Tuesday, 20 May 2014

My Experience: Setting Your Prices

Today's post is all about setting your prices and getting the balance right.  I literally can't tell you how many times I've spoken to therapists about each and every one of these topics that I'm talking about, it's probably hundreds of times.  This post is another from my series of advice for therapists and hairdressers (you should be able to see the rest in a tab below my banner.)

Deciding on your prices is a very important factor of your business for many reasons, probably more than you've even thought of.  It says a lot about your business which I will explain and when you're eventually mad busy you will use your prices to naturally balance out and calm down the rush (that will come!)

The first thing you need to do is to find out the cost to you per service.  Most good companies should be available to advise you the average cost per treatment.  Obviously this is the bare bones of the money you need to charge but then you also need to factor in a wage for yourself which is going to be over £7 as this is above the minimum wage in the UK.  On top of that you need to bear in mind that there will be a 20% deduction for tax per treatment as you are a self employed business.  I have a whole blog post coming about special offers but if and when you decide to have one, you need to take this figure into consideration.

Once you've worked those figures out, the thing I normally do is open up a spreadsheet on my computer and bring up yell.com.  Down the left hand side I will list all of my treatments and across the top I will input the salon name to remind myself.  I will then search for the salons in my area with websites and fill out my spreadsheet for the prices they charge per service.  Although I work from home I will look at salon prices and then a couple of mobile therapist's prices too as a guide.


So you've now got all of your facts and figures in a nice table so that you can quickly glance across the row.  Here's where you have your big decisions as you need to decide on what type of business that you want to be.  You could work out the average of all of the row and:

* set your prices a couple of pounds cheaper.  I hear this a lot when people start out because they think this is the only way to gain clients.  Trust me when I tell you it's not.  Clients want a good service and you'll soon learn that being a couple of pounds dearer will not deter a client who loves your work, they just see it as worth the extra.  Typically the lower priced salons will end up working for very little and can in some cases, less than minimum wage.  In the end it's likely you'll end up with the type of client who only focuses on the cost so as soon as another therapist decides to undercut you, you won't see them for dust.  

* set your prices somewhere in the middle of those.  This is a nice, safe bet if you're unsure.  It means you're amongst the rest and you've decided to leave the salons who like to undercut to it to earn less for the same amount of work as you.  

* set your prices higher.  If you think that you offer a service that's above and beyond the rest then go for it!  Does it sound like a scary idea if you're a newbie to the industry?  Of course it does!  If you believe that your work is of premium quality and your service is top notch then go higher with your prices.  If you knew you'd get good nails for a certain price or amazing service for £2, £3 or £4 or whatever extra, you'd pay it wouldn't you?!  I would!

Now prices say more than you probably think.  Lower prices can sometimes translate to potential clients as a therapist who uses budget products and perhaps doesn't provide a good level of service.  Higher prices can give the impression that a higher standard of product is used and a better result will be achieved.  Think about it, let's say that you go into your local supermarket and you look as lasagne for example.  You will have three options, their budget version, their own brand and then their preminium version.  You will instantly assume that the beef will be of a higher quality and that the ingredients will overall be a better standard in the preminium brand lasagne and that they go down from there to the low quality meat in the budget option. 

So what did I chose to do for my business?  I chose to go higher of course!!  I go above and beyond many therapists in my area to get my client what they want and they do pay the extra knowing they could go cheaper elsewhere.  I open my diary for appointments whenever and if they need a repair, I'll do everything I can to get them the first available appointment.  Last week I did two spray tans at 10pm because I knew the girls needed them for their holiday and couldn't do any other time, no salon is going to do that for them!  The gasps I hear from new clients when they realise that there are more than 10 Shellac shades exist, (I don't know of a salon locally that owns every single shade like I do) The amount of times that clients have told me that full salons don't have this much choice when they see every different colour glitters to chose from or all of the Shellac layering options all neatly swatched and labelled, this is why they book with me.

Whatever you decide you need to bear in mind that it's often difficult to raise prices at a later stage and you want to appear consistant.  Clients dont want to be told every couple of months that it's now going to be a £1 or two more.  It comes across pretty unprofessional and like you either didn't know what you were doing at the start or that you're trying to swindle an extra quid off them to pay for your Take A Break at lunchtime.  

This is going to sound like a 'toot your own horn' situation but I've been told by quite a few of my regulars to raise my prices.  Bearing in mind that I'm already more expensive, it's quite a funny thought to think that they are telling me they will pay me more but equally it shows you that you shouldn't be frightened of charging what you believe you're worth as they will pay it.

In my three years I have been told only once I was too expensive, that's literally what she said to me.  I wished her a good day and that was that.  I think that's how you have to be, I wasn't about to start haggling with her, you have to value yourself.  Also, if I had accepted the appointment at a lower cost, it's hardly fair to my loyal clients who happily pay my prices without question.

Eventually when your business is booming (and it will be if you work hard at it) then you can then rise your prices until fewer new enquiries come in and then stop rising them until you hit a balance with your existing clients.  

I have a whole post on my thoughts on special offers, if it's been posted when you're reading this it will be in the advice tab below the banner.

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1 comment:

  1. Thank you for sharing this, your swatches of colours are so impressive. You've inspired me.

    ReplyDelete

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