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Should I Increase The Prices For My Hair Extension Services?
When starting your own mobile hair extension business, or opening your first salon, one of the most important tasks you will complete is establishing your initial price list. This can be a difficult task at first - working out how much your costs are, what others in your area are charging, and what you feel is a fair price for your time and experience - but once it's completed you can feel comfortable and confident in knowing that you are offering valuable services and products to your clients at the right prices. Need help choosing your hair extension prices for the first time? Check out our article. However, many people forget that over time the pricing of your services will need to be adjusted. There are lots of reasons why small businesses need to keep in touch with their prices in order to ensure that their business is healthy and growing successfully, the most central of which we shall now outline below.
Global Costs In The Hair Extension Industry
The hair and beauty industry is changing all the time, especially when dealing with raw products such as human hair. As supply and demand changes across the globe, so does the cost of the goods, and this is what causes an increase in prices across the industry. With this forming a standard aspect of the industry, it is important that you integrate this inevitability into your own business and pricing plan so that your prices create a consistent and fair profit for you and your business. By being aware of these trends within the hair and beauty world and planning ahead, you can ensure that you are always one step ahead of your competition and that your business thrives in the ever-changing market. So, what other reasons are there for me to increase my own prices, aside from the increase of raw material costs?
Value Your Hair Extension Experience
When you first started out in the industry, you would have most likely been fresh out of hairdressing college or hair extension training course. Your prices were most likely based on the cost of your products and the prices offered by your competition, which is a smart way of planning your own pricing but does not take your experience into consideration. As the years pass and your client base grows, your experience also has a value which needs to be considered and reflected in your pricing. Although many clients will be looking for a bargain, they will also be looking for someone with experience, and most are happy to pay a premium for the peace of mind that the individual fitting their extensions knows exactly what they are doing. After 1 year of working in the industry, you can start to think about increasing your prices based on your experience; an increase of around 5-10% would be typical for this type of adjustment. It is recommended that you re-evaluate your prices at least once a year with small adjustments being made wherever necessary, however, once you reach larger milestones such as 5, 10 and 15 years, you have a clear advantage over those just starting out and large increases such as 20-30% could be considered. Of course you will no longer be the cheapest in your area, but with over 15 years’ experience you should be able to afford and have a large enough client base to charge a premium for your services, and you will be surprised at how many people will pay your higher rates for a truly experienced technician.
Keeping Up With Your Local Hair Extension Competition
If you base your original prices on the competition in your local area, but then never look to re-evaluate your pricing, you may find that prices around you have been changed; this could be due to new competition within your area, or your existing competition making their own adjustments. You don’t want to get left behind if prices around you are changing, so it is important to keep your finger on the pulse of the industry and constantly assess how your competition are adapting so that you can stay ahead of the game.
Worried About Changing Your Prices?
Adjusting your prices to a higher level than your competition can be a daunting idea. Will it put people off? Will I lose out to people who charge less? Am I being greedy? There are many questions that are likely to cross your mind if you are thinking about a price increase. Fortunately, the answer is generally no to these questions, and as long as it has been done correctly a price rise will not have a negative impact on your business. Of course there may be the odd customer who is purely looking for the cheapest option around, however as you become more experienced you will realise the true value in what you do. By offering an experienced service with great products at a fair price you will attract clients who are looking for quality rather than the cheap, and these are the clients who are far more likely to be loyal in the long run.
Reinvesting Your Profits Into Your Hair Extension Business
A very common reason to consider a price increase is by thinking about how additional funds could be reinvested into your own business. For example, if you increase your prices by 10% from £200 for a full head to £220.00, you will be receiving and extra £20 more than you were before. This £20.00 could then be put to one side and saved to invest in a range of aftercare products to retail in your salon or to bring along with you as a mobile technician. Some of the most successful hair extension technicians or salons make up to 10% of their annual profits from retail, so if you have not considered this for your business as of yet, it's a great opportunity to expand. Check out our retail hair extension after range here. Increased prices does not necessarily have to mean that you are simply charging more - you are actually investing in your business so that you can offer more and make more clients happy, which is an obvious win-win situation for everyone with only a slight change in your pricing.
Time To Reflect On The Progress Of Your Hair Extension Business
Taking all of the above into consideration, only you will know when the time is right and when you feel comfortable and confident enough in your own abilities to increase your prices. However, if you take one piece of advice from this article, make it to not be afraid. Price increases are inevitable in business, and as successful business women and men you have already done the hard part of getting your business off the ground. Now it is the time to reflect, reconsider, and reinvest in yourself and your business so that it can continue to grow and flourish.
