One of the most frustrating comments I hear about the hair industry is how expensive hair services are.

I decided to break it down, and explain the costs involved in a haircut and also explain why the average stylist isn't ripping you off by charging $40 - $60 for a haircut and up in the $100 and above range for color.  I'd be willing to bet that some of the expenses in a hair salon just might surprise you.
Since our fans and readers span the globe, researching the "national average" and spending a lot of time with numbers and calculations seems unnecessary since numbers can be misleading.  Instead, I will bring you the cost of running my full service hair salon including Brazilian waxing, skincare, nails and men's barber.

I live in city of around 4.3 million people in the middle of the greater Phoenix area.  Obviously, hair salon expenses in other parts of the country will be higher than mine; others less than mine.  My salon is above average in terms of our level of talent and overall salon vibe, however we are in a relatively average city.  I lease a small studio salon in Old Town Scottsdale and a medium sized studio space downtown Phoenix.  I personally run my own business out of the studio with the help of my dedicated staff.

For the purpose of this article, and to open your eyes to just how much talent and money are invested into being your hair stylist, I am only going to talk about haircuts.  I will not go into vast and various expenses of chemical services, various tools and supplies, marketing expenses, and everything involved with running a full service salon; just haircuts.

Education

Surprisingly, beauty school is not cheap.  On average, cosmetology school costs anywhere from $16,000 - $35,000 per year at a typical state or private school.  If you live in a rural area, your cost could be as low as $5,000 - $6,000 and up to $10,000 - $15,000 if you live near a slightly larger city.  Around 1,600 hours of instruction and clinical experience are required prior to graduation and completion of the State Board Cosmetology Examination.  It takes approximately 15 months of full time cosmetology school to complete these requirements.
College Tuition = Monthly Expense: Average $295

Rent and Utilities

Some hairstylist work for a company or person and are paid a commission or salary. Others work for themselves and pay a chair rental fee, studio rental fee, or they buy or rent their own property.  At any rate, a building that is properly equipped and licensed by state regulation for hair services is required and is the biggest monthly expense. Some rental fees include utilities, products, or use of equipment. 

It all varies for each situation.  Our stylists pay a chair rental fee, which includes water, trash, heat, and electric utilities as well as the use of a two sinks, two hydraulic styling chairs, two styling stations, a storage cabinet, and hood hair dryer with chair.
Average Monthly Expense: $1,200

Licensing & Insurance

Maintaining a valid cosmetology license is very important and a required expense of every stylist and salon owner.  A salon license ($80) and separate individual cosmetology license ($30) is required to be renewed every other year. In order to be eligible to renew your license in Arizona, you have to complete continuing education hours, and pay the associated fees with these hours.  I typically attend more than the required 8 hours, but for the sake of this article, I will only include the expense of the required hours.  In the past year I have spent $250 on continuing education and license renewal.

In addition, insurance is important to cover liabilities in a salon.  You never know what may happen when you're cutting hair and it's important to be covered in case of an accident, theft, fire, or natural disaster. My annual cosmetology insurance cost is $250.
Montly Expense: $31.25

Professional Hair Cutting Tools

One of the reasons people think haircuts are too expensive is because "all that's required is a comb and some scissors".  It's actually a little more involved than that.  I have several pair of shears that I require to do my job.  They last any where from 2 to 5 or more years depending on the shear, how often it needs sharpened, and how often it's used.  In my first four years as a stylist I have spent $2,500 on hair shears, and $1500 on clippers and accessories (which reminds me that I need to buy a new set).  I also go through at least a box of razor blade replacements every week.
Monthly Expense: $150.50

Backbar Supplies

If you are going to get a haircut, chances are you will want it washed and styled.  This requires the use of "backbar" products and supplies.  Backbar supplies are the products and tools used by a stylist to wash and style hair during a haircut service (shampoo, conditioner, styling products, towels, capes, etc.) as well as the necessary sanitizing agents required by the state.  I think it's important that all of my clients leave my salon with a polished style to feel confident about their new cut.  I've also included laundry expenses to wash the towels and capes regularly.

Monthly Expense: $113.00

Hair Styling Tools

Styling hair can't happen without styling tools.  Professional hair dryers, flat irons, curling irons, brushes and combs are not inexpensive.  Professional quality products are important because they need to have the ability to stand up to hard repeated daily use.  Of course, some last longer than others.  I've estimated that in the past four years I have spent at least $1,000 on hot tools and hair styling equipment.
Monthly Expense: $20.83

Total Monthly Expenses

Let's add this up.  Please keep in mind that the monthly expenses that I included in this list are minimal and apply only to hair cutting.  If a stylist performs any other services like waxing, paraffin, coloring, perming, Brazilian Blowout, deep conditioning treatments, other chemical services or offers retail products for sale, the costs will increase.  This monthly expense list also doesn't include the little extras in a salon like wine, coffee, decor, magazine subscriptions, and other miscellaneous costs.
Total Monthly Expenses: $1,937.58

Breaking It Down: Why Haircuts Cost So Much

Now, let's break down this monthly cost of $1,937.58 so it makes sense on a haircut by haircut level.  If I work 40 hours per week, and assuming 4 weeks in a month, that's 160 hours in one month.  Dividing the monthly cost by 160 gives me the amount of money it costs to have basic hair cutting supplies and tools on hand each hour.

It costs $12.10 to cut hair in my salon for one hour.

In order to make a profit and take home money to make a living, I have to bring in more than $12.10 each hour.  It takes me 20-30 minutes on each man's or child's haircut and 30-60 minutes on each women's haircut. This includes washing and styling time, discussing products, and ensuring my client's satisfaction.

To break it down further.  Let's assume a men's haircut is $40 and a women's haircut is $60.  In two hours time I can bring in approximately $100, or $50 per hour.  $50 minus the $12.10 operating cost leaves me with $25.80 per hour "profit".  However, keep in mind all the extras that I did not include in the figures above like decor, coffee, magazine subscriptions, online reservation system, website costs, telephone expenses, advertising costs, marketing materials (business cards, brochures, etc), and other miscellaneous expenses come out of that $24.14 profit.  Not to mention income tax and sales taxes that need paid, and let's not forget the countless hours that I spend doing paperwork, updating my website, purchasing supplies, returning emails, setting appointments and other miscellanous tasks that I am not compensated.

Every year the costs go up, and every year your stylist gains 365 days of increased experience, talent, and skill.  How do you place a price on that?

At Salon D' Shayn, we pride ourselves in providing our clients with above average hair styles, haircuts and color.  I hope this helps you understand all the costs involved with getting a haircut, and maybe you'll appreciate all that your stylist manages on a monthly basis to simply make an honest wage.