The Level Up Academy ◆ Force Four: Profit and Protection

Client-Funded Ads

How much can you pay to get a new client in the chair, and how do your clients pay for the next round of ads?

Start here

This whole lesson in one minute

Every new client from an ad has a price. Take what you spent on ads and divide it by the new clients who showed up. That is what each new client cost you.
There is a most you should ever pay. We call it your Ceiling. Pay less than your Ceiling and ads make you money. Pay more and ads lose you money.
Your clients can pay for your next ads. A client from an ad pays you, comes back, and sends friends. Put part of that money back into ads. That part is the Ad Tax. When your clients pay for your ads, we call it Client-Funded Ads.

How to use this page

1. The LessonThe idea, in plain words. You are here.

2. Your NumbersType in your salon's numbers. Get your Ceiling and your letter.

3. The Ad TaxSee 12 months of your clients paying for your ads.

4. Your HomeworkWhat to do this week, step by step.

Bonus: HiringThe same idea, used to hire stylists.

GlossaryEvery word on this page, explained.

Tab 1

Ads are fuel, not the fire

Your free posts on Instagram and Facebook are the fire. They build trust, show your work, and keep your name in front of people who already follow you. That does not stop. Ads are the fuel you pour on top so the chairs fill faster than content can do alone.

Two places to run ads

Google shows your ad to people who are already searching for a salon, like "balayage near me." Meta (Facebook and Instagram) shows your ad to people scrolling, who were not looking yet. A Google lead often costs more and books more often. A Meta lead often costs less and needs more follow-up. So never compare the two by cost per lead. Compare them by cost per client.

On Google, your free fire is your Google Business Profile: your photos, your hours, and your reviews. People who click your ad check your reviews before they book. Clients who find you there cost $0 in ads, so keep them out of your ad numbers.

But fuel costs money. So before you spend a dollar, you need to know one number: the most you can pay to get one new client and still come out ahead. That number is your Acquisition Ceiling.

A lead is not a client

Your ad account will tell you a lead cost $30. Meta calls it "cost per result." That feels cheap. But a lead is a message, a call, or a form. It is not a person in your chair. If only 4 out of 10 leads book and show up, that $30 lead really cost you $75 per client. Here is the math: 10 leads at $30 each is $300. That $300 got you 4 clients. $300 ÷ 4 = $75 per client. The shortcut: $30 ÷ 0.40 = $75.

Same ad, same $30 lead. If 5 out of 10 show up, each client costs $60. If only 3 out of 10 show up, each client costs $100. How well you follow up changes the cost of every client.

So is your message. Call out the specific person you want in the chair: the service, the problem, the result they want. The right people raise their hand, and the wrong ones scroll past. More of your leads can be a good fit, more of them book and show up, and each client can cost you less.

One rule for your message: call people out by what they want, not by what is wrong with them. "For blondes in [your town] who want color that lasts" works. "Is your hair falling out?" can get your ad turned down, because Meta does not let an ad act like it knows something personal about you.

Four setup rules before you spend

Track every lead. Your count will not match Meta's or Google's. Use yours.
- Keep one lead sheet: name, phone, date, and whether they booked, showed, and paid.
- Put every form, message, and call from an ad on it the day it comes in.
- Form leads sit in Meta's Leads Center. Download them every week.
- Ask every new client, "How did you find us?"
- Give each ad its own booking link.
- On Google, turn on the ad's own phone number, so you know which calls the ad paid for. "I found you on Google" is not proof. Many of those came from your free Google profile.
- Match leads to clients by phone number. A name can be spelled five ways.
Answer fast. Form leads do not ring your phone, and messages land in your Instagram and Facebook inbox. Turn on alerts, and pick one person who answers every lead within the hour you are open. A lead who waits until tomorrow has often booked somewhere else. On Google, check for missed calls. Every missed call is a lead you paid for and lost.
Pick the right kind of Meta ad. A form is the easiest to fill out, so you get the most leads and the most people who never answer. If you use one, pick "Higher intent" when Meta asks. A message ad starts a chat you can turn into a booking. A "book now" link gets fewer leads, but they are ready. Try one at a time and keep the one with the lowest cost per client. The Boost button on a post works too. It gets your salon in front of more people, shows them you exist, and brings in leads. Track the leads and clients it brings on your lead sheet, like any other ad.
Tell Google what to count. Google counts whatever you tell it to count. If it counts clicks for directions, it chases clicks for directions, not clients. In Google Ads, this setting is called Goals. Tell it to count only real calls and bookings.

