The secret to a successful business? Passion, a superb ability to remove hair, and a profit-driven mindset. Estheticians have the first two, but you must learn the science of business ROI to meet your goals. This means comparing how much you spend on what goes into your waxing services versus how much of a profit you’re making.
What is ROI?
Return on Investment (ROI) measures the gain or loss generated on an investment versus the amount of money you’ve put in. Expressed as a percentage, this formula helps show which aspects of your businesses are doing well or need improvement.
A profit margin, or earning more than you’re spending, is essential for your business’s long-term sustainability. Understanding your business ROI assists in making informed decisions about where to allocate resources for healthy growth.
Calculating Your Waxing Business ROI
To calculate ROI, use the following formula:
ROI= (Net Profit/Total Investment) × 100
Step 1: Determine Your Net Profit
Net Profit is the amount of money your business earns after subtracting all expenses from the total revenue. To calculate net profit, account for all the costs involved in running your business, including product costs, employee wages, rent, utilities, marketing, and any other operational expenses.
Step 2: Calculate Your Total Investment
Total investment includes all the money you’ve put into your business. This can range from the initial setup costs, like purchasing waxing supplies, equipment, and furniture, to other investments, like marketing campaigns and Starpil U educational courses for further training.
Step 3: Apply the ROI Formula
Once you have your net profit and total investment figures, plug them into the ROI formula to find your percentage.
Example
Suppose your business earned $150,000 in revenue last year. After subtracting all operating expenses ($100,000), your net profit is $50,000. If your total investment in the business was $40,000, your ROI would be:
ROI=(50,000/40,000)×100=125%
This means for every dollar you invested, you made a $1.25 return.
Bonus tip: While the example above calculates net business profit margin as a whole, you can also utilize this formula for fixed areas of your waxing business ROI. For instance, put the amount you spent specifically on roll-on wax vs. the revenue from these services.
Pink Film Hard Wax Microbeads - Rosin Free (1lb - 30lb)
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Blue Film Hard Wax Microbeads - Rosin Free (1lb - 30lb)
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Black Hard Wax Beads Rosin Free (1lb - 30lb)
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Starsoft Film Hard Wax Microbeads (2.2lb - 30lb)
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Starsoft Film Hard Wax Tablets - (2.2lb - 22lb)
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StarFLEX Malva Ultra-Flexible Hard Wax (2.2lb - 22lb)
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StarFLEX Blue Hard Wax (2.2lb - 30lb)
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Coral Film Hard Wax Microbeads (2.2lb - 30lb)
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Tips to Improve Your Waxing Business ROI
Price your waxing services properly
Never underestimate your worth when pricing your waxing services. You should charge fairly to maintain a strong ROI. Research to see what services at salons in the area cost, and implement other factors like skill level, or educational training to determine how much.
While there’s no one correct way to price your services, balance affordability and profitability, and go with your instinct. For example, eyebrow and lip waxing are more common techniques, so don’t drive clients to competition by overcharging. However, if you’re the only Bikini or Brazilian waxing specialist within a 20-mile radius, you may price a bit above average to maintain your business ROI.
A key factor in determining prices is how much wax is required to perform the service. While it varies by individual and wax type, these are standard amounts of wax it takes per service:
Eyebrow, lip, and facial waxing: 7-10 grams of wax at $20 per service
Leg wax: 280 grams of wax at $70 per service
Bikini wax: 50 grams of wax at $20-$30 per service
Underarm wax: 10 grams of wax at $15-$20 per service
Bulk and wholesale ordering
Becoming a Starpil Pro partner has a variety of benefits, the first is ordering bulk wax boxes. Enhancing your return on investment (ROI) by having high-quality products at low prices, serving quality and quality while ensuring you never run out of wax.
This also leads to substantial cost savings that add up over time, allowing to invest in other areas of the business (like marketing) for increased profits and maximum ROI.
Buy only the best tools
Even if you save money upfront on a lower-quality wax warmer, you'll feel the effects of technical difficulties. It’s extremely frustrating to have wax heat unevenly or too slowly—why not save time and money by investing in a high-quality hard wax warmer from the beginning?
This applies to all the tools you use for customers, from stripless hard wax and soft wax to pre and post-waxing care. Investing in top-tier materials ensures an efficient service, happier customers, and quicker turnarounds which results in maximum ROI.
Retail products
Waxing and skincare go hand in hand, your clients deserve smooth skin that’s hairless, healthy, and glowing. That’s where selling retail skincare products comes in, providing an additional revenue stream and helping to improve your business ROI.
By selling products like facial scrubs, creams, exfoliators, and moisturizers, you’ll expand to become a 360° beauty experience. Complementing the waxing service and encouraging clients to maintain their skin between appointments.
Embrace technology and streamline systems
Looking to cut costs, save time, and improve your waxing business ROI? Technology is your friend. Many sign-in systems can be used for customer check-ins and waivers, eliminating the need for a receptionist. Additionally, resources like Calendly, Google Meet, and other tools help book waxing appointments ahead of time.
From payments and marketing analytics to inventory management, there’s an app for just about every part of the business. These are easier on your mind and wallet, running more smoothly (and with more profit) than ever.
Upgrade Your Waxing Business ROI
When you calculate your business ROI, everything else falls into place. It’s as simple as making more money than spent—and we’re here to help every step of the way. This isn’t about depriving you of the necessities, as only you can decide the best products, services, and tools to do your job.
However, cutting unnecessary costs is the first step into a successful self-employed business venture. Managing your time, expenses, and inventory creates a smooth business! Remember, improving ROI is an ongoing process that requires regular review of your practices and finances. With the right strategies and focus, you can enhance the financial health and success of your business.
FAQs
Professional Large Hard Wax Warmer Kit - 5lb
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Professional Large Hard Wax Warmer - 5lb
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$199.90
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Starsoft Film Hard Wax Microbeads (2.2lb - 30lb)
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$62.90
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Blue Film Hard Wax Microbeads - Rosin Free (1lb - 30lb)
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Premium Hard Wax Warmer Kit
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$252.40
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Hard Wax Sample Kit
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$107.50
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