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There are 3 huge pricing mistakes stylists make when trying to come up with their own pricing structure. These mistakes can fatally harm your business and suffocate your income earning potential.
You're tuned into Reviving the Stylist, a business podcast for hairstylists looking to build a dream career that creates financial freedom and flexibility. I'm your host, Kristen Lumiere and as a stylist I've had my share of successes. Building a successful six plus figure business working only three days a week while being able to prioritize my family, travel and buy my dream home. I know it doesn't sound easy, but if you put in the work, I guarantee you'll see results. No matter what your goals are. I'm super stoked that you're here so I can help you crush them. Let's start today's episode.
Kristen Lumiere 0:03
You're tuned into Reviving the Stylist, a business podcast for hair stylists looking to build a dream career that creates financial freedom and flexibility. I'm your host, Kristen Lumiere. And as a stylist I've had my share of successes. Building a successful six plus figure business working only three days a week while being able to prioritize my family, travel and buy my dream home. I know it doesn't sound easy, but if you put in the work, I guarantee you'll see results. No matter what your goals are. I'm super stoked that you're here so I can help you crush them. Let's start today's episode. Hello, and welcome back friend. It is currently freezing balls in Texas.
Kristen Lumiere 0:48
And I am ready so incredibly ready for hot weather.
Kristen Lumiere 0:52
Oh my goodness, I don't know about you. But I am a total warm weather gal. I love being in weather was hot. And I love it when it's warm. Anything basically that is 75. And above I am down before I can even sit out on my porch in like 105 degree weather. And I can sit out for an hour and I won't even drip a sweat. I'm like in love with it. I don't know what the deal is with me and hot weather. But I am so better off in hot weather. I think you know what it may be is I actually grew up in Vista, California, which happens to be the number one weather capital of the world. I don't know if you knew that. But now I live in a super small town in Texas. And it is definitely one of those things where winter comes around. And I'm feeling a little bit a little bit more like an indoor person than an outdoor person. Because I do not love weather that is cold. And that doesn't mean that there are definitely times where I'm like, Oh, this weather is so refreshing. But I'm kind of one of those people who's like, Oh, I'll go and like drive if I want to get to cold weather. And then I want to drive back to warm weather. That's at least how it was when I was living in Vista, you could drive three hours you'd be at the mountains or you could drive three hours you'd be in the desert. And then of course you drive 15 minutes and you'd be at the beach. So it was kind of like all the best of both worlds or three worlds I guess. And that's really the only thing other than my family and friends that I miss about California is the weather like you cannot beat the weather at least where I'm from. Now that I got all that out. Let's get started with today's episode because I swear I could go on and on about how much I love warm weather. And let's jump into one of the biggest struggles that stylists have. And that is pricing.
Kristen Lumiere 2:43
There are three huge mistakes that stylists make when it comes to pricing. And trust me when I say that each of these mistakes I have made multiple times I have been in those shoes, because I've moved from California to Kansas back to California and then to Texas. So coming up with prices was something that I had to do quite often, in the very beginning of my career. I was also one of those stylists who kind of Salon hops, until I found out that I really am better off at being the boss of my own schedule and the boss my own business. So I became an independent stylist, but even then I still move from being in a larger city to a smaller town. And I needed to figure out the best prices for that because there are differences in prices between a small town and a large city. So that is something that of course needs to be taken into account because your Spence's are also going to be one of those things that changes when you go to a new location. So you do have to account for your expenses in your pricing. So the first mistake I made when it came to my pricing is that I carried around on the internet, all the salons and stylists in the area and looked at their prices as a reference. Now the reason why this is a huge mistake is because you do not know number one, if that person is actually pricing their services correctly. Number two, if their expenses are the exact same as yours, those are two big things. How do you know you don't? And why would we know 100% That their prices are correct for their area, also who their target market is that's a really big one too, like who is your target market. And those prices should also be reflected on that. The second was, I just took a wild guess I would think to myself, well, I really feel like I should charge $50 for a haircut, because that's where I like the pricing. So I'm just going to keep it there. And then I'm going to do $120 For an over color and so on and so forth. And the third was keeping the exact same prices when I moved to a new location. I'm not a