Pulling together all her experiences as a salon owner over the last 16 years, Tina shares six key areas to focus on in your business…
- You aren’t taking responsibility for the success of your business
No one will look at your business like you do.
It’s great to be friends with your team, but ultimately it’s your business and you need to set targets and ensure that they are met. Most salon owners started out as a hairdresser or beauty therapist. They concentrated on their craft, built a clientele and then took the leap into starting their own business, often without any business or management training or real idea of what they’re getting themselves into!
All of a sudden it’s gone from the fun idea of owning a salon that you can decorate how you like and create beautiful hair in, to being responsible for overheads that exceed just your wage. You now have the responsibility of staff wages, invoices, rent/mortgage to pay, plus everything else. And that’s when reality kicks in… So working out the breakeven for your salon on a weekly/monthly or yearly basis is a massive reality check.
2. You don’t know your numbers.
Being a salon owner myself, I can totally relate to the fear of working out your numbers, to sit down and be realistic with your overheads can be daunting, it’s much easier to stick your head in the sand and just get on with it. Robbing Peter to pay Paul and muddling through is not the way to go, but SO MANY salon owners are doing just that! And managing staff and their expectations on top of all of this just sometimes feel too much.
When I started to really look at my figures, I realised that one of the nail services my beautician was doing was making such a small profit margin compared to the other nail service, it was hardly worth her working! By adjusting the price and pushing the more lucrative service we hugely increased her margins – same time spent working, different service, better profit.
Know your numbers for the calendar month and break it down into weeks, THEN KEEP TRACK OF IT. Setting an alert on your salon system for when you hit your breakeven is a great way of monitoring your business on a weekly basis without having to add everything up every day, plus it’s a great feeling when you hit it early in the week, and if you don’t hit it until later in the week you can look at what you can put in place to help reach that goal earlier.
3. Your team don’t know, or care about, their numbers.
Teach your staff how to look after their column including knowing their numbers, letting them know when they’ve hit their target is a great motivator. Their column is their business, the better the column, the better the wage! Teach them to understand and manage their column to maximise profit, show them what they could make and how – what do they need to upsell? Break it down into an easy-to-understand format – if they sell 3 treatments a day what does that do to their profit?
PROFIT IS NOT A DIRTY WORD – I heard this on one of the many courses and seminars I’ve been too, and it really clicked! I used to feel embarrassed talking to my team about the figures because I felt if I talked about profit too much I’d sound greedy, that if I told them the salon was making profit they’d resent me or think I was “showing off” about it. BUT without profit there would be no point in me running my salon and they wouldn’t have jobs – simple.
4. You aren’t motivating staff with the right rewards.
When setting targets for your staff do it with a decent reward, the difference in a stylist’s motivation earning 15% commission to one earning 30% is big! Get them to see their commission as their profit and they’ll have a better understanding of things from your business point of view.
5. You aren’t encouraging your team to contribute ideas, or listening to them when they do.
Get your team involved, if they feel like you listen to their ideas, you’ll be surprised at how much of a difference it can make! This can be anything from shift patterns to training, or client feedback – are clients asking for a service you don’t offer? Is there anything that would make their visit better? I learnt that by being open and honest not only did my team understand the salon better but they respected it more too.
Setting targets and knowing your numbers needn’t be a de-motivator, it can empower you and your team.
Working together, feeling passionate not just about your craft but the salon itself is a big seller and from my experience, if that comes across on the salon floor from your team you are onto a winner, because passion and motivation sells without trying, so guess what, YOU AND YOUR TEAM MAKE PROFIT!
6. You’re scared to increase your prices
Us salon owners are renowned for being terrified to put up our prices, and I see all sorts of random ways of pricing, including just charging what other people in your area charge. DO NOT DO THIS! It is completely arbitrary! Your prices should be dictated by what your costs are to break even, plus the profit margin that you want to make. We need profit for many reasons – security, improvements and investments among others.
Running a salon can be stressful, especially with all the external price increases (hello PPE and energy bills!) just as we’re getting back on our feet after the Covid lockdowns. We knew it was coming, but were we really prepared for it?
I’ve learnt not to be scared of the numbers, but to use them as my driving force behind it all. If the bills don’t get paid then there’s no salon and I’m getting too old to not be sleeping at night properly through worry! I learnt to be open with my team, get them involved and let them be part of the reality check.
Once that clicked, things became easier! My drive to ensure I hit my breakeven grew and I had a better understanding of my business, I know which services make the salon more money, so I know what I need to push more or if we need a special offer for a new stylist I know I can offer something and still make profit from it. Ultimately, many salon owners pay themselves last, and if the money isn’t there at the end of the month, go without. This isn’t a business. If this is you, it’s time to address it.
Tina Hollis will be hosting a new colour course, running on 18 July in Kent. Delegates who take the course will also get a complimentary 30-minute one-to-one call afterwards with Tina, which can be focused around colour or business. Click here for more info >