When you own and manage your own business, it can be a challenge to know just how much you should be charging your customers. How much are your services and time worth? How much are your clients willing to pay? It's common to underestimate the answers to both of these questions. Don't be too modest when deciding it's time to raise the price for your work. Cost of living is constantly increasing, and business expenses such as updating your salon furniture and paying utilities will generally not get any lower. Everyone deserves a raise in pay, including you!

Knowing When to Make the Change

In general, if your prices haven't changed in the past year or year and a half, now is probably a good time. If you need further justification, determine how booked you are on a regular basis. Track your work time closely over the next couple of months and divide your actual hours with clients in your salon chairs by your preferred amount of hours. If you're booked more than 85 percent of the time, you're ready for a price increase.

You can also consider discreetly checking around to other similar local salons to see what kinds of pricing they're offering for the same services so you know if yours line up.

How High Is Too High?

Once you've made the commitment to give yourself a raise, how do you know what kind of an increase is appropriate? Definitely don't raise prices drastically all at once - this would shock your clients. Start with 10 percent, which actually won't affect your clients' bills too much but will allow you to see a quick increase in profits. Expect to lose approximate a corresponding 10 percent of your clientele when you do this, but don't worry too much, as you can begin to focus more on clients who want higher-value services. Continue paying attention to your booking percentage and when you get back to 85 percent capacity within a few months, raise your prices again.

How to Inform Your Clients

Don't let your clients find out about your price hike by presenting them with an increased bill after their regular appointment. Announce it in advance and don't raise your prices just yet. Think about how often you normally see each client and make sure to publicize the upcoming increase well before each person comes back by using signs at your styling stations, emails, snail mail, and social media to communicate it. Whenever possible, tell your clients in person. Be professional about it and thank the client for their business. This conversation should be brief, concise, and should not contain excuses or detailed reasons for the change.

While you could end up with a few unhappy customers when you make a price increase, for the most part expect your clients to support you. There's a reason they keep coming back to you, and they want you to succeed!