Approach to Set Right Price in Your Barbershop
It is likely that, given recent times, you will have to review the prices in your hair salon. Fortunately, Carl Hinder has developed a clever equation to establish the right prices for your hair salon.
Social distancing, PPE and disinfection are just some of the effects that will affect the company in the coming months, and their pricing must take this into account.
Carl is a consultant who helps hairdressers optimize their business. It focuses on correct prices rather than low/high prices and has a clear method to determine what the correct price could be.
Carl says: “Over the past few months, many companies have received mortgage holidays or rental holidays, subsidies and other types of financial support that are ultimately added to the accumulated debt that they will recover. Many stores are already running at breakeven and therefore this is the most important time to check prices to make sure that what you are asking for your services is correct.”
Here are Carl’s steps to set the right prices for your hair salon
- Make a List of each overhead for your business for the year. Everything! Right down to the Barbicide and the tea bags.
- Add them all to an annual total.
- Add up the amount of winnings that you need to make. This is a reward for you that you rightfully deserve if you take the risk to build the business.
- Divide by 12 for a monthly breakdown. Share four for a weekly Breakdown. Divide five (or the number of working days per week) for a daily breakdown. Divide by 60 for an accurate breakdown by the minute.
- Now you have the total cost per Minute for the company.
- Multiply the amount by the average time it takes to provide a service. So, for example, a 50p per Minute for a 30-minute Service costs.
Carl says: “A lot of hairdressers are worried about raising their prices. They are worried about losing customers. If you have used competition as a guide for pricing your services, there is a 70% chance that you do not currently have the exact price of your business.
“By recalculating and adjusting prices to the right price, you risk losing some customers at first, but increasing your profits. I also advise my consulting clients not to justify their price increase or apologize for a price increase.”
Apologizing to customers for the price of a service does not happen in any other industry, so why would this happen in the hairdressing industry?
Carl believes that correct pricing is at the heart of any business strategy because without fact-based pricing, none of the other ways to develop a good business will work effectively.