If you’re wondering whether your prices reflect the time and effort your staff puts in, while still being fair to your clients, a salon cost calculator can help you.
The best way to see how much your overall salon expenses come out to, plus the average profit that you’ll need to make to meet your budget, is to figure out your cost per minute. Then, you can come up with an effective pricing strategy.
So, how do you calculate cost per minute?
Calculating this is essential if you want to put a proper price on your salon’s services. You’ll need to figure out your annual spending, working hours and the salary you pay each employee in order to do this calculation. Don’t worry - we can help.
This cost covers everything from the price of rent and utilities to what salon owners spend on instruments and towels for the business.
To get an exact number, you’ll also need to look at the pricing of things like inventory for sales and services, stylist support and education and the amount needed to cover monthly stylist salary (as well as that of other team members).
Oh, don’t forget to consider the average income you pay yourself per month, too. All of these things will have an effect on pricing, later.
This will help you set your prices for services in a way that’s fair to each customer and your stylists. Don’t worry - it’s simple. To make this calculation, you’ll need to find your rate for each minute.
Here’s the best way to start:
Combine all your annual spending, then divide this number by 12: This is what your business spends on the price of literally every single thing, including products for services, the space itself, utilities and any extras.
Find your working hours for each chair: Most hair salons operate at least 5 days a week. If your business has five chairs and is open 10 hours a day, 5 days a week, then each chair could take a client for 50 hours a week, or 200 a month.
Now, if this amount is then based on 5 chairs, multiply it by 5 and you’ll get 1000 a month. This will help you set a price, later on.
Determine your staff member’s salary per minute: This calculation is based on their employee salary per month, divided by their working hours, divided by 60.
Add your running costs per minute and your staff member’s salary per minute: this is the price of your total each minute.
For each client visit, you’ll need to consider your base cost each minute (Your running cost each minute + staff pay), multiply it by your average time for this service, then add what you’ll pay for products used.
Service Cost = (Running Cost/ Minute + Staff Cost/ Minute) x Service Time + Products Used
Now that you know this, you can begin to get a better idea how your pricing should look.
Salon software can help you to determine your needs and set prices that hit each revenue target, while still being fair to new and existing clients. With our salon calculator, you can manage your business services smoothly and have more time to focus on what matters- your clients.
All business owners know that setting prices and adjusting pricing as needed is one of the most important things you’ll do to attract and retain clients. Of course, you’ll need to be aware of your local clientele and any competition when you come up with your final pricing strategy.
Using a hairdresser calculator is a great place to begin. You can stay aware and “on top” of your business costs, while still setting each price in a way that attracts clients. If you’re looking to improve your salon pricing strategy, a salon cost calculator will take a lot of the guesswork out of it.
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