How to Price Your Salon Services (Without Underselling Yourself)
Most salon owners set prices based on what competitors charge. Here is a better approach that starts with your actual costs.
Pricing based on what other salons charge is a race to the bottom — and it almost always means you are undercharging. Here is a cost-based approach that ensures every service is actually profitable.
Start With Your Cost Per Hour
Calculate your total fixed and variable costs per month: rent, wages, insurance, software, products, utilities. Divide by the number of productive hours per month (staff hours actually in services, not admin time).
If your monthly costs are $15,000 and you have 200 productive hours, your cost per hour is $75. Every service needs to generate more than $75 per hour to be profitable.
Calculate Each Service's True Cost
For a service that takes 45 minutes with a product cost of $12:
- Time cost: 0.75 hours × $75 = $56.25
- Product cost: $12
- Total cost: $68.25
Your minimum viable price for this service is $68.25. Your actual price should be higher — to account for profit margin, occasional slow days, and room to offer promotions without losing money.
Stop Comparing With Competitors at Different Cost Structures
A salon in a suburban strip mall with lower rent and lower wages has fundamentally different costs to a salon in a city CBD. Pricing yourself to match them makes no sense if your costs are different.
Your price reflects your cost structure, your skill level, and the experience you deliver. Own it.
How to Communicate a Price Increase
If your prices need to come up, give at least 4 weeks' notice, communicate it clearly (in your booking confirmation messages, at the front desk, on your social media), and frame it around the value you deliver. Most loyal clients accept a well-communicated price increase. Those who leave were likely marginal clients anyway.
Review Prices Annually
At a minimum, review your pricing every 12 months and again whenever your major costs change (rent renewal, award wage increases, product price increases). Use your Trimsy reports to see which services have the highest volume and margin — those are the ones to optimise first.