10 steps to rapidly increase your profits · However, it’s not just your business life you need...

www.beautysalonscoach.com

10 steps to rapidly increase your profits

http://www.beautysalonscoach.com/


Own a beauty salon, or

thinking of going into the

business? Set yourself up

for success by learning

the secrets behind rapidly

increasing your proits. I’ve put together 10 simple

steps that will make huge

difference to your bottom

line, ensuring on-going

business success.

#1

Not Setting Goals

Before you take that irst step, it’s essential to understand and acknowledge your business goals. This isn’t just looking ahead a year or two, but to the end game – what your perfect business looks like and how you could get there. By establishing your broad goals and knowing what you really want, it will be easier to create smaller, more achievable goals. When you conquer these, you’ll be spurred on to keep going, aiming for success. However, it’s not just your business life you need to consider. As a business owner, your personal life is intrinsically linked to your business, so you need to think about what your perfect life would look like. What do you want to leave behind? If there was nothing holding

you back, how far would you go? Finding this clarity will help provide motivation when the going gets tough.

The secret to running a successful business is all in the mindset – without having a clear direction on where you want to go and what you want to achieve, how will you know when you get there?

The most important part of goal setting is putting pen to paper and luckily for those creative souls, there are so many fun ways to do so. For example – why not create a dream board? Get the whole team on board for a session of creative thinking and then put it up in your staf room. This way, the team has a clear vision, knows exactly what direction to move forward in and are enthusiastic about the end goal.

But not only do you need to look at your business but you personal life too, so what would your perfect life look like. By getting clarity it makes it easier to achieve but not only does it make it easier it helps to motivate you when you feel like you just can’t keep going.All of these questions and goals will guide the process and act as indicators when it seems you’re getting bogged down in other things. They will clear the path for personal and business development and ensure that the lifestyle you’re dreaming of becomes a reality.

However, it’s not just business that you need to consider. Don’t forget about your personal aspirations and ambitions – everything starts from the mind, so make sure it’s clear before embarking on any adventure!

Hello!



#2

Time Management

When it comes to owning and operating a salon, time is money. Using your time

eiciently and efectively will result in higher proits and increased success in the long-run.

However, before trying to implement any strategies to save time, you need to igure out where it goes! This is where a time sheet comes in. Over a week, take the

time to jot down what you are doing at work, with approximate times. If a diary or notebook is too hard, make a note on your phone. If you’re prone to getting distracted or think you might forget, set an alarm to go of every hour during your working day. While this may seem counterintuitive, knowing how you spend your time is going to make reviewing it even easier.

WHAT YOU CAN DO RIGHT NOW:

Grab a pen and paper and start writing down where you want to be professionally in ive years. Once you’ve done that, open your diary and book in a date you can host a

team brainstorm.



Strategies to Implement

Once you’ve discovered how you spend your working hours, it’s time to establish which tasks are necessary and which are optional. From there, work through the ‘necessary’ list, identifying which tasks you don’t enjoy or don’t necessarily have to do yourself. Delegate them out – there is bound to be someone in your team who can take on additional responsibility.

To give you a gage on how much time you should be spending ON your business and not IN it, you should be allocating at least ive hours a week to these necessary tasks. They shouldn’t be in-salon activities, but things you need to do to improve the business. Using a ‘week at a glance’ planner or diary, block out certain times for the remaining tasks and don’t budge on these. By scheduling your priorities, you will feel organized and relaxed in knowing you have the time to get these done.

When completing these tasks, take a new approach. Multi-tasking is out and single tasking is in. Whenever you start something, don’t allow yourself to be distracted by your phone or think you can do a few things at the same time. Dedicate all your time, efort and energy to getting the job done – you’ll be surprised how quickly you’ll complete it! If you need some extra help, hand a colleague your phone, or leave it in another room. With no access, you won’t be tempted!

As part of this approach, you shouldn’t be afraid to say no! As the owner, you don’t have to be involved in every project, so igure out where you are most needed and focus your energy there. This is also where delegation can help. Ask senior members of the team to take on more responsibility, thereby freeing you up to focus on other important matters.

