E12. How Much You Should Actually Be Charging...

If you’ve ever based your prices on what other nail techs are charging… this episode is going to change everything 💅

In my last pricing episode, we unpacked the mindset around pricing and why it’s so controversial in the nail industry. But today, we’re getting into the part most people avoid… the numbers 👀

Because the truth is, you can’t build a profitable business by guessing your prices 😅

In this episode, I walk you through:
✨ How to calculate your true cost per service
✨ How to factor in overheads, product cost + your hourly rate
✨ How to set an hourly rate that actually supports your life
✨ Why being fully booked doesn’t always mean you’re profitable
✨ The biggest pricing mistakes nail techs make (especially when it comes to nail art)
✨ When you need to raise your prices, even before looking at the numbers

We also dive into real examples that break down exactly why so many nail techs are undercharging… and why “$100+ sets” are often not expensive, they’re necessary 💅

This episode might feel overwhelming at times, but it’s one of the most important conversations you can have if you want to build a sustainable beauty business 💓

If you’re ready to stop guessing your prices and start understanding them, this is for you 🌸🎙️

And if you haven’t already, make sure you go back and listen to “The Controversy Around Pricing in the Nail Industry” first, it will completely shift the way you think about charging 🎧🙌

Don’t forget to rate this podcast 5 stars ⭐️

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Transcript

SPEAKER_00 0:00

Hey everyone, welcome to Blossom and Business, the podcast for beauty business owners who are ready to treat their business like a business, not just a hobby. My name is Monique and I'm a Melbourne-based salon owner and educator and I'm here to help you grow your income, attract the right clients, and build a business that's actually sustainable. So if you're in the beauty industry and you're ready to level up your mindset, your marketing and the way that you run your business, this is the podcast for you. I hope you love this episode now. Hey guys, welcome back to the podcast. In this episode, we're talking all things pricing. So in my last pricing episode, we talked about mindset and how controversial pricing is in the nail industry. So if you haven't listened to that one, go ahead and do that first. It kind of like lays a foundation before we go into this episode, so you're in the right mindset to actually put what you learn in this episode into action. So today we're going into how you actually calculate how much you should be charging. Knowing your numbers and calculating your pricing is super important. You can't just price yourself based on what you think you should charge. You can't just price yourself based on what everyone else around you is charging. You actually need to look at the numbers because otherwise you can't guarantee that your pricing is profitable, first of all, or if it's even covering your overheads. Because you could be working at a loss and you don't even know it. Now, I don't work in finance, I'm no expert, so take everything I say with calculations with a grain of salt. I don't have a calculator sorted out for you guys yet, but I am working on it. Eventually, I'm gonna have a whole system and program that you guys can follow. But for now, the podcast, I'm gonna do the best that I can to explain my calculations and what I personally do in a podcast episode. Ideally, this isn't a platform that I would be teaching this on, but this is all we've got for now. We just got the podcast. I don't have like a business course or program or anything at this stage. So I'm gonna help you guys the best that I can given that this is like an audio kind of thing. I don't have numbers that you can look at or like a spreadsheet or anything like that. So just take some notes. If you're driving, stop and listen to this later because trust me, you're gonna want to write some of this down. I'm gonna try not to make it a lot of like calculation gibberish. It is very numbers heavy. So again, if you're driving, if you're multitasking, wait until you finish and then listen to this because trust me, you're gonna need to write some stuff down. Again, I'm no finance expert, I'm just gonna be giving you guys this as a guide, so take it with a grain of salt. So when it comes to calculating your pricing, the first thing you need to do is calculate your expenses. So this is gonna be your products and your overheads. So you can convert this to whatever service that you offer, but for example, we'll do nails. So with nails, every single thing that you need for a manicure, you need to list it out and find out how much it costs per client. So I don't know the numbers off the top of my head, but let's say a top coat costed you $20 and you got 20 users out of that top coat, that's 20 clients you get out of that one top coat. So if you can use that $20 top coat on 20 clients, that top coat costs approximately $1 per client. Again, just off the top of my head, you may get more than that, but that's just an easy example. But that's kind of the calculations you need to be making. So let's use another example. Say you get nail files in a pack of 100, and let's say you're someone that's using one file per client, as you should. A 100 pack of nail files for $25 works out to be 25 cents. So the calculations are super basic, but I know not everyone has math skills. I don't have math skills, these are like, you know, basic multiplication, division, all of that. I'm actually horrible at maths, but these calculations that you need for your pricing are actually relatively easy. I just use a calculator, you don't need to do it in your brain. So to find out the product cost per