Articles > Business > Raising Prices? Why Inflation Should Not Be The Only Factor
Last updated: May 01, 2024

Raising Prices? Why Inflation Should Not Be The Only Factor

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Photo Credit: Instagram via @mysalonsuite

1. Find Confidence In The Price Increase Conversation

 

Here’s how according to Kelly Westbrook, Vice President of Member Development for MY SALON Suite®: 

 

  • Talk about your industry and education often. Talk about your continued education experiences with your clients so often that when it comes time for a price increase, there will be no explanation needed. “You’ve put the work into this profession, you’ve continued education and in order to level up—[you must] talk about your industry all the time,” says Kelly who educates thousands of beauty professionals each year.

 

  • Figure out how much money you spend on business expenses. Understanding how much money goes into your business helps you understand you and your business’ true value.
    • Here’s what to consider:
      • Cost of rent or commission—whether you’re a salon suite renter or work in a commission salon, understand where your money is going just to have a location to service your clients in
      • Cost of your website and POS software
      • Taxes and annual fees
      • Cost of investing in in-person and online continued education  

 

  • Focus on your monetary goals. After evaluating your profit margin, decide how much profit you want to make a year and calculate the workload needed to get there.
    • Ask yourself these questions to help reach that ideal number:
      • What is your current schedule like: working days, hours, services booked?
      • What services take the most time and least amount of time?
      • What services earn you the most/least amount of revenue?
      • How many clients are new clients vs. regular returning clients? How often do they visit your chair?
      • What percentage of your business is retail?
      • How many referrals are you getting?
      • How many are new clients vs. regular returning clients? How often do they visit your chair?

 

Photo Credit: Instagram via @mysalonsuite

 

You deserve a raise—click here for tips on implementing your price increases after you’ve established them.

 

2. Here’s How Your Environment Affects Your Prices

In order to charge your worth and keep your prices competitive, you must determine the impact your current environment has on your prices.

 

Here’s a list of factors to consider:

  • Are you in a salon, chair rental or salon suite?
  • Did you recently move into your own salon suite?
    • Moving into your own suite is a great opportunity to update your prices as you are providing your client with a more luxury experience while also taking on all business expenses yourself. For example, MY SALON Suite offers private, luxurious suites that are exclusively yours to service your clients.
  • What’s currently going on in the market?
    • Is there a higher demand for the services you offer? 
  • Where are you located?
  • What are other people in your area charging for the same services you offer?

 

Pro Tip: Kelly recommends raising your prices every 12 to 18 months by 3 to 10 percent each time. Exactly how much you choose to raise them by should depend on where you are in your market and career.

 

“It can be anywhere from 3 percent if you’re on the higher bracket of competition or 7 percent if you’re on the lower bracket,” says Kelly. For stylists going from graduating cosmetology school to renting a suite, Kelly says their prices could be raised by 10 percent.

 

Photo Credit: Instagram via @mysalonsuite

 

Considering opening your own suite? Use this profit calculator to see how doing so helps you keep more of your money.

 

3. Give Your Service Menu An Overhaul With These Easy Steps

Raising your prices is a great time to do two things: Reevaluate your menu and print off physical menus your clients can hold when reading—here’s why:

 

  • Ask yourself these questions when evaluating your menu:
    • How many services are you offering?
    • Do you offer too many? Too few?
    • Do you regularly do all of the services on your menu?
    • Is it time to remove services you never do?
    • Is it time to include new services?
  • Your price structure should reflect your experience and make the best use of your time. Here are the four hair price structure options: 
    • A La Carte Pricing: Services are broken down individually
    • Experience Pricing: All inclusive bundled prices based on experience
    • Hourly Pricing: Services are charged at an hourly rate factoring in service, product usage and steps needed to achieve desired result
    • Career Path Pricing: Some commission salons are organized by tier system pricing (Master Stylist, Senior Stylist, Studio Stylist, etc). Prices vary depending on your stylist’s experience and the tier they are in
  • A physical menu acts as your business’ advertisement and is key if you’re working on price increases and establishing your business.
    • Putting the menu in your clients’ hands allows you to talk them through the investment they’re making
    • Clients can leave with the menu and give, show and talk about it with other potential clients

 

Photo Credit: Instagram via @mysalonsuite

 

Here are bonus tips when implementing your price increase:

  • Price increases should happen every 12 to 18 months consistently
  • Keep your mind out of your client’s wallet when raising your prices
  • Communicate price adjustment 60 to 90 days before increase occurs

 

Worried about communicating your price increase to your long-time clients? Click here for the word-for-word dialogue to use!

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