Being Good with Hair Doesn’t Make you Good with Money
Image courtesy of Kevin Doncaster
Sometimes all you need to improve the profits of a business is to manage the money you’re making better and reduce costs. While this industry is full to the brim with brilliant creatives with supreme intellects for shape and color, only a modest percentage of those creatives understand the business side well enough to turn the art into a profitable career. It’s easy for creatives to get sucked into the fallacy that so long as they do great work they’ll be okay. Very often that’s not the case. There are thousands of stylists doing great work out there. And while there are a hundred and one ways to stand out and bring in more money to your salon, you’ll still need to know some solid housekeeping to survive the dry spells and take full advantage of your busy seasons.
Go Digital
We live in the age of information because it’s so easy to find and share information. It’s never been easier to track who comes into your salon, when, and what they’re paying for. There’s a thriving industry of salon management software designed to track this kind of information for you. Most of them are designed to streamline the booking process (as they should be) but it would be highly irresponsible for a salon owner to ignore the information they can give you. If you don’t know where to start with structuring or fixing a budget, or finding out where you’re slipping, then almost any of the well known management softwares out there will help you get on track fast.
Break the Numbers Down
Jim Pacifico of World Class Salons has a strategy of breaking down the numbers of his earning goal for the company by “the number of people and the number of days.” This way he gives stylists a less intimidating daily goal and each salon a weekly or monthly number to work with. While Pacifico is working with a much larger company than your average salon owner, the principal of structuring your goals and limits into manageable sizes is the same. Once you’ve figured out how much you need to make or save in order to turn a profit each year, start breaking that number down into what you need each month, and then day so you’ll have a clear idea of what you’re striving for everyday. This way you can gauge when you need to change something: for example, if you’re almost fully booked and still not quite meeting your goal, it’s either time to get a little quicker to fit in more appointments, or (more likely) it’s time to raise your prices.
Watch Your Color Bars
This should be one of the first places you look if you want to loosen up your budget a bit. A lot of money flows through a color bar, and stylists aren’t always mindful of how much they’re wasting what comes out of those color, bleach, or shampoo bottles while they’re working. It can be a touchy area, because so many colorists rightfully see what they do as an art, so they’ll use as much as they think they need. Most times though, there’s something in their method they can adjust to save product without hindering their creative vision. Whether it’s finding a new color line with a better price point, or just refining the way stylists apply product, good color management will bring health to your budget and opportunities for hair artists to grow.