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How to Know What to Charge for Hair Services

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How to Know What to Charge for Hair Services

We get it, we understand the feeling of the freeze – ” WHAT DO I CHARGE!?”. Pricing your services as a hairstylist can be one of the most challenging decisions in your career. Charge too little, and you risk devaluing your expertise and overworking yourself without seeing the financial rewards. Charge too much, and you may alienate potential clients. This step by step guide will break down exactly how to figure out what you need to make, what to charge, and provide a simple formula to help you confidently set your rates.

Step 1: Determine Your Personal Income Goals

Before setting any prices, you need to decide how much you want to earn per year. Your income goal should reflect your lifestyle needs, career aspirations, and any long-term savings or investments. Here’s how to break it down:

  1. Calculate Monthly Expenses
    Add up all your personal and business expenses. This should include rent/mortgage, utilities, transportation, groceries, insurance, and any other recurring payments.
    • Example:
      • Rent: $1,200
      • Utilities: $300
      • Groceries: $400
      • Business costs (supplies, rent, marketing): $1,000
      • Total monthly expenses = $2,900
  2. Factor in Desired Profit
    How much profit do you want to earn monthly after covering expenses? Let’s say you want an additional $2,000 each month as profit.
    • Desired income: $2,000 + Total monthly expenses = $4,900/month
  3. Calculate Annual Income
    Multiply your desired monthly income by 12 to get your target annual income.
    • $4,900 x 12 = $58,800/year *note these numbers are just used to the example*

Step 2: Determine Your Annual Working Hours

Now that you know how much you need to make, it’s time to figure out how much time you’ll spend behind the chair. The number of hours you work annually will help you set your hourly rate.

  1. Estimate Weekly Working Hours
    Decide how many hours you want to work per week. For this example, let’s say 40 hours.
    • 40 hours/week x 52 weeks = 2,080 hours/year
  2. Subtract Time Off
    You won’t work every single week of the year. Subtract your vacation time, holidays, and any sick days you anticipate. Let’s say you take 4 weeks off annually.
    • 40 hours x 48 weeks = 1,920 hours/year

Step 3: Calculate Your Hourly Rate

Now that you know your annual income goal and the number of hours you’ll work, you can calculate your hourly rate.

  1. Formula:
    Hourly rate = Desired annual income ÷ Annual working hours – Using our example:
    • $58,800 ÷ 1,920 hours = $30.63/hour
    This is your base hourly rate, meaning you need to charge at least $30.63 per hour to meet your income goal.

Step 4: Factor in Overhead and Supplies

Your hourly rate needs to cover more than just your salary—it also needs to account for overhead costs and supplies. Overhead includes salon rent, products, marketing, and other costs associated with running your business.

  1. Estimate Your Business Overhead
    Add up all your monthly business expenses, including salon rent, product costs, utilities, insurance, etc. Let’s say these total $1,000 per month.
  2. Convert Monthly Overhead to Hourly Overhead
    Divide your monthly overhead by the number of hours you work each month (assuming 160 hours/month for a full-time stylist).
    • $1,000 ÷ 160 = $6.25/hour
  3. Calculate Final Hourly Rate
    Add your overhead cost per hour to your base hourly rate.
    • $30.63 (hourly rate) + $6.25 (overhead) = $36.88/hour

This is the minimum amount you should charge per hour to cover your income and business expenses.

Step 5: Adjust for Expertise, Demand, and Market

Once you’ve determined your baseline hourly rate, it’s important to adjust for factors like your experience level, local market rates, and client demand.

  1. Consider Your Expertise
    If you have advanced skills, certifications, or years of experience, you can charge a premium. Add 10-20% to your base rate.
    • $36.88 x 1.20 (20% markup for expertise) = $44.26/hour
  2. Research Your Market
    Compare your rates with other stylists in your area offering similar services. You want to stay competitive while reflecting your expertise.
    • If your competitors charge $50/hour for the same service, you can confidently set your rate at $44-50/hour.

Step 6: Price Individual Services

Now that you have a clear understanding of your hourly rate, it’s time to apply that to your service menu.

  1. Estimate Time for Each Service
    For example, if a haircut takes you 1.5 hours, you can price it as follows:
    • $44.26/hour x 1.5 hours = $66.39
      Round up to $70 for a haircut.
  2. Add Product Costs for Color Services
    For services that require products (like hair color), factor in the cost of supplies.
    • If a balayage costs you $25 in product and takes 3 hours to complete, your pricing formula will be:
      • $44.26/hour x 3 hours = $132.78 + $25 product cost = $157.78
        Round up to $160 for a balayage service.

Setting Your Prices with Confidence

Knowing how to charge for your services is essential to running a profitable and sustainable hairstyling business. By breaking down your income goals, calculating your overhead, and adjusting for expertise and market demand, you can confidently set prices that reflect your value. Use this guide as a blueprint, and don’t be afraid to reassess your prices as your business grows and your skills evolve.

Not sure if its time to raise your pricing? https://dite.ca/is-it-time-for-you-to-raise-your-prices-as-a-hairstylist/

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