Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host Britt Seva and I could not possibly be more excited about today’s topic. We are talking about the income potential in your business today. This is a very inspired podcast for me. It came from a journey I went down about my own business.
I’m going to get a little transparent and vulnerable about my own business. I want to talk about the income potential that lives within your business. I want to give you some tools to get there. Lots of goodies coming your way today. And I also want to unpack why I think this topic is so important.
First, let me start with how I got here and what this journey looked like for me. In November, actually every single November for several years, my leadership team flies out to meet me here in northern California. Me and one other leadership team member live here. Everybody else lives elsewhere. We come together collectively and we spend about 72 hours annual planning and deciding what our upcoming year is going to look like.
One of the things I got curious about was what is the income potential of our business as it exists today? And then also what changes would we need to make to increase that income potential? It felt very abstract of, well, I could just say our goal is to make X dollars this year, but is that actually possible? Does that make sense?
That’s something that honestly we as a team have wrestled with for a really long time, of I can create whatever pie in the sky financial goal I want for this business. It doesn’t mean it’s feasible or possible and/or I can make a goal that’s extremely low compared to what our income potential is.
I was like, I just feel like there’s got to be a data-driven scientific way to find out what the income potential in any given business is and guess what? There is.
I’m going to share that formula with you today and I have some treats and goodies that are going to help you as well, so get excited. Lots of goodness in this one.
But I want to break down for you what my business looks like so you know where I’m coming from, give you a little bit more backstory.
I would say I have a successful business coaching business. Business coaching business. Yeah, I guess that’s what it is in this industry today, right? I think I am a successful educator. When you look at all the angles of it, I do think so.
However, when you look at what I offer, it is less than a hundred dollars for a stylist to get started working with me. And so because I have chosen to have my education be as literally as low cost as it possibly can be, as accessible as humanly possible while providing a ton of value, it can make for a bit of a tricky business model.
The overhead to run my business—our payroll alone is $1.3 million a year just for me to pay my team. That’s what it costs me to jump out the gate.
Now that’s simply payroll. We’ve got a whole slew of other business expenses, right? So I’m trying to pull that off while still offering affordable accessible education to stylists at less than a hundred dollars. You can see the conundrum that I get myself into.
The reason I’m sharing this and the reason why I’m getting a little bit more transparent than I normally would is because I think a lot of times when I do episodes like this, I’m going to talk about making a hundred thousand dollars today in this podcast. And I think sometimes when I drop numbers like that, people are like, “Yeah, maybe for someone in Manhattan.” We assume “Oh, okay, I hear that number. But that would be impossible for me because I live in a small town in Michigan,” or “I live in North Dakota. Nobody here makes that kind of money.” Why can’t it be you? It always starts with somebody.
The idea that Southern California stylists were always making a killing is simply a lie. At some point, somebody developed a market. Why not you? There’s always that potential.
To be candid, I have faced the same conversations. I shared on a podcast episode a few months back that I had been approached about a couple of buyouts of the company I have now a couple times. One was a full buyout and one was a buy-in, so somebody wanted to come in as a business partner. One of the things that always comes up is “You are running this very high volume, low cost membership. Is it sustainable?”, and it’s something that I’ve had to wrestle with as well.
I was like, “I want to be the person who comes to the table with such a clear, clean, educated answer of ‘Here it is. This is the financial potential of my business based on my price point, based on my volume, based on my team, based on the scale, based on the market, on everything,’” and now I have it. I feel so excited and so empowered.
The other thing too, and this was the other piece I decided I want to mention to y’all as well, why this is so important. I’ve been very transparent always about the fact that I am an entrepreneur at heart. I am very visionary, just like many of you are. I get bored and I catch FOMO and I have 25 other business ideas that I would like to get started at any given time, and I’ll probably come up with a new one tomorrow.
It is important for me to have this number and to see the income potential in my own business so that I don’t chase squirrels.
How many of you have felt one of two things, either completely bored in your business as a stylist where you’re like it’s boring? First of all, boredom is often ease miscategorized. Your business should get to a point where it’s easy. You shouldn’t have to be working hard, sweating bullets to run your business.
Sometimes boredom is not a bad thing, but then there’s frustration, stagnation and frustration. Stagnation is the worst and that’s when you feel like you’ve maxed out the existing business you have. Usually when we either get bored or we feel like we’re stagnating, rather than just looking inside at what we’ve already got, which by the way, the business you’ve already got will always be easier to grow and scale than starting a new business.
