Difference between a good and bad haircut

When I opened my new salon, I refused to offer a senior price on anything but a hair cut. And even that will be phased out by the end of this year.

I think that one of the main reasons that so many salons under charge for their services is that as long as there is money in the register then they are happy. They have no real idea of what it is costing them to run their salon and what they should be charging.

In most of these salons I would suspect that accounts vary from a little overdue to a lot overdue. I know of salons that must give reps a cheque for their stock orders, before he leaves and it is shipped only when it clears.

Another thing that happens is that the owner doesn't pay themselves properly, they will take a short pay or no pay so that the staff can be paid. They often are not paying superannuation either, always meaning to "get around to it".

Another thing they do is when things are quiet they drop their prices. Creating a "cash flow" but often no profit.

As I said earlier I sold my last salon 2 years ago. I still live in the area and knew people who worked there so I got to hear alot about how it was run.

The first thing the new owners did was slash the prices, I was charging $40 for a cut there. This they probably felt would make them busier. And it did for awhile. The also dropped the prices of the colours too, but brought in a colour line almost double the cost of what I was using.

After about 3 months I noticed flyers in the mail offering 1/2 price cuts. Now since she dropped the price to $18 from $40 that I was charging, now she was cutting hair for $9 yes it put people in chairs for a week or two.

Within 6 months she had the business up for sale. And unfortunately two weeks ago unable to sell a business that had been run into the ground she closed the doors and walked away. She had become bankrupt. She did a lot of stupid things that young and not so young hairdressers do. She refit the place to her liking (I only refitted it 6 months before selling with new furniture) that she leased at a total of $20,000 and she bought a solarium at a cost of $12,000 which only she and the nail technician used, so it wasn't even generating an income. Pile this on top of the fact she borrowed the money to buy the business in the first place......

Anyway the point of this was at $40 I wasn't the busiest salon around but I was paying the bills and always drew a full wage for myself (well sometimes more than a full wage ) at $18/$9 she was probably busier for a short time but obviously not in a way that let the business survive.

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Sad story but all to common. It must be a shame to watch you old salon go down the toilet.
To run a salon you must be very very good at maths, it is not as easy as it appears!

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Smile, we have the greatest job in the world!