client, what you want to do is put the total cost of whatever it is you buy. So for example, the nail files, how much does that pack of files cost you? Put that in the calculator, then do divide, and then how many uses you get out of that? So 100 pack would be divided by 100, and then you just get the total, and whatever that price is, that's how much it costs you per client. So things that you use multiple of, such as like nail wipes or cotton sticks or anything like that, it's the same process, but that last number that you get just times it by how many you use. Say, for example, you use five nail wipes per service, you would times that final number by five, and then you get your cost per client. So that's fairly simple. It is just a little bit time consuming because we use so much stuff to run a service, no matter if it's nails, lashes, brows, and with liquids and stuff like that, it can be a little bit hard to figure out at first, but some suppliers might even have a guide on their website, like how many clients you could get out of a bottle of top coat or for lashes, like lash glue. Otherwise, what I'd be doing is writing down what date to you open a new bottle of anything, and then track how many uses you get. So something like top coat that's super easy because you use it on every single client. So just track when you open the bottle and track when it's finished, and then count how many clients you've had over that time. So calculate every single thing you use. So nail wipes, cotton sticks, top coat, builder gel, tips, sterilization pouches, gloves, all of that. I would also go into your cleaning stuff and try to calculate that as well. Now, with things like e-file bits, what you want to do is figure out how many uses you get out of them before you replace them. So for example, a $20 e-file bit that gets you 40 uses is 50 cents per client. So in your calculator, you just put 20 divided by 40 and that gets you 0.5. Electricals are a little bit harder to calculate because you do keep them for quite a while. So what I want you to do is figure out how many clients you'd be taking within that time before you replace them. So for example, nail lamps, you typically replace them every two years. So you need to figure out on average how many clients you'd be taking over a two-year period. Then you would take that lamp cost, divide it by that many clients, and then you get your cost per client. Now that is just your product cost. When I work out pricing, I like to do it in like three different categories. So I have product cost, overhead, and then your wage. So that's your product cost all done, ready to go. You've got the numbers, but just keep in mind that sometimes your suppliers can increase their prices. So every few months I would recommend checking to see if any of your supplies have gone up. So then we want to look at your overheads. So I find it's best to get these calculations monthly and then you can break it down from there. So it's things like booking systems, insurance, all of that, anything that you pay a subscription for, anything like that. And if you pay something annually, like maybe your council renewal or business name renewal, anything like that, just divide it by 12 and then you get how much it costs per month. So with your monthly expenses to get the cost per client, what you're going to do is take those expenses and divide it by how many clients you would typically take in a month. And that's how you're gonna get the cost per client for your overheads. Now, when it comes to the amount of clients per month, I don't recommend going based on like how many can actually fit. I don't recommend going based on 100% capacity because like realistically, clients do reschedule. We do maybe get like one or two reschedules cancels every week. Maybe depending on your business, you might get more or less, it really just depends. And even if no one cancels or reschedules, maybe there's like one spot that doesn't fill or anything like that. And even if you are like fully booked, you could have like 10-15 minute gaps in between clients that aren't times that you're getting paid for. So, what I'd recommend is when we're going about how many clients you would take per month when we're doing all of those calculations, I would actually go based on if you had 70% capacity. Because if you do have those gaps or you do have that one cancellation, like with enough notice that you don't have a booking fee, your pricing isn't gonna be entirely accurate because you're not getting that same amount of clients every single week. So when you're dividing by how many clients you take within a month, do that based on if you had 70% capacity, that's how many clients. Now we've got our product costs and then we've got our overheads, and now we need to figure out our hourly rate. So this is what we need to be paid as a wage, regardless of our product costs and our overheads. So to do this, we need to figure out how much we actually want to be earning per week. Now, as an example, let's say we want to earn $2,000 a week, and this is before tax, by the way. So we're gonna obviously be taxed on this so we don't actually get the $2,000 per week, we get less after tax. But this is just a guide before tax. So you can choose whatever number works best for you and your lifestyle. Everyone's lives are gonna be different, everyone's going to be able to live with a different amount of money. I will get into later in the episode how much is actually roughly equates to after we consider tax and all of that. So this isn't actually what you take home, this is before tax. So we're just gonna go with $2,000 a week as an example. So this is how much we want to be earning per week, and if we times that by how many weeks are in the year, which is $52, that brings us to $104,000 a year. So that's roughly how much we'd be earning before tax. Because overheads and expenses, we're paying for those, you know? So this pricing is not actually going into our pockets, it's paying off our expenses. So with the $2,000 a week, 52 weeks a year, we'd be earning $104,000 before tax. But realistically, we're probably not going to be working 52 weeks in a year because we might want some annual leave. Maybe we get sick, or for whatever reason, we're not working all 52 weeks of the year. So if you want paid annual leave and paid sick leave, we need to calculate it a little bit differently. Now I'm trying not to like go through this too quickly. I know I speak really fast. Pause, take some notes, do what you need to do, but I'm trying to like make this make the most sense as possible. Like it makes sense in my head, but I know that like numbers can be scary for some people. So if you need to pause, take a moment, come back, do what you need to do. So if you wanted paid annual leave, paid sick leave, because we all deserve paid annual leave and sick leave. Like literally, if you work for someone else, that is what you get. What we need to do in our calculator is $104,000 or whatever your yearly income goal is, divide it by 48. So that's more if we're wanting four weeks off a year. Maybe it's two weeks of annual leave and you have two weeks backup in case you get sick or whatever time off you need, take that away from how many weeks there are in a year. So we're doing 104,000 divided by 48. So 48 weeks. So in the weeks that we're actually working, so 48 working weeks, instead of earning $2,000 per week, we actually need to earn $2,166. And that's again before adding our product costs and overheads. Now, this is our desired weekly rate. We need to break this down further so we can get our hourly rate because obviously our services are usually an hour, an hour and a half, something like that. So it's just going to be easier to break it down into an hourly rate. That way, when we actually look at our service pricing, we can consider our hourly wage for whatever time it is, then add our product costs and our overheads. So we're gonna look at like a 40-hour week in the salon, right? So that's eight hours a day, five days a week. We could divide our weekly rate by 40 and then get our hourly rate, but realistically, again, you may not have full capacity of clients. And then if you did that, this wouldn't account for the hours that you're working outside of clients. So doing your marketing, your setup, your pack-up. We should all be paid for this. This should be incorporated into your pricing. Setting up and packing up for your client's appointment should be incorporated into your pricing. And realistically, I could do a whole other episode on this. There is gonna be a lot of work that you do in your business that's not face-to-face with a client. Your marketing, your bookkeeping, your stock ordering, literally anything, this is still work that you're doing that you need to be paid for. So let's say out of this 40-hour work week, about two hours were sent on setup and packup at the start and end of each day or between clients, and three hours is probably spent on social media, bookkeeping, stock ordering, literally any of your admin work. That brings us to 35 hours. Now you could say that when you're at 70% capacity, you're using that spare time, those gaps, or that unfilled or cancelled spot to do all of this work, your social media, you're cleaning all of that. Therefore, that would be considered in our calculation. Or you could break it down even more and make it so that you earn this in only 70% of your hours to account for your 70% capacity. But in that case, your hourly rate is going to be higher. So, like someone like me, I have a designated admin day because I do education and things like that. But let's say you're someone that just does all of this social media, admin, all of that in any little gaps that you get or in maybe one unfilled spot a week. So for this example, we're just gonna base it off those 35 hours. So in 35 hours, we need to earn that $2,166. So then we have other considerations such as super and profit. So super typically comes out of your wage at the very end. This is about 12%. But if you were not happy with your wage after taking away the super, you could just increase your wage higher, so you would increase your weekly earnings higher. And then profit, I'd be aiming for at least 30%. At least. The more the merrier, but at least 30%. But for example purposes, because I already started with a little bit of a higher wage to some people, we're just gonna leave these out. Now we need to take our weekly wage and divide that by how many hours we're going to spend working on clients. So again, this is going to be 35, not 40. So 2166 divided by 35 is $61.80. So to make things easier, we're just gonna say $62. So our hourly rate, just for us, is $62 an hour before expenses, before overheads. So if you have a one-hour service, which for nails, it's probably unless you're very fast, it's probably gonna be more than an hour, but maybe something like a lash lift or like a quick lash refill, anything like that. If your service is only an hour long, you would take this hourly rate, add whatever your product cost was, and add whatever your overhead cost was, both of those being per client, and that's how you get how much you're gonna be charging for a one-hour service. But because we're focusing a little bit more on nails, most nail services are probably one and a half, two hours. Nail art, that's a whole nother thing. I'll get into that a little bit later. Let's say our nail set takes us an hour and a half. We needed to calculate 62 times 1.5 to get an hour and a half, which gives us $93 before expenses. So we