Cost per lead tells you if people are raising their hand. Cost per client tells you if the business is working. Never mix them up.

What a new client is really worth: Real Client Value

A new client is not worth the ticket on the receipt. It works like Real Revenue from your Profit and Protection lessons: start with what they pay, strip out what was never yours, and count what comes back. Real Client Value runs that same move on one client, over their first 90 days.

Visit one. The first-visit ticket, minus product, minus what you pay the stylist (with payroll tax on top).
The return visit. If they come back inside 90 days, run the same math again and add it.
That total is Real Client Value. A client who never comes back was never worth what the first ticket said.

Why 90 days and not a year? We give a new client 90 days to come back for the first time. That return visit is the first proof they are really yours. If a new client pays back what the ad cost by then, the client pays for the next client. If it takes a year, your bank account pays for it until then. If your clients come back faster, switch the calculator to 60 days. Tab 2 still shows first-year and lifetime profit so you can see the upside. You just do not set your budget from it.

The two-thirds rule: how your Ceiling is set

Say a new client makes you $120 in their first 90 days. Split that into three equal parts of $40. You can spend up to two parts, $80, to get that client. The last $40 is yours to keep. That $80 is your Ceiling.

Never pay more than two thirds of Real Client Value to get a new client in the door.The last third is the profit you are actually growing for. It also covers the months when ads run expensive and the months fewer new clients come back. Spend all of it and that client made you nothing.

Client-Funded Ads: how the machine feeds itself

Here is the part most owners miss. The clients your ads bring in can pay for the next round of ads, three ways: they come back, they send friends, and the Ad Tax puts a share of their profit back into ads. That is Client-Funded Ads.

When you stay under your Ceiling, a new client pays back what you spent to get them inside their first 90 days. The Ad Tax is a set share of that profit that goes straight back into next month's ad budget. The clients the ads brought in pay for the next round of clients. You stop funding growth out of your own pocket.

Think of it as a jar. Every time a client who came from an ad pays you, you drop part of the profit into an "ad jar." Next month, your ads run on what is in the jar, not on your own money. The Ad Tax is how much you drop in. The jar can be its own savings account or a line in your books. Meta and Google just charge your card.

1. SpendAd budget goes out

2. BookNew clients sit down

3. ProfitThey pay on every visit

4. TaxA share goes back into ads

Set the Ad Tax as a percent. Put all of it back, and every dollar of profit from those clients can go to next month's ads. In the example, all $1,663 of month one's profit goes in the jar, and month two's ads spend $1,450 of it. Put half back, and about $831 goes in the jar and $831 stays with you. You pick the number. Tab 3 shows what each choice does over 12 months.

Get them back: the return visit finishes paying for the ad

The first visit may not pay for everything. When it does not, the return visit finishes the job, and every visit after that is profit. So every new client leaves with a reason to come back. That is what the mystery envelope in the Retention and Referral Playbook does: a sealed reward they can only open in your salon, and it expires in 60 days.

Tab 2 shows it side by side: what a new client is worth, what you can afford to pay, and how fast the ad money comes back if they never return, compared with every new client coming back inside 60 days.

The referral bonus: word of mouth your ads paid for

Here is the part that compounds. A client who came in from an ad loves their hair and sends a friend. That friend cost you nothing in ads. But they only exist because the ad brought in the first client. Then the friend sends a friend of their own.

So one ad client is really more than one client. If 2 out of every 10 new clients send someone who books, every 10 ad clients turn into about 12 and a half clients over time, friends of friends included. Your real cost per client drops, and nobody touched the ad budget.

Earn it, do not budget on it. Your letter in Tab 2 still uses the ad cost alone, because referrals take months to show up. Tab 2 shows how far word of mouth drops your real cost, and Tab 3 adds those free clients month by month.

This only works if your numbers in Tab 2 pass. If a client costs more than they make you, the Ad Tax just pours more money into a leak. Fix the leak first.

Where your numbers come from

Number	Where to find it
Ad spend and leads	Meta Ads Manager, or your Google Ads account, last full month. Use what they actually charged you, not the budget you set.
New clients from ads	Your lead sheet. Count only clients you can prove came from the ad, and only the ones who showed and paid.
First-visit ticket	Your sales report, new clients only. Service plus retail.
Return-visit ticket	Your sales report, your regular average ticket
New clients who came back inside 90 days	Your booking system's new-client report. Use new clients from at least 90 days ago. Count the ones who actually came back, not the ones who said they would. Once you have ad clients that old, use their number. Clients who came for a deal can come back less.
New clients who sent a friend	Your booking system's referral source, or ask every new client at checkout who sent them
Visits per year and years retained	Your retention report. No report yet? Use 4 visits and 1 year to be careful. The example uses 2 years.

