How to Calculate Your Nail Service Costs
Creating beautiful nail art is not just a cherry on top of your manicure– it's also a business. While it's important to charge an appropriate amount for your services, many nail artists struggle to set a price that reflect their true costs. Many nail pros end up undercharging, leading to frustration, burnout, and financial strain. I'm going to show you how to calculate your costs and break them down by overhead, products used, retirement, healthcare, and other expenses. Armed with this knowledge, you'll be able to set prices with confidence and KNOW what you're actually making at the end of the day!
First of all you need to establish your hourly rate. This will vary depending on your skills, experience, location, and other factors. Start off by looking into the average rates for nail artists in your area, and compare them to the ones in other regions. You can also take into consideration your level of education, your certifications, and your years of experience. Keep in mind that your hourly rate should also cover your indirect costs, such as rent, utilities, and equipment.
Next, you need to figure out the cost of products used for each service. This is KEY! This includes everything from gel polish, to bits, to brushes, to crystals. Keep track of how much you use for each client, and calculate the total cost per service. For example, if your Erica's Gel X bit costs $35 and you get 300 services out of it, it's cost per service is 11¢. Add all these costs per use to know how much each type of service costs you.
And you can't forget the overhead cost. This includes all the expenses that are related to running your business, but are not directly linked to a particular service. Examples include rent, equipment purchases, advertising, taxes, and insurance. One way to determine your overhead cost per service is to divide your total overhead by the number of services you provide on average per month.
Retirement planning is yet another factor to consider. As a nail artist, you may be self-employed which means you don't have a traditional employer-sponsored retirement plan. However, you still need to prepare for those golden years! Consider contributing to a personal retirement account, such as a Roth or a traditional IRA, or a 401(k). You can factor in the contributions as an indirect cost when calculating your hourly rate.
Finally, healthcare is an important consideration for any self-employed person. While it can be tempting to skip health insurance premiums in order to save money, this can be a risky and potentially costly decision. Make sure you have adequate health insurance coverage, either through a spouse's plan, a private plan, or a marketplace plan. You can also factor in the premiums as an indirect cost when calculating your hourly rate, too.
So, now that you know how to calculate your costs, are your services profitable? Profits include anything left over after covering your costs, such as investments in further education, advertising, retirement, and taxes (never forget taxes)!
No matter how passionate you are about nails, it's important to remember that you're also running a business. By taking the time to calculate your costs and determining a fair hourly rate, you'll be able to set reasonable prices that reflect your true value. This will not only benefit you financially, but also help you attract the right clients who appreciate the quality of your work. Remember to factor in overhead, products used, retirement, insurance, healthcare, and other expenses, so you can create a sustainable and rewarding career as a nail artist!