These are the ranges Ignite CFO Group uses to rate salons, the same ones behind our client dashboards and Kite Agent. They come from Ignite's P&L Benchmark, a model of a healthy commission salon, with bands set by Josh McGee, Ignite's founder and fractional CFO. Every figure is a share of total income unless noted.
Labor
Rated in two lines, because one blended number hides where the money goes.
| Metric | Benchmark | Healthy | Watch | Act |
|---|---|---|---|---|
| Service labor (commissions and stylist wages)Before payroll taxes and benefits. Loaded with them, about 44.5% at benchmark. | 38.5% | 40% or less | 40 to 45% | Over 45% |
| Front desk and admin laborSupport staff 3.5% plus associates 1.0%. | 4.5% | 3 to 5% | 5 to 7% | Over 7% |
| Payroll taxesReference. | 5.0% | |||
| BenefitsReference. | 1.0% | |||
| Total labor, all inReference: rate the service and front desk lines, not the total. | About 49% |
Product and occupancy
The lines that leak margin quietly.
| Metric | Benchmark | Healthy | Watch | Act |
|---|---|---|---|---|
| Back bar and product costAbout 2.5 to 3% of service revenue. | 2.0% | 2.5% or less | 2.5 to 4% | Over 4% |
| Retail cost of goodsReference. Kept separate from back bar. | 7.0% | |||
| Rent and occupancy | 7.3% | 8% or less | 8 to 12% | Over 12% |
Profit
What is left after everything above.
| Metric | Benchmark | Healthy | Watch | Act |
|---|---|---|---|---|
| Net margin (net profit) | 14.3% | 10% and up | 5 to 10% | Under 5% |
| Gross profitReference. Direct costs 60%, indirect costs 25.7%. | 40% |
Revenue and guests
Where the income comes from, and whether the book is healthy.
| Metric | Benchmark | Healthy | Watch | Act |
|---|---|---|---|---|
| Retail revenueMost salons run well below. | 20% | 15% and up | 10 to 15% | Under 10% |
| Income mixReference. | Service 70%, retail 20%, color 10% | |||
| Average ticket, full-service salonDollars per guest visit, not % of income. | $90 to $120 | $75 to $90 | Under $75 | |
| New guests as a share of all guestsHigh: retention is leaking. Low: the book is aging. | 20 to 30% | 30 to 40%, or under 15% | Over 40% | |
| Rebook rateFrom the Salon CFO Playbook. Around 30% is a treadmill; 70% is a book that fills itself. | 70% and up | 30 to 70% | 30% or less |
Cash
Profit is not cash. These keep the slow months boring.
| Metric | Benchmark | Healthy | Watch | Act |
|---|---|---|---|---|
| Operating reserveBuild it in November and December, before January. | 4 to 6 weeks of fixed costs | |||
| Gift card liabilityA liability until redeemed, never spent as income. | Tracked as its own balance |
How to read these
- Healthy means the line is in good shape. Watch means it's drifting. Act means it's costing real money and needs a fix, not just a better month.
- Benchmark is where a healthy commission salon in Ignite's model lands. Lines marked reference have a benchmark but no bands.
- Commission salons. The model is a commission salon. For booth rental and hybrid salons the labor lines don't translate, because booth rent comes in as income instead; rent, occupancy, and net margin still apply.
- Any size. Single and multi-location salons use the same ranges.
- Peer figures. When we publish how salons Ignite works with actually compare, it will only be with client consent and only for metrics where at least five salons contribute.
Common questions
What is a good net profit margin for a salon?
Ignite's benchmark commission salon keeps 14.3% of total income as net profit. 10% and up is healthy, 5 to 10% is worth watching, and under 5% needs action.
What percentage of salon revenue should go to rent?
Rent and occupancy at or under 8% of total income is healthy; Ignite's benchmark is 7.3%. 8 to 12% is worth watching, and over 12% needs action, often at the next lease renewal.
How much should a salon spend on back bar and product?
Back bar and product used in services is healthy at or under 2.5% of total income (benchmark 2.0%, about 2.5 to 3% of service revenue). Over 4% needs action. Retail cost of goods is a separate line, about 7% of income at benchmark.
What percentage of salon income should come from retail?
Ignite's benchmark salon earns 20% of total income from retail. 15% and up is healthy, 10 to 15% is worth watching, and under 10% needs action. Most salons run well below the benchmark.
What is a good average ticket for a full-service salon?
$90 to $120 per guest visit is healthy for a full-service salon. $75 to $90 is worth watching, and under $75 needs action.
What share of salon guests should be new?
About 20 to 30% new guests is healthy. Over 30% usually means retention is leaking, under 15% means the book is aging, and over 40% needs action.
Do these benchmarks apply to booth rental salons?
Partly. They come from a commission-salon model, so the labor lines don't translate to booth rental, where rent comes in as income instead. Rent and occupancy and net margin still apply. Single and multi-location salons use the same ranges.
Ignite CFO Group, Phoenix, Arizona. Reviewed October 2026 by Josh McGee. General guidance for salon owners, not tax or legal advice.