Tab 2

Your numbers

What this tab does. You type in numbers from your own salon: your prices, how you pay your stylists, how often clients come back, and what your ads cost last month. The page does all the math.

At the bottom you get three answers: your Ceiling (the most you should pay for one new client), what you really pay, and a letter, A, B, or C, that tells you what to do next. Do not know a number yet? Leave the example in for now and find the real one this week.

These are example numbers. The example assumes every new client came back inside 90 days. It also books 25 of every 40 leads, more than the 4 in 10 on Tab 1. At 4 in 10, this same salon pays about $81 per client. That is right at its Ceiling, so it gets a C. Your real numbers can change your letter. Clear the example and enter your own.

How the stylist gets paid

Commission rate
Doing it yourself? Enter what you would pay a stylist.

Tax and burden multiplier
The same one you use for your floor price

The two visits

First-visit ticket
New clients only. Service plus retail. Includes any parts charge.

Return-visit ticket
What a returning client usually spends

How you track product cost

Product and color cost
Share of each ticket. Do not track it? Put 15. That means $15 of every $100 ticket.

Do they come back, and do they send friends?

How long you give a new client to come back

New clients who came back inside 90 days
Use new clients from at least 90 days ago, so they have had time. Do not guess high.

Visits per year
How many times a regular client comes in each year

Years retained
How long an average client stays

yrs

New clients who send a friend
Out of every 10 new clients, how many send a friend who books and pays? 2 of 10 is 20. Blank if you do not track it yet.

Referral thank-you, per friend
Any credit or gift you give for a referral. Blank if none.

What the ads cost (last month, or your last three months)

A lead and a client are not the same number. Enter both. Run Meta and Google? Do this step once for each, with only that platform's numbers. Each letter tells you what to do with that platform. Count each client once, from the one ad they came from. Fewer than 30 new clients? Add up your last three months of spend and new clients, because one month can swing your letter.

Ad spend
What Meta or Google actually charged you last month, plus anything you pay someone to run your ads

Leads
Real people who asked and left a way to reach them: forms, messages, real calls. Count each person once. Skip spam and a "hi" with no reply.

New clients
From your lead sheet: came from these ads, showed up, and paid. Do not count referrals or walk-ins. Count the ones from last month's leads, even if they came in this month.

Your answer

Your Acquisition Ceiling

Most you should pay per client. Two thirds of Real Client Value.

What you really pay (CAC)

Ad spend ÷ new clients

Room left

Ceiling minus what you pay

WHAT YOUR ADS ARE TELLING YOU

Cost per lead

Ad spend ÷ leads

Leads that became clients

New clients ÷ leads

Ad cost paid back by

WHAT ONE NEW CLIENT IS WORTH

Visit one keeps

Ticket minus product minus pay

Return visit keeps

Same math on the return ticket

Real Client Value

The first 90 days. Your budget is set from this.

First-year profit, before ad cost

The upside. Not for budgeting.

Lifetime profit

A projection, not cash in hand

Profit from last month's new clients

First 90 days, after ad spend

THE REFERRAL BONUS

Extra clients per 10 from ads

Friends, and friends of friends, over time

Real cost per client, with word of mouth

Ad spend spread over every client it led to

Extra profit per ad client

Real Client Value from the friends it led to

CLIENT-FUNDED ADS: GET THEM BACK

	If they never come back	Your rate now	If every new client comes back inside 60 days

Same ticket, same pay plan, same ad cost. The only change is whether they come back. A client can pay back the ad and still get a C. A C means you paid more than your Ceiling, so there is no room left for a bad month. "Comes back for every $1" counts visit one and the return visit only. The mystery envelope from the Retention and Referral Playbook is built to get that return visit inside 60 days.

What you pay

Your Ceiling

Real Client Value

First-year profit, before ad cost

The red line marks what you pay per client. You want it well to the left of your Ceiling bar.

Tab 3

Client-Funded Ads: 12 months of the Ad Tax

What the Ad Tax is, in plain words. Think of a jar. Every time a client who came from an ad pays you, you drop part of that profit into an "ad jar." Next month, your ads run on what is in the jar instead of your own money.

