Chapter eleven · about five minutes
Which services are actually worth keeping
A service is worth keeping when an hour of it earns more than an hour of you costs, or when it brings in the clients who book the ones that do. Chapter ten priced the hour. This chapter reads your menu with it.
By Issa and the IssaBudget team
The question chapter three left open
Chapter three listed four questions a studio runs on, and one of them has been waiting since: is that service still worth its spot? Until an hour had a price there was no honest way to answer it. Now there is, and it takes one division per service.
Take what the service charges. Take off the products it uses and the card fee, the way chapter two did for one appointment. Divide what is left by the hours it takes, gap included, because the gap is yours too. That is what an hour of that service earns. Set it beside the price of an hour from chapter ten, $61 in the example, and the service has told you the truth about itself.
Two questions, four answers
Every service on your menu answers two questions. Does an hour of it earn more than an hour costs? And does it bring in the clients who book the others? Yes to both is the spine of your menu. Yes to the first only earns its keep and asks nothing more. Yes to the second only is a door, and doors are the ones the number alone gets wrong. No to both is where the verdicts start.
Three services, one hour price
Three services from the studio this guide has followed since chapter two, read the same way.
The long one
- What it charges
- $200, and it takes two hours.
- Products and card fee
- $30, so $170 is left.
- An hour of it earns
- $85. That is $24 over the $61 hour, $48 a visit.
The quick one
- What it charges
- $50, and with the gap it leaves, it takes the hour.
- Products and card fee
- $8, so $42 is left.
- An hour of it earns
- $42. That is $19 under the $61 hour.
The one with the pricey product
- What it charges
- $120, and it takes an hour.
- Products and card fee
- $70, so $50 is left.
- An hour of it earns
- $50. That is $11 under the $61 hour.
The long one earns its place. The other two lose money every time you book them, and the one that looks cheap for the client loses the most. That is the reading. It is not yet the verdict.
The door
Now the second question. Say the quick one is the service most new clients book first, and half of them book the long one next. Run ten of them. Ten hours, $19 under each, $190 the studio paid to deliver them. But five of those clients came back for the long one, and each of those visits is $48 over: $240. Without the quick one, those five visits never happen, and $240 over is worth $190 under. It is not a loss. It is how the long one gets booked, and the number on its own would have dropped it.
A service that loses its hour and brings the client who books three others is not a loss. It is a door. Read it by what walks through it.
The pricey one, asked the same question, is usually just a service. Nobody books it first and it brings nobody. That is the one the verdicts are for.
The verdicts, in order
Raise it. The quick one is $19 an hour short, so nineteen dollars more on the price closes the gap exactly, and the pricey one needs eleven. Chapter two’s calm still holds: it is a conversation, not a panic, and it comes first because it keeps everything else the same.
How many clients you could lose to a raise and still come out ahead is a number, and the free tool What if I raise a price? works it for one service from the price and the raise.
Shorten it. If the quick one takes an hour because of the gap it leaves rather than the work, fit it into the time it really takes, and the same $42 earns more per hour of you. For the pricey one, ask chapter ten’s second question of the product: is there a cheaper way to the same result?
Keep it as a door. If it brings the clients who book the others, leave the price where it is and know what it is for. A door is allowed to lose its hour. It is not allowed to be the only thing on the menu.
Drop it. Last, and only when the first three did not work and it brings nobody. A service that loses its hour, cannot be raised, and opens no door is an hour the rest of the studio pays for.
The app keeps two numbers for every service, how many times it was booked and what it brought in, over the last twelve months, and shows which share of your money and which share of your bookings each one is. A service you take off the menu stays in that report, so last year does not change because you changed your mind.
What the number cannot see
The hour price is the truest thing in this guide and it is still only a number. It cannot see the client who has come to you for six years for the quick one and would not come for anything else. It cannot see the service you are known for. And it cannot see a bad quarter, which is why one reading is not a verdict: read a service across a season, the way chapter five reads the buffer, before you change anything about it.
The last chapter
This is where the guide was going. Every dollar gets a job. Every hour has a price. Every service has a verdict, and every one of those is something you decided on purpose instead of found out later.
Chapter one promised you would not have to become a numbers person, and you have not. You write it down while it is warm, you give the money its jobs, you pay yourself the same amount every month, and the rest of this guide is what the app is doing in the background. You did not become someone else. You just stopped being surprised.