The Salon Dollar

The Salon CEO Operating System

What the percentages mean, where they are supposed to land, and what your salon actually keeps. Start on the left and work your way right.

A percentage is one cost divided by your month.

That is the whole calculation

Rent was$8,000

The month was$100,000

8,000 divided by 100,0008%

Cost on top, your month on the bottom. That is it. No accounting degree, no software.

Why you cannot judge a number in dollars alone

$8,000 rent on a $100,000 month

That is 8%. Comfortable. You have room to pay everybody and still keep something.

The same $8,000 on a $40,000 month

That is 20%. The exact same lease is now eating you alive, and nothing about the building changed.

The rent did not get worse. The month got smaller. A dollar amount with no month behind it is a number with no meaning, which is why every target on the next tab is a percentage.

The one trap that catches everybody

Not every percentage divides by the same number. Get this wrong and your math will never match anybody else's.

Divide by TOTAL revenue

Payroll, rent, your pay, manager pay, and profit. Everything that came in the door goes on the bottom.

Divide by SERVICE sales only

Retail and backbar. Leave retail sales out of the bottom, or you are measuring retail against itself.

Divide retail by your whole month and it will look better than it is, every single time.

How to pull your own numbers

Five minutes, once a month. You need four things and they are all in your booking software and your bank.

Total revenue. Everything that came in. Service plus retail.
Total payroll. Commissions, hourly, salary, bonuses, and your own pay. All of it, one number.
Your fixed bills. Rent, insurance, utilities, software, marketing.
Product. What you paid for backbar and for the retail you sold.

Use last month, not a good month. The point is to see what is actually happening.

Now go see where the targets are

Every number a healthy salon is measured against, on one page.

Where every dollar of income goes

Measured against total income

Payroll 45% ceiling

Every dollar paid to a human. Wages, commissions, salary, bonuses.

Rent 10% ceiling

Fixed, so the only fix is more revenue in the same room.

Everything else what is left

Product, card fees, insurance, utilities, software, marketing, payroll taxes, repairs.

Profit 20% floor

A floor, not a goal. Below 10% is survival mode.

Two limits that live INSIDE the 45%

Your pay: at least 10% of income. If this is zero, the salon is a hobby.
Manager and admin: 10% or less of income. Salaried, not behind a chair.

The grey slice is not a target. It is simply whatever is left once the other three are right, and it shrinks every time you beat 20% profit.

Money you move before you spend a dollar

Each one is a share of a different number

Move this	This much	Out of
Income tax	10%	Income
Payroll tax	8 to 10%	Payroll, not revenue
Retail replenishment	50%	Retail sales
Cash cushion	3 months	Operating expenses

Profit is what is left. Reserves are what you protect. Treating tax money as spendable cash is borrowing from next year to pay for last year.

The commission ladder

Measured against that stylist's own service sales

The 45% ceiling is the whole building. This is one chair. Earned on productivity, not on how long somebody has been here.

Junior40%

Stylist42%

Senior45%

Master48%

Hard ceiling50%

Every target, and what it is divided by

Number	Target	Divided by	Why it matters
Payroll	≤ 45%	Total income	Break it and raises become impossible.
Rent	≤ 10%	Total income	The fix is revenue, not a smaller space.
Your pay	≥ 10%	Total income	Sits inside payroll. Zero here means a hobby.
Manager and admin	≤ 10%	Total income	Sits inside payroll. The role has to pay for itself.
Net margin	≥ 20%	Total income	Downstream. Fix what is bleeding into it.
Retail	≥ 15%	Service revenue	Close to pure margin. The biggest ignored lever.
Backbar	≈ 5%	Service revenue	Over is a leak. Way under is a shortage coming.
Utilization	≥ 80%	Bookable hours	Below 70%, no raises and no hires.

Now put your own numbers in

See what your salon actually keeps, and what it would take to change it.

The Salon CEO Operating System

What does your salon actually keep?

Put in one month of revenue and how you pay your team. This shows you where every dollar lands and whether the profit you want is even available at the numbers you are running.

Monthly revenue

Profit you want to keep

Set this first. Everything else has to fit around it.

Four starting points. Pick the one closest to your salon, then change any number below.

Your numbers

Where the revenue comes from

RetailShare of total revenue. The rest is service.

Bill parts and labor separately Charge the color you actually used as parts, then pay commission on the labor only. A mechanic bills both. Most salons absorb the parts and wonder why the margin is thin.

What you pay people

Service commissionPercent of service sales paid to the team.

Retail commissionPercent of retail sales paid to the team.

Payroll tax and burdenOn top of every payroll dollar. FICA, unemployment, workers comp.

Your pay, per yearA fixed line, like rent. Not what is left over.

Manager and adminSalaried, not behind a chair.

Fixed bills, in dollars

Rent and CAMYour actual lease number.

MarketingAds, shoots, print, referral rewards. Most small businesses run 5 to 8 percent of revenue. Established salons with strong word of mouth sit at the low end.

Everything elseInsurance, utilities, phone, software, education, repairs, supplies, accountant.

Costs that move with sales

BackbarProduct used behind the chair. Percent of service sales.

Retail product costWhat you pay for what you sell. Percent of retail sales.

Card processingPercent of everything you run.

Where it goes

Line	Dollars	% of revenue	What is left

How to close the gap

How to read this. Profit is not an input. It is whatever survives after everyone else is paid, which is exactly the problem. Set the profit you want at the top, then move the levers on the left until the number on the right actually gets there.