Determining how to set your rates is an important part of starting your makeup artist business — and unfortunately, one that a lot of makeup artists tend to mess up.
Here’s why: When you’re starting out as a makeup artist, you might think that one of the best ways to acquire clients is to set your hourly rate lower than your competition’s. So you do that and end up working your fingers to the bone for what seems like pennies.
Making this common mistake can lead to a trap; it’s a lot harder to raise your hourly rates than it is to lower them. If you’ve attracted clients with your lower prices, they’re not going to be happy if you raise them.
So how do you determine your hourly rate so that you don’t end up falling into this trap?
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Your hourly rate should cover your expenses (makeup, travel, business insurance and licensing fees) while still providing you enough left over to turn a profit. Additionally, if there’s a specific salary goal you’re trying to achieve in a year, you should factor in that number when determining your hourly rate.
While each makeup artist’s specialties may influence how much the hourly rate will be, here’s a basic formula for determining how to set your rate:
X 40% profit margin
= How Much You Need to Make Each Month
Once you’ve calculated your monthly income, divide it by the number of days you want to work, then divide that figure by how many hours you’ll work in a day (5-8 hours in a day is a realistic goal for a new makeup artist).
There’s your hourly rate!
As you grow your makeup artist business, keep coming back to that formula to see if you should raise your hourly rate. In fact, we recommend checking it every three to six months when you’re starting out in your business, as you’re going to be playing around with your rate until you find what works for you.
Admittedly, that’s a lot of math to throw at you, so let’s take a closer look at what this formula looks like in action.
Add up how much you’ve spent on makeup (including tools). We recommend estimating how much you’ll continue to spend on makeup within a year; use past months to determine your estimate.
From renting a chair in a salon and paying utilities to fees for building your website, make sure you record every business expense, no matter how small it might seem. You should also include any marketing costs you’ve incurred in your efforts to get clients (we’ll talk more about that in the next section).
Remember to keep track of receipts/invoices from expenses such as business insurance and association fees, as most of these expenses can be deducted from your income tax.
As a makeup artist, it’s fair to say you’re probably doing a lot of traveling to clients and/or venues. That’s why it’s important for makeup artists to include travel costs in their hourly rates, especially if they’re using their own car. For 2019, the IRS calculates the standard mileage rate at 58 cents, but you should also include travel expenses if you’re spending money on hotels, meals, and more.
Once you’ve added your expenses to determine how much you’re spending on a monthly or annual level, we recommend adding in your profit margin. Covering just your expenses isn’t enough; if you want to build a thriving makeup artist business, it’s important to pay your bills and have enough money left over to support yourself!
Makeup artists usually charge a profit margin between 25% and 50%, so we selected 40% as an even number. Play around with a profit margin that works for you, as you know how much money you need to make to support yourself and your family.
Once you’ve calculated your total expenses (and remember to include your profit margin!), you’ll divide that final number by 12 months. The end result will be how much money you’ll need to make each month to support your makeup artist business, as well as your lifestyle.
This monthly figure is a great jumping-off point for figuring out your daily rate, or even your project fee, if you want to get that granular.
Not to worry — you can figure out what your hourly rate should be by determining how much revenue you want to earn each year, and working backward from there. It’s a bit more basic than the above formula, but it can give you a better idea of how much you need to earn in order to make your makeup artist business a sustainable way to earn a living.
For example, let’s say you want to net $65,000 a year, which is enough to moderately grow your makeup artist business while paying your bills.
Using some quick math, you’ll need to net about $5,416 a month ($65K/12 months). You can continue to work backward to determine your hourly rate by deciding how many days you want to work, or using this number to figure out how much you should charge for makeup trials, projects, and events.
Here’s how that works:
Let’s go back to that $5,416 figure to achieve the $65,000 annual revenue. If you’re a makeup artist specializing in weddings, here’s what you need to charge per project to make that monthly fee
This basic math can give you a good idea of what you should be charging for projects, based on how much you want to earn each year.
If you’re just starting out and still feel uncertain about calculating your hourly fee or project rate, there’s no harm in getting a better idea of what your competition is charging and using that information as inspiration.
Do a little online research and gather a pricing list for makeup artists who specialize in your type of work and in the locations you serve. Most makeup artists show prices on their websites, or at least are willing to email you those prices if you reach out. It can feel a bit sneaky, but this is a great way to gather competitive information so you can charge realistic prices.
Play around with your pricing as you grow your makeup artist business, but keep this advice in mind: always overestimate how much you should charge. Underpricing your makeup artist services might leave you struggling to pay your business’s bills — plus, it’s hard to raise your prices without losing existing clients.
As you grow in experience and demand, don’t feel bad about raising your prices to reflect your newfound expertise. While you’re doing what you love, you still have bills to pay — plus, you should charge accordingly if you’ve become the most in-demand makeup artist in your area!
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I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
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28 November 2018 • 6-minute read
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