26-Is a $5 INCREASE The Enemy In Your Salon Business?

Hair stylist, when does it end? When will you actually start to put yourself first so you can make more money, keep more money and do it without feeling guilty? I'll tell you when, right, mother, effing now. Welcome to the Make That Money Podcast with Nina Tulio, where we talk all things pricing, all things profit and how to build your business with confidence. Hello, my beautiful friends. Welcome back to the Make That Money Podcast. I am your host, Nina Tulio. And today we have a hot ass topic. So a week or so ago, I shared something on my Instagram that kind of blew up and it was all about why a $5 price increase is the enemy in your salon business. So let's talk about it. Actually, it could even be between a $3 and a $5 price increase. That could be the enemy in your salon business. And I want to go through the reasons why there has been so much talk about burnout. And this is kind of always been how it has been in our industry for the longest time. People are getting burned out. They're getting tired. And a lot of that is fueled by pricing. And for the, I'd say over the last month or so, I have received, I've had more conversations about $5 increases than I've had in the longest time. And what I'm noticing is that stylists are having these $5 increases and salon owners too. And the $5 increase isn't doing what it needs to do. And so let me go through my top areas here that I want to dive into. And I want to talk about why this $3 to $5 price increase could be causing more chaos in your business. And don't get me wrong. There may be a time where we need a $5 price increase. There's so many stipulations and so many key components that go into a price increase. And so I'm not saying that there is never a time for a $5 price increase. But if you haven't had a price increase in a year and a half plus and you've only had $5 price increases, you're probably not even catching up to the rising costs at that point. And so you end up getting burned out because you're working way more than you have to in a lot of cases working over 40 hours a week just to cover the bills, just to pay the bills. And then you get irritated because the $5 increase wasn't enough. And then you're like, shit, now do I have to do another $5 price increase? And these are the conversations that I've been having. And so I'm not saying don't ever have a $5 price increase, but the way that I coach and teach pricing with my budgeting worksheet and calculator first, with my price per minute, price per hour, baseline and target second. And then with looking at all of the services in your business and calculating price per minute. So you know exactly how much you should be raising prices. That is a very systematic and strategic way to have a price increase based on data. So maybe the calculators will show us that you only need a $5 price increase. Great. That's awesome. So if you're a business, it works with your brand and it works with the amount of profit that you need to make in your business. But I will say we typically don't do a lot of $5 price increases unless it's on a haircut service. This is something completely different. So let's dive into why the $3 to $5 price increase could be the enemy in your salon business. Number one, it's a fear based move and not a fact based move. So I kind of just covered that by going into using my calculators and really getting the data that you need. And I don't price without budget first. So you're going to know exactly where you are per category, your rent, your payroll, your back bar, what you're spending and that those are your business expenses. That is a key component in pricing services. Most $5 price increases happen out of panic and not strategy. They happen out of fear and you're like, wow, I know I need to do a price increase. And listen, I've been here. So I'm not talking shit like I've done it myself as a salon owner. So no shade. It's just the reality of her business. We feel like I have to do a price increase, but I'm so nervous. So if I do a $3 or $5, it's going to be okay. They'll absorb that. They'll accept that and it makes us feel better, but it's not working for your business. It allows you to feel like you're doing something, but the math doesn't support the change that the business needs. That is number one and probably one of the most important. Number two, it doesn't keep up with the rising costs of expenses. We've got product cost, back bar rent, taxes, payroll, all of these things that are increasing, constantly, especially over the last five years. That $5 increase may help you and give you a boost in revenue, but it's not the boost in revenue that you need to cover all of these costs in order for you to be profitable. So that $5 bump doesn't even scratch the surface for what most businesses and most salon businesses need in order to keep up with rising expenses and to also throw a profit and pay yourself. Super, super important. Number three, it's fueling burnout. We had this conversation at the beginning of this episode. It's fueling burnout. You're most likely having a price increase because your demand is high. A small price increase isn't going to create the space that you need to take on more clients. It's going to create more stress. If you're fully booked underpaid, no room to welcome in new clients, take time off, pay yourself, do all of the things. You end up working way harder and not smarter and it's draining your energy, your passion, your time, every, it's draining you. And so then you become resentment, you become resentful toward the client and it's not about the client. This is about you. It's about us and it's about us taking accountability for what's going on in our businesses and making pricing decisions based on facts and data and not fear and Facebook groups and emotion. So if you are having these price increases and you're feeling burned out, this episode is for you because you're going to start to slowly see that with the rising cost, and with everything going up, that $5 increase is just a band aid. It is a short term solution for a long term problem. Number four, it creates the illusion of profit without real results. So you do the $5 increase, you think it's fixing