With the cost of living rising even further in recent months, an increase in energy prices and product costs, as well as a reduced level of disposable income for clients, is having a catastrophic effect on salon businesses around the country. With that in mind, it’s important for businesses to have reporting systems in place, particularly when it comes to salon finances.
We sat down with Mike Waldon, General Manager at Salon Manager, to learn some of the ways sales reporting and financial reporting tools are crucial for salon businesses…
Track your Expenses:
- By using reporting data for financial management, you are able to track expenses, monitor profit margins and assess the overall financial health of the salon – this information is vital for budgeting, setting prices and maximising profitability.
- Should you see that the financial health of your salon is in danger, you can look at areas that may need improving and take any steps that may be necessary to see positive changes.
Monitor Price Changes and Cost Reduction:
- Should you make any price changes, financial reporting will allow you to see how these are working for you – specifically whether or not clients are still returning after the extra costs.
- You can also see what you are spending money on, allowing you to look at ways you can reduce your spending. During a cost-of-living crisis, it’s a good time to relook at what you are spending money on and whether there’s any way you can reduce the costs.
Make Data-Driven Decisions
- Being able to easily track sales and revenue is also crucial for your salon business. Accurate and detailed sales tracking will make it easier to analyse revenue trends, identify peak sales periods and make data-driven decisions for the salon.
Analyse Seasonal Trends:
- When looking at your peak sales periods, it’s important to also consider off-peak seasons/hours in the salon. This is an opportunity for you to run a specific promotion, attracting new and existing clients and increasing sales.
- January/February, for example, are quieter months in the salon following the Christmas rush. You may want to use this time to look at any services you can promote at a reduced cost, whether it be colour offers or packages of multiple in-salon services at a set price.
Identify Bestselling Products:
- With sales reporting, you will also be able to see your bestselling services or products. This will ensure you can always be well stocked on the salon floor, as well as allowing you to only offer clients the services that they want and need.