We’ve all seen it. Inflation. And it’s only getting worse. Since 1982, the inflation rate of 7.5% (as of February 2022) is the largest price increase in a 12-month period according to Bloomberg.com. Who’s to blame? Covid stimulus packages and the trillions of dollars put out by the federal government among some other factors. We won’t get into the deep economics of it all, but one thing is for sure, we are all feeling the crunch. Costs are going up and those costs are being passed onto everyone.

Where food prices have increased over 7% in the last year, energy has increased 27%. With rising costs, hair professionals need to take hard look at their business numbers and ask themselves how inflation is affecting their business and livelihoods. For many stylists and barbers, the most obvious ways to make up for the inflation is to raise prices. But that might not be the best immediate answer. Here are some areas to review in your business.

How booked are you? Are you 80% booked? 90% booked? If you are 90% booked or more, you can probably raise your prices and not lose too many clients. The increase should be determined by how much inflation has affected your business. If you are less than 80% booked you may want to hold off on raising prices just yet. Focus on doing more marketing and gaining more clients. Every time you raise prices you risk losing clients. However, if you have a fairly full schedule, losing a client or two won’t make much of a dent. Here’s a great video on how to raise your prices.

Where can you make more money in your business? Perhaps retail more product. If you can make a sale with your clients, you can increase your revenue significantly. By selling product you can make more money per client and make up for any inflationary offsets. Selling shampoo, conditioner, hair serums, sprays and hair vitamins can all be great money makers. A great marketing tactic is to you use these products on your client while servicing them. If they like them, they are more willing to buy them. If you need some tips on how to retail effectively, watch this video with Ivan Zoot.

Are you ready to put in more hours? If you don’t feel comfortable retailing product, you can always work more. However, if you are already working a full schedule, this could lead to burnout. This is a good suggestion for anyone who has room to work more. More clients = more money.

Where are you making the most money? Alternatively, review in your business where you are making the most money. If you’ve noticed you are making a lot more money giving straight razor shaves vs. regular barber cuts, push your focus to giving more shaves. By increasing the amount of money you make per hour, this can lead to a large increase over time.

Where can you make cuts? Make cuts in areas that won’t affect the quality of your work or customer service. Perhaps there’s a better booking service out there for managing your clients that costs less. Or maybe you can split certain costs with other hair professionals in your salon or shop. Get creative.

Only raise costs of services where the products you use for them have increased. For example, if the cost of hair color has increased significantly, then raise prices for hair color services proportionally.

When evaluating where to make adjustments on the financial side of the business, consider different angles. Do what makes sense for your business and your clients. But one thing is for sure, if you don’t make any changes and inflation continues to go up, you are making less money than before and that’s not the direction you want to go. Costs will always go up over time. Unfortunately, we are in a time where the rise is significant. Evaluate your options and take charge.