the problem. You think it's going to give you more money and profit. You think that it's going to help you move the needle in the right direction in terms of giving you a little bit more breathing room, but unfortunately it could cause you to stay stuck in survival mode and not building the real income and profit that you need and deserve. And so it's like this illusion, kind of like the band aid, right? We think that it's doing all the things. We're like, yes, I did the $5 increase, amazing. And listen, good for you for having the increase, right? But it only is putting a band aid on this long term problem, which is you're not going to be able to see new clients. If your schedule is gridlocked, so is your income. And price increases are not meant to get rid of clients. It's meant to allow you to charge what you need to based on demand. It's allowing you to create more room and space for clients that are requesting you that you can no longer see. It's allowing you to create more creative freedom in your business because listen, if you had the same clients that you've had for the last 15 years and you're doing 7N and 20 volume, is that allowing you to grow creatively? No. So these price increases are also meant for you to create a successful, sustainable, profitable business that you can pay yourself. And in most cases, not all, but in most cases, the $5 increase, the $3 increase is just not going to cut it. Number, I think I'm on number five. It delays hard conversations that you actually need to have. This one right here. Racing based on emotion or fear keeps you still in stuck. It allows you to avoid the real thing in the business, which is the math, which is the finances, which is the back end of the business, which is the real adjustments and increases that need to be made. And also, hear me out. The hard conversation that you actually have to have with yourself and the accountability. The accountability of saying, you know what, I haven't had a price increase in two, three years. And the increases that I've had have been three to $5. I know I'm not making profit in my business. I know I'm working over 40 hours a week and I'm killing myself to keep this business open. That's on me. And so when we look at this overall and we really start to see why this $5 or $3 increase can be causing a lot of chaos, there are solutions to that problem. You don't have to stay here and you don't have to keep having this conversation with your client about the $5 increase. Every, you know, maybe you have it once a year, maybe you feel like doing these $5 increases every six months is a thing. But one other thing I want you to think about too is if you're having these small, safe increases, what kind of messages it having, what kind of messages it's sending to the client about your skill, your time, your talent, and your expertise. For you only worth those five dollars. Oh, you're worth a lot more. It's hard to elevate a brand or a brand or a business when you're consistently underpricing your value. So I coach and teach to building, yes, understanding price per minute, price per hour, but I'm also helping you build confidence. So you set pricing with intention and it reflects the true value that you have and what you offer behind the chair. And so here's what I want you to do. If this is you and this is hitting all of the buttons for you, I've been there. I was an owner that was doing these little minimal increases and it hurt the shit out of my business and it hurt my team because those price increases have an impact on how your team is being paid as well. There are options and resources. Number one, my free guide, the pricing upgrade. If you haven't had a price increase and you don't know when, where, who, what, and how to do this price increase. Check out the pricing upgrade on my website, Nina Tullio.com and is on my homepage. It will walk you through my tiered, three tiered system on having a price increase that I actually took from my make that money course and I'm sharing it for free. Number two, I have free pricing classes and guides that you can check out. I have so many free resources, but if you're looking for the real deal, the real nitty gritty shit that's actually going to get you out of this fear based thinking. If you're an independent artist, I want you to check out my make that money course. It is a step by step guide, step by step guide with the budget sheets, calculators with all of the calculators price per service with the calculator with your price per minute price per hour. And the budget chief for independence is different for my commission salon owners. That's why they're separate. Check out make that money. Again, go on my website, NinaTullio.com. Check it out. And if you're a commission salon owner and you're having all of these issues, you can check out my synergy course. I even have synergy finance, which is just a smaller version of synergy. And it's all about the finances and gives you everything that you need at a lower price point, or you can reach out for coaching. I have my money talks, which is my new one on one intensive, just covering profit and pricing in a two in a two hour and 15 minute zoom call with me with your numbers, your facts, your data, all of the stuff that you need to make real change in your business. So you don't have to keep struggling and live in survival mode. You have options and you can start as little or as aggressive as you want to. I'm always here to support you. I'm always going to keep it real. And I know that it's really hard to hear some of this shit. However, this is sometimes the thing that we need to move the needle forward in the business and to move past all of that fear and that sometimes that anxiety that we keep and close that we keep close to us that keeps us still in stock. If you need me, you can find me on Instagram. You can always message me. I am always here. I'm always here to have your back. I will always respond. You can always check out my website, NinaToolio.com. And I am so excited. I hope this gives you a little bit of like that push that you need. I hope it empowers you to take control of your business and I am always here to support you along the way. Thank you so much and I will see you next time.