Nail Salon Owners realise they earning less then the minimum wage - so collectively decide to raise their prices

[cakeorwine]

Manicure price rise: Are you happy to pay more for your nails? - BBC News

This is a strange story - I have tun a business so I am more than aware of overheads and the actual cost per hour I made. And if you factor in admin time, as opposed to time spent with customers then it's even less. It's Business 101 - profit and loss, cashflow etc. Small business owners sometimes do earn less than the minimum wage when they look at the profits versus hours worked.

"Ms Jenkins did not realise she was making less than the minimum wage with her current prices.

"I was earning under £8 per hour, which was shocking to think that.
"The fact you're earning under minimum wage makes you quite upset.”
She said she was “nervous but very excited” to be upping her prices.
“It’s really beneficial that we are all raising our prices the same day and you know no-one is going to undercut each other."

"“It will vary between £5 and £10 per service," she said. "I’ve tried to keep it as low as I can because of the cost of living crisis.”

Many would say having your nails done definitely falls under the "luxury service" category, which she said she is aware of.

“We don’t want to put our prices up but we want to live again”.
Cost of overheads is one of the main reasons why Ms Jenkins, from Aberdare, Rhondda Cynon Taf, has decided to up her prices.
“No-one really understands the overhead part of a business. I’ve got three to four lights on constantly so my electricity bill is always higher. I pay extra council tax and I don’t pay [into] a pension because I can't afford to."

Many nail salons in Wales are going to increase their prices on the same day because "Ms Guy, from Liverpool, had the idea of the price increase day to give nail techs the confidence to correctly calculate their prices based on the cost of running their business."

"She did a study through her business and said it showed that on average its members were being paid £7 per hour.
"We know that the alternative is that we're not really making a profit and the fact that if we want to continue doing our clients' nails for years to come, it's a change that has to happen.”

Running a business is expensive - and setting your price right so you get a decent income and can make a profit is important.

I guess they were setting their prices depending on what other people were doing - without doing a cashflow analysis.

I worry that some might lose customers - and will lower their prices to get customers back.

I also suspect that if other small business owners did the maths, they are probably earning less than the minimum wage.

Mine went up to £40 (from £25) so i've stopped going. Used to go 3 times in a 2 month period & whilst I can technically still afford it, it feels a wasteful extravagance now that I can't justify. My nails don't look great but they're ok (& probably better for them anyway!)

I got an infill of my acrylic nails and a single gel colour yesterday. I always go to the same salon, all the staff are fab and I've been going years.

A lady next to me started at the same time for her infill and she got a hand painted design.

She finished before me because she got the salon owner, who is fantastic. I was another 10 minutes and my own nails are beautiful, took longer but equally a quality finish.

My seat neighbour will have paid more but hers took less time.

I paid £30 for a 2hrs in the north east, a deprived town. This is really average, 2hrs at minimum wage would be about £24? There is absolutely nowhere offering their services so cheap. I've not paid that for over a decade

I think all business owners/ self employed people should be taking home at least minimum wage and charge accordingly otherwise the business is not really viable. To be fair I’m not their target market as nails are not my thing.

But costs come out of that £30. It's not all earnings. As well as the cosy of the materials used there's the cost of running the premises, insurance, training etc. If those came to say £10 then they've only earned £10 an hour, not £15.

But they haven't "all got together to raise prices." It's a single lobbyist - from the sounds of it, not even an interest association with actual membership - recommending a price hike. Individual business owners are free to follow or not follow that recommendation. Very different from how cartels operate.

@cakeorwine
"I think it's about people running a small business but not being aware of the actual income they are making versus what they could make in an employed job."

They have to be 'aware' of their income. Same as anyone else there will be a gross payment going into their personal bank account on a weekly or monthly basis as an employee of the business. That payment will be paying their mortgage, their bill and groceries etc. If they can't live on it (and it stands to reason no one can comfortably live on an less than MW income) they surely have a look around at what others earn and realise their business isn't paying them enough and therefore isn't working. This has to be even more obvious for a business owner who works in the business and has staff who'll they'll be paying at least MW.

Am I missing something here? Is it that nail salon owners have rich husbands and their wages are going into a fat bank account and just getting lost?

If someone did 24 hours work for year at Minimum Wage, they would have:

£14,277 gross - this is before tax or NI. During that year period, they would also have 5 weeks holiday given to them.

Looking at the calculations on the website (24 hours, 16 clients per week, £38 per set (and taking 5 weeks holiday), then the gross income is £27,968 and the overheads are £14,670

Leaving a profit before tax of £13,298.