need to be charging at least $93 just to cover our wage, not even accounting for the product cost and the overheads. I hope this is still tracking for you, guys. I'm trying to like break it down as best as I can. So again, this is just random numbers off the top of my head. But let's pretend your product cost per client was $7 and your overheads per client was $5. So add those to the $93, that is $105. We'd need to charge for an hour and a half service. If this was a two-hour service, maybe some that takes a little bit longer, this would be $136. So we got that by timesing our hourly rate by two, then adding the product cost and the overhead per client. Now, in order to have $104,000 income, which after tax will vary person to person because everyone's taxed differently, I put this into ChatGPT, so take it with a grain of salt, it would be approximately $77,600. So as you can see, your income drops significantly because tax. The tax here is crazy. But this is before GST. This is just like me asking ChatGPT about like just a general income tax. Once you hit this income threshold, you need to be registered for GST and you need to be charging your customers GST. So this is typically around 10%. But sometimes you can also claim GST credits on what you've spent. So some purchases you make you would have paid GST on, and if they're eligible for GST credits, it reduces the amount of GST you pay to the ATO. Every country is gonna be different, so this is just based on Australia, and again, not a financial expert, doing the best I can. So again, this is before GST, but let's say we had expenses that we could claim some GST credits for, and ideally your expenses would be a lot lower than your income. So we're gonna use about 7% GST because let's say our expenses that we paid GST on brought our GST down a little bit. So we're gonna use 7% GST. So let's say we take away 7% GST from that price, that brings it down to $72,168. Now we have 12% super. So if you're putting money into your super, it's recommended to do 12%. If you're a sole trader, you're gonna be doing that by yourself. Even as a sole trader, I do highly recommend paying money into a super, but I know everyone thinks differently, everyone has a different opinion. I would highly recommend doing so. So this is about 12%. So if you're putting about 12% into your super, after that you're left with $63,507. So see how it went from $104,000 all the way down to $63,000 something dollars. There are so many factors to consider. But as you can see, for this income level, this product cost and this overheads, the set of nails are over $100. So to the people charging less than $100, please I beg you, check your numbers. If you can charge $80 per set and still be profitable, that is amazing. Good for you. Everyone's desired income is going to be different because as I mentioned in my previous pricing episode, everyone's lifestyle is different. Some people are single people paying off a mortgage that do nails full-time, so they need to earn a certain amount from nails per week. Some people just do nails on the sign, maybe a little side hustle, or maybe they do it full-time, but their partner brings in the money for their family. Therefore, they can get away with charging a little bit less because they don't actually need that much money. So some people are gonna think that before tax, $104,000 is quite high. To some people, this is not even gonna be enough. You can see from this example alone, just based on like a rough estimation, that earning over $100,000 per year, earning six figures, after you take away tax and super and all that, you're actually left with something in the 60s. You could have more, you could have less, it just depends on tax and all of that. But after you take away all this tax and things, you're actually left with in Melbourne, like the median income. So depending on what everyone's going on in their lives, everyone's going to need a different income. And not only that, everyone's product costs are going to be different. Different suppliers charge different amounts. Overheads are gonna be different. Not everyone has a booking system or a website. Some people aren't legit businesses, they don't pay for council registration, business name registration, insurance, any of that. Every business is going to be so different. That's why you can't just pick your pricing based on what other technicians are charging. Your required income to like live is going to be different, your overheads are gonna be different, and your product costs are gonna be different. So you need to do the calculations for your business. Another overhead is people with a commercial space have rent. People that work at home don't have the commercial rent. Some people are cash in hand, some people take payments on card or online that charge a surcharge. There are so many factors. So after this episode, I really want you to broaden your perspective. If you're someone that's been charging $60, $70, $80 and you look at a nail tech that charges $100, $150, and you're like, they're expensive. Like again, the value of nails and pricing, I did a whole episode of that not long ago. Go listen to it, I highly recommend. But you might think that they're expensive, but maybe they're just doing the bare minimum to cover their overheads, their expenses, and pay for their life. Some people are paying off a mortgage, some people maybe want to do one holiday a year. There's nothing wrong with that. But our pricing needs to reflect our lifestyle. That doesn't mean that the person charging $100, $150 for nails has designer handbags and has a Ferrari. I don't know. But like, I hope you get the point that not everyone's pricing is gonna be the same. So when you see someone charging more than you, don't assume that they're a ripoff, don't