believer in downgrading your prices unless you're moving to like a company pletely different state and you're starting 150% over from scratch. But if you're moving from one town kind of to the next, and your prices may need to go up, that's totally fine. But when it comes to decreasing your prices, if you're still sticking with the exact same clientele, then I would not be changing those prices to go lower ever, I would always keep them the same. So if you're moving from one place, and maybe it's a 30 minute drive to your new location, more than likely, you're going to keep some semblance of your clientele. But if you're moving from one place that is maybe six hours away from your old location, then you're probably not going to be maintaining a lot of that clientele. Now maybe there are some clients who will drive that far. For me, there were a few that would come from out of state, come and see me maybe once or twice a year, but that wasn't what my clientele was based on. So in that instance, if you go to a location that has lower expenses, lower costs for you, then at that time, I could see how a price decrease, it wouldn't even necessarily be a price decrease, it would be just you're starting over from scratch. And if your prices are a little bit lower, because your expenses are a little bit lower, then that's because you move to a completely new location. So it wouldn't necessarily even be a price decrease. So now I can change how I how I view it and say, price decreases should not happen. Now, there's a statistic that I just kind of think is absolutely insane. And it's more than half of independent stylist in the beauty community are losing money on their services, or barely breaking even. That's a statistic that really disturbs me, and is one of the reasons why I knew that I needed to become an educator to really help those stylists who are struggling living paycheck to paycheck or living in the red. That sucks. And I've been that sales before. So that's why I'm here because I'm here to uplift as many people as I can. Now another statistic is a little less than half are living paycheck to paycheck, and only 10% Don't feel financially insecure and are able to save money in the bank. I don't know what you think. But all three of those statistics are absolutely terrifying. That only 10%. And sometimes even less than that, of course, it depends on what the statistics are at that time of year. But it changes sometimes it's even less than 10% are actually feeling financially secure. Those are horrible. Now, when I finally realized back in 2019, I was losing a lot of money on my services, I decided to completely change the structure to my prices, I created a system that took me from making like 30% commission per service to 55% commission per service that was over a 25% increase in what I was actually able to pay myself from my services. Now the other 45% went towards product costs and went towards my rent it went towards, you know, some minor maintenance, and all of the other small things that are included within the independent stylists area when it comes to expenses. Now that system was the easiest system to put into place in my business. And once I did, I was able to follow a budget, I was able to have my prices correct. So that way I could price myself for profit, and I was able to double my daily revenue behind the chair. And that system was number one setting structured amounts of product per service. Number two, knowing the product costs for every single service I offered, it didn't matter if it was a full volume highlight, or if it was a color correction. Or if it was a small ala carte service like conditioning treatment add on. I knew how much it cost me for one pump of shampoo for one gram of lightener for how much developer I needed, how much toner every single thing I had, I knew how much it was going to cost me. And then number three, I kept my cost percentages in the green on every single service for maximum profits so I could pay myself a higher commission. Now I know that commission may be a little bit confusing to you. So I want to kind of let you know what my thoughts are. As far as a commission goes as an independent stylist, I still stuck to a specific percentage for my commission from my pay. And with that I was able to create a even stream of revenue into my personal bank accounts. And I was also able to pay my taxes correctly and all other kinds of stuff too. And just by doing those three things, I was able to double my pay without increasing my prices. Now I want you to think about that right now. What would having your pay go up without you increasing your prices do for you right now. Like you literally don't have to do anything except set a specific structure in place and follow it you literally have to do nothing thing else. And once you set this structure in place, this is another system that you don't have to go in and touch again, unless you have your product company does a price increase, which typically they do once a year. So let's just say you have to go in once a year, and make small adjustments to each one of those services. So that way you make sure you account for the price increases from your distributors. Another thing that just really plagues our industry is wasted product, we mix up so much products and want Lightner so much everything else. And then it all just goes down the drain, we pump a million pumps of shampoo into our hand, a million pumps of conditioner, and then it