Month: January 2021

  • How To Make Your Salon More Profitable

    how to increase salon profit

    How are your retail sales? How are your upsells? Cross-sells? Other services? Are all your service providers busy? These are questions you should be asking yourself if you want to increase your salon business profit. But to put everything in a simple perspective, making your salon more profitable comes down to two points:

    Reduce your expenses

    This means reducing your overhead, possibly letting go of some staff, and eliminating services that are not making you money. Reducing your salon expenses also means tracking your spendings and removing the unprofitable ones.

    and…

    Increase your sales

    You can increase your salon sales in a lot of ways. You can either

    • Grow your client base,
    • Increase the average spend per visit, or
    • Increase the frequency of their visit to your business

    But there’s one way to make your salon more profitable and hit all three points mentioned above – simply make sure your new salon clients return for a 2nd visit (and a 3rd and 4th and so on, for that matter)

    On average, salon owners only turn 30% of their new clients into regular, loyal clients. Let’s use this figure in the next section to calculate your salon’s potential profit and leakage cost.

    Know your potential profit number to make your salon more profitable

    Your leakage cost is the opportunity lost each time you lose a new client. But before we calculate this, let’s explore the potential profit of your salon business first.

    Average Cut x Average Visit per Year = Customer Spending Per Year

    Let’s say your haircut rate is $50 and the average visit of each customer per year is 5 times. Your potential profit per customer is then $250. If we add in a couple of colour services, say twice a year at $75 per visit – that’s $400 potential profit per new client annually.

    Assuming you have 50 new clients coming to your salon every month  (50 clients x 12 months x $400), you are now seeing a $192,000 potential annual profit for your salon just from these new clients and basic services.

    Taking in what we previously mentioned that salons only keep about 30% of new clients and losing the other 70%, that’s 420 new clients each year bringing their money elsewhere i.e. your competitors. And that’s a whopping $134,400 of leakage cost and profit you’re missing out on. 

    If you start working on converting an extra 5% of your new clients into regular ones will already make your salon more profitable by $12,000 in gross profit each year. 10% and that doubles the figure to $24,000 annually. You can also ensure more profits by increasing their spending per visit by encouraging them to buy retail or avail more services than just a haircut or hair colour.

    Identify Customers You Want To Keep

    Another way to make your salon more profitable is by classifying your customers – those whom to keep and whom to fire. Ideally, you only want to keep on growing your client base. However, trying to maintain all customers and giving them equal attention and resources might just be keeping you from making more profit.

    So, what kind of customers should you keep? You would classify your A-list customers as low maintenance ones turning in high profit.

    You don’t want those who spend very little but want to get the best possible deal and the juiciest discount. Who are these customers? They don’t buy retail, they drive your team nuts, they usually don’t turn up on their appointments, and generally keep you from servicing your profitable clients. Letting these customers go is not shrinking your client base – it is actually a sensible management strategy to increase your salon business profit.

    Your A-list clients are those who will try new services, buy your retail and recommend you to their friends. They are the ones who deserve your time, resources and efforts. They need to be taken care of and nurtured.

    Pay Close Attention To Your Front Desk

    Your front desk staff plays a very crucial role in bringing more business and profit to your salon. You need to ensure that your front desk is being run efficiently and your putting the right people there.

    Your front desk staff should be there with a mission and make the most out of every call and every walk-in. You need them to

    1. Give leads for the business by getting contact information for you.
    2. Ensure every phone call gets to the appointment book
    3. Provide value to customers by giving them helpful information
    4. Promote your website and ongoing promotions
    5. Sell your other services
    6. Do follow-ups

    And that goes for every member of your salon team. Everyone should be there working to make money for the business. You should not have people who are there to just do the hours and just waiting to clock out. 

    Let’s discuss how you skyrocket your salon business profitability and level up your business, book a call with me here.

  • How To Lead An Effective Salon Team Meeting

    effective salon team meeting

    How often have you conducted a salon team meeting with your stylists and staff and find yourself with an unfocused audience and zero participation? Do you keep on repeating the same agenda and explaining the same points over and over again?

    Well, you’re not alone. 

    Any salon owner can attest that conducting regular team meetings and one-on-one appraisals help transform people, boost performance and improve culture. However, running salon team meetings can come with plenty of challenges – poor leadership, lack of planning, high absentees and low morale, among others.

    So, how can you successfully conduct a dynamic and interactive salon team meeting? 

    The next time you conduct one, shift your approach from a leader/owner-driven to a stylist/staff-driven one. We outlined below 5 questions you can use as a guide in your next beauty salon team meeting that takes this approach.

    5 Questions To Ask On Your Next Salon Team Meeting

    What’s working for you? 

    Since your last salon team meeting (or one-on-one appraisal) you have with them, ask them what they think is working. And this could be about anything – the house rules, the salon SOP’s, the commission schemes, pre-booking, or retail. This will give you insights into your good practices and find ways to highlight them as your strengths.

    What’s not working?

    Next is to ask them what’s not working. Often, what you think as the salon owner could be drastically different from what your staff thinks. They are your frontline and interact with your customers on a daily basis so it’s worthwhile to hear their thoughts. Keep the conversation going and your mind open. Try not to interrupt as much as possible.

    What can you improve?

    After hearing what works and the what not’s, it’s time to ask them to share with you the things they can improve on between now up to your next salon team meeting. This will give them a sense of inclusion and that they matter. It can also excite them to set goals and intentions regarding their productivity and performance.

    What can I help you with?

    This is your turn to let them know that you are willing to provide them with the tools they needed for success in this industry. Show them that you encourage and support their career growth and that you are available and accessible to your team for coaching and advice. One key factor in keeping your team motivated and productive is to let them know that you have their back and you’re there to support them professionally.

    What will you commit to do? 

    Finally, get them to commit to 2-3 things that they will do starting today until the next meeting. It doesn’t have to be big – it could be as simple as coming to work on time or cleaning the dispensary after every use. Keep note of their commitments as these will now be a part of your next meeting’s agenda.

    Some more tips!

    Also, take note of these tips the next time you conduct a salon team meeting:

    • Be organised. Set a date and keep the schedule of the meetings consistent. Prepare an agenda and disseminate it to your staff prior to the meeting.
    • Be purposeful. Keep the content and your overall agenda on your salon’s operations and promotions. Limit your agenda to 3 to 5 important objectives, plan your discussion points and stick to them so you don’t get sidetracked.
    • Celebrate and recognize. Hit your sales target early? Got raving feedback from a customer? Share and celebrate these wins with your team and recognize people instrumental in accomplishing them.
    • Encourage them to participate. Share the podium with your team and allow their voice to be heard. Delegate portions of your staff meetings to others. For example, ask your senior staff to present updates, new processes or changes. Ask open-ended questions and welcome all ideas and thoughts.
    • Keep it light and have fun. You can start the meeting with an ice breaker or some team-building exercises. Meetings don’t need to be serious all the time, lighten up!

    Looking for some 1 on 1 help in your salon? Book a discovery call with me here.