Cost of goods sold (COGS) is the direct product cost tied to delivering services – colour, treatments, disposables as opposed to rent or marketing.
UK colour services can hide large product costs inside a glamorous ticket. Time-based pricing only works if you count product honestly. Untracked usage is one of the invisible leaks described in the finance chapter.
No. COGS is direct product cost. Rent and ads are separate overheads.
High tickets can still earn poorly per hour after product and processing time.
Standardise formulas where possible, train against waste, and review supplier prices.
At least seniors should understand it – otherwise discounting feels free.
Pricing academy/book and finances academy.
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Price after real product cost.
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Time-based pricing sets service prices from the hours (and product cost) a service truly consumes, not from habit or from copying the shop next door. The goal is a healthy revenue per hour after costs.
Average ticket is total service and retail revenue divided by the number of visits. Raising it often beats adding more hours or chasing endless new clients.
Net profit margin is what remains after all costs – expressed as a percentage of revenue. It answers whether the salon truly earns after wages, rent, stock, and overheads.
Cash flow is the money moving in and out of your salon each week – takings, rent, wages, stock, and card settlements. A salon can look profitable on paper and still run out of cash if bills fall due before payments arrive.
