How to price beauty salon services?

How much should a make-up job cost? What price should microdermabrasion be? Pricing services in the beauty industry can be very difficult. How to price cosmetic treatments so as to cover all costs and make a profit?

Very often, owners of small beauty and hair salons do not even know how much they earn per month. Sometimes the amount earned is so low that it barely covers all costs. Why? This is the result of a lack of comprehensive pricing of ongoing treatments.

If you are also in a similar situation,, check out how to price your services so that they provide you with a regular and attractive income!

Why is pricing of services so important? Many salon owners in the beauty industry do not price their services and provide them at prices analogous to those seen in other salons. However, a lack of individual valuation is an easy way for a salon to not only fail to make money for itself, but even cause losses, which can lead to its bankruptcy.

Providing a price quote for beauty services, but also for hairdressing, make-up, manicure, aesthetic medicine or other beauty services, is therefore crucial. Why?

By pricing your services correctly, you can:

• Maintain your salon by covering all associated costs,
• Educate yourself to offer new services,
• Invest in your business by buying new equipment, tools or cosmetics,
• Create a financial cushion for a rainy day,
• Cover your personal expenses and save.

How NOT to price services?

The pricing of beauty salon services only seems simple on the surface, which is why there are so many mistakes involved. What do you need to watch out for?

The main mistakes associated with the pricing of services are:

• Basing prices on competitors,
• Using rigid hourly rates,
• Using a fixed margin for all services.

The use of these pricing methods does not take into account the many factors involved in operating a salon, including the specific nature of the business, the cost of equipment, the seasonality of sales, changing customer behaviour, the salon's own knowledge and experience or the actions of competing companies in the industry.

As a result, the pricing of services does not match the real costs, effort and time expended, thereby reducing potential profits.

How to price cosmetic treatments?

There is no ready-made recipe for making a price quote. However, there are a number of factors to consider to ensure that pricing your beauty salon services is beneficial to both you and your customers.

The prices of beauty services are influenced by many elements that are different for each salon. This is one of the reasons why pricing should be done individually and separately for each procedure in the price list. How to price cosmetic treatments?

1. Identify the costs of running a salon

The first step will be to determine the costs, that are incurred in connection with the activity. The cost of providing services is influenced by:

• Business costs – rent, utilities, commuting, taxes, accounting, insurance and others,
• Costs of purchasing or leasing and depreciation of equipment,
• Costs of purchasing preparations, cosmetics,
• Employee costs – salaries and other payments to employees,
• Customer service costs – customer cards, service software or coffee,
• Training costs,
• Marketing costs.

2. Determine the cost per salon hour

Based on the above factors, wthe cost per hour of salon work can be estimated, which should then be multiplied by the time spent on the service and preparation for it.

3. Take into account your strengths

This category includes, but is not limited to, the location of the salon, its opening hours, its specialisation, its experience and reputation in the industry, specific skills and the services provided based on these.

The higher the competitive advantage, such as opening the salon to evening hours or providing services not available at other outlets, the higher the price you can set, as customers will be prepared to pay it.

4. Take independent factors into account

To make your calculation complete, don't forget to also take into account factors that are beyond your control, but have an impact on your costs or the attractiveness of your offer in the eyes of customers.

These factors include, first and foremost, inflation, i.e. rising prices that drive spending ever higher. The second important issue is the competition, whose actions are worth monitoring in order to constantly keep your offer at the highest possible level.

Should raising prices be feared?

Absolutely not! Many salon owners, especially smaller salons and those operating in small towns, are concerned that an increase in service prices will result in a rapid exodus of customers to competitors. As a result, they do not update their price lists or leave the least profitable procedures on offer.

However, raising prices does not mean losing clientele at all. On the contrary, it may generate more interest in the offer. This is mainly due to the fact that very low prices, especially in the beauty industry, are associated with lower quality services.

Using realistic prices means that the salon can not only earn more, but is also seen as more professional and trustworthy. In addition, higher prices mean more money for further training, new equipment and cosmetics for the practice, which translates into even better service and customer satisfaction.

How to present prices in the salon?

When prices for cosmetic services go up, it is worth ensuring that they are presented appropriately. How can this be done without discouraging customers from taking up the offer?

To emphasise the professionalism of the services provided, it is worth indicating in the price list which equipment and cosmetics are used.

The contrast method is also an interesting idea. It involves presenting two prices – a lower price and a higher price, for example for a premium service such as a show hair/nail styling, an additional treatment or an express service. This gives customers a choice and allows them to opt for a version of the service that is attractive to them – often the more expensive one.

Summary

Realistic pricing of services in the beauty industry allows for a profitable and rewarding business. Therefore, when you are opening a salon or want to make changes to an existing business, reliable pricing is essential!