The Ad Tax is how much you drop in. Type 100 and all of the profit from those clients goes in the jar. Type 50 and half goes in, and you keep the other half. You pick.

The jar is a limit, not an order. The Ad Tax is the most you are allowed to spend next month. It does not mean spend it all. Meta and Google both run on a daily budget: $1,300 a month is about $43 a day. Keep each raise under 20 percent of what you spend now. On $1,300 a month, that is less than $260 a month, or about $8 a day. A bigger jump sends the ad back into learning. Then give it two full weeks before you change anything else. Every change makes the ad start learning again, so it never gets time to work. After two weeks, check your cost per client. Still an A? Take the next step. Slipped to a B? Stop raising, and fix one thing from the B list on Tab 4. Whatever the ads do not spend stays with you.

Here is how it plays out with your numbers

Tab 2Finish Tab 2 first, and your story shows up here.

The rest of this tab shows every month, using the numbers on Tab 2. Each month, the clients your ads brought in visit and pay. Next month's ads can spend up to the Ad Tax share of that profit. Your starting budget is the floor, so spend never drops below it, unless your max, your biggest raise, or your open slots cap it.

Ad Tax
Share of new-client profit that goes back into ads

Starting monthly budget
Also the floor. Filled from Tab 2. If you added up three months on Tab 2, divide it by 3 here.

Most you will spend in a month
Leave blank for no limit

Biggest raise per month
Keep each raise under 20 percent of what you spend now. On $1,300 a month, that is less than $260 a month, or about $8 a day. Blank for no limit.

Open appointment slots a month
How many more appointments your team can take each month, for new and returning clients together. Blank for no limit.

Month view and day view. Meta and Google both run on a daily budget, so every monthly number here also shows what it is per day. A daily budget is easier to set and easier to raise. It does not spend the exact same amount every day. Some days are a little higher and some a little lower. Over 30 days it evens out to the monthly number. So think in days when you set and raise your budget, and check the month when you add it all up.

New clients in 12 months

Ads paid for by the ad jar

The Ad Tax at work

Ads paid from your pocket

Before ad clients start paying

Net to you, 12 months

All the profit from these clients, minus all ad spend

Month by month

Ad spend What the ads cost that month, and about how much a day.

Paid by the ad jar The part your clients' profit paid for.

Paid from your pocket The part you paid yourself. After month one, you want this at $0.

New clients from ads People who saw an ad, booked, showed up, and paid that month.

New clients from friends People your clients sent you. $0 in ads.

Profit from these clients What all of those clients made you that month, new visits and return visits, after product and pay.

Month	Ad spend	Paid by the ad jar	Paid from your pocket	New clients from ads	New clients from friends	Profit from these clients

Show the math

How the math works. New clients = ad spend ÷ your cost per client. Each new client earns visit one's profit in their first month and their return visit at the end of your 60 or 90 days. The rest of their first-year visits are spread evenly over the months after that, and from year two they earn visits per year × return-visit profit ÷ 12 each month, for as long as they stay. Word of mouth: at the end of the same window, every new client from ads or from a friend sends friends at your referral rate. Those friends cost nothing in ads, take open slots before new ad clients, and send friends of their own. Any referral thank-you comes out of that month's profit. The Ad Tax is your percent of each month's profit. Next month's budget is the Ad Tax, never below your starting budget, never more than your biggest raise above last month, and never above your max or your open slots. Returning clients from earlier ads fill open slots first. Any budget the Ad Tax does not cover comes from your pocket. When your open slots are full, or your biggest raise stops it, the Ad Tax the ads cannot use stays with you. "Net to you" is all profit from these clients minus all ad spend.

Be honest with yourself. This assumes each new client costs the same as you spend more. That is rarely true. On Google, only so many people in your town search for a salon each month. On Meta, you run out of people who fit. Re-run Tab 2 every month with real numbers, and if your cost per client passes your Ceiling, stop raising spend.

Tab 4

Your homework

What this tab is for. What to do this week, in order. First find your two numbers. Then see your letter and what it tells you to do. Then teach it to someone on your team.

Your one job this week: find your Ceiling before you spend your first dollar, or your next dollar, on ads.It is on Tab 2. Write it down. Then write what you really pay for each new client right next to it.

Never run an ad? You still have homework. Go to Tab 2. Put in your prices and your pay plan. Leave the ad boxes blank. Write down your Ceiling. When you start ads, that is the most you pay for one new client.