assume that they're expensive. But on the other hand, you can have people charging less than you that are still in profit because maybe, first of all, their overheads are very low. They might not have a booking system or a website, they might only accept cash, they might not even be paying tax, first of all, they might not even have a registered business or an ABN or anything. There are so many factors involved. There are gonna be clients that pay for $50 sets and there are gonna be clients that pay for $150 sets. It all comes down to quality and value at the end of the day. So one of the mistakes that a lot of beauticians make is they don't actually calculate their pricing. They simply just look at what everyone else is charging. But everyone's expenses and income is going to be different. That's why you can't compare two different technicians and assume that the one charging more is getting more profit. Higher pricing does not always mean higher profit. This all comes down to expenses. So what's profitable for someone else may not even be livable for you. I am heavily invested in this topic, especially for Nailtechs, because I feel like we're one of the most undervalued, undercharged beauticians in the industry. And again, I keep going on about my previous pricing episode. Highly recommend listening to it. I'm gonna keep mentioning it because I think it was just such a good episode and this really comes back to value and things like that. People are gonna continue undervaluing Nailtechs unless we charge what we should be charging, unless we change the narrative and actually increase our prices. Because again, high prices doesn't mean high profit. You can be charging over $100 for nails and still work at a loss. How much you actually charge on paper has nothing to do with the numbers behind the scenes. So another thing I noticed in other nail techs do is maybe they calculate the price of their sets for like their base sets, you know, maybe like a manicure removal manicure, anything like that, but they don't actually do the same calculations for their nail art. So their nails could be making alright money, but then the nail art is what's making them broke. The nail art is why they're not reaching their desired income per week. Because they're just charging random amounts for an L art. Again, maybe based on what other people are charging, they're not actually doing their calculations. That's why for some nail techs, even with like higher, according to some people, higher pricing, they might actually not be bringing in that income simply because their nail art is what's holding them back. Their nail art is what's keeping them broke because it's not priced correctly. And if you have a lot of clients that get nail art, that is a huge chunk of your week. Where your calculations that you did on your manicures don't even matter because you didn't calculate your nail art pricing. So this is personally how I recommend pricing nail art and sorting it all out on your bookings, and that is packages. So these are gonna be packages based on time. So that way it's super easier to figure out how much your wage needs to be for each package. So for example, half an hour of nail art, that's going to be half your hourly wage. Super easy, just divide it by two. Now again, this is just a wage, not considering product costs, not considering overheads, but let's say that our manicure covered our overheads, because otherwise it does get a little bit more complicated if we include that into the art. So if you're someone that does a lot of nail art, you would have already considered how many clients you do per week. You wouldn't just be going on how many basic sets you could fit per week, you'd actually be going on how many clients you have per week. So in that case, your overheads are already included in like the base price, your base manicure. So we don't really need to add it into nail art. We just need our wage and we just need the product costs. So product costs for art, depending on what you do, can be fairly low. Typically, it's just like let's say it was a French chip or some abstract lines or maybe a tiny, tiny, tiny bit of 3D gel, pretending that we charged extra for charms and 3D flowers and things like that that may have a higher materials cost. So let's say our nail art package is 30 minutes long. So our hourly rate was 62. We divide that by two to get half. That is $31 for just our wage alone. So let's say our product cost for this art package was fairly low because it might be just a little bit gel polish, gel paint, maybe a small amount of rhinestones, anything like that. Might have been. $1.50 just off the top of my head. So for this 30-minute nail art package, you would need to charge $32.50 based on this income. Yours could be higher or it could be lower. So this is just your base price for that package. I recommend having your packages priced at like a from price, not a set price, because this just covers like your time and like a small amount of materials. But if you're having someone that comes in and wants charms or sculpted 3D flowers, all of that that you do still do within that 30-minute time period, but increase the product cost, that way you can charge accordingly for those extra costs of materials. So I personally for art always recommend having packages. That way it's easier to figure out your wage because you have packages based on time, and that would incorporate a small amount of product and then have it as a from price because if they do want anything that is higher product cost, higher materials cost, you can just tell them it's gonna cost a little bit extra. So that way you can still perform gorgeous nail art, but actually cover your wage and cover the product cost. Again, I'm trying my best to make this episode the least