So, your business “survived” COVID-19 in your city. You’ve reopened and clients are slowly booking appointments. However, you probably haven’t fully financially recovered. In fact you probably have some extra costs added to your plate right now. Although your first thought might be to raise your prices, take a deep breath, pause before making any rash decisions, and take a look at the big picture first.
Many people are experiencing some form of financial stress right now and raising your prices may actually deter clients from booking. With that said, this is your career, you need to make money in order for your business to thrive. So what now?
How do you re-evaluate your business in the middle of a pandemic?
STEP 1: The Current Market
The first thing you’ll want to do is look at your current local market. What are your peers charging, have they increased their pricing? How does your current pricing compare? It never hurts to reach out and network with other lash artists. Most are more than happy to have a chat and help out.
STEP 2: Your Ideal Client
Now that you have a better idea of what is happening in your local market, it is time to focus on your ideal client. Has your ideal client changed since the pandemic? Was your current clientele financially affected? Would raising your prices shy them away or would they be understanding or maybe they have disposable income and weren’t affected financially at all. Understanding your ideal client right now, will give you insight into whether changing prices post-pandemic is the best option for you and your business.
STEP 3: Cost, Time, and Skill
After looking into your local market and ideal client, it is time to factor in cost, time, and skill. What do you want to pay yourself hourly? Your experience and skill level must always be factored into your hourly rate. What is your current average cost per client? Figuring out the average cost per a client can be challenging and even overwhelming. You want to make sure you are factoring in everything that costs you money to run your business. When figuring out your cost per client don’t forget to include expenses such as rent, insurance, PPE, internet, and even toilet paper. What I recommend is that you total up monthly costs and divide by your average number of clients per month, then add product cost. For example if your business costs you $1,000 a month to run and you see on average 50 clients a month your cost per client is $20 now add the cost of product, $5 and you have your total cost per client, $25. This number will be unique to your business and I don’t recommend guessing. When you do the math you’ll be surprised at how high the cost actually is.
Time to put the pieces together. Taking a look at classic lashes, if your salon books 2.5 hours for a full set and you want to make $30 an hour, you would need to charge $100 for a set of classic lashes. Here is the breakdown:
$30 (hourly wage) X 2.5 (hours) = $75 + $25 (cost per client)
How does your final number compare to competitors within your local market? How does it compare to what you are charging now? If you are charging below the number you came up with, it’s time to increase your prices. The only thing worse than overcharging is undercutting the market. KNOW YOUR WORTH!
You’ve figured out the big picture, now you have a decision to make. It’s never easy to decide to increase your prices, but by doing the work and trusting your instincts you’ll be able to make the right decision for your clients, your business and yourself.