There’s a version of success in this industry that’s really easy to see: A full schedule, a waitlist, being so busy that we work through lunches – all of these things, from the outside can look like you've made it ... and maybe you have. But, a full schedule doesn’t necessarily mean you have a healthy business. I also want you to remember this if you feel like you're not where you want to be or comparing yourself to other estheticians.
Coming from experience, I know you can be completely booked and still struggle to pay yourself. You can have your highest revenue year ever and wonder where all the money went. You can also raise your sales month after month while your expenses quietly rise right alongside them. This is one of the harder lessons of owning a service-based business: being busy and being profitable are not the same thing.
For self-employed estheticians especially, this matters. There are only so many hours you can physically spend in the treatment room. At some point, you can’t add another facial without giving up your lunch, your evening, another day off, or eventually your sanity. If the only way your business can make more money is for you to perform more services, you haven’t really built much room for growth....and we don't want that....so lets dive in:
- Start with what your treatments actually cost
Most estheticians can tell you exactly what they charge for a facial. Far fewer can tell you exactly what it costs them to perform one – and I mean actually costs.
Think about everything you touch during a treatment: products, gloves, sponges, any disposables, etc. Then think about all of your overhead: rent, booking software, insurance, credit card fees, utilities, laundry service and of course, your own time. And lets be honest, there's likely more costs that I haven't mentioned.
When we think about all of these costs, it can feel a little overwhelming. You may also discover that the treatment you perform most often isn’t actually the treatment making you the most money. You may realize that you’ve added so many “little extras” over the years that a service that once had a healthy margin no longer does. Or maybe your product costs have increased three times while your service price hasn’t changed at all.
You can’t price appropriately if you don’t know what you’re spending.
So the first step, is to figure out how much your overhead is, and also roughly what each service costs you.
- Pay attention to your time
When you work for yourself, it’s surprisingly easy to forget that your time is an expense, too.
You might look at a $175 facial and think, I made $175 in an hour. But did you? Maybe the facial is 75 minutes. You needed 15 minutes to turn over the room. You spent another 10 minutes talking through homecare afterward. There was setup before the client arrived. Suddenly, that $175 occupied close to two hours of your day.
Your time is one of the few things in your business you cannot reorder. There is a hard limit to how many treatment hours you have available each week, which is why understanding what you’re earning from those hours matters so much.
This is also why copying another esthetician’s pricing doesn’t make any sense. You have no idea what their business looks like behind the scenes. Maybe they own their building, their rent is twice yours, or they have a team, etc.
Or maybe, despite what it looks like from the outside, they aren't profitable either. It's okay to look to see what other business charge because it helps you understand your market, but don't let someone else's price list determine what your business needs to charge.
- Revenue is not what you made
This is probably one of the biggest mindset shifts when you start taking the business side of esthetics seriously.
If your business did $150,000 in sales last year, you didn’t make $150,000. Your business collected $150,000. Now it's time to start subtracting (rent, backbar, retail inventory, merchant fees, booking software, insurance, utilities, education, taxes, etc.). And then there's you. What did the business actually pay you?
Revenue is exciting because it's a big clean number. Profit makes it a bit messier, but it tells you considerably more about whether your business is profitable. A business doing $200,000 a year with healthy margins can actually be more profitable than a business bringing in $350,000 and spending everything it brings in. So remember, bigger doesn't mean better. - Discounts cost more than you think
I’m not against promotions. They can be a great business tool when there is a reason behind them. But there’s a big difference between intentionally using a promotion and constantly discounting because bookings feel a little slow.
Let’s say your facial is $150 and costs $30 in product and supplies to perform. Before we even account for overhead or your time, you have $120 remaining.
Run a 20% discount and now the client pays $120. Your treatment still costs $30 to perform. Your rent didn’t go down 20%. Your credit card processor didn’t decide to give you a break because you were having a sale.
You now have $90 remaining instead of $120. If you’re introducing a new service, rewarding loyal clients or running a promotion with a specific goal, great. Just make sure the promotion is doing something for the business besides making you feel busy.
- Before you look for more clients – look at the ones you already have
Whenever revenue slows down, the first instinct is usually, I need more clients.
Maybe. But before you spend more money on ads or start panicking about your Instagram reach, look at what’s happening with the people already walking through your door. Are they rebooking?
Do they know when you want to see them again and why? Are you having that conversation before they leave, or are you hoping they remember to book another appointment three months from now?
We spend so much energy trying to get new people through the door when sometimes there is a huge opportunity right in front of us. A client who trusts you, rebooks, consistently buys homecare from you, and they recommend you which is incredibly valuable to your business. There's no convincing, you already did the hard part.
- It's usually the small things
Businesses don’t always lose money because of one huge mistake. Sometimes it happens $8 at a time.
It could be the subscription you forgot to cancel, over dispensing products, giving too many free upgrades, smaller orders with skincare companies so you have to pay for shipping 3 times a month instead of one.
None of these things feels particularly serious on its own. But multiply them by 20 clients a week, 50 weeks a year, and suddenly those little decisions aren't so little.
- Your most expensive treatment may not be your most profitable one
This is a really interesting exercise to do with your service menu.
Instead of looking at which treatment has the highest price, look at which treatment produces the most profit for the amount of time it occupies.
Maybe you have a $300 treatment that takes two hours and uses $75 worth of product. Then you have a $175 treatment that takes an hour and uses $15.
Suddenly, the $300 service doesn't automatically look like the obvious winner [the $175 treatment has a higher profit margin].
There are other things to consider, of course. Maybe one treatment leads to significantly more retail sales. Maybe clients who book it have a much higher rebooking rate. Maybe it introduces new clients to your business. Maybe it’s an important part of what you’re known for.
The point isn’t that every decision has to come down to a spreadsheet, but you should definitely know which services are most profitable.
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What does your business actually need to do for you?
This might be the bigger question behind all of this.
We talk a lot about revenue goals. I want a six-figure business. I want to hit $20K months. I want to double my sales. Okay, but why? What do you actually need the business to provide?
Ask yourself these questions:
- How much do you want to pay yourself?
- How many days a week do you want to work?
- Do you want to eventually hire someone?
- Do you have bigger plans like buying a building, or other expansion?
- Do you have kids and want a flexible schedule?
Those answers matter because your business is supposed to support a life, not become your entire life. If you're booked six weeks out but exhausted, skipping lunch, answering clients at 10 p.m., unable to take a week off and still worried about money, the answer probably isn't finding a way to squeeze in three more clients.
Something else needs to change.
Maybe it's your pricing, reducing expenses, increasing retail, changing up your treatment menu, finally hire help, or maybe we as a collective need to stop measuring success by how exhausted we are at the end of the week.
There is no prize for burnout. I know a full calendar can feel really good, and I understand why estheticians celebrate it. But what if you can increase your profit while working less? It's possible, and that is my wish for every esthetician.
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