Are you asking the right person for advise when it comes to your pricing strategy?

At HEIR Education we tell our students on a daily basis to make sure they price their services profitably. But, what do we mean by that?

Pricing profitably simply means that there is a calculated % of money left over after a service once all the stock, wages and operational costs have been met. This strategically calculated amount of money is then used for things like:

• to build a buffer for the business

• Invest into areas of potential growth for the business

• Salon refurbishments

• Pensions

• Investments

Without profit in a business the business is vulnerable and put plain and simply, just winging it.

The meaning of profit:

‘money that is earned in trade or business after paying the costs of producing and selling goods and services’

So, now that we have that covered, we want to know. What is your pricing strategy?

How do you make sure you price your hairdressing services profitably?

A common problem within the hairdressing industry is that we are never actually taught how to price our services correctly.

A very common practice for self employed hairdressers or salon owners is simply to charge a similar price to their competitors and then to use heavy discounts to try and drive more clients into the business during quieter times.

We see this daily on social media, and we know it happens because, well, we are ashamed to admit this, but we followed the same strategy for nine years!

Then we admitted defeat!

Nine years in business and still very little to nearly no profit to show.

We decided to cut the crap and educate ourselves, thank goodness we did!

After working with an amazing business coach, Jessica Crane, we implemented a very clear pricing strategy, Jessica taught us her profit equation and within a matter of weeks our profit grew by 19%.

This was the one big mistake we had made consistently for nine years, we had our prices all wrong.
Now that our eyes have been opened wide, we use our education platform to tell other hairdressers daily that they must have a clear pricing strategy!

The most frustrating thing is when we see other hairdressers asking in forums or Facebook groups for advice on their prices.

We see posts like, ‘how much do you all charge for balayage?’ and ‘should I increase my prices?’

And honestly we want to scream!

Now don’t get me wrong, we don’t think anyone is out to sabotage and the people who comment are simply just trying to help, but, it’s very likely that the person asking for guidance is actually getting the wrong answer to the question they asked.

You see, if a salon in a city centre priced a balayage with a 20% profit margin and a freelance hairdresser priced a balayage with a 20% profit margin. The two prices would be very different to each other.

The profit is what is left over after all the stock, wages and operational costs have been met. So even though the profit margin is the same, the stock costs, wages and operational costs will definitely be very different to each other.

Therefore, how can a hairdresser possibly be able to tell another hairdresser what to charge if they don’t know all of that information.

So this has led us to the conclusion that in order to gain advise on how to price correctly then make sure you ask the right person, someone who has a clear pricing strategy in their business, or a business coach.

When you are able to price your services profitably you will never fear a price increase again.

You will make informed decisions on your prices and everytime your rent has increased, or you stock costs go up, you will confidently build that into your pricing structure.

Asking the wrong person for help with your pricing can have devastating consequences on your business and livelihood.

If you don’t price your services with profit in mind, you could be constantly working at a loss, this is a sure fire way to head straight into burnout or even worse, bankruptcy.

So next time you ask someone for advise on pricing, ask yourself:

Is the person you asking advise qualified to help you.

Does the person have a proven strategy in place?

Does the person understand their own business costs?

If yes… then ask the question, absorb the answer and make the relevant changes.

If the answer is no, then it’s probably best not to ask in the first place!

Do you have a clear pricing strategy in your hairdressing business? We would love to hear from you in the comments below!

Want to know more about pricing profitably? Check out ‘charge your worth’ We teamed up with Jessica Crane to show the exact pricing strategy which turned our business around! In this accessible and affordable, real talk education, we even divulge a breakdown of the exact breakdown of a bleach and tone service.