Aside from the obvious nail salon expenses like equipment and rent, nail salon owners and managers are required to think about the average nail salon expenses in everyday operations.
But do not worry- this isn't as tough as it sounds.
Jump to The Section You Like
- What is Nail Salon Overhead?
- What Are Some Nail Salon Expenses?
- How to Reduce Your Nail Salon Overhead Prices?
- Nail Salon Expense Sheet Template
What is Nail Salon Overhead?
The term "Nail Salon Overhead" covers numerous expenses and normally includes things like your nail salon equipment, nail salon product stock, and the supplies that your stylists utilize- including nail polishes or art. It also covers your financial expenses, such as staff payroll, any taxes that you pay, maintenance, and business insurance coverage for your nail salon. These are all things that you'll require to comprehend and keep track of to remain in control of your overhead costs.
Now, let's take a look at all of these items in a little bit more detail.
What Are Some Nail Salon Expenses?
Nail Salon expenses can be divided into 2 categories: Recurring Expenses and Occasional Expenses. While it's crucial to watch on a nail salon's occasional expenses, it may not be possible to anticipate what specifically these costs will be or how they will impact your profit margins. Recurring expenses, however, can and ought to be accounted for. They're the average prices that need to be paid monthly, so you'll have a good understanding of how each recurring expense will affect your earnings, profits and bottom line.
Let's begin with a breakdown of recurring expenses. Recurring expenses are the costs that you can anticipate to pay routinely, normally every month. These costs are simpler to budget for, especially if you utilize nail salon software to track all your business expenses in one place.
Some Recurring Nail Salon Monthly Expenses Are:
Personnel wages and salaries
People often ask, "What is the largest expense in running a nail salon?" The answer is generally salaries. The average manicurist or pedicurist in the U.S. makes nearly $28,000 a year. This can quickly accumulate if you have a big team. Keep an eye on your payroll expenses.
Payroll (social) Taxes
These costs will differ, depending on your business area. Make sure to research what's needed in your state and reserve some cash to cover these prices.
If you're still selecting a nail salon business location, check out the typical rent rates in your area online. These will depend a lot on location. Businesses typically pay greater rent than residential properties, so it's necessary to be well-informed and have a dollar amount in mind when preparing your nail salon's budget. If you can save on rent, this will add a lot more cash to your overall revenue by decreasing the overhead expense.
Licenses and Permissions
Business licenses are necessary, however they differ depending upon the province, state, or city. You will most likely need health and safety inspections and certificates. In some locations, you'll be free to offer retail items connected to your nail salon, however in other areas, you will need to pay for an authorization. Check your state's site and the website for your city to see what's required.
Most likely, you'll ultimately wish to get some extra education, training, or professional advancement for each nail technician at your business. Nail salons typically seek new training to keep up to date with the latest nail trends or technique. Nail industry is continuously changing, and this suggests that businesses need to keep up. Education is critical here. A brand-new training course or license will not be free. Still, if nail salon owners work with each employee and select carefully, the long-lasting profits from education investments will add a lot to your earnings and raise your nail salon's month-to-month income. Plus, it's a great way to develop staff member loyalty.
Nail Salon Software and POS System
These systems differ in price, depending upon your nail salon's needs. Choose exactly what metrics you wish to track (for example, do you would like to know when you should reorder your product stock, what appointments are coming up, or just how much income each manicurist and pedicurist has generated so far)? You can choose something that fits your requirements once you know this. A POS system is necessary for processing transactions, however bear in mind that it might also require particular equipment (such as iPads, if it uses wifi) and receipt paper.
Do not miss our post on nail salon license.
No matter what services they provide or what industry they're in, businesses all have to pay for utilities. Nail salons all need water, electrical energy, and heat, of course. So, it's a smart idea to search for the typical costs for these services around your location. To offer you an idea, the typical electrical power bill for a nail salon begins at around $150 each month, and water bills can cost from $45 to over $150 for the biggest and busiest nail salons.
In addition, you'll have to consider the price of internet service and a phone line. A reliable internet connection is crucial for processing payments, managing your nail salon's social networks, and doing any internet marketing.
