Marcus charges $40 for a men's haircut. He hasn't raised prices in three years, even though rent is up 12%, products jumped 20%, and he just bumped his team's pay. Last month, he finally did the math: a $5 increase across his 20 clients a day would mean an extra $25,000 a year. He raised prices on Monday. Not a single client complained.
If you've been avoiding a price increase, or if you set your prices years ago and haven't looked at them since, you're not alone. Most salon owners don't have a real salon pricing strategy. They price based on gut feeling or what the place down the street charges. This guide gives you a better way: a step-by-step method to price based on your actual costs, structure a price list that works, and raise your prices without losing the clients who matter.
Why Pricing Is the Biggest Lever in Your Salon Business
Here's a number that should stop you cold: only 7% of salons actually make a profit. Another 20% break even. The rest go backwards every single day. As Jason Everett of the High Performance Salon Academy puts it: the number one reason is they never built profit into their pricing.
The average salon runs on a 6% profit margin on about $245,000 in revenue. That's razor-thin. One slow month, one staff member quitting, one equipment breakdown—and you're in the red.
The reason pricing matters so much: when you raise prices, almost all of that increase goes straight to profit. Your rent doesn't change. Your utilities stay the same. Product costs barely move.
A 10% price increase on a salon doing $245,000 means roughly $24,500 more per year. Most of it is pure margin.
One UK salon raised prices by 7%. They lost 6% of their clients. Revenue? Up 11%. Fewer clients, more money, less stress.
"Pricing is the thing that will make or break the success of your business in the long term." — Phil Jackson, Build Your Salon
So why don't more owners raise their prices? Fear. Guilt. The worry that clients will leave. But the data tells a different story: when salons raise prices by 5-10%, client loss is typically under 2%. And those who leave over a $3 increase were never your loyal clients anyway.
Put it in the client's perspective: a $5 price increase costs your average client just $29 per year at 5.8 visits. That's less than a single takeout dinner. Most clients won't even notice. But for you, $5 more across 20 clients a day, 250 working days a year? That's $25,000. Same hours, same work, real money.
How to Calculate What You Should Charge
Most salon owners set prices by looking at the competition. As Phil Jackson puts it: *"You're allowing someone who doesn't need to make a profit to inform your pricing strategy. Absolute insanity."* That salon down the street might be going broke, and you've just copied their failure.
There's a better approach. Start with your costs.
Step 1: Calculate your hourly chair cost
Add up everything it costs to keep one chair running for a month:
- Rent (divided by number of chairs)
- Utilities (electric, water, heat)
- Product cost per chair
- Staff cost for that chair (wages + taxes + benefits)
- Insurance, software, and supplies
Divide by your working hours per month. That's your hourly chair cost.
Step 2: Price each service above that cost
Use this formula:
Minimum service price = (hourly chair cost × service time in hours) + product cost + target profit
Step 3: Add your profit margin
If your profit margin target is 15-20%, build it in now, not as a leftover. A 5% margin is surviving. 10% is healthy. 20% means you're running a real business.
Step 4: Check the market, but don't copy it
Look at what other salons in your area charge. This tells you where you're positioned: premium, mid-range, or budget. But your prices should be driven by your costs and your value, not by someone else's menu.
A worked example
Say your hourly chair cost is $65 (rent, staff, utilities, insurance—everything). A cut and color takes 2 hours and uses $18 in product. Your minimum price:
($65 × 2) + $18 = $148
Add a 20% profit margin: $148 × 1.20 = $178
If you're charging $140 for that service, you're losing money on every appointment. Margie Gleeson of the Salon Mastery Society puts it bluntly: a $35 brow service might net you just $6 profit for 30 minutes of work. Her signature $95 version nets $55 in 45 minutes—nine times the profit for 15 extra minutes. Which service would you rather be fully booked with?
How to Structure Your Salon Price List
A good price list is clear and easy to scan. Here's how to build yours.
Group by service category. Keep it simple: Cuts, Color, Treatments, Styling, Add-ons. Clients should find what they need in seconds.
Use "starting from" pricing for variable services. Balayage, highlights, and color correction vary wildly by hair length and density. List "Starting from $150" and quote the exact price at consultation. This sets expectations without locking you into a price that doesn't cover your costs on long, thick hair.
