Monthly Expenses of a Hairdresser and Tips to Reduce it
In this digital age, the hairdressing profession is attracting the young generation, and they are opting for it. That is why this industry is growing strongly despite so much competition. If you are one of them, you must know how much you have to spend monthly for your salon. Or if you are a hairdresser, you need to have an idea of the monthly cost so that you can reduce it further. Let’s know about the Monthly expenses of a hairdresser and tips for how to minimize them. Stay tuned for more!
A hairdressing salon incurs a lot of monthly expenses, such as staff salaries, electricity and water bills, rent, insurance, taxes, etc. There are many more relevant expenses, such as marketing and staff uniforms. However, it depends on various factors, such as location, the size of the salon, the number of employees, and the services you offer.
The main costs of a hair salon
Generally, the main monthly cost of a hair salon is around €10,000, but it depends on many things. Being a great and successful hairdresser is not the same as being a successful manager. It doesn’t matter if the salon is small or big, but to be a good manager, you always need to monitor and optimize the business performance. Suppose you want to open a new hair salon or prepare a business plan for the new year; you must know what are the main and exact costs that you have to incur monthly. The main budget items that you should keep in mind are:
- Staff costs
- Costs for products or other tools
- Renting cost
- Advertising and marketing costs
- Taxes and contributions costs
- Electronic fees for hairdressers
Let’s dig deep!
Staff costs
We know how important staff cost is, which is a large monthly expense. And not only the general annual salary of the employees but also taxes and other payments you have to take into account. For example, TFR, Social security costs, and Overtime or extra work. However, their salary depends on their contract with you and their work experience. But always remember that workers’ salaries should never be more than 45% of revenue. Of course, it’s different if you’re hiring permanent staff. We’ve already discussed how much an employee’s salary affects the cost of an entire salon, so you should always monitor their costs and your income. And my suggestion for this would be to use a management system. Otherwise, it won’t be easy to maintain all the data.
Renting cost
The rental cost depends entirely on your location and the size of your salon. Shop rent depends on its condition, ie, it can cost you 200 to 1000 euros. However, you have to remember that according to the national benchmark, the cost of rent should not exceed 6% of gross income or sales. It is essential to keep each expense item under control so that you avoid spending more than you earn.
Costs for products or other tools
Warehousing costs depend on many variables such as size, type of goods stored, whether insurance is taken, inventory, and compression. Also, note the losses due to damage to products; perhaps they are misplaced or stolen. Not only that, but there are other things like consumables and staff clothes. There are two easy ways to get the right result for example:
- Initial stock + purchases – Finall inventory = cost of goods sold
- Product Cost / Total Revenue
But one thing to remember all the time is that you always need to be aware of the price of the product as well as its quality.
Taxes and other costs
The tax depends on your income. Also, It is essential to note that contributions can be deducted for tax purposes. There are different regimes for different contribution schemes.
- Flat rate regime: This is taken into account when the income does not exceed 65,000 euros. The most important feature of this regime is that the taxable base on which the alternative tax is calculated is determined on a flat rate basis.
- Simplified system: Tax is paid on the net result, and the tax rate varies from 23% to 43%. Revenue cannot exceed 400,000 euros, and taxes are paid based on the IRPEF bracket.
- General regime: Taxes are similar to a simplified regime.
And if you are using the Ateco Code for hairdressers, that is 96.02.01, The profit coefficient for hairdressers and barbers provides a rate of 67% (amount as a percentage of total paid). This means 67% of the revenue is taxed, while the remaining 33% is not.
Advertising and marketing costs
Advertising is an important aspect to consider to promote your salon and attract customers. And in the 21st century, building an online reputation is a must to increase your brand value. You need to consider those expenses, too. However, it depends on the choices made, e.g., if you run an ad campaign on Facebook or Google Ads, the cost will be different than printing posters or building a website.
Electronic fees for hairdressers
There are some other monthly fees, such as Electronic bills, water bills, gas bills, and more. Also, some renovations are required every month, and this cost must be kept in mind.
Tips for reducing expenses and maximizing profits
- Always have a business plan
- Track expenses carefully
- Choose low-cost lamps to reduce electricity bills
- Turn off what you don’t need
- Buy efficient power classes
- Create spending categories
- Avoid missing appointments
- Reduce No shows