Running a salon is definitely a creative and profitable venture. However, managing profitability in a crowded market is no mean feat. Let’s accept it – costs are rising and the competition is fierce.
There are organised as well as unorganised players in the beauty parlour market. You may have the best salon services to offer but they’re of no use if you don’t know how to tap the right services that are bringing maximum revenue to the table.
So, what is the secret?
As a salon owner, how do you identify services that deliver strong returns?
Well, if you don’t have the answer, we do.
In this blog, we will be discussing the most profitable salon services, and how they can increase your income to help you stay ahead in a competitive market.
Key Takeaways
- High margin salon services in India typically offer 60-90% profit margins. They’re high-ticket services but low-variable-cost treatments.
- Services that require recurring maintenance cycles create stable long-term income in comparison to one-time appointments.
- Retail product sales paired with high-ticket salon services contribute a major chunk of salon profits.
- Running a survey or study can help you analyse salon services that keep clients coming back.
Why Profitability Matters in a Salon Business?
Profitability in a salon business matters more than you can imagine. Every salon owner, no matter what kind of salon they run, focuses on services that are bringing maximum revenue.
However, let’s get one thing straight – high revenue does not always mean equal profit. For instance, a hair colouring treatment that uses expensive products may generate less profit than an acrylic nail extension treatment that requires minimal materials.
When you’re calculating profit margins, you also need to look at which services are consuming more staff time. Those that take up a lot of time are not really profitable. Instead, it becomes an expense.
Thus, understanding profitability in a salon business is of utmost importance. As a salon business owner, if you want to grow and open more branches, you need to capitalise on your high margin salon services and promote them as well.
In every salon or beauty business, there are two types of services that help generate revenue and those are:
- High-traffic Services: These include haircuts, gel nails and waxing that bring in consistent footfall and revenue.
- High-profit Services: These include hair treatments, scalp treatments, hair colouring or bridal makeup that help one earn more per appointment. However, you don’t get clients for such services every day. Adequate marketing is required to get more clients to book such services.
It is important for every salon owner to find the right balance. Alongside everyday services that help maintain volume and keep staff productive, premium services help increase income. You will only be a successful salon, if you’re able to balance high-ticket services and repeat appointments, and low product costs and efficient delivery at the same time.
Salon Services Profit Margin: Explained with Detailed Breakdown
Before we give a profit margin breakdown of salon services, let us have a look at how it is calculated:
Profit Margin = (Revenue – Service Cost) ÷ Revenue × 100
The service costs in a salon include products used for the service, staff commission/salary, utility expenses, equipment and consumables.
Hair Colouring Services
One of the highest revenue-generating services worldwide is hair colouring. Clients usually frequent a salon for root touch-ups, balayage, global hair colour, streaks, toning and maintenance.
A major reason why it is profitable is because of its premium pricing and encourages strong repeat business if done well. Hair colouring also gives salon owners the chance to upsell products associated with the service.
For instance, once a hair colour treatment has been done, clients are usually advised to wash their hair with a particular shampoo that prevents the colour from fading. This presents a perfect opportunity as it not only helps sell a service but a product too. A win-win for any salon.
Even if a balayage is priced at Rs. 8,000, a salon is probably using materials only for Rs. 2,000 which leaves them with Rs 6,000 profit which is quite high. Also, hair colouring and highlights encourage a repeat booking every 6-8 weeks or about 2 months.
Hair Smoothening Treatments
Keratin or hair smoothening is the most profitable salon service in India. Such treatments are known to improve hair texture and reduce frizz.
Clients don’t mind paying more for such treatments as the results are long-lasting and it helps them with easier hair management. Hair Botox also comes under this category.
The average price, estimated product cost and profit margin is similar to hair colouring services. To further make the average client ticket size higher, salons can even focus on bundling post-treatment care products. This small upselling initiative can mean big business to any salon owner.
Bridal Makeup
If you’re a beauty salon that offers bridal makeup services, you can make big bucks. It is one of the most lucrative services.
A major reason why it generates high-profit is because of its premium pricing and it being linked to other services thereby making it a package.
The only downside of bridal makeup is that it is seasonal and heavily depends on the wedding season. Nevertheless, it is a great service to include in your salon menu if you have the right talent of makeup artists and freelancers.
The average price of bridal makeup per session or per event in India is usually Rs. 25,000. The estimated cost for this is around 7,000 so salons are usually left with a profit of Rs. 18,000.
