#44 How to Tell If Your Stylists Are Profitable
Just because your stylists are busy doesn’t mean they’re profitable.
You see a packed book, back-to-back guests, and you assume it’s a sign that everything is working as it should. But here’s the truth: some of the people working the hardest in your salon might actually be costing you money.
And if you don’t know how to calculate stylist profitability, you’re running your salon on emotions instead of numbers.
I promise it’s not as scary as it sounds. You don’t need to be a math wizard or live inside spreadsheets; you just need one simple formula. Let’s walk through it.
Step 1: Start with Revenue (What They Bring In)
Look at your stylist’s monthly revenue, the total dollars they generate from services and product sales. This is your “top line.”
Example:
If Sarah brings in $7,000 in services and $1,000 in retail, her total revenue is $8,000.
Sounds great, right? Let’s take a closer look.
Step 2: Subtract Compensation (What You Pay Out)
Your stylist doesn’t work for free, and this is your biggest expense. Factor in not only their base pay or commission, but also payroll taxes and benefits.
Example:
If Sarah makes 45% commission, that’s $3,600. Add $300 for taxes, and you’re at $3,900.
Step 3: Subtract Direct Costs (What It Costs Them to Work)
Product usage, color, backbar supplies, all of that comes out of revenue. If a stylist is heavy-handed with product or their guests require a lot of extra time and bowls, it matters.
Example:
Sarah’s product use adds up to $900.
Step 4: Look at What’s Left (Contribution Margin)
Here’s the golden number:
Revenue – Compensation – Direct Costs = Profit Contribution
From Sarah’s example:
$8,000 – $3,900 – $900 = $3,200.
That $3,200 is what’s left to cover overhead (rent, utilities, front desk, software, marketing) and still produce profit for the business.
Step 5: Analyze the Results (Healthy or Not?)
If your stylist’s contribution margin is strong, amazing. You know they’re supporting growth. If it’s razor thin (or negative), that’s a red flag.
And this is where you stop making decisions based on feelings. You don’t keep someone because “they’re nice” or “they’re busy.” You look at the math.
You can’t scale back from the chair, hire strategically, or pay yourself consistently if you don’t know whether your team is actually profitable.
The formula doesn’t lie. And once you start running these numbers, you’ll see where adjustments need to happen:
Price increases
Coaching stylists on product waste
Reviewing pay structures
Adjusting booking times
Your next step: Run this formula on every stylist in your salon. Yes, every single one. It might be uncomfortable, but it’s better than crossing your fingers and hoping the numbers work out.
You’ve got this.
Salt & Light,
Heather