However, it’s not just your own time management that can afect your salon’s success. If clients have a tendency to cancel last minute, leaving you and your team in the lurch, they are wasting your precious time and resources. To stop this happening, it’s worth considering charging a deposit for each appointment. It doesn’t have to be much - 20% is ine – but it a) stops people from cancelling and b) covers your expenses. If it happens regularly, this small change can make a big diference!


Print out the time sheet in this resource and put it in a spot you’ll easily see it. Over the next week, take notes of how you are spending your time in

preparation for a re-haul!



#3

Not having a Unique Selling Point (USP)

In this industry it’s very diicult to stand out from the crowd. However, it is so important to recognize, acknowledge and understand what sets you apart from your competition and why a client may come to you. It will make your marketing eforts much easier and guide your brand and ofering in the future.

Your unique selling point doesn’t have to cost you millions but it should add value to what you are ofering. If you’re not sure where to start, ask yourself the questions: “What makes you stand out?”, “What makes a client come to you over the venue next door?”. Once you can identify these diferences, you can set about marketing them.

If you are struggling to identify these, then you may not have one! In this case, you need to urgently think about a way to diferentiate yourself. Examples include establishing a loyalty plan where clients receive discounts after a certain number of visits, or investing in a line of products that clients can only source from you. Perhaps you are the only salon to ofer a particular service, or have a memorable tagline?

Other options include increased customer service – simple things like taking a client’s

coat, ofering them a glass of water, tea or cofee or even ofering them a healthy treat can all help to leave a positive impression. Aim to make each client feel as if they were the most important person in the entire

world, treating them like royalty. Make sure they have a warm welcome and when it comes to the treatment, that the conditions are just perfect. The treatment room should be the right temperature, and if it’s not, ofer them extra blankets. You need to make sure everything is suited to their needs so that they’ll report positively about the experience.

As with every marketing initiative, the main objective is to encourage repeat visits and loyalty. So once your USP is established, don’t forget to let everyone know about it! If it’s the service, encourage clients to leave reviews on social media and tell their friends. If it’s a discount scheme, don’t be afraid to publicise this on your front counter or during the treatment process.


Brainstorm! Take 10 minutes to

list all the things that make your

salon diferent.



#4

Not re-booking clientsWe often don’t re-book clients as there’s a presumption that since the service was so great, they will deinitely come back, or they’ve said they would so we’ve taken them at their word. However, when they don’t return, or return less regularly, it really hurts the business. It means you have to put the hard yards in attracting brand new customers and reduces the wide net of people you could reach.

Worst of all, by not re-booking a client while they are in front of you, you are leaving the door open to them going elsewhere. While they may have every good intention of re-visiting, busy lifestyles mean that they may revert to a salon closer to their work or where they live, purely for convenience. How many times have you had a client call up hoping for a last-minute appointment because they’ve been too busy and haven’t realized a month has passed? If you can’t it them in, they may go elsewhere and you lose that business.

To stop this happening, it’s worth explaining to every client the value of return visits. This conversation starts at the very beginning of a client’s treatment – the consultation. When chatting about the current state of their hair or skin and inding out what they are after, make note of their reasons – perhaps they left too much time in between treatments and their hair is now unhealthy, or their eyebrows are now overgrown. Whatever it is, it will usually be a case of too long between visits. Keep that knowledge at the back of your mind as you conduct the treatment and before letting them go, initiate a second consultation, explaining how to maintain their hair or skin at home and what products to use. In this conversation, you can casually drop in that the aftercare regime should include a return visit in a month. The most important thing is here is to not phrase it as a question; instead just note it as one of the steps required to keep their skin or hair healthy and happy. While this may seem easier said than done, it’s all about being frank and honest.


Try out this approach! Next time you are overseeing a consultation,

see if you can arrange a repeat booking.

When it comes time for payment, don’t forget to ask when would suit them best for the next appointment. Turn the mountain of commitment into a molehill by explaining that they can cancel up to 24 hours beforehand and can do so in the following ways. Remind them that you’ll also give them a call closer to the time to conirm their attendance. This way, it’s proposed almost as a penciled-in appointment, rather than anything set in stone and they can’t use the excuse of forgetting. The worst that can happen is that they say no!

