Sometimes it’s tough to figure out how to accurately price services. Let’s start at the top: What does “pricing perfectly” mean? Most of us were taught to price our services based on “what was appropriate for our demographic.” Those rules simply don’t apply anymore. Your prices should be based on three things: 1) your expertise and demand, 2) your time and 3) your product cost. Likewise, your clients also need to know three things: 1) the promised end result of the service, 2) how much time it will take and 3) what their investment will be.
I recommend tracking the key numbers in your business for six to eight weeks. That way you get a good idea of what is really coming in and out when it comes to services, products and your time investment. Examples of some of these key numbers include how long a service takes you to complete from beginning to end (make sure to track what kind of service it is); application time for color/chemical services; what your total service dollars are per service; and tips per service. At the end of six to eight weeks you are going to have a weekly average rate, and then you can have a good idea of what your new average hourly rate is after seeing it week after week.
From here the goal is to clean up your price menu, not raise it. You want to build a nice, smooth and even foundation for your price menu so in the future you can raise everything evenly. Your first raise will just include raising what needs to be raised to meet the rest of your services. Typically, I find this is haircuts, single-process colors and color corrections.
How do you know when it’s time for a raise? As a rule of thumb, if you’re solidly booked out with zero openings for four to six weeks, it’s time for a price raise. This will allow you to make room for your “dream clients” and create a new window of growth.
Being burned out, overbooked and underpaid is not success. The goal is to have a regular stream of income, to have personal/work-life balance and to spend your effort in the salon doing services you love that make the most impact financially. Once you truly take control of managing your work behind the chair like a business, it will change your life.