What's Up?

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?

Let's get ready to RUMBLE!!!

It's time to stop procrastinating, face your fears, shape up that business, and "knock out" all of your worries.

We're gonna get down and dirty and talk about your bottom line.

1. Do you have a system for inventory control?

If you answered no to this question, you must have thousands of dollars of inventory collecting dust on your shelves. You are spending more on buying retail products than you should be. You should not be spending more than 50% of your total retail sales buying products for retail.

2. Do you know how much money you should be spending monthly buying back bar products in relation to your service sales?

If you are not controlling your back bar spending you better think about raising your prices NOW, especially your chemical service prices. You should not be spending more than 6-8% of your service sales on buying back bar products. These products include colour, peroxide, foils, cotton, perm and relaxing solutions, massage oils, hair/spa products for your staff to use on your guests, etc.

3. Does your salon have a budget?

If you answered no to this question, you can not possibly set service and retail goals for your team because you don't know how much money the business needs to make! You can't plan your marketing because you don't know how much you are able to allocate to advertising and promotions. You can't hire new staff because you honestly don't know if (and what) you can afford to pay them.


To put it simply: If you don't know how much money the business needs to bring in each month to cover your expenses or how much money should be spent in relation to how much is coming in...your business will never ever ever make a profit.

If you would like to know more about cosmetology industry benchmarks (goals for best practices), retail and inventory control, and/or budgeting please call us at 604-314-4981.

"Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy." -Dale Carnegie

Why should you invest in a business consultant?

Wondering why you're so stressed out? Salon owners aren't just salon owners. They are visionaries, managers, coaches, mentors, educators, arbitrators, book keepers, event planners, promotions creators, in-house advertising executives, maintenance and repair (wo)men, sounding boards, merchandisers, customer service representatives, and also often service providers.  

  

Usually when you're at the top you have nowhere to turn for motivation. Who gives you that little nudge you may need to keep you from procrastination? Who do you bounce your ideas off of?  Who provides you with un-biased opinions and advice? Who encourages you to set and achieve goals? Who guides and supports you through change?

As a salon owner you are held accountable to your staff by your staff and held accountable to your customers by your customers. Who is holding you accountable to your business?

Investing in a coach/consultant can mean a big increase in your bottom line. Business consultants are educated in our industry's "best practices". They can clearly communicate ideas that may be derived from complex information and concepts. They help organizations improve their performance through the analysis of existing business problems and assist with the development of strategies for improved operations. They will wear some of your many hats!

Please don't hesitate to call us to schedule your complimentary 1 hour needs analysis. "Stressed" is "Desserts" spelled backwards!
In The Black Salon Business Consulting 604-314-4981

Client Retention: The What's, Why's, How's, and WOW's

Client Retention: The maintenance of the patronage of people who have purchased a company's goods or services once and the gaining of repeat purchases. Customer retention occurs when a customer is loyal to a company, brand, or to a specific product or service, expressing long-term commitment and refusing to purchase from competitors.

BNET Business Dictionary

Client retention directly influences productivity and profits. Do you have systems in place to ensure your guests will have the best possible experience (in and out of your salon) and return?
In The Black Salon Business Consulting, in alliance with West Coast Beauty, presents "Client Retention: The What's, Why's, How's, and WOW's". Learn industry stats and tips for long term client retention. 
Please be our guest.

What: Client Retention: The What’s, Why’s, How’s and Wow’s!!!

When: June 28, 2010 from 1-3pm


Where: West Coast Beauty Showroom & Educational Centre 108-6741 Cariboo Road, Burnaby, BC


More Info: Please ask your West Coast Beauty Sales Representative for more details

I Want To Make More Money!

I am sure that most salon owners and managers have heard this one before..."I want to make more money". The funny thing is...there's usually no more money to give. We would love to be able to pay our team members more, have a solid emergency fund in the bank account, and be living the high life ourselves...but the reality is...most salons DO NOT make money.

Money, and the desire to have more of it,  was the number one topic of conversation in each and every team member review I conducted. When the topic was brought up it usually went something like this: "I need to make more money". My response was "well then,  what can you do to make more money?" I would explain that we promote the salon (and our team) by advertising, marketing, and implementing systems for client retention but it is also the responsibility of each individual operator to grow their own business.

The client bus (you know, the one that pulls up outside the front door and drops off enough guests to fill the salon for a week) DOES NOT EXIST.

Your team members must be providing outstanding customer service, asking for referrals, upselling services, and retailing...this is how they will MAKE MORE MONEY...and... you must help them along the way by mentoring, posting goals, regularly reviewing their progress, and rewarding positive behaviors.

Ask us for ideas on how you can make more money :)

Budgets: A Must Have

When I speak with a salon owner for the first time I always ask what they love about their business. A common answer is "I'm the boss". When I ask salon owners what frustrates them about their business I am often told " I am not making any money".

It can feel like you are carrying the weight of the world on your shoulders when you are running a business that isn't making any money or is drowning in the pool of debt.  

Typically salons are opened by talented stylists who have a passion for their trade, a large clientel, and are "sick of raking in the dough for someone else". Unfortunately, it takes more than talent and a loyal following to successfully run a salon.

Running a salon profitably requires dedication, an entrepreneurial spirit, the ability to wear many hats (owner, manager, mentor, service provider, etc), an understanding of business, and a budget.

Do you have a budget? Many salon owners do not. They have no idea how much money is being spent or how much money should be spent. Having a budget and tracking your spending will have a positive impact on your bottom line. 

By creating a budget that incorporates benchmarks we are able to dramatically decrease spending and increase profits.

If you're a salon owner who is tired of carrying the weight of the world on your shoulders, give ITB a call. We can help.

Inventory Control: Dust off the bottle

I recently had the pleasure of introducing myself to a group of sales reps from a local distributor. As I am constantly performing market research to better the quality of service I give to my clients, I asked the sales reps to participate in an "In The Black" survey. Sales reps spend 40+ hours a week in salons all over the Lower Mainland. Two of the questions I asked were "What do you feel is lacking in the salons you service?" and "What do you think the salons you service need the most in terms of business education?" Their answers were unanimous: RETAILING SYSTEMS AND INVENTORY CONTROL.

According to the Professional Beauty Association Salon/Spa Performance Index for 2009, Fourty-seven percent of salon and spa owners reported lowered retail sales.

Have you set a budget for retail product purchases?

Is your salon automated?

Have you adjusted your retail purchases to reflect your retail sales or are you constantly dusting off those bottles?

Have you implemented retailing systems, giving your staff tools to help them succeed with retail sales?

Do the products you sell reflect current industry and consumer trends?

Retailing not only helps pay the rent, it increases client loyalty and retention.
In The Black can help you set purchase budgets based on industry benchmarks, develop systems for inventory control, and assist with retail sales strategies.

It's time to put down the feather duster.