If you don’t want to be so direct, consider signing them up to your loyalty program. Not only will they then have an incentive to return, but also hopefully through your marketing, the name of your salon will continue to pop up in their email inbox and social media.

Remember, your knowledge is why these clients are coming to you in the irst place, so you need to use it – recommend what is best for them and what is going to work. Letting a client walk out without even a tentative booking does both you and them an injustice.



#5

Being afraid to raise pricesI’ve worked with many salon owners who are worried about raising their prices because they think they’ll lose business. I can honesty say that this isn’t the case. The only time you are going to lose clients is if your customer service doesn’t match your process. Expenses are constantly on the up and as much as we would love to dish out free treatments, this just isn’t possible. By raising your prices you show that you have respect for the industry, your knowledge and your team’s skills and services.

General inlation has meant that most consumers are used to prices rising about once a year. Take advantage of this by doing the same, performing annual price reviews to

ensure your bottom line remains consistent.

Every year, review your costs, taking into account supplier expenses, wages and anything else that will afect your margins. From there you will be able to igure out how high you need to go. As a general rule of thumb, a 5-10 % increase will make a huge diference to your proits but is within reason for your clients. If


Find out the last time you changed your prices.

it isn’t within reason for some, these are the people you probably don’t want to be servicing anyway!

If you want to soften the blow, consider incremental increases. If a supplier of a particular product increases their costs, you could pass this on only on the treatments that use the product. If a client asks why the prices have risen, you can be honest and note that supplier costs have gone up. This minimizes the impact on customers and gets them used to regular increases.

When all is said and done, the best way to navigate a price increase is to remind clients of the value you ofer. This harks back to your unique selling point and what you can give clients that others don’t – perhaps it’s a case of extending the scalp massage for a few extra minutes, or including a short foot massage in the pedicure process. It’s these little details that will make customers return, not the low prices.



#6 Not marketing correctly If you aren’t advertising on the Internet, you’re doing your business a great disservice. Having an online presence is so important to the success of a beauty salon. It is the main form of marketing these days and can drive countless new customers to your services.

The best way to take advantage of everything the Internet ofers is to create a website. You don’t need anything fancy but it does need to be well-designed and thought out. These days, there are plenty of free resources that can help you create something special with just a few clicks. All you’ll have to do is write the content and choose what to advertise.

It’s imperative to show clients who you are as a salon, what services you ofer, what your USP is, how to book and where you are located. Therefore, consider headings like ‘About Us’, ‘Services’ or ‘Menu’ and ‘Contact Us’. The latter is extremely important – new visitors to the area are one of the most valuable sources of new customers so ensuring that

they know exactly where you are and how to get in touch with you is essential.

It’s also worthwhile explaining what each treatment involves. A short description after each service allows you to demonstrate how you are diferent from other salons and what clients can expect.

While advertising your services on your website is important, the end goal is to have them book a treatment. So it’s vital that you make this process as easy as possible. Consider having a clear ‘Book Now’ button on all pages, as well as a separate page that sits loud and proud in your website menu. An online booking system can form part of your USP, as it makes booking appointments easier for the client and ensures the experience is seamless.

In the age of Instagram, having a website and imagery that looks enticing goes a long way in attracting new clients. While most website providers will ensure your design is up to scratch, you will need to invest in some photography. Luckily, modern phones now have cameras that are up to the task. It’s just a case of asking your clients if you can take a picture and spending those extra few seconds ensuring that the lighting and angles are right. Most hair and nails shots won’t require faces to be in it, so you shouldn’t have a problem inding potential models.

These photos can also appear across your social media, another integral part of your marketing strategy. A Facebook and Instagram page are essential tools in your arsenal and once again, free to set up. Everyone is on social media nowadays, spending hours upon hours on it, so it’s a great way to reach A-grade clients.

Every time you’re running a promotion or event, have welcomed a new staf member or




Start taking photos!

Once you have a small database, create your Facebook and Instagram pages. They are the irst steps to solidifying your online presence.

are introducing a new service, spend a couple of minutes posting about it on the relevant networks. You should aim to post at least

three times a week, showing clients that you are active within the market.

