Business

Price for profit

From recalculating treatment times to introducing memberships and tiered pricing, Eve Oxberry explores how salon owners are finding practical ways to improve profitability

Underpricing remains a challenge across the beauty industry, with many salon owners still unsure how to calculate their treatment prices for true profitability. Combined with a tendency to feel apologetic about charging more, even experienced professionals can find themselves busy but not financially thriving.

To address this, at Professional Beauty’s Growth Summits (running from March to June this year across the UK), leading salon owners are sharing the practical strategies they use to price with confidence, balancing profit, client loyalty and long-term business growth. Here’s what the London panellists had to say.

Start with the numbers, not the treatment

For Elle Winslow, founder of Winslow Skincare in Sussex, the turning point in her business came from stripping pricing back to basics. “We worked out our hourly rate just to switch the lights on – the booking system, the PDQ machine, all of those little details,” she explains.

“Then we looked at wages, then the treatment cost, and then our profit margin. If you go through those steps, you know you’re making money at the end of it.” That process revealed a major issue. “It was almost like we were paying ourselves below minimum wage,” she says. “We had to look at the numbers and say, 'OK, we’ve got to charge more'.”

Andrea Dorata, owner of Andrea Dorata Marlow, has built this thinking into a simple formula he now uses across his business. “I divide what we charge by three,” he says. “One third is wages, one third is taxes, one third is running costs – and then I add 10% profit on top.” Crucially, he doesn’t assume full bookings. “I also calculate a buffer for downtime, because nobody is fully booked 100% of the time. All of these numbers are built into my pricing.”

Fix timings before raising prices

Before increasing prices, Kelly Shaw, salon business coach and owner of K:Spa in Hampshire, advises looking closely at how time is used in the diary – something she recently worked through with a client she was mentoring. “We were looking at eyebrow waxing,” she says. “She had 15 minutes booked, which meant she could only do four an hour, and wasn’t hitting her hourly target.”

The solution wasn’t to increase the price, but to adjust the timing. “If we changed that to 10 minutes, suddenly she could hit or exceed her target,” Shaw explains. “Most of us can do an eyebrow wax in 10 minutes. Of course, therapists would like longer but you have to be led by the numbers.”

This kind of operational change can have an immediate impact on revenue. “That’s a huge difference just from changing diary timings,” she adds, highlighting how efficiency can be just as important as pricing.

Build around what you want your team to earn

For Dorata, pricing starts with what his team should be earning. “I base it on wanting a mid-level stylist to earn £20 an hour net,” he says. “So I have to build that into every price.”

This ensures that every service supports not only the business but the team behind it. “If we don’t change with business needs, we find ourselves short,” he adds. “For me, it’s about making sure my team are rewarded properly.”

Use memberships to guarantee income

One of the most concrete strategies discussed was Shaw’s use of memberships, which she credits as a major driver of stability in her business. “Memberships literally run my business,” she says. “That money goes into my account on the first of the month and I know my wages are paid.”

Her VIP Skin Club is designed to guarantee regular visits while increasing client lifetime value. “I priced it higher than a standard facial, but it includes all of my treatments across the year,” she explains. “So, clients might start with more basic treatments and then build up to things like microneedling as part of their skin journey.”

She also builds in added value through perks such as starter kits at cost price, birthday vouchers, VIP events and small retail incentives. The model prioritises consistency over maximising individual transactions. “Yes, I might make more if they paid individually,” she says, “but will they come every month? I know with a membership, they will.”

Winslow sees growing potential in this model too. “People love that feeling of being part of something exclusive,” she says. “That ‘club’ mentality is really powerful.”

“Don’t shop from your own pocket. Price from your client’s perspective, not what you would pay”

Add value instead of discounting

While packages can be an effective way to encourage repeat visits, Winslow is clear that discounting should not be the focus. “It’s not about giving 20% off,” she says. “It’s about adding perceived value – maybe a product that doesn’t cost us much but is worth a lot to the client.”

This approach allows salons to maintain their margins while still enhancing the client experience. “It keeps the client coming back, and every visit is an opportunity to upsell and retail,” she adds.

Consider tiered pricing

Tiered pricing is a well-established model in hairdressing, and one that Dorata believes offers clear business benefits. “It’s a great tool,” he says. “We have an entry level, which makes the salon accessible to more people, and it allows younger team members to build a clientele.”

At the same time, it supports higher pricing at the top end. “I often compare it to buying a car. Advertising shows you the top spec, but you can choose the base model,” he explains.

Shaw has also used tiered pricing to retain clients while increasing her own rates. “As I stepped back from treatments, raised the prices for the treatments I personally do but I didn’t want to lose clients,” she says. “So, they could move to a senior therapist and stay within the business.” Meanwhile, she charges less for treatments with her apprentice, meaning clients have more choice. “Maybe they want to save up and see a senior once every few months rather than a junior every month – it gives options.”

Review regularly to avoid big jumps

Rather than waiting until prices need a significant increase, Shaw reviews her financials monthly. “I look at my P&L every month to make sure we are where we need to be,” she says. “If costs go up, I can see when I need to adjust.”

This helps avoid sudden, large increases that can feel uncomfortable for both salon owners and clients. “Otherwise, you end up panicking and putting prices up by 20% all at once,” she says.

Dorata agrees that regular reviews are essential. “Every six months is ideal,” he says. “At the very least, once a year.”

Winslow adds that pricing should also reflect skills and development. “If you massively upskill or invest in training, that should be reflected in your prices,” she says.

Train your teams to understand the numbers

Shaw has embedded financial awareness into her team culture by openly sharing how the business operates. “I sit down with them and get them to list everything the salon has to pay for,” she says. “Then we go through everything they’ve missed – software, licensing, all the extras.”

This transparency creates a noticeable shift. “They get to the point where they say, ‘we don’t need to give that much away’ because they understand the business.”

Dorata takes a similar approach from the beginning of a stylist’s career. “I teach the business of hairdressing from apprentice level,” he says. “They need to understand how the numbers work.”

Sell results, not price

For Winslow, one of the most effective ways to support higher pricing is changing how treatments are positioned to clients. “We don’t sell, we prescribe,” she says. “If a client wants a certain result, this is the treatment they need.”

She likens it to a medical model, where the focus is on outcomes rather than cost. “If a doctor prescribes something, you don’t question it, you just follow it. It’s the same with treatments.”

By shifting the conversation to results, price becomes less of a barrier. “Whether it’s £10 more becomes irrelevant if the result is what they want,” she adds.

Remove the emotion from pricing

All three panellists agree that pricing needs to be approached as a structured business process. “Look at pricing as a system,” says Shaw. “We have systems for everything else in the salon; this should be no different.”

Winslow highlights the importance of perspective. “Don’t shop from your own pocket,” she says. “Price from your client’s perspective, not what you would pay.”And for Dorata, the bottom line is “if you’re not making a profit, you’re running a hobby.”

Want to learn more about mastering pricing? The topic will be covered in our panel “Charge Smarter, Sell Better: Service Pricing & Retail Strategies” at the upcoming Regional Growth Summits in Birmingham (May 11) and Leeds (June 8). Find out more and register for free to join us at professionalbeauty.co.uk/regional-growth-summits