Launching a freelance stylist business is an exciting venture. But don’t let your pricing strategy fall by the wayside!
There’s more to freelancing than flexible hours and a better work-life balance. COVID-19 has totally changed the game as many stylists are doing what they need to keep pushing forward. Going on your own is guaranteed to bring many financial ’what now?’ moments. One of the top reasons why freelancers fail is incorrect pricing. Unless you know how to set up your rates correctly you could be heading back to the 9-5 lifestyle before you know it.
Be sure to crunch the numbers thoroughly before you decide what to charge your customers. This will ensure your freelance stylist career brings you all the rewards you’re looking for!
Things to Consider
It all boils down to economics. Unless you are a billionaire doing what you do for the love of it, you need to earn an income as a freelance stylist. The only way to do this is to see things from a business point of view.
In this regard, there are four things you need to take into account when setting up your rates.
- Rates in the area
- Your budget
- Your time
- How good you are
Let’s take a look at how these three factors combined can help you to set up rates that both you and your customers will love.
The Going Rate
Your first step is finding out what other hairstylists in the area charge. Start with salons and then see if you can find out what other freelance stylists near you are asking for their services.
You will discover that the range of rates can be quite wide. Knowing what the market will bear should give you an idea of what to charge. However, it won’t provide you with a set rate and is not the route to a profitable business.
By all means, start out lower than the norm if you have little experience and qualifications, but set yourself a target to work towards. Hard work will soon earn you the right to up your rates in accordance with your expectations. Even Hollywood’s top hair stylist started somewhere.
Setting Goals
Doing the math is never easy for creative types but a budget is essential for your freelance stylist business. Taking the following into account will help you determine reasonable rates.
Fixed Expenses
Don’t wing it. Get out your bank statements and make a list of your expenses over the last few months. Don’t leave out luxury expenses or splurges – it won’t make them go away.
Enter them on a simple spreadsheet, or you can use specialized software for hair stylists where you can keep track of every other aspect of your business. Now you can determine the average amount you need to cover monthly living expenses. This figure is the least amount you need to make to break even. It may shock you, but we aren’t done yet.
Other Expenses
Now you need to add an amount of savings (both for a rainy day and for retirement), as well as how much your earnings will be taxed. Many salons were caught with little to no savings when the entire industry went on lockdown due to the COVID-19 pandemic.
To get yourself on the right track, divide this new figure by the number of hours you are prepared to spend working every day. This is your rock-bottom hourly rate, excluding any products you will be using.
What to Charge for Each of Your Freelance Stylist Services
Every service you provide has two aspects. The time you spend, and the raw materials or products used.
Time
The next step is to count the time it takes for you to perform each of your services. A cut is pretty straightforward and you may already have an idea of how long this takes. Remember to include time spent shampooing the client’s hair.
Other tasks, such as coloring a client’s hair, is a different kettle of fish. You can perform other tasks while you wait for products to take effect. When you are first starting out, you may not have any other clients to see to during this ‘wasted’ time. To avoid a total loss, you can use this time to build a relationship with your client instead and put it down to marketing.
When first starting out, you may not have any other clients to see to during this ‘wasted’ time. To avoid a total loss, you can use this time to build a relationship with your client.
Materials
The tools of your trade are what cost you money. You need to add the cost of products such as shampoo, treatments, and hair color to the price of your service. This is where specific salon software can come in handy. Once you have entered these costs, you don’t need to keep recalculating them every time you quote a client.
Are you blowing the client’s hair out? Add some electricity charges to your fee, as well as a little towards the cost of the hair dryer. Don’t forget taxes either. When you did your initial budget, you will have discovered that these little expenses add up, so don’t skimp on them now.
Don’t forget taxes either. When you did your initial budget, you will have discovered that these little expenses add up, so don’t skimp on them now.
The Final Figures
Now that you know what each of your freelance stylist services is costing you, you can determine the additional charges to your customer. Calculate this figure according to your experience and qualifications. Again, comparing yourself to other professionals in the area is a good place to start.
While you may feel obligated to charge less if you are new to the area, remember that people associate high prices with high quality. One idea to attract business is to advertise your prices plus a special rate for new clients.
In this way, you are not bound to the lower rate and don’t undersell yourself. You may need to experiment with different rates until you find a happy medium.
Time For a Raise
Inflation happens. Every year, you can count on an increase in your living expenses as well as the products you use in your business.Clients expect annual increases, and your peers will also be implementing them, so don’t feel bad about upping your price. Take your added experience as well as any further training you had into account when calculating your increase. You deserve it.
Just as there is no secret recipe for success, trial and error will eventually lead you to your own magic formula when it comes to pricing. As long as you follow these guidelines when you start up, you should move steadily forward and successfully grow your business. You have nothing to lose.
Tell us how you worked out your freelance stylist prices in the comments below or on our Facebook page. We would love to hear from you.
Try Daysmart Salon Software absolutely free for 14 days!