3. Determine the total amount of money you want to earn each month. Perhaps your hope is to earn a gross annual income of $50,000. That is a nice round number and a good one for this example. Divide this $50,000 by 12 months and you will want to earn $4,166.00 per month in NET profits, that is to say the amount left over AFTER you subtract all your expenses for your business. This number is $10.85.
Combine your required profit with your real costs and you now have the minimum price for a men's haircut in YOUR situation. You need to charge at least $14.24 for a men's haircut.
If the going rate for a men's haircut in your area is $8.00 you have some serious work to do to market a $14+ haircut to your community. If the going rate is $22 you have a lot of room to work with to upgrade your service, your environment, your marketing, etc.
If the going rate was $12 and you used the "phone around" method you might have set your price at $11. You would be behind on your plan, your income and your numbers even before you cut your first head of hair.
This simple formula will help you make better decisions for pricing your offerings and building your business. I encourage comments on this and other strategies I share.