confusing as possible. I know it's a lot of numbers, but I really hope that you guys can like make sense of this. If anything's unclear, please message me again, not financial expert. Now, just quickly before we move on, this is a little bit of a controversial topic, at least I think it would be, and this is a mistake that a lot of beauticians out there actually make, and it's not adjusting their hourly wage based on public holidays and weekends and things like that. So, for reference, in Australia, it might be different in other countries. Typically, you'd be paid more if you were employed by someone else. You'd get paid more working on a weekday after 6 p.m., working on a Saturday, a Sunday, or on a public holiday. They have to pay you more, they have to pay you penalty rates because these are hours that no one really wants to work. Like realistically, no one really wants to work on a weekend or late at night or on a public holiday. So if they are going to be working, they need to get paid more. Now, being a sole trader, you technically don't have to pay yourself more, but you could also be ripping yourself off because if you're working for someone else, you would be getting paid more for working these hours. Now, if you have staff, you do need to consider this because you're going to be paying your employees like double pay or more like on a public holiday. So if you're open on a public holiday, you need to make sure that your pricing covers this or that you charge extra like a surcharge on that exact day. And the surcharge that you charge has to be high enough to account for your employee's wage. Staff is a whole nother thing that I personally don't have experience on, but that is absolutely something that you need to consider. Most salons actually close on a Sunday, most actually close on public holidays simply because they probably can't afford to pay their staff, that it's actually not worth it to be open. And even the ones that are open like a Saturday or like a late night, they have to pay their staff more. So either their overall pricing has to account for these hours, or they have to have a surcharge in place. Because otherwise their business probably isn't gonna be the best financially. Now I actually looked up what the rates are, like what the increase in your wage is for these certain days and times. Now, this is just a summary, AI Google summary, so take it with a grain of salt. But after 6 p.m. on a weekday is typically 10 to 15% more of your wage. Saturdays are normally 125 to 150% of your wage. Sundays are usually 150% to 200% of your wage, so up to double your wage. Public holidays are typically 225% to 250%. So that's above double your wage. Now again, you could just not charge extra and still work them, anyways, or you could charge extra. It's completely up to you. Now, if you wanted to calculate this into the pricing that you would charge on those days, if you wanted to charge extra before you add the product costs and the overheads to your calculations, you would simply just multiply your hourly rate. So if we use the same example again, $62 hourly rate, on a Saturday we'll go with 150%, right? So that's like our wage and a half. That would bring us to $93 for one hour. But our nail set doesn't take an hour, it takes an hour and a half. So we're times that by 1.5 again, and then we have $139.50. And then we add the $7 product and the $5 overheads, which is $151.50 for a basic hour and a half nail appointment on a Saturday. Again, everyone's desired income is gonna affect their hourly rate, and everyone's products and overheads are gonna be different. This is just an example. But you can see the difference between charging on a weekday during the day, $105 for this set. Compared to a Saturday, it's $151 for this set. Sundays is even more, and public holidays is even more than that. So I've already done the calculations, so I'm just gonna be reading it. So this is for an hour and a half an hour appointment, no art, nothing, just your basic manicure that takes an hour and a half. So it's $105 during the week, roughly $119 for a weekday after 6 p.m. Roughly between $128 to $151 on a Saturday, roughly between $151 to $198 on a Sunday, and roughly between $221 to $244 on a public holiday. So the biggest comparison is $105 for this set on a weekday to $244 on a public holiday. That is a huge difference. So I know that some people have public holiday surcharges, and after this, I'm gonna be reflecting like my surcharges as well. I personally have a surcharge, it's like 20%, but I just don't have it open for booking, so therefore like I never actually charge it because I never actually work them. I have worked Saturdays for the longest time, not charging extra, but I'm actually instead of charging extra, I just scale back the Saturdays and maybe eventually I won't be working them at all. But if I had some clients that are desperate enough, maybe I'll look into actually charging extra on a Saturday. And again, this pricing, like $105 to $244, is based on an hour and a half manicure. If you take longer, or if your overheads of product costs are higher, it's gonna cost even more. You're gonna have to charge even more. But at the end of the day, firstly, no one's forcing you to work these hours. No one's forcing you to work after 6 p.m. on a Saturday, on a Sunday, public holidays. I did a whole nother episode on work hours, things like that. Check it out. But if you choose to, like let's say a public holiday falls on a Monday and you normally work on a Monday, and you don't want to take that public holiday out of those four weeks that maybe you've accounted as like your annual leave, sick leave, whatever, I highly recommend charging extra. Even if it's not like this full amount that like most people in industry would be