How much should you expect to earn as a beauty professional? If you work as an employee, you’re entitled to no less than legal compensation (prevailing wage, tax withholdings, etc.) and other required protections and benefits provided by your employer. That’s the price salon owners must pay to have employees available to perform services for clients, no matter how busy their business.
The shortage of qualified workers and excess capacity of space to rent make this a very competitive market.
No one forces salon owners to employ anyone; employers, not workers, bear the financial and legal responsibilities for engaging someone to work. When seeking employment, never compromise your rights for false promises or shady business practices. Demand the legal minimums and negotiate for as much as possible in additional compensation.
If you work as an independent contractor (self-employed) or as a salon owner, all your compensation comes directly from your clients. However, the freedom to price yourself comes with the risk of sacrificing your potential to compete on “affordability.”
No one is entitled to receive professional beauty services.
Whether just starting your beauty business, or reinventing an existing one, pricing decisions can be overwhelming. “Overpricing” may discourage potential clients, while underpricing will discourage and possibly ruin you financially. Ideally, your service prices will strike just the right balance between appealing to discerning clients and providing adequate compensation so you can earn a living doing what you love.
“Price is what you pay. Value is what you get.” – Warren Buffett
Spend any time in the beauty industry and you’ll recognize the first words of most potential clients: “How much is a (insert name of service here)?” If you instinctively answer, no matter what that number, the answer will be wrong. Why? Because without context, a mere number proves meaningless. Beauty services are not created and delivered equally. Clients cannot appreciate the quality of your work when they don’t understand what they’re paying for. It’s your responsibility to communicate value.
Avoid the common and misguided mistake of competing on price.
The only thing more frustrating than feeling that clients take advantage is the realization that it’s your fault.Pricing decisions require research, but not the kind you might expect. How many times have you been advised to let what other beauty pros and salons charge guide your own pricing? That’s ridiculous when you must account for your own compensation requirements and unique costs:
• Lease
• Equipment, tools and products
• Utilities (internet. telephone, water, gas and electric, etc.)
• Outside/professional services (website hosting, accounting, laundry, etc.)
• Licenses (business and professional)
• Insurance
• Taxes (retail, property, etc.)
• Marketing/advertising
• Education
• Professional memberships
• Payroll, or your time if working independently
Because costs vary widely based on your circumstances, procedures and sourcing, it’s imperative that you do this math for yourself. The best tool for doing calculations remains The Service Pricing Toolkit produced by Tina Alberino, creator of This Ugly Beauty Business. As in any business, we should make every effort to reduce costs and increase profit margin.
An earlier version was published by Beauty Cast Network.