Service price increase- how much and when?

Hello all - new to the forum!

I have been a licensed esthetician for eight years, and for the last two of those years I have been owner/operator of my own waxing studio. And I'm debating on whether or not to increase my service prices, aka give myself a raise. Rent has increased, product prices have increased, and my demand is greatly outweighing my ability to meet that demand. And though my prices are comparable to spas in the area, I am the only shop in this area who only specializes in waxing, and I'd like to set the bar a bit higher because of that.

So I have two questions:

1) Has two years even been long enough to increase my prices?

2) How much should I increase each service? Most sources say 10% but that seems a bit high.

Thoughts, opinions, and advice are greatly appreciated!

Tags: business, increase, owner, price, raise, self-employed, studio, waxing

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Permalink Reply by Amy Sherman on May 23, 2014 at 11:07am

Depends on a couple of things...your area being one.

I would raise them 10% but do it January 1. That way, you can notify everybody who is buying Gift Certificates in December, and everybody knows about it all during the holiday.

As for raising them, I want you to thinka bout it in this way: A regular employee would get a 3% cost of living raise every year they are employeed. If you aren't doing that every year, then raising them NOW is always a good idea. I once had a hair dresser who said to a client who was complaining about the increase "I haven't had a raise in 5 years. When was the last time you had one?" lol You sound like you are worth it so do it!

Also: To figure out costs, take all of your products and add them together.

Take all of your monthly operating costs. Add them together.

Add products and operating costs.

Now, take all of your income for a month and add it together.

Subtract your product/operating from your income.

Divide that answer into 3rds.

1/3 for the government

1/3 for the business

and the last 1/3 is your profit.

Now.... do it over using what the new prices would be.

how much larger is your 1/3 profit?

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Permalink Reply by Molly Ingle on May 28, 2014 at 1:28pm

Good information and great advice, Any, thank you. I'm still not comfortable with 10%, but I'll just have to do some more budget calculations to see what would be the minimum I could "psychologically" get away with in the clients' mind and still turn a higher profit.