Why Does a Haircut Cost So Much?



 

Why Does a Haircut Costs So Much (2014) ?

Estimate of where your money goes BEFORE taxes when you spend $75 in a Manhattan salon (as of 2015)

haircut 2015The landlord makes more money than the salon owner. How crazy is this?

Let me explain by breaking down all the expenses. Remember first that most hairstylists work on commission, wages and tips on the East Coast but others rent their own booth which is very common on the West Coast. Factoring in to what you will eventually pay for your new hairdo comes down to these:

 

  • Rent

 

In Manhattan, a good booth is around $2500 monthly. No matter how good your hairstylist is, he relies on high retail lease (Prime corner) rent to be successful; in Manhattan those are usually corner avenues. Fifth Avenue between 49th and 59th streets has the highest average ground floor asking rent among all primary shopping corridors citywide and has set a new record at $3,550 per square foot/year (yes you heard me right $3550).

An average salon is around 600 ft square with 3 stylists

 

\[\frac{600\times3550}{12}=177,500\]
  The monthly rent would be $177,500 . So, for this salon to make money these stylists would need to charge around $600 assuming they’re busy 100% of the time. (yes it’s insane)    

          • Education

 

        Cosmetology School is actually pretty expensive and mandatory in every state. For NYC, 1600 hours of school is the minimum requirement before passing the state exam which costs around $16,000 for basic education. Big name brands like L’Oréal, Wella, or Redken will also offer deeper training for stylists, which is highly recommended to keep up with. Monthly Expense: $350  

          • Licensing and Insurance

 

        Maintaining a valid cosmetology license is very important and a required expense of every stylist and salon owner. A salon license and separate individual cosmetology license is required to be renewed every other year. In addition, insurance is important to cover liabilities in a salon. You never know what may happen when you’re cutting and coloring hair and it’s important to be covered in case of an accident. Monthly Expense: $50  

          • Hair Cutting and styling Tools

 

        I have several pair of shears (most expensive shears can be as much as $5000). They last anywhere from 2 to 10 years or more depending on the shear, how often it needs sharpening, and how often it’s used. Professional hair dryers, brushes and combs are not inexpensive and need to be replaced frequently. Monthly Expense: $150 Back-bar Supplies Shampoo, Conditioner, Serum, Gel ,Wax, etc… Monthly Expense: $150  

          • Total

 

 

 

 

        The total basic monthly expense of any hairstylist is $3200. An average haircut in NYC is $55, so it will take 58 haircuts for the stylist to break even without counting taxes. In NYC, the hairstylist is positively not laughing all the way to the bank but his/her landlord definitely will!

 



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