Professional Nail Supplies
When you start your nail salon business, you must have enough nail supplies and basic tools all set for each employee to work with. Keep in mind to include these business costs in your regular monthly expense budget. A nail salon’s professional supplies typically include nail polishes and art, acrylic nails supplies, topcoat, and any chemicals used during services (such as polish remover).
Nail Salon Product Inventory
This is not the stock that your team members use on customers. It's your supply of retail items. A large part of a nail salon's income can result from product sales, so it's essential to have adequate stock all set for your staff members to make add-on sales and suggestions.
Online and Credit Card Processing Charges (Fees)
Credit card processing charges can vary a bit, depending on your provider. The typical charge that you'll experience is around 1.5% to 2.7%, however, be careful. Some providers will charge as much as 3% or more. As a nail salon owner or manager, make sure to do your research. These relatively small charges can quickly eat up your profits.
Nail salon monthly expenses for marketing vary extensively, depending on your business strategy and the tools you utilize. An email marketing campaign or a nail salon newsletter can be fairly cheap, particularly if you have an employee who can help out with this. The price of putting an ad online or in print, especially if you work with a professional to do it, can be quite costly.
Business insurance coverage will not be your most considerable overhead expense, but it's an essential one. Insurance isn't just a nice thought. It's a legal necessity. As a nail salon owner, anticipate paying anywhere from $500 to $700 a month for business insurance coverage costs, depending on your nail salon services and area. There's also a possibility that companies will suggest extra business services, such as health insurance for your team members. Not all nail salons choose to provide this, however it might be something to think about if you wish to bring in and retain accomplished staff. The dollar price of insurance will vary a lot, depending upon the place of your business. Do your research and see which service providers fill your needs, and make certain to compare quotes.
To learn more about nail salon management improvement check out our post How To Improve Nail Salon Management Efficiency.
Your Occasional (one-off) Nail Salon Costs Will Be:
Nail Salon Opening Costs
Nail Salon start-up expenses will include hiring nail technicians and other personnel, retrofitting and cleaning your brand-new place, and marketing expenses for your new business.
New Equipment Purchases
The costs will depend a lot on the type of nail salon business. Is it exclusively a nail salon? Does your business provide clients with any other specialized beauty services, such as tanning, waxing or spa services? These are all related expenses that can add to your basic equipment cost. You can expect to invest somewhere in the range of $25,000 when you purchase your basic equipment. That includes everything from chairs, electric nail files, UV light and nail dryers. You can always begin small, adding more equipment as you need it.
Nail Salon Fit-out
A properly designed nail salon with decor that catches the eye is crucial to be competitive and bring in more earnings. For example, a nail salon is more likely to be successful if it feels open and inviting, not cluttered or dated. It's important to budget for this when opening a new nail salon. Consider setting aside a part of your revenues each month towards future enhancements or updates.
This is a big one. Not big in regards to expense; it's just very important. It is an excellent time to get imaginative and shop around. Really cool signs can be surprisingly inexpensive if you shop around carefully. That stated, a professionally made sign can also cost several hundred dollars, depending on your requirements.
Having an online exposure is crucial to success as a nail salon nowadays. Think about investing a little cash (or time, at the very least) in a nail salon site. It does not need to be pricey, although you can employ a professional web designer if you wish to benefit from that "wow factor." It's also okay to start with something less complex, like an online layout.
These are anything from the cash float in the till to any dollar amount you need to spend on random emergencies. It's an smart idea to have at least $500 put aside to pay for unforeseen things.
We also recommend you to check out our post Nail Salon Design Ideas.
How to Reduce Your Nail Salon Overhead Costs?
Understand What Exactly Drives Your Overhead
Have regular meetings and talk with your staff. Ensure that they feel safe complaining to you about anything related to the nail salon that they believe is problematic or inconvenient. Since they're on the front lines, your team members will typically recognize ineffective expenses first. Show that you're on their side, appreciate their input, and then develop a strategy to tackle the most significant expenses first. You'll be amazed by just how much money and time you'll save. You'll also have happier personnel and more satisfied clients.
