Episode Details

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This week, we're discussing money. 

Topics include:

• Freebies and why you should pay attention to the big companies reworking their strategies
• Some industry statistics we found interesting
• Inflation

Todd kicks things off with a story about an oyster. Then he breaks down a couple of examples from Red Robin (the burger place) and Sephora.

Some statistics:

1. Americans spend an average of $110 monthly on beauty, fitness, and wellness, with women averaging $124 per month and men $94 per month.
2. 58% of Americans would not cut beauty spending despite a looming recession.
3. 25% of consumers claim they only buy eco-friendly beauty products, while over three-quarters are concerned about the environmental impact of the products they buy.
4. 92% of buyers claim they'd be more loyal to cosmetic brands that supported environmental or social causes.
5. 67% of beauty shoppers turned to social media influencers to seek information about beauty products before purchasing, followed by third-party reviews (59%) and beauty professionals (55%).
6. 44% of beauty salons said they were focusing on growing their social media profiles in 2022, while 35% of hair pros claim their growing social following was their biggest opportunity for business growth. 
7. 92% of a salon's income is from cut, styling, and color services, followed by retail sales (8%) and care services (7%).
8. The average hourly wage of a hairstylist in the United States is $18 as of December 2022, though the range is between $11.78 and $20.19.
9. Beauty salons account for 95% of industry revenue — barbershops make up the other 5%.
10. About 70% of U.S. women invest in hair coloring and styling.
11. The U.S. state with the most expensive men's haircut is Delaware at $42; West Virginia is the cheapest, averaging just $15 per cut.
12. California is the most expensive state to get a women's haircut, with prices averaging $93 — 81% more than a cut in Wyoming, which averages around $17.

Eliminating Freebies:

Cost Control: Offering freebies can be a significant drain on your biz. 

Profit Margins: To sustain and grow your business, it's essential to maintain healthy profit margins. Freebies can reduce margins by increasing your costs without a corresponding increase in revenue.

Client Expectations: Offering freebies can sometimes set unrealistic expectations among clients. 

Todd shares a story about free water and his gym.

Dealing with Inflation:

Pricing Adjustments: To maintain profitability, it's essential to periodically review and adjust your prices to reflect these increased costs.

Transparency: When you need to raise prices, it's crucial to communicate this transparently to your clients. Don't surprise people. 

Perceived Value: Step up your game. Become virtuous by doing the little things exceptionally.

Cost Management: Beyond adjusting prices, actively manage your business costs. 

Financial Planning: Develop a financial plan that includes forecasting for inflation. 

Diversification: Explore diversification opportunities within the hair industry. 

This stuff is possible, and it's being done whether you're comfortable with it or not. At a certain point, your biz can't survive without revenue. We see places that choose to stay complacent close often–that doesn't have to happen to you.


If you're ready to chat, reach out here.

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