Amy Guy breaks down how nail technicians must price services to cover product costs, monthly overhead, and profit. With £660 in monthly fixed costs, a 40-minute service needs to contribute £15.50 just to cover rent, insurance, and software. A £40 service with £8 in products leaves only £16.50 for labour and profit.
Questions this video answers
Salon rent £500/month; insurance £30/month; booking software £25/month; professional memberships £50/month; basic utilities £50/month.
About £660 per month.
£15.50 per client (approximately).
£31 per client (approximately).
Service price £40; variable costs £8; plus £15.50 fixed-cost contribution → total cost £23.50.
Chapters
Now, let's start with a simple truth. Every single nail service that you provide costs you money to deliver. But not all costs are equal. And understanding this difference is crucial for building a sustainable business. Now, we've already spoken about how the true value of your services should affect your pricing. But when it comes to the solid facts, your treatment prices should just absolutely cover your business costs and your time. That's why every nail tech's prices must be different, because every nail business is different. And every nail tech will be doing a different amount of clients, taking different lengths of time and incurring different business costs as they do. Now, to understand the different costs in your business, I want you to think of your business like an iceberg. Now, some costs are visible above the water, right? These are your variable costs and they change with each client that you save. But beneath the surface are your fixed costs. And these are the expenses that you pay regardless of how many clients you see. When nail tech struggle with pricing, it is sometimes because they are only looking at what's above the water. Now let's talk about fixed costs first. So these are the expenses that stay relatively constant regardless of how many clients you see in a month. Your rent or your space fee doesn't really change whether you see 10 clients or 40 clients. Usually you're just paying a set weekly or monthly amount. Your insurance costs will usually stay the same. Your booking software typically charges a flat monthly rate. You've got your professional memberships, basic utilities and business licenses. All of them are fixed monthly costs. They don't change month on month. Now why does this matter? It matters because these fixed costs need to be covered by your service pricing. But so many nail techs make the mistake of only considering their variable costs when setting the prices. So they'll think things like, oh well, they're this gel cost me about this much per bottle, so I'll charge this much per set without actually factoring in how their rent, their insurance and other fixed expenses actually impacts their overall costs. So let me just show you how that works in real terms. Now, let's say you have a series of fixed monthly costs and I'm going to give you some examples. So let's say your salon space rent is £500 per month. Let's say your insurance is £30amonth. Let's say your booking software is £25amonth. Your professional memberships are are £50amonth, and your basic utilities are also £50amonth as well. Now that would lead to £660 ish of fixed costs every single month before you have even seen a single client. Now if you're seeing 40 clients every month, then each client needs to contribute about 15 pound 50 towards these fixed costs. But if you're only seeing 20 clients, then each one needs to contribute about 31 pounds to to cover the same fixed expenses. Now this is why copying another nail tax prices can be so dangerous for your business. They might be seeing twice as many clients as you and that allows them to spread those fixed costs differently. Or they might be working from home with significantly lower fixed expenses. Now let's look at variable costs. So these change based on how many clients that you serve. Your products like your gel polish, maybe your nail tips, your acrylic powder, your disposables like your files, your buffers, your cotton pads, cards, all of those things. Your electricity usage that increases with each service. Now variable costs are typically easier to calculate per service. You can work out that a full set of gel extensions usually approximately takes x amount of value of products and disposables. But remember, this is just part of your total service cost. And here's why many nail techs go wrong. They base their prices primarily on product costs, perhaps adding a little bit extra for their time. But they're missing huge portions of their actual business costs, which means that they're essentially subsidizing their clients services. Now let's talk and work through a real example. Say you charge 40 pound for a full set. Your variable costs for products and disposables are £8. Now that seems like a good profit margin on the service. But when you add your 15 pound 50 contribution to fixed costs that we spoke about before, assuming you've got 40 clients a month, then your total cost is actually £23.50, leaving you with £16.50 before factoring in your time, your skills and all of those other things. Now if you're spending two hours on that service, that's just eight pound 25 per hour, likely below minimum wage after you've accounted for tax and national insurance as well. This is the hidden reality that so many nail techs face when they don't understand their full cost structure. Now the breakthrough comes when you start thinking of both your fixed and variable costs as a part of every service that you provide. Your pricing at a minimum, absolutely needs to cover all variable costs specific to the service. A contribution to your fixed monthly costs, your time, skills and client experience, and a profit margin for business growth and stability. Now understanding these cost structures also helps you to make strategic decisions about your business. If your fixed costs are high relative to your client numbers, you might consider whether a different business model would work better. Or if your variable costs are eaten into your profits, then you might look at a more efficient product usage or looking at setting premium pricing. This knowledge is particularly powerful when you need to adjust your existing prices. Instead of making arbitrary increases, you can clearly see which services are actually profitable and which ones aren't even covering their full costs. That then allows you to make targeted changes based on real numbers rather than just guesswork. Now remember that both fixed and variable costs tend to increase over time due to inflation due to supplier increases and also your business development. Your prices need to reflect these change in realities to maintain a sustainable business. Now, the nail techs who build lasting, profitable businesses aren't necessarily the most skilled or the most creative. They are the ones who understand their complete cost structure and price accordingly. They recognize that charging appropriately isn't just about making more money. It's about creating a foundation for consistent quality, ongoing education and business longevity. Now, in your workbook, I want you to take time to complete the fixed and variable cost and analysis. This clarity is the first step towards building a truly sustainable pricing structure. Understanding that relationship between your fixed costs, variable costs and client numbers gives you the confidence to set prices that reflect your true worth and also your business reality. This isn't just about numbers. It's about creating a business that can thrive long term, that's still here in years to come while continuing to deliver the quality service that your clients expect and deserve.