getting from their employer. I would highly recommend at least charging something extra. Especially if it's a day or time that you don't want to work. And trust me, if clients are desperate enough for an appointment, they will pay. With those days and times, it's honestly just up to you and what you think is worth it at the end of the day. No one's forcing you to work them in the first place, and no one's forcing you to charge extra unless obviously you are an employer with staff. You're gonna have to probably charge extra or just close on those days because otherwise it's not gonna be the most financially feasible. But as a sole trader, it's up to you. You could work it, you could not, you could charge extra, you could not. It's completely up to you. But I thought I would just mention it because it blows my mind how many people I see working on like a Sunday or even like a Saturday. Like I don't charge extra for a Saturday, but I could in the future. But like a Sunday or public holiday, and they're charging the same amount, but they're working on a public holiday. Like if you were employed for someone else, even though you wouldn't be getting profit, you'd still actually be earning probably more, a lot more. Because at the end of the day, yes, we're sole traders, we have more flexibility, we have profit incorporated into our pricing if we do it correctly, but you also need to consider if you were working for someone else, you'd be earning more. So you want to think about did you start your business to be earning more than just an employee or less? Like with any sort of pricing, some clients might find it too expensive that it's not worth it for them to get done on that day. And that's fine because it just means that they simply don't book the appointment on that day. But the people that do book in for that day, you earn more for doing less. Simply because they want you to work on these special days or during these special hours that most people don't want to work. Now, numbers and calculations are the best way to figure out whether or not we need to increase our prices. But there are some other telltale signs that we can look at to know whether or not we need to increase our prices before we even look at all of the numbers like every single product cost, every single overhead, all of that. There are some other signs we can just tell we need to increase our prices. So a sign that you might need to increase your prices is that you're fully booked, you're at capacity, and you're not making any money. You're broke or you're just barely getting by, but you're fully booked. So how does that work? That is likely because your pricing isn't actually accurate. That is where the calculations come in. We don't actually need to look at the actual numbers and the calculations to know that you're not earning enough money and that your prices aren't high enough. You could simply just look at what you're earning per week and just know that is not livable. And if you're fully booked, that is wild, that you're not making any money and you're fully booked. So clearly something in the numbers is very wrong. Same thing is if you find yourself having to work more than eight or nine hours a day, more than five days a week, your pricing is probably too low. You're probably undercharging. Because if you have to work more than like a basic nine to five, then something's wrong with your pricing. You probably feel very burnt out, or like me when I undercharged, very resentful. Because as much as you love doing nails or lashes or whatever it is, as much as you love running your business, it's actually not supporting you. You're not actually able to rely on it to fund your life. So you need to actually start charging appropriately. So these are some of the reasons I've noted down for you guys to know when you actually need to increase your prices. This is going to be based on what's going on in your business. So, firstly, you need to increase your pricing if you're working at a loss and you're not covering your expenses, you're not covering your overheads, this is absolute bare minimum. Like, you need to have like an okay wage, you need to cover your overheads and your expenses. You need to have like an okay wage, you need to be covering your product costs and your overheads. If you're not doing that, then you're already working at a loss. You're probably just gonna go broke. Sorry, not sorry, but it's true. I wish I could put it nicer, but that's just how it is. You need to have, like, even if it's minimum wage, ideally no one wants to earn minimum wage, but at least, at least minimum wage, cover your overheads, cover your product costs, bare minimum. You need to increase your pricing if you're earning minimum wage or less. So, again, minimum wage is already bare minimum, but no one wants to be earning that. So I would be increasing your prices. You can actually look at the award rates as a guide. They have award rates in our industry, and even if you don't have a CERT 3, they are really good to look at just as a guide, because that's how much you'd be getting if you're working for someone else, given that you had those qualifications, but still good to have a guide. And on those award rates, you can also see the after 6 p.m., the Saturday, the Sunday, the public holiday, and that's what inspired me to mention it in this episode because it's like wild the difference. So I definitely recommend having a look at those as a guide. So minimum wage is bare minimum. If you're earning less than minimum wage, same thing again, you probably go broke. There's no way to sugarcoat it. You need to increase your pricing if you're not making 30% profit. So again, profit is optional, but at least 30% is recommended. Now, if you don't have a business, maybe you're a client or