How to Calculate ROI for Your Waxing Business

Posted on Apr 12, 2024 By Julian Tavera

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.

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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

Is waxing profitable?

Yes, waxing can be a very profitable venture. MarketWatch.com’s market analysis states the hair removal wax market is projected to grow to an estimated $10.5 billion in worth by 2028. With proper money management, education, and marketing strategies, you can have solid revenue within a few years.

I’m not making a profit in my first year; should I quit?

Absolutely not! It's common for businesses to not see a profit, even if you’re doing everything correctly. As you build up your client base and refine your services, you’ll learn and adapt to ensure long-term success.

What growth opportunities should I consider?

As your business stabilizes, consider expanding your service offerings, hiring additional staff, or opening new locations. Stay informed about industry trends and consider additional certifications or specialized training to broaden your expertise and attract a wider clientele.

Should I work solo or hire employees?

This is dependent on your working style and business growth. However, if you find yourself with more clients or internal paperwork than you can handle, hiring a part-time contractor could be the solution.

For instance, an accountant could help you identify esthetician tax write-offs and maximize your ROI, while an assistant is ideal for scheduling appointments or ordering supplies.

This is a major business decision, but can also be a lifesaver for those who need support.

How do I know if starting a waxing business is right for me?

Are you passionate about improving others’ well-being and confidence through waxing? You’ll make a great esthetician. It takes a strong leader to run their own business — with the ability to be resourceful, analytical, personable, and adaptable.

Being a business owner means that you’re responsible for everything, from inventory and customer retention to financial aspects. This also comes with the perks of a flexible schedule, setting your prices, and personal satisfaction.

It’s essential to weigh the pros and cons and determine if this is a fit for you.