Money Matters

What’s Your Time Worth?

Candice Everest, owner of Panache Nail Studio in Stanwood, Wash., offers these four steps to determine how much to charge for a given service.

Deciding how much to charge for your services doesn’t have to be a guessing game. Nor should you simply see what others are charging in your area and do the same. The numbers should ultimately reflect your unique situation. Candice Everest, owner of Panache Nail Studio in Stanwood, Wash., offers these four steps to determine how much to charge for a given service. Get out your calculators!

1. Calculate your monthly overhead, including everything not directly associated with services: rent, utilities, insurance, licensing, paper supplies, dispensary, refreshments, magazines, etc. Next figure out how many service hours you will work per month (not counting opening, closing, cleaning, and administration). Then divide your overhead by the number of hours worked per month — this tells you what it costs per hour for overhead. So if your overhead is $1,000 and you work 35 service hours per week, divide $1,000 by 140 hours (35 x 4) = $7.14 per hour. This assumes four weeks worked per month. 

2. Calculate your cost for each service, including everything used (products, wipes, cleanser, pro-rated wear on towels, wear and tear on tools and equipment, etc.).  Also figure in expenses like credit card fees and state taxes.

3. Determine the hourly rate you want to earn while doing services. (Keep in mind that your pay needs to cover your time while doing things that don’t generate revenue, like cleaning.)

4. To determine how much you should charge for a given service, add the following:

> time multiplied by hourly overhead cost (step 1)

> service cost (step 2)

> time multiplied by hourly wage cost (step 3)

Once you have all of the services calculated you can compare them to each other and find price points for services that should be comparable or different. For instance, most people agree that a full set should cost more than a complete re-balance, but they actually have the same cost, more or less, so when you bump the price of a full set up you will end up with a higher hourly rate.
Finally compare with other salons in your area. If you are considerably higher, make sure you’re offering the extras that make it worth the cost.

SPONSORED CONTENT: DeEnterprises recommends that you examine the cost of your products and consider buying products in bulk at a discount. Browse their website for ideas on saving money for your salon purchases.

Keywords:   raising prices     service pricing  



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