all just goes down into the drain. When I set these three things in place, I no longer wasted product, I didn't waste that product, because I actually put $1 amount to every single gram of whatever I was using. And I actually saw money at that point go down the drain. And that is where things completely changed. Because no longer was I just like, well, I'll just mix up more products, it was more like, well, this is actually money that is in this bowl, this is money that's pumping into my hand. And if I use too much of it, I'm actually gonna be losing it. So now that I was actually pricing my services correctly, and I wasn't wasting product, I felt so much more financially secure. And I was actually able to save money in the bank. This was the year my business boomed. I went from making about $167,000, which I will say, is incredible, right? That's a great amount of money. But the thing was that I was actually losing more than 50% of that money towards expenses, wasting products and a whole bunch of other BS. But when I actually switched to this, I became a lot more money conscious, and also understanding of the actual profits, what I needed to do to make my profit higher and my revenue higher within my services. So that way, I could pay myself better, I could save for a rainy day, I could save for maternity leave, I could actually take eight plus weeks off for maternity leave. Once I did that my entire business changed. I went from making $167,000 working three days a week with an assistant to 285 plus $1,000. Working three days a week with an assistant I didn't up my hours, I didn't go super insanely crazy and up my prices. Now I definitely did raise my prices a little bit because my actual services were not priced correctly. So I did have to do a little bit of price increases. But I was also able to level up the experience to my clientele because I was so much more service conscious. I wanted to make sure that the experience matched the level of service pricing that I was offering, or it blew it out of the water, like the experience that my clients would get was so incredible, that they wouldn't even think twice about what the price was because it was worth it to them. Now I know that these three things and implementing them into your business actually seems kind of impossible. Maybe you're like where the heck do I even start with this? I don't know what I should be structuring my service amounts to be per product. I don't even know how to figure out what that even costs. I understand that. And I actually created a masterclass that teaches you exactly how to price your services correctly.
Kristen Lumiere 13:20
It's called is the price right? In that? Yeah, there's a question mark. At the end of it. I actually really loved creating the name to that one. Because that is something that we ask ourselves, right? Like, is the price for this service, right? So I was like, how do I make that catchy? And that's where I came up with is the price rate. I gotta say it in a question or two, because there is a question at the end of it. But in this actual masterclass, I'm going to teach you how to price every single one of your services correctly. No matter where you live, if you live in a large town, if you live in a small town, whatever your location is, I'm going to teach you how to price those services correctly. And I'll add the link to that masterclass in the show notes. So that way you can go check it out and see if it would be a great class for you. Pricing is one of those things that no one really set a solid standard for in our industry. And I hope this episode gave you the foundation for pricing your services for profit, because that's what it's about. It's about profit behind the chair. If you're not making a profit behind the chair, then I guarantee you're going to start feeling like you're burning out and that is just something that I don't want for you. I want you to feel like you are thriving behind the chair. I want you to revive your passions so that way you can live your dream life in your dream career. So hey, we're at the end of another episode. I'll see you next Tuesday with another episode. So don't forget to leave me a rating and review before you go. And whatever topic suggestion you would like me to cover I read every single one of my reviews and take all of my suggestions from there. Of course, if you DM me on Instagram if you share This year sorry, I take suggestions from there too. So I definitely make sure that I go to every platform that my listeners are at, and make sure that I really, of course, listen to you and what your needs are. So I really appreciate you joining me today. And I'll see you here again next week. Bye for now. Thank you so much for joining me today on Reviving the Stylist. If something really resonated with you during this episode, take a screenshot share it to your Instagram story and let me know what you love most don't forget to also send it to a friend so that way they can reap the incredible things from this episode too and leave me a rating and review. I'd also absolutely just love to connect with you outside of the show too. So you can find me on Instagram at Kristen Lumiere that's L u m ay er E or my website, Kristen Lumiere calm. And before I go, I just want to leave you with one reminder. It isn't about living to work. It's about working to live. And that is my goal for you, friend, because you deserve it. I'll see you on the next one.
Transcribed by https://otter.ai