We have an analysis of what your competitors are offering, on what terms and for what price. Now compare their price level for services with yours in individual groups and suggest yours without any restrictions.
Simply put – how much should services in the salon cost compared to the competition and what you already know about it. Now you can see the strengths and weaknesses of your salon so it will be easier.
STEP 1
From your prices, subtract direct costs related to the treatment, eg cosmetics / raw materials / components for the treatment, commission for employees for each treatment / service. As a result, “main profit” will remain. The one resulting from the performance of the procedure itself (e.g. price 50 – cost 10 = 40 profit on the procedure).
STEP 2
Next, determine the performance. Assuming that you have 100% of customers in the salon – calculate how many individual treatments you can perform every day. There will be conflicts, e.g. in the same clinic, you can perform the treatment with one client at the same time. The treatment takes an hour, so you will perform 10 treatments in 10 hours.
Perform this calculation for each treatment, based on real limitations, e.g. by running a brow bar with 4 stands, you can serve a maximum of 40 clients. This way you will know your “production capacity” or performance.
STEP 3
Multiply your unit profit from the first point (for each treatment) by the number of people you can serve (point 2) each day (e.g. 40 profit x 20 people = 800). Make a do for each treatment / service you offer. A list of profits from treatments will be created, which will show you how much you can earn each day on each treatment with the maximum number of clients.
STEP 4
Set the popularity of individual treatments as a percentage so that the sum of the popularity of all treatments is 100%. Use your own experience from the local market, and if you don’t have one – general use Google Trends. Enter the names of the treatments there and then select the place where you work on the map.
The percentages you see are multiplied by the profit value from point 3 (e.g. 800 x 57% = 456). This way each of your services will show how much profit it brings and at the same time – what (statistically) demand for it is in your region. Remember this in the context of marketing materials and price list design.
STEP 5
The result from the point above is the planned “first” daily profit of your beauty salon. Multiply it by the number of working days.
STEP 6
From the amount you get, subtract the fixed costs, which are the same whether you have clients or not. For example, rent, costs of employees, telephones, internet, accounting etc.
STEP 7
What you’ll see at the end is your planned gross including fixed costs. This is your reward for your effort.
STEP 8
Remember – it’s a plan. From the first month, note the deviations from it – what the actual interest of the clients looked like (chart from point 4) and what the actual profits were. When the deviations are significant (over 20%) – take a closer look at this procedure and the competition and its advertising.
This way you will learn how to set prices in a beauty salon. They will be fully related to the market situation (related to the place where you operate) and take into account the calculation approach.