As a salon or beauty parlour, if you want to make bridal makeup your key service, it’s important to ace your social media strategy by posting client before-and-after photos.
Nail Extensions/Nail Art
Women in India have become very particular about how groomed their nails look. Thus, nail art, manicures, gel nails and acrylic nail extensions have become a fast-growing salon category.
Nail services are a great way to attract Gen Z clients and millennials. What makes it the best salon services to offer is the low material cost and quick service duration.
Nail artists and freelancers can quickly service many clients at a time. Also, since it is a trend-driven service, the repeat demand is also high and clients will want to come often to fix any kind of breakages.
A nail extension service at any mid-size salon usually costs around Rs. 3,500, and the material cost is around Rs. 500. Nail salons are thus left with a flat profit margin of Rs. 3,000 which is very good and lucrative.
Salons that want predictable recurring monthly revenue should offer a large number of nail services and 3D nail art which is quite trending now.
Facials
In India, suddenly there is a spurt around skin services. Everyone including both men and women want to take care of their skin and indulge in anti-ageing treatments.
This has made hydra and advanced facials extremely popular. Beyond basic facials, you also have chemical peels and microdermabrasion.
For any beauty salon or skin clinic, they’re popular because of their high perceived value.
Salons can even sell packages or memberships to their high-spending clients. Recurring income with such services is guaranteed as clients will visit every two months for their skin restoration service.
A gold facial or hydra facial in any average salon costs Rs. 5,000 and the material cost is around Rs. 1,000. A salon is left with a profit of Rs. 4,000.
Lash Extensions/Lash Lifts/Brow Grooming
Lash extensions or lash lifts are trending in urban areas. The material cost for such services is low but the pricing is premium which makes it a high-ticket salon service.
What makes it a profit driver is the quick turnaround time, and the earning potential per hour.
If your salon has newly introduced lash services, it is best to spread the word around on your social media. That’s how this service gained popularity too.
To make the service more profitable, upselling related products such as a lash serum is a good idea.
A full lash service in a salon costs around Rs. 4,500 while the estimated cost is only Rs. 500 thereby leaving a salon with a profit of Rs. 4,000. Salon owners can use salon service tracking software to see which service is fetching them maximum revenue.
Service Type | Estimated Profit Margin | Why it Generates High Profit? |
Hair Colouring | 60%-75% | High-ticket size and moderate product cost |
Hair Smoothening Treatments | 50%-70% | A single treatment generates the same revenue as regular haircuts |
Bridal Makeup | 65%-80% | Premium pricing and multiple upselling opportunities |
Nail Extensions/Nail Art | 70%-85% | Recurring revenue and time efficient |
Facials | 65%-80% | Low cost, easy to bundle and recurring revenue |
Lash Extensions/Lash Lifts | 75%-90% | Low cost, minimal equipment needed |
In Summary
Salon services profit margin comes from those services that use only a small quantity of consumable product. Hair colouring is the most profitable salon service as clients pay for skill more than the material used and that’s what urges them to return in the future as well.
To further make salon services profitable, salons should bundle them with retail products. This can raise the average ticket size and improve overall salon profitability.
With Salon360, salon business management system, salon owners can track which service is driving them maximum profit. They can also track packages and memberships to see which client is contributing the most to the overall profit margin. This also helps them incentivise them accordingly.
If you’re a salon owner looking to grow sustainably while being profitable, you should start by investing in efficient operational systems such as salon service tracking software.
Get a free demo.
FAQs
How Can I Make Basic Services More Profitable?
The best way to make basic services more profitable is by bundling them. During appointments, upsell related products and higher-value treatments to increase the average ticket size per customer.
What are the Most Profitable Salon Services in India?
Hair colouring, facials, nail extensions, eyelash treatments and smoothening services are the most profitable salon services in India. The consumable material cost for these services is low and drives high demand.
Which are the Recurring Salon Services?
The best recurring salon services are root touch-up, nail refills, acrylic nail extensions, lash maintenance, facials, waxing and brow grooming.
Are Bridal Services Profitable?
Yes, bridal services and bridal makeup especially are extremely profitable. However, such services have seasonal demand which doesn’t make the revenue recurring. Along with bridal makeup, other upselling opportunities include hairstyling, pre-bridal services and makeup for family and wedding guests.
How Can I Track Which are the High-ticket Salon Services?
Salon pricing software can help you track which services are driving maximum profitability. It helps you track key metrics that are driving your revenue.
