An interesting question Simone, and one where the answer should be built into the ‘DNA’ of how you run your salon. One of the reasons that I became a member of 3•6•5 more than 25 years ago was that, like most salon owners, I trained to be a hairdresser and not a businessman. Businesses sell their products based upon their manufacturing costs, their distribution and marketing costs, their fixed costs, the profits they want to make, they add a buffer for potential discounting and then add the relevant sales taxes and this produces the price they sell their product at.
Hairdressers tend to look at their competitors, they often undercut them just slightly and then pray that at the end of the day they will make a profit. All of your concerns are systematically factored into regular price rises within any normal business. Hairdressers are often scared of raising prices because they react emotionally and not with a business mindset. Often they try to absorb any increased costs, which can only ever have one effect. Reduced profits! If I were to give you some ‘tough love’ then I would say that the National Living Wage increase shouldn’t bother you at all. As an industry, minimum wage appears to hit us far more than it should, but that’s another whole article. The reality is that the rise happens every year, just like your stock costs increase and all of the other costs across your business.
So back to the ‘DNA’ of your business. Every year at the same time, just before a rising market (for example at the beginning of April or October ), we recommend that you increase the price of every single service in your salon by the same percentage. No ifs, not buts, no emotion… just do it!
Price rises are part of life and deep down clients know that too. However at the same time as you raise prices, look at everything that you do and ask yourself: “is your ‘product’ truly worth what you now need to charge for it?” Are you delivering an average product or a first class market-leading one? Deliver today what you delivered yesterday and you will only be able to charge today what you charged yesterday. Raise your ‘spec’ and you will be able to raise your prices. Because you’re worth it, Simone!