Ultimate Salon Monthly Expenses List and 3 Secrets to Increase ROI

salon expenses

An average salon profit margin is 8%. How to increase the salon’s profit margin by reducing the beauty salon monthly expenses without affecting the services? Let’s explore!

Running a salon takes a large number of products and resources. It is always a good idea to have a checklist of salon monthly expenses rather than discovering new expenses by surprise. Also, many salon owners are not aware of the latest innovations that help them reduce their beauty salon’s monthly expenses to a great extent. In this article, we will cover two main things.

  • 3 secret tips to increase the salon’s profit margin.
  • List of the most common beauty, nail, and hair salon monthly expenses.

3 Secret Tips To Increase a Salon’s Profit Margin

1) Avoid Paying Credit Card Processing Fees: How?

All the payment processors like Stripe, PayPal, Tilled, etc. generally charge 2.9% + $0.3 per transaction. That means, that 3% of your revenue is instantly taken away by the credit card (CC) processor. The secret to reducing your beauty salon’s monthly expenses is to transfer CC fees to customers’ final bills. This will increase a customer’s bill by a negligible amount but a salon can save a huge cumulative amount.

How to do that?

Use a payment processor that provides the facility of transferring CC fees to customers. Less than 1% of software providers do that right now. Yottled is a 100% free payment processing software that provides the feature of passing the CC fees to your clients.

You can reduce your salon’s business costs by approx. 3% immediately by using tools like Yottled.

2) Use Free Salon Automation Tools to Reduce Front Desk Workhours

A salon receptionist or front desk worker’s average salary is $14.22 in 2022. Moreover, the US is passing through a challenging labor shortage crisis for the last 2 years. It is essential for a salon owner to shift to automated tools that utilize the front desk employees efficiently to reduce salon monthly expenses.

Use salon booking software on which customers can check out all the available time slots and self-schedule their appointments. They can also cancel and reschedule it themselves without back-and-forth phone calls and emails. You can reduce up to 60% of phone calls and emails for appointment booking by using the software. Here’s what salon booking software looks like.

3) Get an Incentive (Discount) to Book Online: Why?

You might ask why. How giving a discount for online booking can improve profit margin at all? Here’s a secret.

  • When people are motivated to book your salon services online, they need to pay in advance at the time of booking. Make very strict cancelation and refund policies. This will reduce no-shows and last-minute cancellations.
  • Online advanced booking will help employees to be prepared for their upcoming appointments.
  • It is an assured income for the salon, compare to unpredictable walk-ins.
  • You’ll be able to reduce appointment conflicts and waiting times for customers. The salon booking software will automatically block the reserved time and customers can book only for the available time slot.

Salon Monthly Expenses for Budgeting

Use this spreadsheet to list and track salon monthly expenses. We have also included expenses that are specific to hair, nail, and beauty salons.

Jan 22
Income
Revenue from salon services – Income Spreadsheet$62,380
Profit on products sold (purchase price – sales price) – Profit from Goods Sold Spreadsheet$6,169
Revenue from gift cards sold$4,000
Tips$3,500
Other income (if any)$2,100
Gross Income( A)$78,149
Expenses
Total monthly Salaries + commission
employee 1 (salary+ commission+ tips)$1,800
employee 2 (salary + commission + tips)$2,200
employee 3 (salary+ commission+ tips)$2,300
Admin employee salary monthly$2,800
Pay to Temp/hourly employees
employee 1 ( hours worked * per hour rate) + tips$1,800
employee 2 ( hours worked * per hour rate) + tips$2,200
employee 3 ( hours worked * per hour rate) + tips$2,300
Per hour admin employee pay (hours * rate)$2,300
Cost of goods purchased (used for business, not for selling)
Hair services
Scissors (units * per unit rate)$100
Blow dryers$200
Hair colors$430
Trimmers$340
Chemicals$295
Hair spray$495
Combs/Brushes$300
Curlers$450
Straighteners$200
Curing lamp$120
Hair Extensions$230
Shampoo bottles$230
Conditions$420
Foil/papers$45
Color caps$54
Other item 1$0
Other item 2$0
Other item 3$0
Shaving
Shaving Creams$430
Razors$200
Aftershave lotions$430
Other item 1$0
Other item 2$0
Waxing
Rica$450
Honey$200
Brazilian$120
Other$230
Waxing Strips$230
Waxing spatula$420
Warmer$400
Threads$54
Beauty services
Facial creams$300
Lotions$100
Tweezer$200
Toner$120
Steaming machines$340
Foundations$295
Lipsticks$495
face masks/sheets$300
Body polishing scrubs$450
Face scrubs$200
Other item 1$0
Other item 2$0
Other item 3$0
Nail services
Regular nail polishes (units * per unit price)$530
Gel nail polish$200
Manicure kits$430
Pedicure kits$560
Hand cream$120
Foot cream$290
Nail art kits$430
Other item 1$0
Other item 2$0
Other item 3$0
Miscellaneous
New uniforms + aprons$300
Towels$250
Doormats$54
Gloves$20
Wiping and cleaning papers/cloths$43
Furniture$600
Chairs$450
Other item 1$0
Other item 2$0
Business expenses
Rent$3,000
Electricity bill$330
Gas/heat bill$380
Water bill$200
Internet bill$250
Repairs and maintenance$100
Cleaning services expenses$900
Insurance$430
Advertising/marketing expenses$4,400
Phone charges ( landline & mobile)$295
Certificates/ Licenses$1,495
Accountant’s fees$2,000
Legal expenses$4,050
Other items$0
Technology Expenses
Website development/maintenance$900
Hosting, SSL certificate and domain name renewal$250
Appointment booking software charges$600
Credit card processing fees$4,060
Bookkeeping software$400
Payroll software$300
CRM software$450
Other item 1$0
Other item 2$0
Other item 3$0
Total expenses (B)$56,640
Gross Profit before tax ( A-B)$21,509
Tax$0
Net Profit$21,509

Conclusion

The best way to reduce the salon monthly expenses is to use software like Yottled. It

  • is 100% free for salons.
  • Helps reduce manual work for booking and scheduling appointments.
  • Gives an option to transfer CC fees to your customers’ bills and increases the salon ROI by 3% instantly.
  • Offers 15+ industry-leading features for free.

Medha Mehta

Medha Mehta

Medha is a Sr. content marketing manager at Yottled. She is passionate about writing, SEO, and digital marketing. She's a tech and cybersecurity enthusiast.

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