The hair waxing industry continues to see increased demand. Women have been using at home waxing strips since the 1960s. Men caught on to the waxing trends after 2013 too. Therefore, the client pool is wide.
All mobile businesses have the potential to become profitable. The key is to keep your expenses lower than your revenue. It takes between three to four years for a company to see consistent profit. During the first two years, it’s important to continually reinvest in the business.
The following are seven factors to help you determine if a mobile waxing hair removal business is profitable.
1. Transportation Costs
As a mobile business, take into account your transportation costs. In 2022, gas prices have set records across the United States. In addition, mobile businesses must factor in their vehicle and vehicle insurance costs.
You can use your current vehicle, lease one, or purchase a new one. A company car turns into a tax write-off. Plus, you can also deduct some of the mileage.
In 2019, it cost 53 cents to drive one mile, up from 15 cents in 2006. Today, it’s more. Therefore, calculate your transportation costs before taxes and write-offs. Then, break it down into costs per mile.
The figure helps you understand how far you’re willing to drive to a client against how much you’ll charge for the service.
Learn more about starting a hair waxing business.
2. Equipment Costs
A freelance hair waxing professional must invest in equipment. You’ll need a:
- Wax heater
- Applicator strips or sticks
- Lotions or serums
- Grooming tools
A quality wax heater should last a few years. Thus, you’ll continue purchasing the wax beads and applicators. Some waxers use baby powder to help the wax adhere better. Others apply lotion to the waxed areas.
Professional wax heaters cost between $250 to $400. A 10-pound bag of wax beads costs about $200. If you show your license, you can obtain discounts on products.
3. Register a Business Costs
As a freelancer, you own a business. Even if you file taxes as a sole proprietor, the United States Internal Revenue Service sees you as a business owner.
To open a business account and protect your assets, you must register your company. Then, you’ll obtain a company tax ID number and license. Waxing falls into the cosmetology category.
Cosmetology license fees range from $70 to $400 depending on your state. The costs to register a business also range from $50 to $725. Plus, the fees depend on your state and whether you will register a corporation or LLC.
All companies must market their business. Corporations advertise on a large scale to support their employees, executives, and business operations costs.
A freelance waxer can market their business locally. Moreover, you can leverage social media in your favor. There is no cost to open an Instagram account or YouTube channel.
You can hire other freelancers to optimize them for you or you can start posting yourself. Then, hook up your social media accounts to a website. In the beginning, a one-page website that disperses your contact information is enough.
Once you figure out your marketing strategy, complement it with branding. When clients can associate your business with a logo, they trust you more.
Branding legitimizes your operation, especially when you travel to people’s homes, places of business, or special events.
If you hire a freelancer to design your logo, it might cost $50 to $100. If you want to expand your branding, the freelancer will charge you additional fees according to your requests.
Since you will operate a mobile business, you must obtain commercial vehicle insurance. Industry insiders estimate that it costs between $600 to $2,400 to insure a commercial van annually.
Professional waxers also benefit from obtaining general liability and professional liability policies.
As this field grows, you’ll find that insurance providers will start bundling insurance for waxers. When you speak with an agent, ask for their professional advice.
The IRS requires freelancers to send quarterly estimated payments. Tax professionals encourage them to send between 25% to 30% of their income quarterly. If you send too much, you settle up the difference with the IRS at the end of the tax year.
Let’s say that you complete a waxing service daily for $50 each for the quarter or 90 days. That’s an income of $4,500. You’ll send 25% to 30% of it to the IRS.
Calculating if a mobile waxing hair removal business is profitable or not requires a few steps. Start by adding up your costs including transportation, taxes, and equipment. Once you can calculate your per mile cost, you have the data you need. Now you can figure out your prices. More importantly, you can calculate the number of services you need to complete to break even and make a profit.