Salon, spa & fitness
Salon Pricing Calculator
Prices salon services from cost upward, where chair time rather than product sets the floor.
Result
Overhead and margin are taken as shares of the selling price, which is why the cost is divided rather than multiplied. Adding 15% to cost does not produce a 15% margin. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditHow the calculation works
Direct cost divided by one minus overhead and margin together, so the price carries both. The direct cost is dominated by the chair time the service occupies rather than by product, which means pricing has to be built from time rather than from materials, and a service's duration matters more to its price than what goes on the shelf.
What moves the number
- Chair time including processing.
- Stylist cost or commission on that time.
- Product cost for the specific service.
- Overhead per chair hour.
Where this one goes wrong
Pricing by service name rather than by time is how salons end up with a menu where some services are profitable and some are not, and the unprofitable ones are usually the long chemical services priced against a competitor's menu rather than against their own cost. Build the price from the time. Where a price the market will not bear results, the answer is usually a shorter service or a different service mix rather than a price the client refuses.
Before you quote
- Build prices from chair time, not from a competitor's menu.
- Check the resulting margin against the markup applied.
- Reprice or reconsider services that fail on time cost.
Questions
About this calculator
Why price from time rather than product?
Because chair time dominates the cost and product is a smaller share. A long chemical service and a quick cut can use similar product value and occupy entirely different amounts of the salon's only real capacity.
Should I match a competitor's menu?
Only where your cost structure matches theirs, which it rarely does. Pricing against another salon's menu is how unprofitable services end up on yours, since their rent, staffing and service times are not yours.
What if the calculated price is too high for the market?
Then the service length, the staffing or the service mix has to change rather than the price. A price the market refuses produces no revenue at all, and absorbing the gap quietly means that service is subsidised by the others.
The formula
price = direct cost / (1 - overhead% - margin%)
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How to use this calculator
- Labour cost ($). Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($). Enter your own figure; the page starts at $11.
- Other direct costs ($). Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%). Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%). Enter your own figure; the page starts at 15%.
The result updates as you type, so you can try a figure, see what it does to price to quote, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Labour cost | $34 |
| Materials cost | $11 |
| Other direct costs | $0 |
| Overhead rate | 22% |
| Target net margin | 15% |
What comes out
| Result | Value |
|---|---|
| Price to quote main result | $71.43 |
| Direct cost | $45 |
| Overhead recovered | $15.71 |
| Net profit | $10.71 |
| Gross margin | 37.0% |
| Markup on direct cost | 58.7% |
Quote $71.43 to cover $45 of direct cost, recover $15.71 of overhead and leave $10.71 of net profit. That is a 58.7% markup on cost.
How sensitive the answer is
Holding everything else steady and changing only labour cost, this is what happens to price to quote. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Labour cost ($) | Price to quote |
|---|---|
| $17 | $44.44 |
| $26 | $58.73 |
| $34 example above | $71.43 |
| $51 | $98.41 |
| $68 | $125.40 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Labour cost ($)
- Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($)
- A money amount, starting at $11.
- Other direct costs ($)
- Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%)
- Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%)
- A percentage, between 0 and 80, starting at 15%.
What the results tell you
| Result | What it is |
|---|---|
| Price to quote | The headline result. A money figure. |
| Direct cost | A money figure. |
| Overhead recovered | A money figure. |
| Net profit | A money figure. |
| Gross margin | A percentage. |
| Markup on direct cost | A percentage. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.