#24 You’re paying them. But are they profitable?
Alright, my friend, let’s be honest—when was the last time you ran the numbers and actually knew whether your team was turning a profit?
Not a gut feeling. Not “they’re busy, so they must be doing fine.”
I mean really crunched it.
Here’s the hard truth most salon owners avoid:
Just because a stylist’s booked doesn’t mean they’re profitable.
You can be doing everything “right”—training, marketing, supporting your team—and still not be making money.
So how do you know if your stylists are profitable?
You calculate it. Not once. Not just at tax time. But regularly. And with a system.
Let’s break this down into 4 steps:
Step 1: Know Your Break-Even Point
Before you can calculate profitability, you need to know what your baseline is.
What does it cost just to keep the doors open?
This includes:
Rent
Payroll
Supplies
Backbar and retail costs
Education, software, taxes—the whole ecosystem
Once you know your total expenses, divide it across your team. That’s your starting line.
Step 2: Calculate Revenue Per Stylist
Look at what each stylist brings in—not just total service dollars, but retail too.
You want a clear picture of each team member’s total revenue contribution.
** Bonus tip: Track it monthly, not just annually. Trends matter. **
Step 3: Subtract the Costs Directly Tied to That Stylist
Now you’re going to get a little more granular.
Take each stylist’s revenue and subtract:
Their hourly or commission-based wages
Product usage or backbar cost per service
Benefits, if applicable
You want to know their gross profit margin. If what’s left is razor thin (or negative), you’ve got a problem—especially if they’re fully booked.
Step 4: Don’t Forget Opportunity Cost
This is where it gets real:
If a stylist is fully booked but not profitable, that chair could actually be costing you money.
It’s not just about the income—it’s about what income could be if it was filled by someone more efficient, higher-priced, or better retained.
You don’t have to be a math wizard to know your numbers.
But you do have to stop avoiding them.
Salt & Light,
Heather