A solid way to clear a room of hairstylists is to bring up the topic of analyzing your salon’s business numbers. Today I am going to try and break down your business’ number in an easy way so you can start reaching your goals!
There are many many ways to make money in the beauty industry outside of salon services and selling hair product but those are the two most common so to keep this post from turning into a novel, those are the two I am going to be talking about today.
In the context of trying to increase your hair service sales you have two options. More clients coming in per week or more money being spent during current guest visits. There are two ways of acheiving higher tickets, raising your prices or upservicing.
When it comes to retail sales there is also only 2 ways of making more money. Selling more retail to your current guests or increasing the number of people you sell to.
The other side of business numbers that hairdressers often skip when thinking about their totals is, your LOSS!
Have you ever heard to term, cash is king? Cash is king basically means, Cash is everything. None of it means anything until after you’ve paid the bills and see what’s left at the end of the day. What is left after everything else is paid for is your cash.
Some of you may think of this as write offs, or net profit vs gross profit but what it actually is, is a profit and loss statement.
You see, your business numbers are absolutely a combination of the service and retail sales in your salon. It’s also how many people were returning vs new. Referrals vs walk-ins. These things though only make up half of the equation and to really start reaching your goals of making more money in your salon studio, you’re going to have to start looking at the WHOLE PICTURE!
Profit + Loss statements.
Profit is what we were talking about before. It’s the grand total of every single penny your clients gav eyou in exchange for goods or services.
Loss is every single penny you spent making it happen.
What you ultimately want is your profits going up and your loss going down.
The best way for you to do this is to….list it all out.
That’s right, I love a list as much as the next girl and will procrastinate until the end of time with a list. In this instance though, it is necessary!
You should have your profits already listed out and if you don’t, go back and do it. It’s 2019, you should have an online booking system that keeps record of your individual sales. It will definitely take some time, probably just enough to teach you to just do this regularly.
Now, you get to list out everything you spent. You actually should also have these records but if you aren’t as organized as you could be (totally understandable) look up your bank statements and start listing out everything you are spending money on that is for the business.
Now you are going to look at your list of profit and loss and ask yourself, how can I widen this gap?
How can I make my losses go down which will naturally raise my profit! Or in other words, the third way to make, more, money!! Ta-da!!
I know I go on and on about the all-star customer experience. I talk about spending money on education and re-decorating your salon studio all of which add to the loss part of the statement.
What I am talking about is making sure you aren’t signed up for any subscription services you don’t even use. To talk advantage of the sales your Sales Consultants come around promoting instead of buying everything last minute. Creating a calendar to know when those sales are coming up to be prepared to take advantage of them.
The way you start to reach your goals is to look at every little detail. In your customer experience and in your business numbers.
I want to finish off by pointing out, I cannot set your actual goals for you. Your goals are going to be unique to you, your location, your average ticket price and number of guests per week. I want to so badly say do this and you will get X amount of new clients but that honestly isn’t the point.
My rule of thumb is a aim for a 20% growth in the right direction over a 6 month or year long period of time. I like a year with quarterly check ins with myself but you gotta see what works for you.
Every 3 months I like to take a deep dive into where I am spending my money and reflect on if that expense is really necessary. If it is, how can I get it for cheaper without sacrificing quality. I also look at my services and see where a majority of my time is spent.
If I am getting a ton of return clients by doing a particular service, this is obviously an area I should be putting more energy into. This is where you should set your goals.
For me, I get a lot of income from smoothing services and men’s haircuts.
A couple years ago, I was shifting my energy to making my salon more feminine because all I could see was those higher tickets like color corrections and smoothing services and wanted more and more of those. When I shifted my branding back to gender neutral, my mens haircuts sky rocketed.
The short times I can get an entire service completed when doing a mens haircut makes the smaller ticket acceptable. Not only is this service quick, men come in very often for haircuts and the service has very little over head. This makes it an easy service to WANT to do more of.
After analyzing my calendar and seeing how much wasted time I had between cuts, I shortened the amount of time I was booking for my mens haircuts by 15 minutes and am about to fit several more mens haircuts throughout the days in all my little windows. I even have more options to double book.
Shortening the length of time you are giving yourself with a service does require some practice. I recommend first trying this out on someone you are very comfortable with. Someone you know will show up on time and is a service you can easily complete in the now shorter appointment window.
Being fully prepared for a change like this in your schedule will help it be a change you stick to.
In this example, I show you how analyzing your numbers can help you bring in more money. By focusing your marketing energy on where your money is already coming from and intentionally trimming down the length of a service to fit more in.
Unlike the mens haircuts the smoothing services are a very long period of time for 1 service AND the product has a very high ticket item. The value of the service though is so high, it offsets these costs. Without looking at how much you are spending on the product and how much you are bringing in, you can’t actually determine if it is a service worth you pouring energy into.
The point is always that you want your profits going up and your loss going down with a HUGE gap in the middle!
There is your goal. Go trim it up!
Last but not least, I have created easy printable planner pages that are a really great way of integrating the best salon habits into your day easily. These pages also have a checklist including the steps you should be taking every time you post something, whether it be a blog post or a social media post and a place to list your clients of the day, marketing ideas, track your revenue in the salon as well as online and a brain dump section for the days, weeks and months ahead. These instant download printables that are available to you here in my Etsy shop. Check out my entire Etsy shop for tons of great business tools for hairstylists!