I never get confused on that. It will always be easier and more profitable to maximize the business you already have than to look for green grass on the other side. Always. Time investment, money investment, all the things.
If you were to be able to look at your existing business and say, “Okay, I’m not making the amount of money I’m making right now, but if I made these adjustments, I could get it there,” my gosh, would you gain more freedom, more wealth, more profit, all the things, and that’s what I want for you.
Coming from somebody who also gets distracted, who also gets bored, who also has 25 new business ideas, who’s always looking to maximize every opportunity they have, I see you, I feel you. I now know the income potential in my business today and it makes me feel freaking fire and I want you to have that for yours as well.
Here are some of the factors, formulas, calculations you have probably seen floating around the industry forever. One of ’em is let’s figure out how much you can make an hour as a stylist. I think that’s nice. I think it’s a little bit pie in the sky though, right? If you were to charge a hundred dollars an hour times—you work eight hours a day, you could make $800 a day. I get it. But it’s very, very simple math. Any of us could do that. It’s fine, but it’s a little bit of a disconnect from the reality of what’s happening in your business, right?
It’s not that that math is bad, but I was like, we can just do so much better and look at the truth of the business. I set that one to the side.
I’m recording this episode in 2024. I have seen more reckless behavior come out of our industry in the last six months than I have seen in the last decade of coaching the industry. There’s a lot of wild and uneducated decisions being made right now. Lot of them do involve pricing.
It makes me sad because I think some of them will work short term and then there will be a pretty significant crash and burn in the next 18 months to three years.
One of the things is this idea of charge your worth and ad tax. I understand and I think that we should be confident, but what happens is if we decide, okay, well, for me to afford to live my lifestyle, I need to make a thousand dollars a day, so my clients are just going to have to pay $200 an hour ’cause that’s what I need to make.
That’s not how the world works.
Imagine if we were in corporate America and you were going to apply for a job at whatever company and you were applying for an entry level position, something you had never done before. A very common interview question is “Okay, great, and then what is the rate of pay you’re requesting?”, and you’re like, “I’m requesting $250,000 because that’s how much it costs to live my life.” Okay, that’s fine, but you’re never going to get that job because you can’t just make up a fake number about how much you would love to make.
I can make up a fake number for that too, but it doesn’t mean anything. It doesn’t actually serve us.
The math on that would be like if you work 200 days a year and you want to make 200 grand, all you have to do is a thousand dollars a day in services. That’s very aspirational. That’s a feel good number and I love it, but I think sometimes it can be a little bit misguided.
We’re not going to do any of that kind of math.
One of the best pieces of advice I ever got from a business coach was, “For every dollar you make, you leave three on the table.” It was a real slap in my face because I felt like the business coach who told me told me this at a time when I was on this beautiful trajectory. This was probably eight years ago or something like that. I was on this great trajectory and I felt like things were going well and I had simplified some things and I definitely cut some corners and he was calling me out on it and I said, “I hear you, but I’m so happy with where I’m at. Why would I make this harder than it needs to be?”
His response was, “Well, because for every dollar you’re making, you’re leaving three on the table.”
I was like, “Dang it.” It was what I needed to hear, not what I wanted to hear, but absolutely what I needed.
Some of you were doing the same thing. You are like, “My business is good,” or “This is just the hand I’ve been dealt.” But if that rule were true for all of us, and as the years have gone on, I’ve come to realize it is, that for every dollar we make, we leave three on the table, it really makes you think about the untapped potential in your life and in your business. What can I do to capture every little bit of it?
Maybe we never will, but if I can capture two of the dollars instead of just one of them, why not? Right?
The question becomes what is the actual potential value of your business today and how much can you truly make as it stands right now? If you didn’t listen to last week’s episode, I want you to do it. It’s episode 320 and it’s how to maximize your growth in just one year’s time. I’m obsessed with the topic.
One of the things that we calculate in that episode is what I call your comfort rate. I want you to do that first because I’m going to be using a hundred thousand dollars as really simple math throughout this episode.
But for some of you, your comfort rate is 65 grand. If your comfort rate is $65,000, every time I say a hundred thousand, just slot that in. I had to make the math easy for myself. But what is less important is how much money feels exciting to other people. What is most important is how much money allows you to live a beautiful life. Finding that comfort rate is what’s critical to me.
Now what I want to do is dig in and I want to give you a quick formula to get that net earnings potential so that you know what the potential value is in your business today.
Now before I do that, if you’re listening to this episode in real time, I have a little bonus goody surprise for you. If you head to www.thrivingstylist.com/365 days—and we’ll link to that in the show notes as well—I have a special, never-before-released calculator that I want to share with you.
