Formation of a price list in a beauty salon

First of all, you need to ask yourself a few questions and answer them honestly. This is what Liz McKeon advises in HJ magazine . Very interesting tips, and therefore we have translated the material into Russian for you.

Are you pricing your salon services and retail products at the right price given market conditions? Find out by following Liz McKeon's advice.

Choosing the right price for salon services and retail products can be challenging and is something that many businesses struggle with. If you set the price too high, customers will stop coming to you, but if you set the price too low, there will be no profit or customers will assume that your services are of poor quality. Best Price takes into account all your costs and maximizes your profits while remaining an attractive option for your customers.

To achieve the best price, you need to consider production costs, the market, competition, market circumstances, the brands you stock and the quality of your products.

A well-chosen price list should align with your business's financial goals (i.e. profitability), match market realities (are your customers buying products at this price?), and support your salon's position in the market. To set your prices, there are a few things to consider.

Explore the market

Find out how much customers are willing to pay for the service/product, as well as what price your competitors are offering. Consider matching or beating the same prices. However, don't just compare prices, but also make sure that all your costs (both indirect and direct) are covered. Invest time and energy in adequate market research to know and understand the market in which you are “doing” business.

Control your expenses

List all the expenses necessary to open the doors of your salon, for example, and maintain your business. Add all costs together and divide by the volume of services required to arrive at your daily and weekly break-even number. If necessary, ask your accountant to help you, as it is essential to know your expenses.

Consider cost and price

Add a margin or markup to your break-even point. This is usually expressed as a percentage of breakeven. If the price is too high, cut your expenses and lower your prices accordingly. You should include the value of your time in your pricing structure – your time is valuable, so it needs to be factored into your pricing.

Assess your salon’s position in the market

Service positioning is a unique feature of a service in a competitive market. A valuable position serves the needs of the client, they need it, and it also stands out “from the crowd,” which means you can “charge” more. Customers don't always look for the lowest prices. Especially if they know that they are buying something exclusive, or if your salon is located in a prestigious or convenient location for them.

Consider all the factors that influence pricing. For example, how will charging VAT (value added tax) affect your prices? Can you maintain a markup on some services to get a higher markup on other services?

Prices rarely remain fixed for long. Ongoing costs, customers and competitors can change, so keep in mind that you will have to change your prices regularly to keep up with market trends.

Key tips for getting the price right

- Increase prices gradually: Develop a strategic plan for increasing prices over the next 2-5 years and implement it slowly.

- Train your team to communicate price increases correctly so they can comfortably respond to customer questions or objections.

- Consider pricing at different levels as this will mean your salon will cater to the needs of different types of clients.

- Strictly control discounts and special offers.