Step 1: What does one client really make you?

Before ads, know what one visit leaves in your pocket after you pay for product and pay your stylist. Here is a full highlight, done three ways. Swap in your own prices.

Two things to know first. 40 percent commission means the stylist gets $40 of every $100 on the ticket. Payroll taxes and other costs add about 15 percent on top of pay, so that $40 really costs you about $46. That is your tax and burden multiplier, 1.15.

A $200 full highlight	Commission, no Parts and Labor	Commission, with Parts and Labor	Hourly pay
The ticket	$200	$200includes an $8 parts charge	$200
Minus product	−$30a guess: $15 of every $100	−$480 grams at 5 cents	−$30$15 of every $100
Minus stylist pay	−$9240% of $200 = $80, × 1.15	−$9240% of $200 = $80, × 1.15	−$86$20 × 3 hours = $60, ÷ 0.8 booked = $75, × 1.15
The salon keeps	$78	$104	$84

Parts and Labor keeps more because the client pays for the color, marked up, instead of you guessing $15 of every $100. If your stylist is paid commission on labor only, not the parts charge, you keep about $108.
Hourly pay: you pay for the hours no one is in the chair too. If your stylist is booked 80 percent of the time, divide by 0.8. That is why $60 of pay becomes $75.
Your turn. Pick your most booked service. Write it out the same way: ticket, minus product, minus pay (with the 1.15). The number at the bottom is what one visit makes you. Or type it into Tab 2, and read "Visit one keeps."

Step 2: Two numbers

1Your Ceiling. The most you can pay to get one new client and still make good money. Think of it as your spending limit for one client. Tab 2 works it out from your prices, your pay plan, and how many new clients come back.

2What you really pay. Last month's ad spend, divided by the new clients who showed up and paid. Spend $1,300, get 25 new clients, and you paid $52 for each one.

Step 3: Compare them. That gives you a letter.

AYou pay way under your Ceiling. Good news. Your ads are working. Keep them running. Raise the budget a little at a time, less than 20 percent at once. Then give it two weeks before you change anything else.

BYou pay close to your Ceiling. You are still making money, but it is tight. Do not add more money yet. First fix one thing: call leads back faster, make a better offer, or get more new clients to come back.

CYou pay as much as your Ceiling, or more. Stop the ads for now. You are paying too much for each client. Fix your price, your follow-up, or your offer. Then start again.

Fill in Tab 2 and your letter shows up here.

Why does B start a little under your Ceiling? When you get that close, one bad month can push you over. So you stop and fix things before that happens.

Teach it back

Answer these out loud. Then teach it to one person on your team this week. If they can explain it back to you, you really know it.

What is the difference between what you pay for a lead and what you pay for a client? Which one tells you if you make money?
What is your Ceiling? What do you really pay for each new client right now?
Did you get an A, B, or C? What will you do this month because of it?
How much of the profit from new clients will you put back into ads? Where does the rest go?
How many of your new clients send you a friend? What is one thing you could do to get more of them to?
What would make you stop adding money to your ads?

This week

Let Claude run it every month

You already export a Sales Report, a Commission Report, and a Bank Statement for your monthly Profit and Protection review. Add two things: your total ad spend from your ad platform, and your booking system's new-client report showing who showed, paid, and came back inside 90 days, including new clients from 90 or more days back. Then add this to the same prompt.

Also calculate Real Client Value and my Acquisition Ceiling for this period. Start with visit one. Take my average first-visit ticket for new clients. Subtract product cost. Subtract commission times the same tax multiplier you used above. Then do the return visit. Run the same math on my average return-visit ticket. Multiply it by the share of new clients from 90 or more days ago who came back inside 90 days. Real Client Value is visit one plus that return-visit number. My Acquisition Ceiling is two thirds of it. Next, divide my total ad spend by the number of new clients who showed and paid. Do not use leads. That is my real cost per client. Give me a letter. A means my cost per client is less than 90 percent of my Ceiling. B means it is from 90 percent up to my Ceiling. C means it is my Ceiling or more. Then tell me plainly what that means for my ad budget this month. If I run both Meta and Google, do this once for each.