It’s our 365 Days to $100K hourly rate estimator. It shows you exactly what would have to happen in your business for you to make a hundred thousand dollars this year and/or it shows you the true potential of your business as it stands today.
When you use this tool and this calculator, you will get your current hourly rate, your current annual gross income potential rate, and your annual net income rate. I show you both: what you are projecting to earn top line and then what you’re projecting to earn bottom line.
Plus I have a PDF with three different plans for what to focus on to make it happen.
Some of you are going to find that you use this guide and unfortunately, you can’t make a hundred thousand dollars this year. Well, I have a guide that’s going to show you how to course correct so that you can. Some of you are going to find that you could make a hundred thousand dollars this year, but the problem is you don’t have enough guest requests to make that happen. No worries. There’s also a PDF guide that shows you how to make that happen.
If you’re listening to this in real time and you want the bonus resource, again, it’s www.thrivingstylist.com/365days to get your hands on the goodness.
You might want to pull out a little pen and piece of paper as we dig into this formula for net earnings potential ’cause you are going to have to do a little bit of math.
First things first, how many hours a week do you currently work? By that, I mean what is your schedule availability in the salon? If you’re open on Tuesdays for five hours, but generally you’re only taking clients for two hours, I still want you to write five hours. What is your work schedule is essentially number one.
Number two, how much do you charge for a haircut? And/or if you don’t do haircuts, how much do you charge for a blow dry style? But if you offer haircuts, then I want you to use the haircut price.
Now I’m going to give you some easy-peasy math. I want you to take that haircut price or that style price, preferably haircut. If you’re like, “I have both,” then use haircut. You’re going to take that haircut price and multiply it by 1.5. That’s going to give us the most basic hourly rate that we can use to calculate this formula with.
For example, if my haircut was a hundred bucks, my calculated hourly rate for this exercise would be 150. It gives you a rough idea of your hourly earnings potential for most stylists.
Now, this is where it gets tricky. We also want to factor in—if you’re a generalist or a specialist, then I want you to make note of how many clients you usually see in a day. The reason I say generalist or specialist (we talk about this in Thrivers Society a lot), generalist to me is somebody who does cuts, colors, styling, sometimes texture services. As long as they’re not too long or they’re not dominating your books, so a variety of services all day long, you’d be what I call a generalist.
A specialist does work where most appointments are three to four hours. Not every once in a while, like literally most. I know most of you sometimes have long appointments. I’m talking about all of your appointments are long. Extension specialists often fall into this category. Blonding specialists where it’s like, “If you want to sit in my chair for blonding, you’re going to be here for three and a half hours,” pretty much always. Those are the extensive services specialists I’m looking at.
For you all, what you might want to do is take that haircut rate and charge it by two. Because if you’re priced properly, which some of you are not, but if you’re priced properly and you’re a special specialist, usually that hourly rate goes up. But again, not everybody’s priced properly, but this is just rough, down and dirty math to at least get you started with it.
Are you a generalist? Are you a specialist? Adjust the math accordingly, and then make note of how many clients you generally see in a day.
Next, I want you to really take a good, hard look. This is where you have to get a little analytical. You have to get in your feelings, check the ego at the door, and tell yourself like, “If I was maxing out the hours I have in the salon every day and I was filling my days with what I’d like my schedule to look like at the price point I’m at now, no price increase, nothing like that, how much could I be making?” Okay, how many clients could you see in a day? You’re going to multiply that by the hourly rate.
For example, going back to what I said, $150 for the haircut. Let’s say if I decided, honestly, if I was fully booked, let’s say I work seven hours a day and I say, “Listen, if I’m fully booked with the services I’m usually offering, I could see around five clients a day.” Cool, so then my potential for every day, let me make sure I math right on this, would be 750 bucks. That’s my daily potential.
Then what I would do is I would multiply that potential by how many days I plan to work in a year.
One of the things I coach to is I would like all Thrivers to take at least two weeks off vacation every single year. Some of our Thrivers take more like 12 weeks off, but I’d like you to take at least two. If you’re taking two weeks off a year, then you’re working 50 hours a week. Multiply that by how many days a week you usually work. If you work four days a week, you’re working 200 days a year times the 750 I just calculated, so I could make 150 grand a year in my business if that was my truth.
Now, if you do not like that number, like let’s say the numbers spit out to me and it was like, “Listen, based on what you got going on, you could make $40,000 a year.” And I’m like, “Wow, that’s not even enough to feed my family,” I want to help you troubleshoot it really quickly.