I think the calculations they have done should not have included holiday pay - it should look at the gross income over a year. (minus overheads)

However, those 24 hours are actually going to be more than that, because of admin time etc. You are waiting between clients and not earning. Just waiting.

It's a difficult one certainly because as a highly discretionary expenditure we will vote with our feet and stop going.

I pay £27 each time and it takes around 45 minutes, even if you say an hour, if you pay £12 for wages, a couple of pounds for NI and pension, £2 pounds for the nail varnish (probably less but I'm rounding up) £2 for the infill material that leaves £9 for the overheads and a bit of profit which seems about right. Of course I suspect they get more than 5 clients from a bottle of nail varnish, and no idea what infill material costs in bulk! Plenty of people pay more because they want complicated things, pedicures are £35 for instance. It's constantly busy there with 3-5 techs depending on time of day, all completely legal too, they have all their credentials on the wall to prove it!

It's like pubs - although they have to pay minimum wage.
But with overheads increasing and people having less money, pubs are closing or reducing their hours,

Running a business - employed or self employed - is tough. Getting the price right and ensuring you have enough customers to make it worthwhile is tough.

The market economy takes no prisoners.

Not if they identify as energy supplies or water companies.

A lot of the stories I was reading about this were people working as tech alone, so without the benefit of economies of scale. It costs a similar amount to head a room for 4 techs as 1. Buying varnish in bulk is cheaper, ditto everything else. And you can have an apprentice to do the basic treatments or the pedicures, they the more experienced tech does the gel nails. And finally walk in places have a queue waiting so time is used more efficiently.

Can't believe the person who said it takes 2 hours to get their nails done, never been in mine more than an hour unless I'm having a pedicure as well!

It’s been years since I’ve seen a nail salon that a) accepts cards or b) gives a receipt…
If that is who she’s competing with I’m not sure how she can win.

It's certainly a luxury to have nails done, the salon I go to is a large premises within a hairdressers. The nail tech is highly trained, always going to courses learning new techniques etc. Hygiene and safety taken seriously there, they use quality products. It costs £35 for plain gel nails, it's more if you want glitter or nail art.
I could easily go to one of the nail bars locally and get it done for £20, but the quality wouldn't be as high and they are not trained to the same level and I doubt that staff are paid properly. Possibly a cover for trafficking or money laundering.

It worries me that some people will choose to go to the cheaper, unregulated places if salon prices get too high.

Due to the cost of living I have started to stretch the length of time between my hair colouring services and only get nails done for special occasions, Xmas, holidays, because the price increases are so much. I also want the staff to earn a living wage though and don't want them underselling themselves. It's up to me as the consumer to decide whether I can afford their price.

The recommendation didn’t happen in a vacuum.

She’s taking a risk. Aberdare isn’t an area where people have a lot of discretionary spending money so this will price her out of reach for some of her clients.

The article doesn’t say what she is charging though.

I used to have mine done by a self employed nail tech from her own premises as I didn’t want to risk subsidising the money laundering and modern slavery in some salons. I stopped when I left the professional office environment. I do my own occasionally now very rarely.

Everyone should know what their competitors charge

So even if you don't explicitly discuss it, all raising charges isn't that unusual

I've always gone to a salon where it's just the owner.

I’ve never had a manicure / nail art etc…
But I always admire the work I see on others.
I think it’s an art form in lots of ways!
I’d be happy to pay a good price for it.

First thing I was told - look at what people charge in your area for your service.

Then it was suggested you try to go in the upper quarter for that - but then if everyone did that, then gradually everyone would keep raising their prices.

You need to set your price so you get an income that you are happy with.

And is sustainable in the long term

Fundamentally, you need to know your true income - and decide if that is ok for you and your needs and can be sustained.

If it's not, then you need to look at your costs, charges, make changes and see if it's sustainable.

I earned less than the minimum wage when I actually worked out the hours I was working as a primary school teacher

My nail tech has just put her prices up but she made it known in February that they were going up. They haven't increased since she opened her salon 2 years ago. Most things have increased by £5. I've got no problem with paying extra. With the way the CoL has increased recently I'm surprised she didn't do it sooner or increase by more.

This is how the DWP look at it. If you need to claim top up benefits as a self employed person you are treated as if you are earning minimum wage @35 hours a week, if you're not, tough. You'll be classed as not gainfully self employed and will have to seek other work.
Not sure how some of these women didn't realise how little pay they were taking home, do they not submit annual tax returns?

I think it's really tough in a COL crisis when costs are increasing as well as living expenses - and you run a business that is discretionary spending.

I watched all this unfold on Tik Tok it was great.