Salon Business….What do I need to know?

We Do Hair.

We don't need to worry about balancing a check book. We have people to do that for us. We need to focus on our Artistic ability. Right???

WRONG!!!!!!!

If you think someone else will take care of your business like you would take care of your business, then you are sadly mistaken. Knowledge is power and power is knowledge and the more education you can get in the field of Salon Business the better off you will be.

When you start a business you are the chief chef and bottle washer. Deal with it! You will clean potties, sweep floors, do laundry, stock supplies, order supplies, organize educational events, manage the salon, take inventory, clean color bowls, combs, brushes etc....and occasionally, yes, you will finally get to do some hair! Yeah!!!

Starting a business is an expensive endeavor. You have a building to lease, utilities, phones, products, supplies, tools, equipment, taxes, insurance, advertising, employees, education, motivation, and the list goes on and on. Yes you can hire everything done, but you will find you will soon be out of money and operating in the red. This is why so many business fail in the first 5 years of operation.

“ Failure will never overtake me if my determination to succeed is strong enough” ~Og Mandino

Here is a short article from Jon Gonzales about salon management.

Why are so many Salons Failing?

The impact of the recession has proven fatal in many industries but particularly for salons and hairdressers. Why you might ask? Because many salons were already vulnerable, due to several underlying long-standing problems with the structural core of business management aspects of the salon profession; any economic hit was bound to cause complete chaos.

If there are two words that best describe the beauty profession and in particular, the challenges of salon ownership, they would be apathy and turmoil. As our country struggles to get out of this recession, salon owners are facing many challenges and obstacles. Among these, rising business costs, price and commission wars and the challenge of finding and more importantly keeping committed hairdressers on staff has put exorbitant pressure on owners.

These problems are symptomatic of larger scale issues that include a lack of education on business ownership and staff management. Hairdressers end up under prepared in the work place with very little hands on experience seeking higher wages than the salon owners can deliver; which creates tension and high turnover. Conversely, salon owners lack the interpersonal skills and management savvy to salvage the promising hairdressers that could become successful down the line if mentored properly. And sadly, most hairdressers and salon owners do not even have proper health insurance, retirement, or other benefits to fall back on.

While other industries are finding solutions to adapt to changes in the marketplace, the beauty industry and salon owners in particular continue to struggle. New generations of young hairdressers and the small working salon owner will be especially vulnerable in these difficult times. So who’s at fault? Fingers could be pointed in many directions, but will placing blame fix the problems?

Although many of our colleagues are struggling, I urge you to keep a positive attitude, develop strong business management skills, persevere with a competitive spirit, and let Hairdresser Career Development Systems be your partner in addressing your concerns.

Making the Right Decisions
During a Recession

According to the Small Business Association, more than a half-million small businesses close each year while two-thirds of new businesses survive. What’s your survival plan during this economic downturn? Will you close your doors or rise to the top? Making the right decisions now has never been more important for the future. Here are some suggestions to help you make the right ones.

Comfort Zone – Get out of your comfort zone and change your business routine up. Those things you keep thinking about doing need to start happening. Stop putting them off! The smallest change can sometimes make the biggest difference.

Charlene Abretske, Business Support Advisor at Your Beauty Network, Inc. (YBN) encourages you to turn those “some days” into “nows” and be proactive about the future success of your business. “If you continue to wait, you’re going to go out of business," explains Abretske. “If your plan is to ‘hope’ during this economic crisis, your salon and success will be in serious trouble.”

Cutting Costs – Before you start discounting your services, plan on cutting costs in areas that won’t suffer. Yes, your staff may still be ticked off at you for canceling the holiday party, but at least they still have jobs! Eliminating unnecessary cleaning crews and rallying the team to pick up the daily/weekly regimen can free up the budget and allow you to spend money where needed or save for the future.

Cut the Fat - “Frugality is critical right now,” explains Charles Penzone, Owner of Charles Penzones Salons. “We’re tightening things up [at our salons] and cutting as much fat as we can. When someone leaves, especially in the administrative area, we’re not replacing them with new hires. We haven’t laid anyone off, but we’re not replacing those people in the non-productive areas, those who do not generate money, that leave for the basic reasons.”

Priority Check - Before you drop $300 on that vintage mirror for the reception area, make sure your salon equipment is working properly. Décor may be nice, but making sure your business is operating properly and efficiently is more important than sprucing up the joint.

Reduce, Reuse, Recycle – Want to make some extra cash on equipment you’re not using? Instead of listing it on sites like Ebay or Craigslist, why not utilize the powers of the classifieds. Just make sure to put those savings back into the business.

Learn the Ropes – Let’s say you need to downsize your staff. One of the most important things you need to set in place is cross-training your team. Make sure each member knows how the front desk operates and how to cover each others’ stations/departments if you need to cut down on the amount of staff during operating hours.

