Ultimate Salon Monthly Expenses List and 3 Secrets to Increase ROI
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.
- List of the most common beauty, nail, and hair salon monthly expenses.
- 3 secret tips to increase the salon’s profit margin.
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.
Link to this salon monthly expenses spreadsheet.
| 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 |
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.
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.
