November 2008

Make Serious Money in Your Salon

By Gordon Miller

When it comes to making serious money in the salon, it is necessary to address two key concepts:

1. A pricing strategy that includes regularly scheduled price adjustments to reflect market issues and inflation.

2. An incremental sales strategy focused on building additional revenue on top of your base service offerings.

There are certainly other issues to consider when you’re building a successful business geared to last for the long haul. Such things as hiring and firing practices, commission structure, inventory control and employee benefits are a few examples. But if your books are not yet full, those two issues can make a huge difference in your long-term success.

Price increases remain one of the industry’s most profound weaknesses. With inflation picking up, client dollars are worth less today then they were last month—let alone last year—which means you must bring in more to just stay even.

A great example is the cost of backbar products, such as color. In the last year, salons have seen costs soar in this area, as the costs to manufacture and ship product have gone up for producers. Therefore, you must have a strategy to pass on rising costs to your clients, who benefit from the use of these ever more expensive products.

At the heart of this strategy is the simple idea that you must increase prices on a regular basis simply to stay even in an ever-changing economy. Add to that the idea that experience counts, meaning as your skills increase, so should your value. Of course, to make that argument you must make sure your skills are growing from year to year by staying educated. Then, let your clients know about your efforts to hone your skills and knowledge; that way it’s easier for them to perceive your enhanced value.

Commit to raising prices on your services a minimum of five percent per year, more if you’re great at what you do, and lock in a plan. It is important to note that you should not make it a big deal to clients. Do not make major announcements regarding price increases; after all, can you think of another business that does? Be prudent, be sensitive to your competitive position in the marketplace, look at your ratio of requests to walk-ins (more requests means client loyalty, which translates into a more secure client book) and be confident in your approach to adjusting prices to remain competitive and viable as a business.

“Incremental sales” is one of the most powerful considerations when looking at your profitability. The point is to find more revenue from every client by adding additional services and by selling plenty of retail. The first step is to have something to offer—add-on services and a well-stocked yet focused retail offering. The second step is to actually ask for the sale.

Whether it is you, your receptionist or a shampoo technician, you need to be looking for that add-on sale and then complete that sale. If you feel you are not a salesperson, hire a receptionist who is; then provide incentives for that person to get the job done for you.

Remember that retail rules when it comes to added sales per client. Great salon retailers are often paying for their employee benefits—which can create low to no staff turnover in these salons—and often also their rent with their profits from retail.

In the meantime, remember the two key concepts of scheduled price adjustments and robust sales strategies, and you’ll be on the road to making serious money at your salon.

Gordon Miller is the Executive Director for the National Cosmetology Association, the largest organization of salon professionals in the world. Its mission, since its inception in 1921, has been and continues to be to ensure that working salon professionals have the tools and resources available to create career success with integrity. For more information, visit or call Membership Services at 312-527-6765.