Lose the Gloom – Before you bring your economic stress through the front doors, be aware of what that gloomy mood is going to do your business. The last thing you need is for your staff to see you crack under the economic pressure, not to mention your clients. If your business is taking a turn for the worse, check out all the best-selling, business building items at your local bookstore. Best-sellers are affordably priced and…they work! A recent study shows that 9 in 10 entrepreneurs are optimistic about the future prospects of their business. Be one of them!

Protect Yourself! – If you don’t already have disability insurance set in place then you’re not protecting your income. It’s extremely important to protect yourself, your livelihood, and your family during this recession and make sure these are the last areas we look to cut back on. “One way to recession proof your income is to consider disability insurance as a protection against unexpected loss of wages,” explains Gina Bello, Vice President of Salon & Spa Employee Benefit Solutions. “It’s extremely important to protect yourself, your livelihood, and your family during this recession and make sure these are the last areas we look to cut back on. It's unfortunate when people see their insurance as one area to reduce costs. Unfortunately the implication of needing to make an insurance claim without having insurance and being stuck in the middle of a recession with little or no financial means is going to be traumatic.”

Thanks For Everything - Before you start coming up with new ideas to cash in on new clients, you need to make sure you’ll be keeping the ones you already have. “We are making every effort we can to be as indispensable to our clients as we’ve ever been. The customer if also becoming extremely frugal as well, and we want to be the last thing they do without, explains Penzone. To keep them coming back, Penzone's House of Salons sent out thank you cards to all their clients and continuously show their appreciation to the current client roster in addition to giving exceptional service.

Safe Senders List – E-marketing it the way to go. Capturing your clients’ info and utilizing your database to communicate the goings-on in your salon will be the most cost-effective solution for your business. Print, radio or television advertising may not be in your budget, so this is a great alternative. “Each marketing item should have an incentive to get them rushing through the door,” explains Abretske. “Everyone is looking to save money these days. Give them a reason to come in.” Don’t forget to tell your clients to add you to their safe senders list. You can also put this into place for a rewards program. If they forward the email to a friend and they come in, give them 10% off their next visit.

Repeat Rewards – Before you begin the cutting and/or coloring process make sure you’re giving a thorough consultation. Explain to your clients, especially the ones getting a precision cut, permanent color and/or highlights, that the look they’re going for is going to require maintenance, and before you begin you’re going to need their commitment to pre-book their appointment before they leave. Create a sense of urgency and say, “Let’s make sure I can get you in six weeks from now before we begin.” We all know that you’ll be able to get them in, but they don’t! Give them a reason to return.

Speak Up! – Speak up for what you want—don’t settle. Negotiate before settling on the price of something. If your lease is up for renewal or you’re having difficulty paying your overhead and the rent is burning a hole in your pocket, try to negotiate a lower price. At this time, leasing companies are happy and lucky to have you occupying that space and they can’t risk the chance of losing you.

Bust a Move - The last thing you want to do is be stuck with a ton of product, and if you have a retail line that’s collecting dust, get a sale going and move it out. You may want to consider if it’s even worth carrying the line if it’s been a hangout for dust bunnies. “Be the biggest customer to one or two companies rather than blurring the line and looking like a retail store or a drugstore,” explains Steve and Terri Cowan, Owners of Professional Salon Concepts (PSC).

Fill Up! – Don’t treat retail like a chance opportunity. Stay proactive and utilize your salon software for tracking take-home purchases made by clients. “Many [stylists/salon owners] are not using that information as dialogue with the guest,” explains Terri Cowan. Terri suggests asking the client how they enjoyed the last product purchased, did it accomplish what they wanted it to because their hair performed beautifully while they were in the chair with you! Tell them their product should be running low by now, and use a less-generic and more stylized form of communication. Remember to take full advantage of the client’s service history to cash in on the opportunity of raising your retail percentage.

Show the Love – Salon owners are feeling the pressure, but so are their employees. You may not be able to fully show your gratitude in cash, so promote and assign titles, switch stations around bringing your top stylist forward for more exposure or setting them in back for more privacy – it’s your call!

The Big Picture - Owning and Operating a Salon is a Wonderful Endeavor.

Be a Winner!

Don’t get lost in the day-to-day needs of the salon. Make sure you are always looking at the big picture. Customer Service is always first and foremost. Instead of mapping out your marketing and promotions a month at a time, plan your entire year now. Think of your clients and how you can better serve them. You already know what the major holidays are and how to cash in on them, so get busy and create your advertising/marketing and promotion calendar now.

Hope you find this information useful. For more tips on Salon Business and Marketing stay tuned for future articles. Have a Blessed Day!