This issue… 5 ways to CUT COSTS IN YOUR SALON
There’s no avoiding it – everyone is talking about an economy in crisis. It’s a worrying outlook as a business owner, but in my experience, strong businesses are made in tough times. You will inevitably be facing tricky decisions right now, but by tackling them head on, streamlining where you can and keeping your focus on a quality service, you’ll be underpinning your business with strategies that will see you emerge even more resilient on the other side.
1 PRICE FOR PROFIT
If you haven’t already done your forecasting and gone through your cash flow in detail this year, now is the time. It’s so important to do this regularly – whether business is booming or not. Without a clear picture of what’s coming in and what’s going out, you’ll never be able to price for profit. You should be making a 10–15% profit margin after your other costs have been absorbed. If those margins are looking tight, it might be time to re-evaluate various aspects of your business model – including your pricing structure.
2 WASTE NOT, WANT NOT
If I were to give you a penny for every drop of wasted colour or product that has gone down the drain, your bottom line would be a very different picture! It can sound pedantic and negative to keep reminding your team to watch their waste, but trust me it makes a difference. Make everyone aware of how much excess product is costing and make it THEIR mission, not just yours, to care about economising.
3 TAKE STOCK
Be mindful when ordering stock, set realistic budgets and make sure you’re not tieing up too much cash in unwanted products. Running an inventory is vital –luckily, stock management information can be captured in just a click these days with automated salon software. Buy only the products that you require or which your customers purchase the most.
4 WORK SMARTER
No one likes to be rushed, but how long do you allocate for an appointment time and is it realistic? Even if each team member fits in one extra appointment a day, it all adds up. I’m not suggesting cutting corners with customer service, but remember that running your salon as a streamlined business benefits every person in the team. Perhaps we could all work a bit smarter?
5 LOOK AFTER THE PENNIES
When streamlining your business, it makes sense to tackle the big overheads first – but don’t disregard the small ones. Rent, rates and payroll are the costliest financial burdens of your business, but there are small everyday expenses that should always be reviewed and cost savings that can be made by shopping around for a better deal. A rent review is a great place to start, but knocking off an un-used or redundant subscription will soon add up too.
See more from Phil Smith HERE