A MEMBER EVENTS & SEMINARS COLLEGES & TRAINING APAA AWARDS ACCREDITED SALONS HEALTH & BEAUTY FACTS IMPORTANT LINKS
IMPROVING BUSINESS SUCCESS
Who wouldn’t want a business that is a profit-generating machine? No-one I know. The good news is that it can be done and there has never been a better time to get started on turning your business around. No matter what doom and gloom you have been troubled with this past year, you can make profi ts in your business and all it takes is a bit of courage, the willingness to change what you are doing and the perseverance to stick with the new plan.
Every salon owner I have ever worked with has chosen to go into their own business with the dream of being professionally, personally and fi nancially triumphant. To date, I am yet to meet the salon owner who has told me that she wanted to do the hard yards just for fun!
It is not uncommon to be told that instead of working 35 hours each week and taking home a regular pay- packet (as they did as employees), salon owners are now working 55-plus hours per week and only occasionally taking home some form of meagre income. This is not a great situation to be in and rest assured, if this is where you are at present, you are not alone. However, if you continue to do business the same way that you have in the past, you have to expect to get the same results at the very best. Because times are tough at present, you may actually be much worse off. So what is the answer? Change, and lots of it!
The reason that many businesses fail can be attributed to the fact that the majority of business owners come from a service provider background and not a business background. Many believe that because they excel in providing services for their customers during their career to date, it is a given that they will continue doing the same thing as a business owner and success will be theirs. This is the fi rst slippery slide down the tunnel to fi nancial stress.
As a business owner, you have undertaken a whole new and vastly different set of responsibilities and nearly none of them involve providing great professional services personally. Sure, great services are really important to the success of your salon, but it is more about making sure that your people are now the ones who are providing this to salon customers.
Let me ask you a couple of simple questions:
• Are you the most sought-after service provider in your salon?
• Do you spend more hours servicing your customers than any of your other employees?
• Do you believe that none of your staff can do things as well as you can?
• Are you generally the fi rst to arrive and the last to leave each day?
• Are you exhausted, stressed and wishing you had never gone down this path?
If you answered yes to these questions, now is the time to stop! How do you expect to manage your business when you are spending all of your time working in it? When are you fi nding time to work on your business – certainly not after spending 55 hours on your feet servicing customers?
Now is the time to embrace an entirely new mindset about your roles and responsibilities within your business. The question you must ask yourself is this: who is managing your business if it isn’t you?
Here are 13 sure-fi re ways to get your business back on track and making you profi t, and the best part is that most of them won’t cost you a single cent to implement
.
1. Become a Great Leader
In business, everything comes from the top. This means that your actions will affect every aspect of your business. If you arrive at work in a grumpy mood, this sets the tone of the salon for the rest of the day. If you snap at your staff, this is how they will speak to the customers to each other. Be the person you want your staff to be and lead by example – always.
2. Employ The Right Staff
Skills can be taught or upgraded but it is nearly impossible to change a ‘bad’ attitude. Employ your staff with great care as these are your frontline people who will be operating your business. Always check the references of potential employees with past employers and never be tempted just to hire anyone because you have a vacant position to fi ll. Selling is what your business is really all about. Selling products, selling services – it’s all about selling, so make sure when you hire a new team member they love to sell!
3. Treat Your Staff The Same Way You Want Them To Treat Your Customers
Yes – shock and horror. When you treat your staff poorly, this is the example you are setting for them and is exactly how they will treat your customers. Remember, you must lead by example and it has to be consistent. Happy staff really do make happy customers, who will spend more money and time in your business.
4. Educate, Educate, Educate
Ensure both you and your team members undertake regular training in important areas of your business. For you, learn and update your business skills and for your staff, ensure that they not only attend the latest in product knowledge courses but are regularly trained and retrained
in sales and providing outstanding customer service. Just because employees move on to other jobs is not a reason to withhold training from your key people.
Staff turnover is inevitable, but the person who really gets hurt by having untrained staff is you. Motivational staff training needs to be undertaken on a very regular basis if your staff are to keep meeting goals.
6. Set Realistic Goals for yourself, your business and your staff members
Everyone benefi ts from having goals. As a business owner, you need to be putting time into setting goals and then ensuring that everything possible is done to achieve them. Goals are often best handled on a day-to-day basis for your staff. Every day, each of your staff should clearly understand what fi nancial goals they need to meet to be an effective contributor to the success of the business. Assist your staff to fi nd ways to meet their goals by discussing opportunities they may have throughout the day.
