Chartered Financial Analyst specializing in retail and service-based business finance.
Determine how many services (e.g., haircuts, client appointments) your salon must complete each month to cover all costs. Enter any three variables—Monthly Fixed Costs, Avg. Price per Service, Variable Cost per Service, or Breakeven Services—to solve for the fourth.
Salon Breakeven Calculator
Salon Breakeven Formula
The breakeven formula for a salon finds the number of services (Q) it must perform for total monthly revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Service (P):
P = (F / Q) + V
Solve for Variable Cost per Service (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., salon rent, utilities, salaried employee wages, insurance, booking software fees).
- Avg. Price per Service (P): Your average price charged to a client for a service (e.g., an average haircut, coloring, or spa treatment).
- Variable Cost per Service (V): The direct costs per service (e.g., hair dye, shampoo, products used, credit card fees, commission to stylists).
- Breakeven Services (Q): The total number of services you need to perform to reach $0 in monthly profit.
Related Calculators
- Service Business Breakeven Calculator
- Retail Breakeven Calculator
- Freelancer Breakeven Calculator
- Startup Breakeven Calculator
What is a Salon Breakeven Point?
A **Salon Breakeven Point** is the number of client services a salon must complete each month to cover its total costs. This is the minimum number of appointments needed to pay all the bills (rent, staff, products) and stop losing money.
**Fixed Costs (F)** are your monthly “overhead.” These are the bills you pay every month, no matter how many clients walk in. This includes your salon’s rent or lease, utilities (water, electric), salaries for receptionists or managers, business insurance, and monthly fees for booking software.
**Variable Costs (V)** are the costs tied *directly* to performing one service. This includes the cost of products used (shampoo, dye, styling products), credit card processing fees for that transaction, and—most importantly—any commission paid to the stylist for that specific service.
The **Contribution Margin** (P – V) is the profit from a single service that goes toward paying off your large monthly fixed costs. This calculator finds how many services are needed to cover your total overhead. Every client served *after* this point generates your net profit.
How to Calculate Salon Breakeven (Example)
Let’s calculate the breakeven point for a hair salon.
-
Identify Monthly Fixed Costs (F):
The salon has $10,000 in monthly rent, utilities, and receptionist salary.
-
Identify Avg. Price per Service (P):
The average client service (cut, color, etc.) costs $75.
-
Identify Variable Cost (V):
Each service costs $15 in products, fees, and stylist commission.
-
Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per service: $75 (P) – $15 (V) = $60.
Next, divide the fixed costs by this margin:
Q = $10,000 / $60 = 166.67 -
Conclusion:
The salon must perform 167 services (rounding up) each month to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
You must use an average. If you do 100 services at $50 (haircuts) and 50 services at $150 (coloring), your (P) is *not* $100. You must calculate (Total Revenue) / (Total Services). In this case: `($5,000 + $7,500) / 150 = $12,500 / 150 = $83.33`.
It depends. If you pay a stylist a fixed salary (e.g., $3,000/mo) regardless of clients, it’s a **Fixed Cost (F)**. If you pay them a 40% commission *per service*, that 40% is a **Variable Cost (V)**.
This calculator is best for services. Retail product sales (like shampoo bottles) have their *own* P and V. You should either analyze them separately or use this calculator to find your *service* breakeven, treating retail as bonus profit.
Set your (F) (e.g., $10,000), (V) (e.g., $15), and a realistic number of services you can do (Q) (e.g., 200/mo). Solve for (P) to find your minimum price: `P = ($10,000 / 200) + $15 = $50 + $15 = $65`. You must charge at least $65 on average.