Make Your Salon More Profitable with these Tips!

Salons often operate on small overall profit margins. Overhead costs including rent, utilities, and payroll can make it hard to turn your small business into a profitable one. Having an integrated system of accounting can help you manage your business better and increase your income.

Keep an eye on your overhead.

Watch your accounts payable and see if there is anywhere you can reduce that makes sense. High water bills may be able to be reduced by switching to efficient toilets, faucets, and laundry equipment. Motion sensor lights and LED bulbs can save on electricity. Compare your vendors and always renegotiate contracts as you increase your orders.

Digitize customer accounts.

How do you track your clients? Do you have a system for referrals? Each client should have their own entry where you can record what services they have used, who their stylists were, and credit they might have on their account for future services, and referral bonuses they might have earned. There are many salon customer management software programs that integrate easily with QuickBooks accounting software so you can track your accounting and optimize customer communication seamlessly.

Compensate employees fairly.

Your stylists can make or break your business. A disgruntled employee can send your hard-earned customers to a new salon with a single text message or social media post. Do you give your stylists a flat percentage for their services or do you have a sliding scale based on expertise? Many salons charge increased rates for senior stylists. Junior stylists are incentivized to continue training and education. Senior stylists can afford better tools. The salon collects more for each service. Customers will pay the additional cost if they enjoy the experience and feel like they’re receiving an elite service. It’s a win/win.


One of the easiest ways to increase revenue is to diversify your services. Are clients coming into your salon for a quick haircut and leaving, or are they treating themselves to self-care, enjoying the time to themselves, and getting a full beauty workup? When booking clients or confirming appointments, ask a simple question like, “Would you like to book any additional services like a manicure, eyebrow wax, or facial?” Upselling your clients will tie them into your salon and make you their one-stop beauty location.   

Expand into additional locations.

If your salon is operating like a well-oiled machine and you have maxed out your current location, it may be time to expand. Opening a second location may be a risk worth taking if you can build on your success and reputation. You may have some employees that want to take a chance on a new location so you won’t be starting from scratch.

Stay on top of your inventory.

Walk into any salon and the first thing you’ll see is a beautiful display of expensive products: shampoo, conditioner, brushes, treatments, etc. Do you have someone watching that display at all times or does your salon get busy and employees get tied up behind the counter? Does the receptionist pitch in sweeping up, washing towels, or walking clients to the back? If you suspect theft either by employees, clients, or passersby, you can guard against it by staying on top of your inventory. Monthly inventory management can alert you to specific product shrink.

Regular inventory management can alert you to trends as well. Specific products do better at certain times of the year and you can make sure you have those in stock when you need them most.

Increase product sales.

Typical markup of salon products is around 50%, so increasing your sales is a huge opportunity for income. Offer incentives for your employees to sell products and styling tools beyond straight commission like bonuses for quantity sold.

Seek professional accounting services.

As a salon owner you are in the trenches with your employees. You’re working the reception desk, taking client appointments when employees are sick, sweeping up hair—you do it all. Keeping up with accounting may not be at the top of your daily priority list. You need an easy system for your employees to use on a daily basis and one that gives you the reports you need to manage your business.

If accounting isn’t in your background, it may be in your best interests to hire a professional firm. At JADDE Financial Solutions we can help get your salon systems integrated with QuickBooks online accounting and make recommendations for you to increase your profitability!