Generally, posts using sales words such as ‘new’, ‘simple’, ‘easy’, ‘now’, ‘free’ and ‘limited’ are more likely to garner interest and traction, so try and use these as much as possible. You can advertise introductory ofers for new clients, promote new treatments or push your online booking system – whatever the message, there are plenty of ways to catch a potential customer’s eye.



#7

Stop using discounting as

a marketing tool unless

you are priced to do so.Discounting is a super common tool not just across beauty salons but every type of retail. From mid-season sales to promotions, such as buy two, get one free, there’s a deal on every corner.

When it comes to your salon, discounting can be an attractive option. It gets people through the door, who will hopefully return after a positive experience. However, many beauty salon owners are relying too much on discounting to encourage new business and not realizing that they are pricing themselves out of the game and communicating some less than favourable messages to your clients.

To understand the full efect of what slashing your prices says to your clients, it’s best to think about it in terms of a piece of clothing. If you saw a jacket that was 50% of in a sale, what would your irst thought be? Would it be that it was unpopular and so the shop is trying to get rid of stock? Or possibly that there is something wrong with it and so the store can’t sell it at full price?

Both options do not relect well on the product or the store. The same goes for your services. Discounts make potential clients question the quality of your ofering, as it leaves them wondering why you have reduced your prices in the irst place. It also opens the door to a lack of conidence, demonstrating that you don’t believe in the quality of the product yourself.

Discounting also sets a bad precedent, as new clients attracted by this reduced price may not return until you reactivate the promotion. It means that your team have to do a lot more work to bridge the gap between cost and value, going above and beyond to entice them back at full price.

Most obviously, slashing your prices also means slashing your proits. If you halve your prices for a promotion, you’re going to have to work twice as hard to make the same money back. Unless you have a continuous stream of customers, this may not happen. What’s more, unless your promotion is for new customers only, you may have regulars returning who are paying half price because they can.

So how do you entice new customers in instead? Shift the focus from cost to value. Instead of ofering clients a reduced price, promote the value in your services. Go that little bit further to make clients feel comfortable throughout their session or provide that extra something that makes you memorable. Whether it’s an extended hand massage with a manicure or ofering refreshments while colouring hair, these small details add up, creating a positive impression that will last longer than the memory of a discount ever will.

In determining value, it’s worth taking the time to analyse your target audience as well. Perhaps you have a large proportion of mothers as customers, so it could be worth investing in a small toy box that entertains little ones while sitting on their mother’s laps. Know your audience, know what they want and you’ll never need to discount again.


Phase out all current discounts, removing all signage – you won’t

need them anymore!



#8

Knowing the diference between mark up and margins

Every retail business requires mark ups and margins – but do you know the diference? Understanding what each of them means and how they afect your business is a crucial part of proit building and can seriously afect your bottom line.

Most simply, the mark up is the proit calculated on the price you buy products

at. It’s used to igure out what the return of investment will be on anything you sell, including your services.

In contrast, the margin is the proit calculated on the price you sell products at. This comes in handy when reducing prices, as you do not want to accidentally sell below buying price.

So how does this apply to a real-life situation? For example, if a range of products is selling for $100, and you sell them for $200, you have a markup of 100% and take home a gross proit of $100.

$100 x 100% markup = $200, which means $100 gross proit

If it was only a 50% markup, it would be:

$100 x 50% markup = $150, which means $50 gross proit

But just how do you igure out the markup on a product? With an old-fashioned equations that even the most ardent math avoiders could solve.

First igure out how much you want to make on each product (gross proit). Times that number by 100 and then divide by how much you paid for it. The answer is the percentage markup.

To revert back to the numerical examples, the equation in action would look like this:

$100 x 100 = 10,000 /$100 = 100% markup

$50 x 100 = 5000/$100 = 50% markup

To calculate your margin, you need both your gross proit igure (what you’re selling it for minus what you bought it for) and your selling price. Say you bought products for $100, but sold them for $150. The gross proit is $50.

You take the gross proit, multiply by 100 and then divide that answer by your selling price.

For the above example, the equation would be as follows:$50 x 100 = 5000/ $100 = 50% margin

If you bought a product for $40, but sold it for $90, the equation would be:$50 x 100 = 5000/$90 = 56% margin

So even though you are making the same gross proit, the margin changes.

