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How to price a haircut (or any service) so you actually make money

Most stylists set prices by looking at what the shop down the street charges. That tells you what the market will bear, but it can't tell you whether a price covers your costs and your goal. Here is a way to find out in five steps.

1. Count all your hours, not just the paid ones

Chair time is only part of your week. Cleaning, booking, texting clients, social media, ordering and consults are real work that nobody pays you for directly. Add them up. Example: 30 hours with clients plus 10 unpaid hours is a 40-hour week.

2. Count your weeks honestly

Take 52 weeks and subtract vacations, holidays, sick days and slow weeks. Example: 48 working weeks. That gives 30 × 48 = 1,440 client hours a year, and 40 × 48 = 1,920 hours of work in total.

3. Add up what it costs just to be open

Rent, insurance, licenses, software, booking fees, marketing and classes. Example: $1,000 a month is $12,000 a year. Spread over 1,440 client hours, that is about $8.33 you must earn in every client hour before you make a dollar for yourself.

4. Set your goal

Decide what you want to take home in a year. Example: $60,000. If you plan to set aside part of your income for taxes, adjust the goal up with the percent you and your CPA choose. Spread over 1,440 client hours, a $60,000 goal means earning about $41.67 per client hour. The unpaid hours are paid for by charging enough during the client hours.

5. Work out each service

A service that takes one hour in total (chair plus setup and cleanup) with $10 of product and a 3% card fee:

• Break-even price: ($10 + $8.33) ÷ 0.97 ≈ $18.90. Below this you lose money.
• Target price: ($10 + $8.33 + $41.67) ÷ 0.97 ≈ $61.86. At this price you hit your goal.

Notice the gap. A $40 haircut looks fine until you see that, after product, card fees and your fixed costs, it leaves about $20 an hour, and about $15 an hour once your unpaid time is counted. Longer services such as color are often the ones priced too low, because the time and product add up.

What to do with the answer

If a price is too low, you have three choices: raise it, shorten the service, or lower the cost. Raising prices a little on every service often does the most. Then put the new prices on a clean menu and tell your clients early and kindly.

The numbers in this guide are examples to show the math, not advice for your business. This is an estimate, not tax or legal advice. Ask a CPA.