I've blogged about the importance of having a budget for your business, client retention, and inventory control. I've written newsletters about leadership, change, and the benefits of investing in a business consultant...Is anyone listening? You may be reading what I write, but are you actually listening to what I've been saying? Most new businesses will LOSE money for the 1-3 years, many new salon/spa owners can not afford to pay themselves a decent salary (but sometimes pay themselves too much!), and 80% of salons and spas close their doors within the first 2 years of business...Before you open a business please GET ADVICE!
You must have revenue projections and a cash flow plan, you must have money on reserve in the bank, and you must posses some business and leadership skills.I constantly hear stylists and estheticians say "I opened a salon because I was sick of making money for someone else" or "It didn't feel right giving half of my money away (to the salon owner)". Is this reason enough to open your own business if you know absolutely nothing about running a business, you've never been a leader before, and are not aware of industry benchmarks for success. The simple answer is NO.
Most employees have absolutely no idea how many costs are associated with operating a salon or spa and I can assure you that there are very few salon/spa owners who laugh all the way to the bank. Start up costs are usually in the thousands alone (construction, equipment, retail and professional product opening orders, electronics and software packages, advertising, recruitment, team training, etc) and I know that the mountain of monthly expenses can contribute to sleep deprivation!
Here's a list of potential monthly expenses for a salon/spa:
Payroll and payroll benefits (service providers, reception, apprentices, etc)
Incentives (retail commissions)
Professional Product Purchases (Includes wax, wax strips, foils, colour, back bar product, etc)
Retail Purchases
Cleaning and Sundries (tea, coffee, cream, etc)
Decorations/Flowers
Magazines
Dues/Memberships
Courier
Consulting/Coaching
Credit Card Commission/Fees
Bank Fees
Employee Recruitment
Training/Education
Insurance
Legal and Accounting
Telephone/Internet
Advertising
Utilities
Marketing/Promos
Rent/Lease
Security System
Interest Bank/Loan
Donations
Office supplies
Computer Software Support
Besides the financial obligations, many business owners are technicians and are also accountable to their employees and customers. They are the bread and butter of their business, leaving little or no time to focus on the visioning, recruitment, planning, mentoring, networking, system implementation and book keeping required for their business to grow.
With a de-regulated cosmetology industry and such scary statistics about business failure, why is it so hard to find people who want to succeed? I don't just mean talking about it, but actually striving towards becoming an industry leader and being one of the best! Maybe some of you don't like change and some of you may fear the commitment of time and hard work. I can guarantee one thing...if you want your business to grow it will not just "happen".
So my question is...What's Up? I get numerous calls from frustrated salon/spa owners and managers, some are even in tears. We speak (sometimes for hours) about their grievances, we analyze their business practices, we discuss potential solutions to their frustrations and we agree that change must happen and that assistance is necessary.
I never hear from them again. Why? If it's about money you must understand that it takes money to make money and spending a little to improve your systems can potentially make you lots. If it's about hard work, you must remember that nothing rewarding comes easy. If it's about fear you must understand that coaches do not judge, we guide.
So my next question...what are you waiting for?
