, I still can’t pay myself?
I’m more than certain you’re seeing all over TikTok and Instagram hacks for making more money. Or someone is telling you that you need at least 7 streams of income. Well, multiple is important, but this isn’t going to be about that. There is some good advice on the internet, but there is also a lot of catch 22’s. Meaning, that some of the advice you’ve been getting isn’t actually going to help your business.
So often we get nervous about increasing our prices. “What if my clients leave??”. But what if not increasing your prices actually causes your business to go out of business?
Every year as a business owner, you need to evaluate your prices based on what cost you incur and the demand for your services. I’m happy to report that price increase shouldn’t be a headache.
There are 3 common mistakes we see salons and suites make every day when it comes to pricing their services:
Just picking a number to go up by
You saw the salon across the street increase their prices? So you think it’s your turn. Was your plan to just copy them and other salons in your area? Make sure you have competitive pricing?
Or maybe you saw that you should just increase your prices by $2 during the holiday because your customers won’t notice…
If this was your plan, I’m sorry but this isn’t going to work in the long-term.
Each salon and suite incur costs differently. You will have different amounts of rent, you will order different amounts of color each week. You may take on a different amount of clients each week and different services.
Just increasing your pricing can negatively impact your business. Why, well for one, TAXES!! But just increasing your prices won’t necessarily ensure you’re covering your expenses. It’s so important to do an analysis of the costs you’re incurring monthly. This leads us to our next problem…
Not accounting for all of their costs in their pricing
When pricing your services, it’s so important that you ensure that every service will cover your rent, products used, and paying yourself.
We have a quick breakdown on how to find how much you need to charge to ensure you’re profitable here.
The current pricing model isn’t setting up Salons or Suites to be successful in the long term. Especially when it comes to covering our costs, especially as color costs are increasing.
Making the Parts + Labour a method crucial for ensuring you’re covering all of your costs. Here is a quick tutorial on how to. SalonScale is so proud to be able to provide software to salons and suites everywhere to help ensure they’re covering their costs at every appointment! (p.s. we have a FREE 30-day trial!)
Not thinking about the future
When pricing services, you need to consider how the price increase will improve your business’ financial health. Such as creating a savings fund. Or creating more opportunities for education, a raise in the future, or saving to retire one day as well etc.
So often we get stuck in the ‘now’ and do not think about the future. You don’t know what the future will look like, you could have a great fortune but you can also face despair like bankruptcy.
It’s time to lean into your discomfort around finances. As an Salon Owner and Stylist, you cannot be afraid of money. Being afraid of money will set you back. Take some time and think about where you want to be in the next 6 months to year, and take the first step today.