If you don’t like the number that gets spit out after you do that calculation, only about 15% of the time is it a pricing issue. Often people will say, “You want to make more money? Raise your prices.” That’s b.s., very reckless advice. Please don’t do that. Never, never.
Only about 15% of the time, is it a pricing issue. 85% of the time it is a brand positioning or a perceived value issue.
I want you to think about working on your target market, your branding and your brand message. If you don’t know what that means, I’m feeling something bubbling up like we’re going to do some branding training, so keep an eye out for that.
Next, does your clientele you’re currently serving have the potential to get you to your comfort level or beyond? Meaning are you serving the right market? If you’re like, “Listen, I want to have a hundred thousand dollars business, but my clients only pay $22 for a haircut,” okay, so then what is possible in your market? Are you offering the right services? Are you set up correctly? How’s your brand positioning? What is possible for you? Are you serving the right people with the right services? Do you have the right skills you need to be where it is you want to be? Do you know how to do the services that you want to do well?
For me, if I had to rate my hair-cutting skills on a scale of one to 10, I’d be a three or a four at best. I can get through it. It’s not going to be precise. The shape will be okay. I will not cut your ear, but it’s not going to be good.
If I wanted to be a six figure stylist, your girl’s going to have to take some cutting classes, right? If I don’t know how to build a brand message, I’m going to have to take a class on that. What are the things that need to happen to close the gap? What changes would you need to make in your business to get you to that place that you want to be financially? Lastly, what would you offer that is a unique value offer to your market? If you don’t like that number, going back to brand positioning often, you are not special enough.
One of my favorite sayings is be special, have a specialty. I know you’re all extremely special snowflakes and I know you’re unique and the way you take care of your clients is incredible and your communication skills are amazing and you’re so experienced. I got it. I’ve heard it all before. I totally understand. I’m easy to convince of that. Clients are not easy to convince of that. You need to be showing them all the time what it is you do that they’re not going to find anywhere else.
Here’s one more question for you. If you were to reach that potential, like you run the calculator and you’re like, “Hot dang it, I have the potential to make 139 grand in this business this year,” that’s great. Here’s the questions that come up: Could you do it on your own? Would you need to hire an assistant? Is it possible for you to run that volume yourself? Simple question. I don’t know the answer.
What would you need to take on to make that happen? Is it education? Do you need to offer different services? Do you need to beef up your service menu? Do you need to improve your website? What do you need to take on, do you think, to make that potential happen?
Better question. What do you need to let go of? Do you need to let go of the clients who try and negotiate your prices every time? Do you need to let go of Aunt Sally who still comes in for a free root touchup? What do you need to let go of? Do you need to let go of the idea that you’re too good to work Saturdays? I don’t know what your business looks like, but what is it that you need to let go of?
By the way, I know I’m the anti-weekend, anti-weeknight stylist, I totally understand that. But if you need to make a shift to make the money you want, what does that look like? What do you need to take on? What do you need to let go of?
Lastly, my favorite question, who do you need to be? Who do you need to be for that to be possible?
One of my favorite podcast episodes I’ve ever recorded is episode number 69, and it’s called Be, Do, Have. It’s this idea like, oh, for a lot of us we’re like, okay, well once I’m making the money I want to make, then I’m going to start doing these other things and then I’m going to have everything I ever wanted. That’s not how the world works. You have to play the part first.
If you were to be a $200,000 a year stylist, how does that stylist dress? How does that stylist show up on social media? What does that stylist’s brand look like?
For a lot of us, we’re like, “I’ll improve my branding when I’m making the money. I’ll start dressing nicer when my clients start tipping me better.” Yeah, that day’s not coming. They’re not just going to do more for you, hoping that you rise to the occasion. Can you see how backwards that sounds?
Listen to podcast episode number 69 if you have not in a while. Very powerful, very impactful.
Now, before I let you go, I know that was a very mathy breakdown. I want to remind you that you get your little treat. If you head to thrivingstylist.com/365days, you can skip all of that math I just tried to verbally explain to you. Just get access to the calculator. You’re going to get access to the PDF workbook and guide that breaks down actually how to implement strategies to make all of this happen. Let’s make your life easy.
It’s thrivingstylist.com/365days, totally free. Get yours.
All of this being said, I want you to look at the potential that already lives in the four walls of your business today. Stop looking outside, start looking inside, and find your greatest potential.
Y’all so much love, happy business building, and I’ll see you on the next one.