Use Nail Salon Management Software and POS System
Since it will track and record transactions as they take place, proper Nail Salon Software and a POS system will save you a lot of time and also cash. That is specifically useful for processing online transactions and credit card payments for your nail salon. Speaking from experience, the benefits of nail salon software far exceed the costs because of the time you'll save. This is important for your business success and your mental health. You can set schedules, track bookings, inspect your stock of products, and see which manicurist and pedicurists are hitting their targets, all in one place. It will cut way down on the hassle of everyday business operations and really help free you up to focus more on your customers.
Nail Salon Inventory
Unsold or expired products will not make you a profit. It's essential to have sufficient stock for sales and nail salon demands. On the other hand, these goods take up space. Excessive clutter can look unprofessional and compromise nail salon safety. You may need to find the right balance. To prevent taking up space (which can fill up quickly in a busy nail salon) or creating waste, make sure to track this inventory and fill it up just when it isrequired. Wasted items or surplus stock can eat into your profit margins. Think about investing in some nail salon software to track fast-moving items and help handle your orders. You can even set up smart ordering when the stock reaches minimum levels. It will optimize your revenue/ expense ratio and remove needless waste.
You can utilize scheduling software to prevent gaps between visit reservations, send out automatic confirmations and reminders, and fill out any downtime in your nail salon. That will also free your staff up to take care of other tasks.
Make Smart Use of Downtime
When your staff isn't busy with clients, ensure they clean up, make stock orders, post content to the nail salon's social media, or assist with other daily duties.
Cross Train Your Staff
In the long run, everybody will benefit from this. Ideally, your personnel all know how to perform each service, work the till or add to the nail salon's website. Anyone can fill in where they're required, and you will not have to overstaff. Additionally, they'll get valuable experience for their resumes.
Retain Your Best Personnel
Remember, recruitment and training cost money. If you can keep your best/ most popular nail technician, you'll keep the clients (and earnings) they bring in, too. The secret here is to have effective communication. Ensure that you have a good relationship with each manicurist and pedicurists and keep the work environment positive.
Reduce Administration Work
Do you truly require that many receptionists? What about someone whose whole job is just handling the stock space and orders? Nail Salon scheduling and management software can get rid of the need for this much extra help. You can quickly access figures for ordering products and balancing your books. Many young customers also prefer to book visits online in their own time. Make it simple for them.
Do your research and find out just how much things cost. Look for any bulk promos on products or benefit plans that suppliers provide. Find out what expenses you can declare on your income tax in the future.
Utilize Your Nail Salon Space Well
Prevent mess or squandered space. It looks unprofessional and can end up being a safety threat. Also, make sure that you optimize each service space.
Use Smart Nail Salon Marketing
Things like e-mail marketing, nail salon loyalty programs, and motivating customer reviews are relatively cheap and effective methods to increase your earnings margins. You can also have incentives in place for client referrals. Obviously, all of this can effortlessly be managed utilizing nail salon marketing software.
Use a Nail Salon Expense Calculator
Put together with a nail salon expense spreadsheet, these tools will assist you with staying on top of your expenses. You can track income and expenses over time and see where you're wasting the most. Then you can make any necessary adjustments or remove unneeded expenses.
Create a Budget Plan for Financial Expenses
The nail salon budget that you create must include financial costs, as well as any purchases. That begins with location rent, any business license fees required in your state or province, in addition to your team wages and payroll. You'll want to take taxes into account, too. When you're calculating earnings, always set cash aside for taxes. It will save you from worrying about a lot of the fees later on. Think about working with a professional to help you file your taxes and go over your nail salon's accounts, even if you prefer to do your own bookkeeping.
Nail Salon Expense Sheet Template
We have prepared a handy template that will help you better organize the expenses in your nail salon.
Fill out the form below to get your totally free nail salon expenses template.
Do not miss our post Nail Salon Price List.
Running a nail salon is not cheap. That said, nail salon owners and managers can make a healthy revenue if they are smart and use their resources well. The trick is to be attentive and remove wasted time, wasted items, and wasted effort. All of these things have a dollar worth. Nail salon expenses don't need to be a big deal. If you budget thoroughly and communicate well with your clients and staff, it's easy to remain on top of the game.
And if you enjoyed this article or have some other ideas that you've used in the past to promote your nail salon business, why not share them with the Zolmi community in the comment section below. We would be pleased to answer your questions as well.
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