I was talking to a fellow industry friend the other day and we got to talking money. We’re close enough that I asked her how much she makes on a particular service, and she said, “I don’t know? Enough.”
I.Was.Blown.Away. Actually I wasn’t, because I know how industry folks can be (love ya!), but it still left my head spinning. We should know, within a few dollars, how much we’re making on each service we provide, where the bulk of our money is made, and how to increase it. Here’s some info I found helpful in figuring it out:
1. Work from the top down. Determine what the “going rate” is for that service in your area and with your level of experience. This is simplifying it, but for example, the average price for a facial (no frills or special equipment) in my area is $75. Once that’s established, find the lowest cost for the products you need. The lower the product/supply cost, the more money in your pocket. How many of ounces of product do you use per facial? How much is each product by the ounce? Do you give anything away with each facial? This is how specific it should be. $75 – this amount= the profit of each facial. I believe–especially in the beginning–that clients will pay a certain amount for a service, so figuring out how low you can get the back end cost is the best approach. Figuring out how much WE need to make first is a costly mistake in the beginning–once we create relationships and loyalty, this can be a consideration. Developing a rapport, trust, and loyalty can take time; being smart about what we’re charging and how we can do it for less is quick.
2. Market the shit out of your most profitable services (assuming you like doing it and are good at it). Share those photos. Create loyalty programs around those services. Ask for referrals for that service. Traditionally it’s body waxing (high service cost, with a low product cost) or cosmedical treatments (where the service costs pays for the equipment investment pretty quickly). No sense in investing hours into a service that makes you only dollars. More profitable time is time better spent.
3. Maximize the profit of each client. I will never discount the relationship and connection we create with our clients–that is, after all, one of the unique parts of our job. BUT each client is an opportunity. Let’s start small, how can you make 5 more dollars from each client? Add-on treatments (that are properly marketed ahead of time)? Can a brow wax be upgraded to a brow AND (the much needed) lip wax? Can a custom facial go with an IPL treatment or nano needling service? Are there retail opportunities beyond just skincare that someone could pick up as a gift? These are all potentially beneficial for your clients, and you. It’s not about squeezing clients for what they’re worth, it’s providing them a more custom, beneficial experience. $5 from 5 clients a day, 5 days a week is $500 a month…that just paid part of my rent!
Crunching numbers can be tedious; but being smart about where we’re spending our money, our time, and maximizing the opportunities with each client will pay off. By the end of 2020, how much can you increase your profit by simply shining a light on the details of your revenue?