If you landed on C

Do not add ad money yet. Work the problem in this order:

A visit loses money: it is a price or pay plan problem. Fix that before anything else.
Lots of leads, few clients: it is a follow-up or a message problem. How fast are you answering, who is booking them, and does your ad call out the person you actually want? Your form may also be too easy to fill out. On Google, check for missed calls.
Clients come once and vanish: it is a rebooking problem. Every new client leaves with the next visit booked.
Few leads for the money: now it is an ad problem. On Google, open the search terms report first. It shows what people typed before they clicked. Block the ones that are not clients, like "salon jobs" or "beauty school." Then change the offer, or the picture and words in the ad.

Remember: the ads do not replace your content. Keep posting. People who already know your work are the easiest ones for an ad to book.

I am the kind of owner who makes the client pay for their own growth. Never me.

Bonus

Advertise for stylists, too

What this tab is for. Ads can find stylists, not just clients. When a stylist leaves, their chair sits empty, and an empty chair stops making you money every single week.

This tab shows three things: what an empty chair costs you each week, what it really costs to hire someone through ads, and how many weeks until a new stylist pays that back.

Everything in Tabs 1 to 3 was about filling chairs with clients. But a chair with no stylist in it cannot hold a client at all. That is why we run ads for stylists the same way we run ads for clients. It is the same math. You spend money to get someone in the door, and they pay you back over time.

An empty chair is a cost, not a savings

When a stylist leaves, it can feel like you are saving money because you are not paying them. You are not. You are also not getting the profit they made you. Every week that chair sits empty, that profit is gone, and you never get it back.

The real cost of an empty chair is the profit it would have made you, every single week it sits empty.Profit here means the stylist's sales, minus their pay with payroll tax on top, minus product.

What one stylist is worth to you each week

Take what a settled stylist brings in each week. Take out their commission, with payroll tax and burden on top of it. Take out product. What is left is what that chair makes you each week.

On $1,600 of weekly sales, pay with tax costs you $736 at 40 percent commission, $828 at 45, and $920 at 50. Change the commission below and watch the weekly profit and the payback week move. That is why the pay plan matters before you recruit.

An applicant is not a hire

Just like a lead is not a client, an applicant is not a hire. Your recruiting ad might bring in 20 applicants. Some will not show for the interview. Some will not be a fit. Maybe one gets hired. Your real cost is the whole ad spend divided by the people you actually hired, not by the people who applied.

And a hire only counts once they make it through their first full month. A stylist who leaves in week three is not a hire. That money was a cost.

New stylists build up, they do not start full

No stylist walks in with a full book on day one. They build it over weeks. This calculator grows them evenly to a full book over the number of weeks you set. With an 8-week build-up, week 1 earns one eighth of a full week, week 2 earns two eighths, and so on. So the early weeks pay back slowly, and then it speeds up.

You can shorten that build-up. Point your client ads (Tabs 2 and 3) at the new stylist's open book. The faster their book fills, the faster the recruiting ads pay back.

One Meta rule for hiring ads. When you build a hiring ad, Meta asks if it is about jobs. Say yes. That is the Employment category. If you skip it, the ad gets turned down. It also means you cannot pick age or gender, and your area has to be at least 15 miles around the salon. So write the ad for the stylist you want. Do not try to target them.

Your hiring numbers

Start with the example, then swap in your own numbers.

Weekly service sales, full book
What a settled stylist here averages

Commission rate
Hiring uses commission pay

Tax and burden multiplier
Same one as your floor price

Product cost
Share of their sales

Recruiting ad spend
Total, until you made the hire

Applicants
Everyone who applied or reached out

Stylists hired
Only count those who made it past month one

Weeks the chair has sat empty
So far

wks

Weeks to build a full book
From day one to full sales

wks

THE EMPTY CHAIR

Empty chair, per week

Profit you lose every week you wait

Lost so far

Weeks empty × weekly profit

Lost per month of waiting

Weekly profit × 4.33

THE RECRUITING ADS

Cost per applicant

Ad spend ÷ applicants

Cost per hire

Ad spend ÷ stylists hired

Applicants who got hired

Hires ÷ applicants

THE PAYBACK

Stylist pay per week

Commission with tax and burden

Profit per week, full book

Sales minus pay minus product

Cost per hire paid back by

Counting the build-up

First-year profit per hire

52 weeks with build-up, minus cost per hire

Profit during the build-up

Weeks before they reach a full book

Most to spend per hire

Two thirds of their first 12 weeks of profit

HIRE

Week by week, the first 16 weeks

Week	Stylist sales	Their pay	Product	Profit to you	Paid back so far	Still owed on ads

How the math works. Stylist pay = sales × commission × tax and burden. Product = sales × product cost. Profit = sales minus pay minus product. During the build-up, week N earns N ÷ build-up weeks of a full week. Cost per hire = recruiting spend ÷ stylists hired. "Most to spend per hire" uses the same two-thirds rule from Tab 1, on the first 12 weeks of profit, so the hire still leaves you a margin if they do not stay long.

