Intro

Running a salon and spa in today’s economic climate is challenging. The fundamental issue many owners face is that it's a service-based business, heavily reliant on people's time—specifically, the time of your beauty pros. In essence, your people are your product.

We know this because when a beauty pro leaves, a majority of their clients follow them, resulting in significant revenue loss for the salon and spa. To better understand the effect of inflation on the average salon and spa, let's break down the numbers and discuss why pricing is crucial to retaining talent and sustainable profits.

Inflation: The Silent Killer of Salon Profits

Inflation means you’re spending more every year just to keep things running the same. Rent, supplies, wages—everything costs more. Most salons and spas operate on razor-thin margins, often 10% or less, and the average salon and spa has 10 beauty pros. Losing just one beauty pro can wipe out all your profits for the year, leaving your business constantly on the edge. 

But inflation doesn’t just raise your costs—it affects your beauty pros too. They need more income each year just to cover basic living expenses like rent and groceries. And guess what the number one reason beauty pros leave their salon and spa – pay.

Curious how much inflation is costing your salon and spa? Try our Inflation Calculator to estimate how much revenue you might be losing each year and see how a price adjustment could make all the difference.

The Hidden Cost of Losing Beauty Pros

Here’s the hard truth: about 25% of new beauty pros hires leave within their first year, and around 50% will leave by the end of two years.  If your salon and spa has 10 people, that means you’re losing someone almost every quarter. No business can stay profitable with that kind of turnover.

Beauty pros, on average, earn 20% less than the typical American worker – about $17 per hour. The number one reason they leave? To make more money. To keep your best people, you need to help them earn more. And that starts with smart pricing.

Two Ways to Fight Inflation

To outpace inflation, you have two options:

1. Increase the number of services (e.g., more haircuts or treatments)

2. Raise your prices

While squeezing in more clients might seem like a quick fix, it leads to burnout. Beauty pros working harder for less money end up feeling overworked and underpaid, increasing turnover. The real solution? Raise prices more than inflation.

How to Raise Prices Without Losing Clients

Afraid raising prices will drive clients away? Here’s the good news: you can increase prices and stay competitive. It’s all about benchmarking and price optimization. By comparing your prices to nearby salons and spas, you can ensure you’re charging fairly while covering rising costs.

With tools like PrettyData, you can accurately benchmark your prices and make informed decisions. This allows you to optimize your prices – adjust prices in small amounts on targeted services—above the rate of inflation. This ensures you can increase staff pay while maintaining profitability without scaring away clients.

Conclusion

Inflation is an unavoidable challenge, but it doesn’t have to be a threat to your salon and spa’s success. By adjusting your prices above inflation each year, you’ll be able to pay your beauty pros more, increasing retention and ensuring sustainable profits. PrettyData can help you make smart pricing decisions with confidence, so you can focus on what you do best—your craft, not math.

And don’t forget to try our Inflation Calculator to see exactly how inflation is impacting your bottom line!