Where this helps you is in knowing what to price services at. If you do end up discounting (although you have no reason to now that you know about point 7), you want to make sure that you aren’t losing money on the transaction.



Let’s say an eyebrow wax costs the client $15. When taking into consideration the labour, space and materials costs, each eyebrow wax costs you $6. What would the mark up and margin be?

To calculate the mark up, we take the gross proit ($9), multiple by 100 and then divide by what it costs us ($6).

9 x 100 = 900/6 = 150%

This means there is a 150% markup on the service.

To calculate the margin, we take the gross proit once more, multiple by 100 and then divide by the selling price ($15).

9 x 100 = 900/15 = 60%

There is a 60% margin on the service.

What this means is that you cannot reduce your price by more than 60%, otherwise you will lose money.

When pricing, you should aim to have a 50% margin on all treatments. Anything less than this and you’ll be struggling to build a profit.

WHAT YOU CAN DO

RIGHT NOW:

Using the resource at the end of this booklet, calculate the mark

up and margin of each of your key services and products.



#9

Knowing your break-even point Another important inancial element to running any beauty salon is understanding what a break-even point is. In its simplest terms, your salon’s break-even point is the number of units (or services) that must be sold for the income and expenses to be even. At this point, proit is zero, but so is loss.

Your break-even point is essentially the tipping point, and shows how much money you need to make to avoid showing a loss. For proitable businesses, it shows how much room you have to reduce costs and services (if needed), while for growing businesses, it shows what you need to be charging to ensure long-term proitability.

The basic break-even calculation is:Fixed expenses / gross margin % = Breakeven

Fixed expenses are those that stay the same, regardless of salon activity. For example, rent, insurance and the wages of any permanent, full-time staf are ixed costs.

WHAT YOU CAN DO

RIGHT NOW:

Start collecting data on your ixed costs and variable costs.

Begin with the easy ixed costs, such as rent and insurance, and

go out from there.

You can work out your gross margin percentage using the formula below. Total number of sales - cost of goods sold = gross proit

To change it into a percentage, take your gross proit / total sales revenue x 100 = gross margin percentage.

Establishing your break-even point allows you to calculate how many customers you need to stay aloat and what the average customer brings in to your business. It will show if you need more clients or need to increase the average amount of sale per customer (i.e. how much they are spending).

You can do this through upselling, product sales or just a general price rise.



#10 Be a leader, not a bossOwning a salon is a tricky business. On top of inances, suppliers, real estate and equipment, you also have to manage staf!

While everyone’s management style is diferent, it’s important to consider whether you wish to be a leader or a boss. Here are just some of the key diferences:

A leader coaches, a boss drives A leader inspires, a boss instillsA leader guides, a boss blamesA leader shows, a boss knowsA leader mentors, a boss criticisesA leader looks to the team, a boss looks to themselvesA leader says ‘Let’s go!’, a boss says ‘go!’

Can you see the diferences? A boss is often the commander, dictating tasks and invoking authority. A leader, on the other hand, sees themselves as equal to their team, encouraging collaboration and inspiring respect. A leader will have the best interests of their staf in mind and look for opportunities for development and growth.

So how does this afect your business? Having the right team around you is all about whether they enjoy coming to work. If you can foster an environment where your staf are heard and respected, they will stick around, allowing for the development of talent and a much more enjoyable working environment. They will work with you, not against you, and show support in times of need. They will also be more likely to share your vision and values, helping to elevate the salon to the next level.

Most importantly, if your employees are happy, so are your clients! So what will it be – leader or boss?


Block out some time in your diary to have one-on-one chats with each of your

employees. This will be a chance to see how they’re doing, what they enjoy about the role and if there’s anything to be improved on.



Calculating your Markup and Margin

If your markup is % Then your margin is %150 60120 54.55100 5095 48.7290 47.3685 45.9480 44.4475 42.8570 41.1766 40.0065 39.3960 37.555 35.4850 33.3345 3140 28.5735 25.9230 23.125 2020 16.6610 9.1

Markup and Margin Worksheet

TreatmentCurrent Markup%

Current Margin%



Time Management

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What I focused on What I need to focus on

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10 steps to rapidly increase your profits · However, it’s not just your business life you need...

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