Add tiered pricing when you have a team. If you've got more than one person in your salon, tiered pricing makes sense:
Level | Who | Typical Premium |
|---|---|---|
Junior Stylist | 0-2 years experience | Base price |
Senior Stylist | 3-7 years experience | +15-25% |
Master Stylist / Owner | 8+ years, specialized training | +30-50% |
This lets newer stylists build a client base at accessible prices while your experienced team charges what their skill is worth.
Curate your menu. Don't list every possible variation. A focused menu with 15-25 services signals confidence. A 50-item list signals confusion. If a service accounts for less than 5% of your appointments, consider dropping it or offering it as a custom quote.
Don't forget add-ons. Conditioning treatments, toners, scalp massages, and protective treatments are high-margin extras. Price them at $15-50 depending on the service. They increase average ticket without adding significant time.
When and How to Raise Your Prices
If you haven't raised your prices in the last 12 months, you gave yourself a pay cut. Consumer prices have risen roughly **20% since 2021**. Beauty overhead—products, tools, equipment—is up 50-200% in some categories. If your prices stayed flat, your real income dropped.
How often and how much
Raise at least once per year. January or September work best: January feels like a fresh start, and September follows the summer slowdown.
A 5-10% annual increase is the baseline. If you're significantly underpriced, go bigger. Nick Mirabella recommends 10% every six months for salon owners catching up after years of stagnant pricing.
How to tell your clients
This is the part that scares everyone. But it doesn't need to be complicated.
In-salon sign (post 4-6 weeks before the change):
"Starting February 1, our service prices will be updated to reflect increased costs and our ongoing investment in training, products, and your experience. We value your loyalty and look forward to continuing to serve you."
Email or text to loyal clients (2-3 sentences max):
"Hi [name], just a quick heads-up: starting February 1, we'll be updating our service prices for the first time in [X months/years]. This helps us keep investing in the quality and experience you've come to expect. We truly appreciate your loyalty and look forward to seeing you soon."
At the chair (when clients ask):
"We're updating our prices starting next month. It's the first change in [X time], and it reflects the higher costs we're seeing everywhere, from products to training. We want to keep giving you the same quality you expect, and this helps us do that."
No long explanations. No apologies. You're a professional running a business.
"Never talk price, talk value. The difference between the two is perception." — Britt Siva, Thriving Stylist
What if clients push back?
Most won't. When salons raise 5-10%, almost all clients stay. The ones who leave over a small increase are price-sensitive shoppers who'll bounce to a Groupon deal eventually anyway.
And the upside is real. Salon coach Margie Gleeson shares the case of Bianca, a lash artist in Melbourne who raised her prices. She lost two clients in the first month but gained 17 new ones. Revenue up 22%, fewer appointments.
Pricing Mistakes That Cost You Money
Copying the salon next door. Their costs aren't your costs. Their skill level isn't yours. Their margins might be terrible. Price based on your numbers, not theirs.
Never raising prices. A stylist who hasn't raised since 2018 has the buying power of only 65% of their 2018 income. Over a 30-year career, the difference between regular price increases and staying flat adds up to roughly $1 million in lost income.
Discounting to fill empty chairs. A 10% discount cuts your profit in half. You'd need a 35% revenue increase just to break even on a discount. Discounting attracts bargain hunters, not loyal clients.
Underpricing color services. Product cost for color is often higher than owners realize. About 20% of color clients are actually unprofitable once you account for product, time, and staff costs. If your color prices haven't been recalculated recently, they're probably too low.
Excessive "friends and family" rates. One or two close friends? Fine. A dozen people getting discounted services every month? That's a budget line item that's eating your profit.
What to Do This Week
You don't need to overhaul your entire price list overnight. Start here:
- Calculate your hourly chair cost. Add up rent, utilities, product, staff, insurance, and supplies for the month. Divide by working hours. Write that number down.
- Compare your current prices to the formula. Pick your three most popular services. Run them through the formula above. Are you covering your costs? Are you building in profit?
- Pick a date for your next price increase. Put it on the calendar. If it's been more than a year, make it soon.
- Start tracking your numbers. If you're not measuring your key performance indicators regularly, start now. You can't fix what you don't track.
Looking for more ways to grow your revenue beyond pricing? We'll cover that in our upcoming guide on how to increase salon revenue.
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