Deborah Evans, a spa consultant and principal of Deborah Evans & Associates, recently taught a “financial bootcamp” at a spa summit. The session sponsor, Universal Companies, e-mailed me some of the bootcamp’s takeaway lessons, most of which I thought were relevant to nail salons as well. Here are some of the suggestions:
You should upsell clients on additional treatments and products. It is the “would you like fries with your burger” principle.
Avoid “creeping expense phenomenon.” Review each expense line item monthly to try to determine if an “out of line” expense is a one-time increase or indicative of a larger issue.
Pay close attention to “revenue adjustments” such as employee discounts, merchandise returns, and discounts and promotional allowances, to avoid unwelcome surprises.
Excess inventory equals cash out of your pocket. Closely monitor your inventory turnover ratio, which measures the ability to manage inventory, cash, and assets. (Inventory Turnover = Cost of Goods Sold/Average Retail Inventory)
Create a detailed retail plan that includes your mission, theme, type of merchandise carried, merchandising plan, and physical space planning and display fixtures.
Set clearance strategies for retail. if new merchandise does not sell in six to 12 weeks, don’t sit on it and hope it sells, clear it out and move on.
Consider alternative revenue sources such as fitness, lifestyle programming, and food and beverage.
Do you think implementing any of these ideas would make a difference in the bottom line of your salon?