The Beauty Industry in 2025: A Discussion With Meg Ann Lee (Part 3) – Knowing Your Numbers & How To Calculate Your Profit
Hey everyone, it's Meg Ann Lee. We are back this week with part three of our 2025 beauty industry discussion. If you missed part 1-2, make sure you give those a read!
This week, we will be getting into some numbers! I know not always the most fun topic but NECESSARY to figure out how much it costs you to run your beauty business in 2025. If you are a small beauty business owner, this blog series is for YOU!
Ever wondered why a full foil costs more than your morning coffee addiction at ECDC?? Well, buckle up, because we're about to break down the true cost of running a beauty business in 2025-salon math style.
First, Let's Talk Expenses
Running a salon business is like juggling foils in a windstorm. There are fixed expenses (the ones that don't change, no matter how busy you are) and variable expenses (the ones you can control… sort of). I think this is where a lot of people get confused when they go independent. They pick the biggest, coolest, newest location, the best software, the most expensive products in their "fixed" expenses but you SHOULD pick what your business can afford. I once heard an educator say if you must take out a loan to open a salon space and you cannot handle ALL of the bills yourself if everyone walks out on you, you are not ready to open a salon. I never forgot that.
Fixed Expenses (a.k.a. The Bill Collector's Favorites)
- Rent/Chair Rental - That chair isn't free, honey.
- Insurance - Because we love our necks, backs, and wallets.
- Software & Booking Fees - If a stylist books an appointment in the forest and no software records it, did it even happen? The IRS would claim it did.
- Taxes - Because Uncle Sam always gets his cut.
Variable Expenses (Where You Can Get Smart)
- Product Costs - That bougie bond builder adds up but also, mostly necessary.
- Marketing - Free social media? Great. Ads and promos? Not so free.
- Continuing Education - Because trends continuously change and products evolve.
- Extras - Gloves, foils, brushes (and the 5 pairs of shears we swear we won't lose or accidentally throw in with the towels).
Now, let's talk what's left after expenses. Spoiler alert: it's not 100% of what you charge.
Salon Math: The Truth About Your Hourly Rate
As a hairstylist, we often don't take the time to truly know what we make per hour. To be fair, it's continuously fluctuating based on the type of services we do if you aren't purely on an hourly pay scale. If you are independant, this math problem is for you.
A hairstylist charges $180 for a foiling/color application that takes 3 hours. That sounds pretty sweet, right? $60 an hour? Well, that's not exactly how it works even though our end of the day service sales reports looks like we are raking in the CASH!
Let's look at the details:
- $30 for product & rent costs (this includes basic lightener, developer, foils, gloves, backbar and styling product averages) I suggest YOU find out your numbers for this. Everyone's will be different and this one might be a little LOW.
- 30% for taxes (self-employed = paying the IRS like a boss)
-$450/month for health insurance (breaks down to about $2.81 per hour) this MIGHT be high, but I took an average off of marketplace, so we are going with it!
After all that? This stylist is taking home $32.19 per hour. Still solid IMO, but not the "rolling in cash" dream some people imagine when a client is paying $200, $300 or even $500+ for some services.
So, Are You Ready to Be an Independent Stylist? Ask Yourself These 3 Questions:
1. Can You Handle the Financial Reality?
Gone are the days of commission checks landing in your account. You'll need to budget for rent, supplies, insurance, and the sneaky costs nobody tells you about (like a laundry or cleaning service)
2. Are You Self-Motivated?
No salon owner is going to hand you a schedule. You'll need to book your own clients, handle marketing, and, oh yeah, actually show up EARLY. My high school band teacher always said " to arrive on time is to be late and to be early is to be on time". If you're the type to "accidentally" sleep in or often reschedule… rethink being the ONE in charge of everything.
3. Do You Know Your Numbers?
Independent stylists don't just pick a random service price and hope for the best. Well, actually a lot of independent stylists do that but they SHOULDN'T. You have to calculate exactly what it costs to run your business-and price accordingly. Find out which services you enjoy the most, which make you the most and least profit. Focus on your customer experience so that your clients find value in the time and money they are spending with you.
Being an independent stylist is amazing, but it's also a business-and businesses need math (ugh, I know). Make sure you can pay yourself and profit enough to reinvest in running your business so you can stay open for the long haul!
Whether you're dreaming of going solo or just curious where your service fees go, understanding your numbers is the key to making real money in the beauty industry.
Now, if you'll excuse me, I need to go order more foils… again <3