Money Matters

Make Every Little Bit Count by Counting Every Little Bit

Salon owners can reduce costs by limiting the number of product lines and distributors they use. Smart inventory controls also boost your bottom line.

"Every salon owner has experienced that slow burn of anger when she goes into the back room and finds a pile of acrylic powder on the counter where someone was filling a powder dish or a half-used tube of adhesive thrown in the trash because the tip was clogged. The staff looks for more product while you look at your meager profits on the way to the dump.

It doesn't have to be this way! Putting just a few systems in place can reduce your frustration and the amount of money you spend on product.

Use Fewer Lines

If you go into your back room and see a little bit of everything of­fered on the market, it's time to reduce the inventory you are try­ing to track. You are probably buy­ing smaller amounts of lots of dif­ferent products, which can double the amount of money you have tied up in table product. By cut­ting down to one or two product lines for each service you offer, you can buy larger quantities and save money.

In deciding which lines to keep, factor in your distributors. Which ones give you the best service with the least amount of back orders? If you stick to one or two distributors, you can reduce your shipping costs and set up accounts for payment. If your distributor won't let you set up an account, use a credit card for payment and save hundreds of dollars a year in C.O.D. charges.

If you do a sizable volume with one distributor, ask for an across-the-board discount on product purchas­es. This can save you hundreds, even thousands, of dol­lars per year and reduce your bookkeeping headaches. Ted Kossof of Teddie Kossof Salon & Spa in Northfield, Ill., says, "Because I do so much busi­ness with my primary distributor, I get most of my back bar prod­ucts free. Using one or two dis­tributors keeps our volume up [with those distributors] and our bargaining power strong."

Educate Your Staff

Choosing products should be a decision that involves your stall. Everyone needs to feel good about the products the use to service their clients. We all know that not everyone likes the same' tiling, hence the shelves full of multiple items.                            

Noel de Caprio of Noelle: The Day Spa in Stamford, Conn., has eight nail technicians who all use the same products. Spa director Paula Fierson says, "Our nail tech­nicians work together to choose the best products. When they suggest a new product, we consider the distributor and the cost, then have an educator come in for a demo."

Strong product education is the first step. Your staff will have bet­tor success with products that they know how to use properly.

When announcing which lines will stay and which will go, let your staff know the criteria you used in selecting table product lines. Then, you can set up a re­search strategy involving your staff to assure everyone that the best products are being used.

Educate your staff on product costs. At salon meetings compare the cost of different sizes and lines of product, include a breakdown of shipping, handling, and CO.D. costs. Then show them where the table product costs fit into the over­all operational expenses of the salon.

Incentive Programs Work

Show the staff the monthly to­tals of product costs for the past six months, and, as a group, set a goal to reduce the costs by a pre­determined percentage within a certain time period — say, 15% within three months. Then decide what the incentive to meet the goal will be. Money always works, but it might be fun to purchase something for the back room, like an espresso machine, or plan a special event for everyone.

Make a Shopping List

It's so much easier to keep track of what you need to order when you use some sort of inventory list or salon computer software, rather than the "eyeball" method. Your goal should be to order all product just once a month to reduce ship­ping costs. Having a formal track­ing method will keep you from hav­ing to call your distributor in a panic to order one important item that you missed on your monthly order. Also, set up your product on the shelves to match your list so that checking product in and out is less lime-consuming. When your order conies in, rotate your stock so that older product gets used first.

Appoint a Manager

If you are too busy to track in­ventory yourself, make a staff member responsible for the prod­uct reserve. Someone needs to keep an eye on product reserves and be available to dispense prod­uct to the staff. Your inventory manager can also write the orders and process the invoices.

Protect Your Investment

It's really for everyone's benefit to have the supply room locked. When costs are kept down, every­one's profits increase. Only you and the inventory manager should have keys to the supply room. If you have not locked the supplies up before and plan to now, be prepared for some grumblings from the staff (usually from the abusers). When addressing com­plaints, refer back to the new bonus plan to smooth things over.

There should be a policy in the employee manual regarding sup­plies being taken home for person­al use. Kossof's employee guide­lines allow employees to purchase product at cost to take home under special circumstances.

Having an inventory system in place will reduce waste and pil­fering. We are working with a small enough margin of profit as it is in the salon business. When it comes to table product control, "every little bit counts" has a very big meaning.    

Keywords:   budgeting  



Leave a Comment

Name:
Email:
Comment:
Submit

Comments (0)

Subscribe to NAILS & SAVE!

Get a free preview issue and a Free Gift
Subscribe Today!

Please sign in or register to .    Close
Loading...
 
Subscribe Today
Subscribe Today