7. Find Your Market Niche
Let’s face it. You just can’t be everything to everyone. Find out what you are good at and become the market leader. Stop trying to do it all. When you look at other market leaders, you will notice that they don’t offer a wide variety of services, but they do them better than anyone else.
If you are not great at something, either become great or get rid of it. Never offer your clients sub-standard services, as as this is the level all of your business will be judged on.
8. Watch Your Numbers
There is no excuse for any business owner to be ignorant of what their business is doing. It is essential that you know the basic numbers of your business including:
• Break-even point – what does it cost to open your doors every day?
• What is your average dollar spend per customer for both retail and services?
• What is your service to retail dollar ratio? • What is your rebooking rate?
• What is your room usage rate?
• What is your profi t margin on services and products?
• What is the percentage of wages to turnover?
For those of you who are computerised, these fi gures are at your fi ngertips, so stop using your computer like it is a fancy cash register and start utilising those wonderful reports that you have access to and do it regularly. After all, how can you plan to reach a goal if you don’t know where you are starting from?
9. Find Your Profit Gap
Every business has one, and some have lots of them. It is that part or parts of your business that has the potential to generate a lot more money if you were to focus on it more thoroughly. For some businesses, it might be that expensive piece of equipment that is not being properly utilised or perhaps it is as simple as not generating adequate retail sales (which, by the way, is the cream on the cake for most service businesses). Whatever your business may be, look for your profit gaps and then develop ways to generate more profi t from them. Once you start looking, you may find you have lots of ‘gaps’ to fi ll. Wouldn’t that be great!
10. Run a Cost Reduction Program
If you haven’t run a cost reduction program in a while (or perhaps never), now is an excellent time to look at your expenses and see how they can be effectively reduced. Such things as telephone plans, merchant charges, freight costs and bulk purchasing are all negotiable and should be renegotiated with your suppliers on a regular basis. Even looking at ways to trim your electricity costs can save you many dollars over a year.
11. Review Your Service Menu
Is everything on your service menu making you money and if so, is it enough? While things are a little quiet, you have the time to cost out your services. You may well be surprised at how little you are making after expenses on some of the services you are offering. When is the last time you increased your prices?
I generally recomme
nd that my salons run rolling price increases throughout the year so that every service has increased in price at least once every 12 months. A lot of businesses make the mistake of printing too many service menus in one hit and then they feel that they can’t implement a price increase until they have to reprint their menus.
This is flawed thinking and it is costing you money if you are doing this. Only have 25 enough menus printed to last you for three months and then reconsider a portion of your service pricing before having new menus printed.
12. Develop a Loyalty Program
The best customers you will ever have are the ones who already come to you. After all, they already know you and like what you do for them, so steps need to be taken to ensure that they stay loyal to your salon. Customers of today now expect their providers to offer them incentives to stay loyal.
Just look at Qantas’s Frequent Flyer Program or even just the local coffee shop. They are all offering incentives to their clients to stay loyal and it works. Start rewarding your clients today for their loyalty to you.
13. Implement a Referral Program
If you are not utilising the potential in your database to generate new business, then you are missing out on one of the most cost-effective ways to build your business. Your customers already love you and the services you provide, so why not use that loyalty to help you to gain new clients?
It’s cheap and easy to implement and what’s more, your customers will soon become your best source of new business. As a serious business owner who wants to achieve financial success, you need to eliminate the ‘Ostrich Technique’ from your business management.
This is where you simply bury your head in the sand, continue doing the same thing you have always done and hope things improve on their own. If, however, you are hoping to achieve business success, you need to embrace new ideas about what it takes to run a successful business.
You need to get your head around the fact that you are no longer a service provider, but a savvy business professional who keeps their eyes on the fi nances and performance of every aspect of their business. Many salon owners simply never get their head around the fact that life as they once knew it will never be the same, and alas these are generally among the 80 per cent that fail. Yes, it does take courage to step up and learn how to manage your business and lead your people, but the rewards will make it well worth the effort!
Pam Stellema specialises in working with small and micro businesses to motivate business owners, managers and their key staff towards maximising productivity and profits, excellence in customer service and client retention.
Pam can be contacted by phone on 0431 975 515 or 07 5529 6467, or by email at ask@pamstellema.com.au.
Visit her website at www.pamstellema.com.au.
Disclaimer: While every effort has been made to provide valuable, useful information in this journal, Pam Stellema, and any related suppliers or associated companies, accepts no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.
