Pay Raise

If you are reading this article, you have probably been through some very tough times in the past few years. If you have managed to survive and thrive, you should be proud of your accomplishment. Demand is up, but the cost of doing business has risen, and employees are in short supply. We hear this nearly every day. You know you can’t stay in business if you do not make a profit. You need to pay yourself a competitive wage. Your business needs to keep pace with inflation. You may be hesitant about raising your prices, but this may be the best time to not just raise prices, but get ahead of the curve and make price increases a habit. Start the process by taking a few minutes to reflect on how you feel emotionally about a price increase—both personally and for your business. It’s important to know your value! Raising prices has two sides: your personal factors and business reasons. Refl ect on what you provide for your guests. Do you pride yourself on exceptional services and always exceeding their expectations? Do you take extra time to provide personalized services? Do you provide samples or mini add-ons at no cost? Don’t minimize the value of what you provide. It will help you approach the price increase process with confidence.


There are multiple opinions on this question. Some businesses institute a regular price increase every 12–18 months. Others use formulas based on productivity—a full appointment book or a long waiting list signals time for a price increase. These approaches have merit, but the best approach may be to assess multiple factors. Collecting some key data can help you arrive at the decision to move ahead or wait on a price increase. From your salon software or booking records, review what percentage of the schedule is typically booked. If you are consistently booked for 80–85 percent of your available time over a 2–3-month period, your demand is beginning to exceed your supply. When you have a long waiting list, you can’t fi nd an open appointment for a new client, or you fi nd yourself booking appointments 6–8 weeks out due to limited availability, it’s time to raise prices. Staff schedules and availability may be impacting your ability to fi ll your appointments, and this should be considered as well. Make a list of your price increases for supplies, shipping, labor, cleaning supplies, insurance, and other nonnegotiable increases. How much have the increases been? What is the average percentage of these increases? If you have just been absorbing these increases, you are not positioning your business for growth or profitability. And when was the last time you raised your prices? If it’s been a while, it’s time to raise prices!

While many businesses raise prices in January, there really is no best time. Our economy is a fluid factor in your business reality.


While the easiest approach is to simply institute a flat rate increase across all services, there are other factors to consider. Price increases in the beauty industry generally do not run more than 10 percent at a time. While a flat rate is the easiest to implement, you might want to be more strategic. Calculate what the impact of a flat rate increase will be to your business profitability. An important step is to calculate what each service really costs you to provide. The numbers will tell the story and will help you increase prices with confidence.

Another popular approach is to raise prices on a portion of your menu or on the most popular services you offer. You need to do your homework first. According to the “80/20 principle,” you can expect to make 80 percent of your income from 20 percent of your menu.1 You need to identify those “hero” services and figure out what your true cost is. Subtract that from what you charge for the service, then divide it by the average time it takes to finish that service. That’s your hourly wage. Is that number enough for your time, expertise, and products used?

Article by Patti Biro
This article appears in Volume 3 Issue 1 of AHP Indie Stylist magazine


AHP Indie StylistAHP Indie Stylist magazine

AHP Indie Stylist is AHP's bimonthly publication, created to speak directly to you, the independent hair stylist and barber.

In this issue:
Industry Choice Award Winners: The votes are in and the industry has spoken
Women in Barbering: Lici "Lady Barber" Febo shares her journey 
     • AHP Indie Barber of the year: David Peters is the owner of Steel City Barber Lounge and an up-and-coming force in the barber world

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