Need a good reason to get more business education? Salon owner Millie Haynam highlights the importance of not just relying on your technical prowess. From marketing and money management to people skills and PR, business skills are vital to making your salon a success.
All your dreams came true the day you opened your own salon only to spiral into a nightmare of business challenges you never anticipated. How do I keep customers streaming and the cash flowing? How do I handle employee issues? What exactly is marketing? This wasn’t covered in school! If you ask yourself any of these questions you need to search for business education to support your company’s mission to succeed.
Cash Flow and Profitability. Do you understand and track your salon’s profitability? Is your salon making a profit? Do you have an action plan for profitability and growth? Educating yourself in money matters is one way to ensure you are making a healthy profit and building wealth in your company. Taking a close look at your salon numbers with an accountant or business coach can help you set up budgets, track expenses, and enjoy a healthy cash flow. According to Salon Training International, 74% of salons are not profitable. Don’t let your salon be one of them. We work way too hard to not get financial rewards!
People Matters. What is your management style? How do you recruit and retain great people? Managing people that is one of the most challenging tasks. Unfortunately you cannot grow your business without good people and without good management skills you cannot attract or keep a great staff. Many human resources companies have seminars on hiring and keeping a top-shelf team. If your salon has a revolving door, it is costing you money and clients, not to mention sleep. Simple systems implemented in your business can help you steer through the often-choppy waters of team management.
Marketing. How are you driving clients into your salon? Traditional methods of advertising are becoming dinosaurs, and you may become extinct using them. Reading many different types of business magazines can bring many new ideas to your business. See how other industries market and decide if you can create something similar to create a buzz about your salon or spa. Don’t be afraid to try something new and different. There are many seminars and classes at shows to uncover the marketing mystique and hiring a marketing firm can be extremely financially rewarding.
Compensation Systems. How do I pay my staff well and compensate them without breaking the bank? Salon software programs can be extremely helpful in this area. Systems can track service and retail dollars, client retention, and employee growth. Understanding how each employee is producing can determine who fills your salon. Productivity tracking can be done by hand, via software, or through an accountant. Monitoring each employee’s service growth, retail numbers, and client retention is crucial so compensation is rewarded on merit. You can also use these numbers to coach staff in areas they are weak.
PR Basics. “It’s not that salons getting press are doing anything better than you are, the difference is that they are writing and sending press releases about what it is they are doing,” says Jayne Morehouse of Morehouse Communications. Public relations is an area that can increase your credibility as well as your visibility. The beauty of a great PR program is the exposure it provides often at a low cost or no cost.
Retailing. Did you know the retail area of your business has the highest margin of profit? As the cost of doing business skyrockets and your margin of profit hovers around 7%-11%, the retail area can boast margins of 30%-50%. Statistics also prove that the more retail your clients purchase the higher their likelihood of returning to your salon. Maisie Dunbar finds retail invaluable in her salon. “The additional income allows for bonuses, other benefits to my employees, and advanced training.” Working directly with manufacturers and distributors offering monthly specials can increase your margins even more. Many educational materials are available to help you train yourself and your staff to unlock the mystery of retailing. (See our Retail supplement with this issue.)
Educational Networking. Who is in your network? Do you know other owners, consultants, and business leaders you can contact for advice and support? Building a strong network of successful business contacts provides another educational resource. Educational events are prime opportunities to meet like-minded business contacts. Your local chamber of commerce can be a great resource. Doug Johnson, executive director of the local chamber of commerce in my area, has helped put together a Small Business Resource Center offering workshops, networking events, and educational speakers. “We often utilize our members to offer educational events in their field — from human resources and marketing to writing a business plan and creating a business identity.”
Millie Haynam is the owner of Natural Beauty Salon in Twinsburg, Ohio.