Embarking on a career as a self-employed hairstylist gives you the opportunity to smash the glass ceiling when it comes to your earning potential. This freedom and flexibility that comes with choosing your working patterns is both exciting and empowering. Often, however, when it comes to setting your wage, many hairstylists may find themselves at a loss…
It’s often the case that our excitement can be so strong we actually forget to assess the business or financial elements of being freelance. Instead, we just focus on getting booked up as quickly as possible and assume that prices, overheads and wages will naturally be covered.
Unfortunately, however, that’s not how successful freelancing businesses work. As I’ve said before, the best practise is to tackle the numbers head on; do not ignore your pricing as it will not fix itself.
Most freelancers make the same rookie mistake (yes, me included), and price themselves based on other local salons and not on their own numbers. They’ll usually make it to the end of the first tax year, just to complete their books and find out they’ve priced for £8.50 an hour. This is what prompts us to finally sit and look at the numbers.
If this is you right now – or if you’re about to take the plunge into freelancing – then fear not! I have put together a comprehensive guide to help you navigate the labyrinth of money matters and figure out exactly how to determine your wage. Lets go!
1. You need to understand how much it currently costs you to live.
This involves getting a total monthly figure for all your personal outgoings. Things like rent, car insurance, utilities, memberships, food, fuel, clothes, savings, investments and how much disposable income you’d like. Times this figure by 12 (months of the year), and you now have your annual target salary.
2. Now add the dreaded tax.
You really need to consider and factor in the tax that you’re going to have to pay on these earnings. The current tax rates are 20% for £50,000 or less and 40% from £50,000 to £125,000.
3. National Insurance.
This is another cost that you will need to consider. Again, it sits on a sliding scale that depends on your profits.
4. Your skill and your value.
Aside from making a wage that will cover your living costs and help
you reach your financial goals, your skill level is also worth paying for. Whilst it can be difficult to assess where your skill level is in comparison to the rest of the market or your peers, try not to be put off. I like to call this ‘talent tax’.
At the end of the day, I’m a big believer that you’ll get back from the world what you have the courage to ask for. There are (and will always be!) cheaper stylists and more expensive ones. People at the beginning of their career will usually always cost less than people who have 10-15 years’ experience – this is normal for any industry.
Ultimately, to find your wage, you should start with knowing how much you NEED to earn. From there, you can have a goal to aim for that incorporates your ‘talent tax’. Be intentional about your goal, your life, your vision and your business. This is how the money will come.
Stop winging it and start calculating it!
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