Say it back

What does one empty chair cost you each week, in dollars?
What is the difference between cost per applicant and cost per hire?
Why does a stylist who leaves in week three not count as a hire?
What is one thing you can do to help a new stylist fill their book faster?

Make it count

Track where every applicant came from, so you know which recruiting ad actually works.
Call applicants back the same day. Good stylists have other options.
Have a plan for their first 30 days before they start: training, schedule, and a stream of new clients from your client ads.

Glossary

Every term, in plain words

New to ads? Start with the first six words. They are all you need to follow the class.

Start with these six

Ad spend: The money Meta (Facebook and Instagram) or Google actually charged you to show your ads. Meta Ads Manager or Google Ads shows it.
Lead: Someone who saw your ad and called, filled out a form, or sent a message. They have not booked yet. Meta and Google may count more leads than you do. Count from your lead sheet.
New client: A lead who booked, showed up, and paid. This is the only one that counts.
Cost per client: Also called "what you really pay," or CAC. Ad spend divided by new clients. Spend $1,300, get 25 new clients, and each one cost you $52.
Ceiling: The most you can pay for one new client and still make good money. Your spending limit for one client.
Ad Tax: The part of the profit from new clients that you put back into ads. Think of it as the money you drop in the ad jar.

Everyday words

Ad: Something you pay for so more people see your salon. On Facebook and Instagram it shows up while people scroll. On Google it shows up when people search, like "balayage near me."
Ads Manager: Meta's screen for building ads and seeing what you spent. Google's screen is called Google Ads. Both show what you spent and how many leads you got.
Google Business Profile: Your free listing on Google and Google Maps: photos, hours, and reviews. Clients who find you there cost $0 in ads.
Boost: The button on a post that pays to show it to more people. A quick way to get your salon noticed and show people you exist, and it brings in leads too. Track what it brings on your lead sheet, like any other ad.
Lead sheet: Your own list of every ad lead: name, phone, date, and whether they booked, showed, and paid. It is how you prove a client came from an ad.
Daily budget: Meta and Google charge by the day. Divide your monthly budget by 30. $1,300 a month is about $43 a day. Some days spend a little more and some a little less, but over 30 days it averages out.
Learning: The time Meta or Google needs to figure out who to show your ad to. A new ad starts in learning. So does a budget change of 20 percent or more, or a lot of small changes close together. Costs jump around until it settles, so give every change two weeks. At salon budgets, "Learning limited" is normal. Judge by your cost per client.
Leads Center: The place in Meta where form leads wait. Download them every week.
Higher intent: A Meta lead form setting that adds a check step, so fewer people fill it out by accident.
Message ad: A Meta ad that opens a chat with your salon instead of a form.
Employment category: What Meta calls a hiring ad. Pick it for every job ad. It means no age or gender targeting and at least 15 miles around the salon.
Search terms report: A Google Ads screen that shows what people typed before they clicked your ad. Block the ones that are not clients.
Offer: What your ad promises the client, like a service, a result, or a first-visit deal.
Follow-up: How fast and how well your team calls or texts a lead back and gets them booked.
Ticket: What a client pays for one visit.
Commission: The share of the ticket the stylist earns.
Profit: On this page, what a visit leaves you after product and the stylist's pay.
Organic content: Your free posts on Instagram, Facebook, and TikTok. No ad money behind them.
Meta: The company that owns Facebook and Instagram. You run ads on both from one place.
Creative: The picture or video and the words in your ad.
Floor price: The least you can charge for a service and still make money. It comes from your Profit and Protection lesson, and it uses the same tax and burden multiplier.
Full book: A stylist whose schedule is filled with clients every week.
Margin: The money left over after your costs. Here, it is the last third of Real Client Value that you keep.

