How much should I charge for a retouch?

Jerry Gordon, long-time owner of the J. Gordon Designs in Chicago and president of Cosmetologists Chicago, uses a very precise calculation for determining what to charge for salon services. He arrived at this equation in his early years in the garment industry, where he had to calculate the cost of fabric multiplied by the manufacturing expenses, to arrive at a fair price for the resulting article of clothing.

For the equation to work, he says, you have to start at the right place, and that's with your profit margin. "If you want to remain profitable, your supply costs in the salon should not exceed eight percent," he says.

To calculate the cost of a retouch, says Gordon, begin with the cost of the product-that's the tint and the developer combined. Multiply that cost by 12.5 to arrive at the total service charge.

Gordon bases 12.5 multiplier on an eight-percent cost of supplies. If your supply cost percentages go up or down, you must adjust the equation accordingly to arrive at your total service price. If your supply costs far exceed eight percent, Gordon emphasizes, your business could be in jeopardy. 

"A close analysis of your product costs and an honest look at what your salon's market will bear will allow you to arrive at a service charge that is fair for both your business and your clientele," he adds.

Keeping supply costs in line, reducing product waste and fairly pricing the expertise of his talented staff have kept Gordon in the forefront of successful salon owners and business leaders.

"Service pricing is not about lining your pockets," he says. "It is about funding business expenses like building overhead and employee-related expenses and still allowing for a nice margin of profit."