How To Make Money In Your Salon This Year! Running a salon is expensive. The day-to-day maintenance of keeping a business open, paying staff, and making sure you have working, up-to-date equipment all adds up. The biggest cost of running a salon is wages – just under half of all your expenses goes on paying staff. Then, on average you’ll spend about 7% on purchase and 4% on rent and utilities. After this you’ve also got to consider the cost of insurance and legal fees, so you’re protected for any potential damage. As these expenses rack up, there’s not a business around that wouldn’t like to be making more money this year. But what are some strategies you can use to increase your profit? We spoke to Jade Spehr, business coach and qualified accountant to find out her top tips for making money as a salon owner.
Stop discounting
You might think that discounting your services is going to bring more clients through the door. But it’s a strategy that Jade can’t stand. “Discounting is a swear word in our community,” says Jade. “It’s not the answer. The type of clients you attract when you discount are often not the type of clients you want to work with.” She explains that the more you discount, the more you have to work to earn the same amount. If your prices are higher, your books might not be as full, but you won’t have to work as hard to earn the same amount.
Learn how to create value
Instead of discounting, create value. Your clients will be more likely to stick with you in the long term if you have clients that value quality over cost. And if you can nurture those relationships, you’ll end up getting more out of your clients. “Long-term sustainable growth is not a quick fix,” says Jade. “Quick fixes – like discounts – are really damaging to your business. Instead, create offers that add value.” Learning value creation strategies means you can create unbelievable offers to impress your clients without discounting your core service.
Stability, culture, and profit
Hair Biz Year 17 Issue 6
The first thing to clarify, Jade explains, is what it is that you want to diversify and why. “We work with business owners to help them diversify in a number of different ways,” says Jade. “The number one thing to get to the bottom of is ‘Why are you diversifying’?” It could be that business owners want to step away from the business, so they want to set up a succession plan. Maybe they want to increase their revenue streams, either by selling more products or setting up more services. Maybe they want to focus on their brand to differentiate from their competitors.
“Having a strong, solid culture is a really core element to having a thriving business,” says Jade. “This weaves across your clients, your team, your business and your brand.”
“We love working on the market positioning around diversification strategies,” says Jade. “There’s so much you can unlock in terms of brand awareness, PR opportunities, status in the marketplace.”
If your staff love going to work, then your client base is going to love going there too. If staff are exiting the business all the time, your clients will see that on social media and wonder what’s going on.
When it comes to making more money for your salon this year, focus on value, profit, stability and above all your reasons why you’re doing something. Having your strategy front and centre will help you align your goals and make solid, transformative plans for the future.
With a stable culture, you can create stability in sales. That means getting stable around your marketing, branding, lead conversions and sales processes.
Find out how Timely can free up your time and give you insights into your salon, so you can put more time into developing your business strategy.
“When a business is performing really well, you see consistency around all of these processes,” says Jade. “Generating income feeds into profitability which makes the business sustainable long term – and the staff don’t burn out.” 112
Diversifying your business
Visit gettimely.com to find out more. @timely