just someone that's watching this for fun, you may be thinking, but why does profit need to be included? Like, why should I pay higher prices for my nail tech to be rich? In reality, like 30% profit is already like nothing. Like it's like bare minimum, first of all. And sometimes this profit doesn't actually go into our pockets, sometimes it's actually just used as backup if maybe we have a higher expense month. Maybe our lamp breaks and we have to replace it sooner than we intended to. Maybe your selling gets broken into and your insurance doesn't cover certain things. Maybe something else broke that needs replacing that you never thought would need replacing. Even though profit is intended to be a little bit of extra money for ourselves to take home as a reward for working so hard in our businesses, sometimes it is just used as a backup. You could also incorporate a buffer into your pricing, which is where when these things happen, you do have a backup that is another option to have as well. But just for profit alone, I would aim for at least 30%. I know that you didn't start your business and put all this work into it to get nothing from it. You need to increase your pricing if you rely on 100% full books, because again, some people do cancel last minute, deposit or not, whether it's within your cancellation period or not, you're still earning less than what you were supposed to be getting. And there can be random 10-15 minute gaps throughout the day and throughout the week, throughout the month, throughout the year, that all adds up. So that's why I recommend doing the pricing based on 70% capacity rather than full capacity, because otherwise you're gonna be struggling to pay your bills if you're not full like to the brim with appointments. You need to be increasing your pricing if you're working more than 40 hours a week. I don't know about you guys, but I didn't start a business to be overworked and underpaid. So if you have to work more than 40 hours a week to earn what you need to earn, you need to increase your prices. You need to increase your pricing if you have improved your skill set and furthered your education. Because not only do you have the cost of that education that you've invested in, whether it's a course, workshop, mentorship, anything like that, because when your skill increases, your value increases, therefore your prices should increase as well. You need to increase your pricing if your expenses have increased. So this is why I highly recommend looking back at your product costs because these can change over time. Sometimes your booking systems go up in price, or maybe you didn't have one and now you have one. You need to incorporate that into your overheads. Sometimes your insurance can go up, council fees can go up. I know both my insurance and council fee has gone up in like the past like yeah, like crazy. So many things are going up in this economy, so you do need to keep an eye on it. If you're moving into a commercial space, you obviously have an increase in expenses because you're now paying rent. You need to increase your pricing when you're fully booked. So a lot of people think they just get fully booked, whether it's you know 70% or even 100% to the brim, fully booked, and they think that's it, closing my books, not taking new clients. But when you do that, there's no room to actually grow. When you're fully booked, you're in demand. So that's actually the perfect time to increase your prices because your value has gone up because you're so in demand. But also now you can increase your prices and earn more for doing less. Because closing off your books, you reduce your potential to increase your profit. There are only so many hours you can work with clients. So when you just close your books and your pricing remains the same, there is literally no room for growth and you're gonna be in the same position forever. So if you're fully booked, that means you're in demand. That means there's higher value, therefore your pricing should be higher. Now, you've probably resonated with at least one of these reasons as to why you need to increase your pricing. You've been working on your fears of increasing your pricing after my last pricing episode, and you're finally in the right mindset to implement a price increase. And after this episode, you're doing all your calculations to know how much you should actually be charging. Then you know that you have to do it, you want to do it, and you know exactly how much you need to be charging when you do it. But how and when do you actually do it? I'm gonna be doing a whole nother episode on that because this episode is probably already so long, but don't worry, it will be out by the end of the month, so it will be perfect timing for the new financial year. So I hope you guys learned something super valuable from this episode and can now use this as a guide to calculate your pricing. Again, not a financial expert. This is the technique that I recommend, and I really hope that it works for you, even if it's just a guide, because you deserve to be charging your worth, not based on how you feel, but based on the numbers. I'll see you guys in the next episode. Thank you for listening to this episode of Blossom in Business. If you enjoyed this episode, I would love if you could give the video a thumbs up on YouTube or rate the podcast 5 stars on Spotify and Apple. If you don't want to miss an episode, make sure to hit the notification bell so you get notified every single time a new episode drops. If you want to follow along on my journey, I've put the links to all of my socials in the description. If there's any topics you'd like covered on the podcast or you'd like to apply to be a guest speaker, you can find the links in my description. Stay tuned for the next episode.