The ad numbers

Lead: A call, form, or message from someone who has not booked yet. Not a client.
Cost per lead: Ad spend ÷ leads. Tells you if people are raising their hand.
New client: Someone who showed up and paid. Only these count.
Cost per client: Ad spend ÷ new clients. Tells you if the business is working. This is the number that decides your letter.
CAC: Short for customer acquisition cost. The same thing as cost per client: ad spend divided by new clients who showed up and paid. This is the number your Ceiling is checked against.
CPC: Short for cost per click. What you pay each time someone clicks your ad. Meta and Google show it. It is NOT cost per client. A click is not even a lead yet, so never compare it to your Ceiling.
CPL: Short for cost per lead. Ad spend divided by leads. Meta calls it "cost per result."
Leads that became clients: New clients ÷ leads. 4 out of 10 is 40%.

What a client is worth

Tax and burden multiplier: What pay really costs once payroll tax and other employer costs are added. At 1.15, every $1 of pay costs you $1.15. The same number you use for your floor price.
Visit keeps: The ticket, minus product, minus the stylist's pay with tax and burden on top. What one visit leaves you.
Return window: The time you give a new client to come back: 90 days, or 60 if your clients come back faster.
Came-back rate: The share of new clients who came back inside the return window. Count new clients from at least one full return window ago (90 or 60 days), so they have had time.
Real Client Value: Visit one keeps, plus the came-back rate × what the return visit keeps. What a new client is really worth in their first 90 days (or 60, if you switched).
Acquisition Ceiling: Two thirds of Real Client Value. The most you should ever pay in ads to get one new client.
Room left: Your Ceiling minus what you actually pay per client. Your safety margin.
A, B, C: Your letter. With an $81 Ceiling: pay less than $73 and you are an A, keep spending. Pay $73 to $80 and you are a B, hold the budget. Pay $81 or more and you are a C, pause the spend.
Paid back by: When a client's profit covers what the ad cost to get them: visit 1, the return visit, or a later month.
First-year profit: What one client makes you in their first 12 months, before ad cost. The upside. Not for budgeting.
Lifetime profit: What one client makes you for as long as they stay. A projection, not cash in hand.
Parts and Labor: Charging for the grams of color and bleach used, marked up, separate from the labor. The parts margin is what that charge earns you after your cost per gram.

Client-Funded Ads

Client-Funded Ads: The whole machine. The clients your ads bring in pay for the next round of ads, three ways: they come back, they send friends, and the Ad Tax puts a share of their profit back into ads.
Ad Tax: A set share of the profit from new clients that goes straight back into next month's ad budget. Put in 100 and all of it can go back. Put in 50 and half can go back, and you keep the other half. Whatever the ads do not spend stays with you.
Starting budget (the floor): The least you will spend on ads in a month, unless your monthly max, your biggest raise, or your open slots cap it. The Ad Tax can raise spend above it.
Monthly max: The most you will spend on ads in a month, no matter how much the Ad Tax adds up to.
Open appointment slots: How many more appointments a month your team can take, for new and returning clients together. Clients the ads already brought in fill them first. When they are full, it is time to hire.
Biggest raise per month: The most your ad spend can go up from one month to the next. Keep each raise under 20 percent of what you spend now, then give it two weeks. Bigger or more frequent changes make the ad start learning again.
Word of mouth: A friend who books because a client sent them. They cost nothing in ads, but they only exist because an ad brought in the first client.
Referral rate: The share of new clients who send a friend who books and pays.
Real cost per client, with word of mouth: Your ad cost spread over every client it led to, friends of friends included. If 2 of every 10 new clients send a friend, $52 becomes $42.
Referral thank-you: Any credit or gift you give a client for sending a friend. It comes out of the profit.
Retention and Referral Playbook: The mystery envelope system. A sealed reward the client can only open back in your salon, and it expires in 60 days. It gives every new client a reason to come back.
Comes back for every $1 of ads: For every $1 you spend on ads, how many dollars of profit come back in the first 90 days.
Paid by the ad jar: The part of this month's ad spend your clients' profit paid for, out of last month's Ad Tax.
From your pocket: Ad spend the Ad Tax did not cover yet, usually month one.
Net to you: All profit from new clients minus all ad spend, over 12 months.

Hiring

Empty chair cost: The profit a settled stylist would have made you each week the chair sits empty: their sales, minus their pay with tax and burden, minus product.
Applicant: Anyone who applied or reached out. Not a hire.
Cost per applicant: Recruiting ad spend ÷ applicants.
Cost per hire: Recruiting ad spend ÷ stylists hired. Only count stylists who made it past their first month.
Build-up: The weeks it takes a new stylist to reach a full book. They earn a growing share of a full week until then.
Most to spend per hire: Two thirds of a new stylist's profit in their first 12 weeks, counting the build-up.

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