In case you missed parts 1 and 2, I’m including the same intro for all 3. Ok, so I want these first couple paragraphs to really stick in your brain too! It’s important!
I want every lash artist out there to be successful. You can’t be a success if you are undercutting yourself.
So many lash artists today are starting out with no business experience. While this can be great, as there are no bad habits to unlearn, it can also put a new artist at a disadvantage when it comes to making their business successful.
Not knowing how to price services is a hot topic in many groups and forums. The worst advice I see, on a daily basis, is to charge what others in your area charge.
No! No, no, just… NO!
You are not them. You do not have the same expenses that they do, you likely don’t use all of the same products or have the same amount of space or the same advertising costs, or the same service timing. About the only thing you can guarantee about Judy down the street is that you both pay the same amount at Starbucks.
So why would you price your services to cover costs you don’t have or worse Not cover costs that you have and Judy doesn’t?
The first question you should be asking yourself is…
How much does it cost me to perform this service?
There is much more invested in a service than your time and the products that touch the client. There is equipment and tool costs, there are cleaning supplies, there are utilities, there is insurance and licensing cost, not to mention the money you spent on training to offer this service and advertising to get that client through the door.
All of those things factor into your service pricing. My basic calculation is:
Product Cost + Overhead Costs + Hourly Wage + Business Profit = Service Price
Each of these must be calculated for each and every service, because it’s not the same for all services. Today it’s all about those Hourly Wages! About time, right?
How Much Do You NEED To Make?
The whole point of doing what we do, when it comes right down to it, is that we wouldn’t want to be doing anything else, right? Awesome! But that doesn’t mean that we shouldn’t be paid for the work we do! Whether you’re working for someone else or have your own business, you have to pay your Personal expenses out of what you make.
You are not just the owner of your business. You are an employee of your business!
If you are self-employed, you have to learn to separate the two entities. Your business needs to make money, but so do You.
You need to pay yourself without bankrupting your business. Please, please, please pay yourself properly.
Not only does it make a difference at tax time, it can affect your credit rating and your ability to borrow money for things like a car loan or a mortgage.
How much do you need to make each month, to pay your personal bills? Do you even know what your personal monthly expenses are? And I mean everything here! From the average grocery bill to taxes to saving for retirement or a college fund.
If you don’t know what you need to make, how can you pay yourself a living wage?
The simple answer is, you can’t. Please, take an hour or two this week to actually go through your bank statements and credit card receipts with a calculator and figure out how much you spent, ON YOU, over last 3 months. This is not about your business expenses. This is about your life outside the lash room.
Rent, utilities, food (including take out or restaurant visits), insurance (car, home, life and medical), car loans and mortgages, clothing, are you saving for a vacation or a wedding? Add that too!
Add…everything EXCEPT business expenses! Google Docs has great budget spreadsheets that are easy to customize, easy to read and great at tax time for either yourself or to share access with your accountant.
So Now What?
You added up all of your expenses and let’s say that you need to take home $2000/mo. That’s how much you spent, on average, over the past 3 months.
What about Retirement? Are you saving anything? Do you want to? Self employed people don’t have a regular retirement plan. Tack on another $500/month to go into your future!
What about Taxes? Did you factor what you’re going to have to pay out next year? Don’t forget to add in enough to cover your personal taxes. I usually add 23% to my total.
I’m going to round it off to $3000 today. How smart do you need to work to make at least that figure? Let’s stick to a 40hr work week and 4week month, for the moment.
That seems doable, right? Let’s go a little deeper.
Once again, we need to break this down by service, because each service has it’s own timing. A one hour appointment is great, but what about those 1.5hr and 2.5hr appointments. You won’t be paying yourself for just one hour of work. What about all the work you do between appointments?
A 1.5hr appointment would be $28.12 in wages, with these numbers.
A 1.5hr appointment isn’t just 1.5hrs, though. It includes the time you take to reset your room for the next appointment, time you spend advertising on social media and editing pix, too. All those little things add up! When you’re working for someone else, HOPEFULLY, they’ve already accounted for that time and have set your hourly wage accordingly. When working for yourself, you have to do the math yourself.
But how do I work that to my service pricing?
I block out time after each appointment to do my cleanup. I am the one who turns everything on and sets up for the day, every morning. I’m the front desk person. I’m the customer service representative. I’m the marketing manager. I’m the freakin’ janitor. I do pay myself for that time spent, that time not physically with the client. That time is included in my service pricing because that time is dedicated to my clients and preparing for them. I break that $18.75, into 20min blocks.
For a 1.5Hr Appointment it looks like this:
$28.12 (time with client)
+ $6.25 (time working without client present)
= $34.37 wages
How much time you spend on each client, when you’re not actually with each client, is variable. You might spend a full 8hrs scheduling posts. It might take you 5min to edit and post that awesome pic you just snapped. Or you might spill a bottle of adhesive and spend a full 20min just cleaning up as fast as your can before that next client arrives. 20min an average that works well for me. How much you pay yourself for your working time, away from clients, is up to you.
So, 3 weeks in, using only 3 products, 2 overhead expenses and a guesstimated income need we’ve got working service prices of: $38.02 (1.5hr fill) and $51.36 (2.5hr Full Set).
I’m hoping that by this point you’ve taken some time and worked out your actual product and overhead costs. Your homework this week is to figure out your actual income needs and what your hourly wages need to be!
Here’s a list of personal expenses to start you off:
Average Household Expenses
- Utility Bills
- Loans (car, student, line of credit)
- Credit Cards
- Groceries (Your Daily Starbucks Counts!)
- Entertainment (video games, date night, club night, movies)
- Clothing (Don’t forget the shoes!)
Things Most Forget
- Household items (furniture, bedding, curtains)
- Repairs (plumbing, the car, that broken chair)
- Medical Expenses/Medications
- Gym membership
- Beauty (makeup, haircuts, tanning bed)
- Vacation fund
- Holiday Spending (Christmas, birthdays, Mom & Dad’s Days, etc.)
- Did I mention TAXES?
What are some monthly expenses or unexpected purchases around your house that I didn’t include?
I’d love to hear from you! Comment, reach out on social media or email me below!
Next week I’m gonna wrap up this Service Pricing series with a pretty bow. Don’t forget to do your homework!